Evaluating Information Technology Impact on Business Performance of Biotechnology Industry Using Grey Relation Entropy Analysis

Abstract

Information Technology (IT) is a fast developing and expensive. Since it is critical to enhance business performance, IT investment decision making is getting important. This study explored the relationship of IT investment and financial performance. The research aggregated 20 financial ratios into a signal financial performance indicator and evaluated the relationship between IT investment items and the financial performance indicator. The research was conducted for the biotechnology companies using Grey relation Entropy Analysis (GREA). The IT investment data were extracted from the “Domestic B2B E-Commerce Survey” sponsored by the Ministry of Economic Affairs in 2009. The results show that Induction and Consulting as well as Software in the IT investment portfolio are more influential to the financial performance. The least affecting item is Hardware. Further analysis indicates that Knowledge Management (KM) along with Business Intelligence (BI) systems may play important roles in biotechnology industry.