An Empirical Reassessment of the Measure of Information System Sophistication

For over a decade, Richard Nolan’s stage model on the assimilation of information system (IS) technology has received a significant amount of attention from both academicians and practitioners. The existing empirical studies addressing aspects of the stage model have shown mixed results. This might be due to the inability of the existing questionnaires in capturing the essence of the stage model. To provide added perspective, this study adapted Nolan’s stage benchmarks to develop and test a questionnaire which seems to better capture the essence of the stage model than the existing ones. One hundred and twenty-three companies participated in the study. The results indicated that the instrument possesses reliability and validity in measuring the stages of IS sophistication. The DP-expenditure benchmark was confirmed to have no discriminating power between IS growth stages. It was found that 1) DP expenditures of most firms grow less than the rate of sales growth regardless of the stage of IS growth, 2) the higher the ratio of EDP/MIS budget to sales, the higher the growth of DP expenditure, 3) a company with a higher applications-portfolio stage tends to have a higher DPplanning- and-control or user-awareness stage, and vice versa, 4) a company with a higher technology stage or a higher DP-organization stage does not necessarily have a higher applications-portfolio, DP-planning-and-control, or userawareness stage, and 5) the composite average of the five benchmarks (excluding the DP-expenditure one) appears to represent the overall status of an organization’s IS sophistication and may be used by prospective researchers as a relative measure to compare stages of IS growth between two or more organizations