In Section 2.1 and 2.2, the definition of asset and the classification of general investment from the accounting angle were discussed. In this study, defining ICT expenditure is also a must. Practically, it is still unclear about the definition of ICT investment. For example, would a printer be considered as the expenditure of computer hardware or the expenditure of office equipment?
2.3.1 ICT investment definition
The definition of ICT expenditure is varied by looking at how past researches in ITBV measured the ICT spending of the organisation. ITBV researchers collected information about firms spending on ICT items and included those spending in the ICT variable construct for their researches. What to be included in ICT variable construct are different among researches. Table 2.1 provides the comparison of the
variable construct of ICT spending which reflects the measurement of ICT spending in the past papers.
(Weill, 1992) measured IT investment by using the amount of firm ICT expenditure.
(Brynjolfsson and Yang, 1997) used data from IIC and described ICT variable as the purchase value of computer equipment and PCs. (Tam, 1998), studied IT investment in Asia using data from ACD, constructed IT investment variable by aggregating the spending on PC, Terminal, and Central Processor.(Bharadwaj et al., 1999) included IS Staff, Hardware, Software and Data Communication.
(Dewan and Min, 1997, OseiBryson, 2004, Lin and Shao, 2006) used the IDG Survey as the data source and measured the ICT investment by including the computer capital and 3 times of IS Labor. Among these three papers, at detail level, (OseiBryson, 2004) included Terminal in IT variable construct while the other did not. Also, software was described to be included into the measure of ICT spending in (Bharadwaj et al., 1999, Thatcher and Oliver, 2001) and (Yu et al., 2006) while it was not included in (Brynjolfsson and Yang, 1997).
(Thatcher and Oliver, 2001) measured IT investment by including hardware, software, Client/server system, internet, intranet, and system such as DDS, ES. (Yu et al., 2006)’s IT investment element included PC, Workstation, servers, mainframes, peripheral devices, software, local and wide area network, and telecommunication.
(Lin, 2009) used various data sources and measured IT investment by including the IT spending element Computer Capital (Hardware + Software) plus 3 times IS Labor.
Research IT Investment construct Other Variable Construct (Dewan and Min, 1997) Computer Capital + 3 X IS
Labour
Non-IT capital: net value of property plant and
equipment, inventories, value investment, intangibles.
(Brynjolfsson and Yang, 1997)
Total Purchase of Computer Equipment
Property Plant and Equipment, other asset (Tam, 1998) PC, Terminal, and Central
Processor
(Bharadwaj et al., 1999) IS Staff, Hardware, Software and Data Communication
R&D Expenditure, Advertising expenditure (Kun Shin et al., 2001) IT Announcement Firm size: Total Asset, Non-
Computer Capital (Thatcher and Oliver,
2001)
Hardware, software,
Client/server system, internet, intranet, and system such as DDS, ES
F Fixed costs of overhead
(Marville, 2007) IT Stock Regular Capital, Labor
Complementarities Study
(Lin and Shao, 2006) Computer Capital + 3 X IS Labour
Non-computer capital, non- IS labour
(Yu et al., 2006) PC, Workstation, servers, mainframes, peripheral devices, software, local and wide area network, and
telecommunication
(Shin, 2006) IS budgets / Selling and general administrative expense.
Selling Administrative expense
(Tallon, 2007)
(R.Ramirez et al. 2010). Total value of IT capital stock, including mainframe and mini computers, PCs, local area networks, disk drives, tape drives, dummy terminals, etc.
Other capital; Property, Plant, and Equipment;
Labour expense.
Table 2.1 Summary of the measurement of ICT spending of the past researches
The differences in the measurement of ICT investment can be due to the preference of the terms usage to describe an element of ICT investment. For example, PC and workstation could be used interchangeably. Another explanation to differences could be the availability of data in the data source that the researchers used. (Dewan and
Min, 1997, OseiBryson, 2004, Lin and Shao, 2006) used the same data source and had similar measure of IT investment variable.
2.3.2 Classification of ICT investment
Even though particular guidelines have been developed to enhance the accurate classification and definition of ICT investment, it is still difficult to have a complete and accurate measure ICT investment at firm level. Pointed out by the authors in the chapter 4 of (OECD, 2004), the classification of ICT Investment shall be classified reflectively into IT Equipment, Communication equipment, software and services, yet in practice the differences continue across firm and country. They also mentioned, practically, the processor embedded in aircraft would not be seen as IT.
ICT Investment classification at Aggregate level
(OECD, 2009) (ABS, 2006)
1. Computers and peripheral equipment
2. Communication equipment 3. Consumer electronic equipment 4. Miscellaneous ICT components and
goods
5. Manufacturing services
6. Business and productivity software and licensing services
7. Information Technology consultancy and services 8. Telecommunication services 9. Leasing or rental services for ICT
equipment
10. Other ICT services
1. Computer Hardware 2. Telecommunication Asset 3. Computer Software – Packaged 4. Computer Software – Customised 5. Computer Software – Own Account 6. Computer Services
7. Telecommunication Services 8. Wolesale and retail trade margins
Table 2.2 Comparison of OECD and ABS classification.
Organisation for Economic Co-operation and Development (OECD) has worked on the classification and definition framework for ICT product and services. Australia Bureaux of Statistic (ABS) has also published the classification and definition framework for ICT product and services. The comparison of the classification frameworks published by both organisations showing that the classification of ICT
products and services in (OECD, 2009) is different from the classification of ICT satellite account from (ABS, 2006). Table 2.2 compares the ICT investment classification in (OECD, 2009) to the classification in (ABS, 2006).