Achieving IT‐based synergies through regulation‐oriented and consensus‐oriented IT governance capabilities

This study aims at exploring the IT governance capabilities that enable organizations to achieve IT‐based synergies. Following existing work on the contextualization of theories and drawing on the resource‐based view of the firm (RBV), we develop an RBV of IT‐based synergies in two steps. First, we adopt existing context‐specific constructs and relationships from prior work on IT governance capabilities, IT relatedness, and synergies to develop a preliminary contextualization of the RBV. Second, to further refine our theoretical framework, we conduct an exploratory field study that includes interviews with 26 CIOs and other IT executives from 21 multibusiness firms. Our findings suggest that IT governance capabilities lead to IT‐based synergies through IT relatedness and business process relatedness. We found regulation‐oriented IT governance capabilities (IT roles and IT processes) to increase IT relatedness, while consensus‐oriented IT governance capabilities (IT groups and relational capabilities) had a positive effect on business process relatedness. Our results suggest that, in isolation, IT and business process relatedness lead to IT cost synergies, while collectively enabling IT‐induced business synergies. Our study is among the first to treat IT relatedness as an endogenous construct and to explicitly integrate business process relatedness into the IT governance domain. Our context‐specific decomposition of IT governance capabilities helps to better explain their links to IT and business process relatedness. These findings contribute to a better understanding of the tension between IT‐based synergies and business‐IT alignment. Decision‐makers are guided in developing IT governance capabilities to achieve IT‐based synergies.     

The impacts of competence-trust and openness-trust on interorganizational systems

Trust can have imperative influences on the use of interorganizational systems (IOSs). Management, sociology and psychology literature distinguish different types of trust and attribute distinctive impacts to these types. However, little is known regarding the influences of different types of trust on IOSs usage. This paper focuses on how trust based on partner competence and trust based on partner openness influence the use of IOS-related resources. Hypotheses are constructed relying on the use of the resource-based view and transaction-cost economics to analyse influences on relationship specificity of four types of IOS-related resources: business processes, human knowledge, organizational domain knowledge and IOS infrastructure. Three case studies are conducted on interorganizational relationships employing IOSs. Competence-trust is found to positively influence the use of human-knowledge resources, resources related to interlinkage of business processes and organizational domain knowledge resources. Openness-trust is found to positively influence use of human-knowledge resources and organizational domain-knowledge resources.     

Firm-level benefits of IT-enabled resources: A conceptual extension and an empirical assessment

While the business value of IT (BVIT) is central to the IS discipline, only recently a possible chain of causation from IT assets (i.e., fungible, widely available, commodity-like, technology-based products) to firm performance has been conceptually specified. Furthermore, little empirical evidence exists regarding IT assets’ business value. In light of this paucity, this paper makes several contributions to IS research and practice. First, it advances the BVIT literature by empirically testing a model that traces a path from IT assets through IT-enabled resources to firm performance. Second, it extends the BVIT and resource-based view (RBV) literatures by explicating and testing the impact of a firm’s external environment on its IT-enabled resources. Third, it builds on recent literature to argue for, and test, two distinct forms of firm-level outcome: operational and strategic benefits. Finally, the paper contributes to managers’ and IS practitioners’ knowledge by demonstrating the transformative capacity of IT assets on the strategic potential of organizational resources. Empirically, the paper develops and employs valid and reliable scales to test the research model using survey data on IT-enabled customer service departments. The findings demonstrate that when an IT asset is combined with an organizational resource, the extent of synergy borne out of the resulting relationship can positively impact the strategic potential of the ensuing IT-enabled resource. This IT-enabled resource, in turn, is positively associated with firm-level benefits. Further, the external environment is shown to exert a positive effect on the strategic potential of outside-in IT-enabled resources. In sum, this paper offers several important conceptual and empirical contributions to a stream of research that is at the core of the IS discipline.     

Exploratory analysis on the halo effect of strategic goals on IOS effectiveness evaluation

How do managers evaluate the effectiveness of IT use? Past literature showed that the assessment of IT effectiveness is not straightforward, especially when viewed in terms of “business outcomes,” such as sales increase, firm profitability, and firm success. For inter-organizational systems (IOS), IT effectiveness evaluation is even more challenging, because these IOS are an integral part of a retail channel distribution system where several factors can influence business outcomes. Under such circumstances, IOS effectiveness evaluation is prone to a halo effect. A survey of retailers and suppliers showed that firms favorably judge IOS as long as their strategic goals are met, even when they do not recognize any IOS contribution towards accomplishing them. Conversely, IOS use was not appreciated when strategic goals were not met—even if IOS use benefits the firm at the operational or tactical level. In effect, IOS evaluation was overshadowed by the halo effects of strategic goal accomplishment.     

Unleashing the Power of mCRM: Investigating Antecedents of Mobile CRM Values from Managers’ Viewpoint

Mobile technology together with Internet-based electronic commerce has transformed the way businesses operate. Mobile Customer Relationship Management (mCRM) combines mobility and CRM (customer relationship management) to enable organizations to increase their business performance by delivering better products/services to their customers. Incorporating location-based information into CRM systems has created new values and business opportunities. Using location information, for example, businesses can offer more personalized and real-time location-based services (LBS) to their customers. In this study, we investigate how the IT infrastructure and LBS support of mCRM, as technical resource capabilities, and mCRM knowledge and education, as human resource capabilities, can enhance business performance of the organization by improving mCRM’s quality dimensions. We propose a research model that integrates the resource-based view (RBV) of a firm and DeLone and McLean IS success model to investigate the effects of mCRM quality dimensions on business performance. To validate the proposed research model, we collected a set of empirical data from managers in a wide range of organizations that use mCRM in South Korea. The results indicate that the IT infrastructure of an organization as a technical resource, along with mCRM users’ knowledge, as a human resource capability can significantly influence managers’ perceptions of quality along various dimensions of mCRM: customer data quality, system quality, and service quality. Consequently, improving these quality dimensions will significantly influence the performance of an organization in terms of financial performance, productivity, and customer satisfaction. The present study would help both academic and professionals to understand and improve business performance by employing the appropriate resources that can harness the full potential of mCRM.     

A Theory of Constraints approach to interorganizational systems implementation

Interorganizational systems (IOS) may provide substantial benefits, however many organizations are reluctant to implement them. This empirical research takes a novel approach and develops a model of IOS feasibility, which is based on the Theory of Constraints (TOC). It introduces the notion of maximal infeasibility, which is the highest among the values of five factors: economic infeasibility, organizational infeasibility, technological infeasibility, risks, and lack of financial resources. The highest value was selected because implementation is hindered even if only one of the feasibility requirements is not fulfilled. Data collected from 139 medium and large Israeli business organizations validated the model, and indicated that strategic motivation is the main driving force for an organization to initiate or to join an IOS, while the main barriers are organizational infeasibility issues such as lack of management support or uninterested potential partners. Adopting a TOC approach to IOS implementation may assist organizations to overcome these obstacles and increase the chance of a successful implementation. An earlier shorter version of this paper was presented at WEB 2006, a pre-ICIS workshop on e-business, in Milwaukee, WI.     

Utilizing enterprise systems for managing enterprise risks

Enterprise risk management is a critical concept in the current business environment that supports use of tools and processes directed toward monitoring and mitigating organizational risks. Many organizations have embraced enterprise systems (ESs) technology for improving organizational efficiency and effectiveness. ESs provide value by identifying opportunities in operations and assist in managing risks through context sensitive analyses by eliciting relevant information. This research investigates how ES data were transformed into knowledge by a hi-tech manufacturing firm from an ES implementation, and how this knowledge was used to manage risks by utilizing an ES data transformation model from existing literature. Findings indicate that the ES data transformation process resulted from knowledge-leveraging actions at both executive and operational levels. At the executive level, the use of business intelligence module in conjunction with cascades of balanced scorecards helped in assessing progress for achieving goals, and translated decisions into risk-eliminating actions at the operational level. An initial technology-push approach assisted in creating semantically rich representative process models by simulating risk scenarios, leading to a strategy-pull approach for deploying business strategies and decisions. A value assessment strategic model articulates the knowledge-leveraging processes combining human skills with ES tools to optimize enterprise risks.     

A Decision Model for Strategic Evaluation of Enterprise Information Technologies

Enterprise information technologies (EITs), which are strategic systems seeking to integrate the processes and databases of the entire organization and beyond, require a significant investment of money and human resources in return for the promise of a global business model and its associated far-reaching benefits. Their evaluation/justification must be completed with organizational goals and requirements included in the decision, or the organization could lose financially and competitively. Besides traditional financial models, e.g., ROI (return on investment), that are primarily meant for short-term financial justification purposes, there is a paucity of methods for the evaluation of the strategic and intangible costs and benefits that EITs afford organizations as a whole. This article introduces the use of a robust quantitative technique called the analytical hierarchy process (AHP) that can integrate a diverse range of factors (strategic and operational, and tangible and intangible) into one model. the approach can be easily understood by managers and analysts and has a history of application to other types of strategic justification decisions.     

An integrated big data analytics-enabled transformation model: Application to health care

A big data analytics-enabled transformation model based on practice-based view is developed, which reveals the causal relationships among big data analytics capabilities, IT-enabled transformation practices, benefit dimensions, and business values. This model was then tested in healthcare setting. By analyzing big data implementation cases, we sought to understand how big data analytics capabilities transform organizational practices, thereby generating potential benefits. In addition to conceptually defining four big data analytics capabilities, the model offers a strategic view of big data analytics. Three significant path-to-value chains were identified for healthcare organizations by applying the model, which provides practical insights for managers.     

Realising platform operational agility through information technology–enabled capabilities: A resource‐interdependence perspective

Intensifying competition in recent times requires business‐to‐consumer (B2C) e‐commerce platforms to develop operational agility for competitive advantage. Despite the agreement on an increasing competitive landscape, the process for realising information technology (IT)‐driven operational agility on e‐business platforms has received little scrutiny. Through an investigation of M.com, a leading multisided online retailing platform in China, this study provides a clear thesis of resource interdependencies and IT‐enabled capabilities forged during operational processes to realise operational agility. Our investigation, observations, and reflections from practice substantiate a model of how a platform like M.com cultivates IT‐driven resource‐interdependent competencies and capabilities tantamount to realising operational agility. The model shows how IT enables three capabilities—localised, synergistic, and optimised—which reflect the effective co‐ordination of three resource interdependencies (pooled, sequential, and reciprocal) during M.com's complex operations and processes, and explicates the consequences. For research, we postulate that IT‐enabled operational agility in complex organisational forms, cultivated through the development of resource‐interdependent capabilities to deliver effective sensing and response mechanisms, forms effective strategies for the B2C platform in dynamic marketplace conditions.     

Commodity or competitive advantage? Analysis of the ERP value paradox

A true e-business enabled firm needs the support from a well-tuned enterprise resource planning (ERP) system for providing real time data. However, many companies complain that after their huge investments in ERP systems, they found the ERP systems do not bring them new orders, new profits, or competitive advantage as ERP vendors claim. Academic studies also found mixed results regarding ERP’s payoff. In line with resource based view (RBV), the study proposes an integrated model to shed light on the ERP value paradox. We try to answer “With what organizational resources and by building what firm specific capabilities, the investment in ERP systems may bring firms competitive advantage”. Using a sample of 150 ERP and e-business adopters in the US, we found that (1) organizational resources such as managerial skills and organizational change management play a more important role than IT resources (ERP, e-Business technologies) in generating business integration capability. (2) However, neither IT resources nor organizational resources directly provide firms with competitive advantage. Instead, business integration capability built from the two resources plays a mediating role through which business achieves competitive advantage.     

Factors Associated with Creative Strategic Decisions

The study and practice of business strategy is fundamentally based on employing creative solutions to differentiate a firm from its competitors. Theories used to describe the causes and consequences of strategic differentiation tend to focus on organization‐level characteristics such as resources, capabilities and structures. However, less is known about day‐to‐day processes and practices whereby strategic managers develop create solutions necessary to establish strategic differentiation. This paper presents a preliminary field study of factors suggested by previous strategy process and micro‐strategy research that may lead to, and result from, creative strategic decisions. Findings produced by a longitudinal field study of 52 strategic decisions reveal that creative strategic choices arise in response to managers' perceptions of uncertainty and competition. The findings also suggest that creativity may improve the ultimate effectiveness of strategic choices by 5–10 per cent.     

The synergistic effects of IT-enabled resources on organizational capabilities and firm performance

Computing the value of IT investments and clarifying how the portfolio of IT/IS resources affect a firm's performance and sustainable competitive advantage are critical issues today. We attempted to develop an effective measurement technique and use organizational theory to discover the strategic role of IT-enabled resources in the firm's competitive agenda. Based on a resource-based view of the firm, we proposed a way to evaluate the synergistic effect of such resources on the firm's capabilities, as they, influence the firms’ strategic objectives and improve its financial performance. The technological, human, and organizational resources work together to generate sub-additive cost and super-additive value synergies. Operations, R&D, and marketing capabilities allow firms to implement a business strategy that reflects its customer needs. A survey was conducted to check our framework. Our findings should provide valuable decision guides for practitioners when choosing a portfolio of IT/IS resources for implementing business strategies.     

Examining business value of customer relationship management systems: IT usage and two-stage model perspectives

Empirical evidence for the business value of customer relationship management (CRM) systems remains unsolid in IS studies. This study proposes a new model for CRM value according to IT/IS usage theory and “two-stage model.” Empirical tests show that operational benefits of CRM are reflected in firms’ high revenue per employee, which leads to high profitability; strategic benefits of CRM are reflected in firms’ high customer satisfaction, which leads to high profitability and market valuation. Firm size positively moderates the operational and strategic benefits of CRM, while the industry’s product differentiation level negatively moderates operational and strategic benefits of CRM.     

Enhancing the efficacy of supplier selection decision-making on the initial stage of new product development: A hybrid fuzzy approach considering the strategic and operational factors simultaneously

The majority of the existing supplier selection approaches obtained their optimal solutions based on the operational metrics. This study considers the strategic and operational factors simultaneously to secure the efficacy of supplier selection (VS) on initial stage of new product development (NPD). We suggest strategic factors come from the supplier’s management system itself (i.e., customer-, long-term-, and process-oriented criteria) while the related performances indices of supplier constitute operational factors (i.e., producer-, short-term- and outcome-oriented criteria). The work adopts supplier’s process capability indices (PCIs) and process yields as operational factors to estimate their quality capabilities. The business process-oriented criteria related with the performance of business process improvement (BPI) are employed as the strategic criteria for supplier assessment visit. A fuzzy approach with supply risk consideration is employed then to aggregate the total scores of individual suppliers objectively. An empirical case study is performed to demonstrate the efficacy of the proposed system and to identify the best potential supplier(s) for further development. The results and processes of the case study also provide interesting managerial implications. The derived application of Herzberg’s two-factor theory to the realm of supplier selection is discussed as well.     

A soft knowledge modeling approach for geographically dispersed financial organizations

Fund management is a major function for most financial sector enterprises with geographically dispersed activities. The risk associated to such managerial decisions affects directly the continuity, profitability and reputation of the enterprise. This paper presents a knowledge modeling methodology tool to act as a decision support mechanism for geographically dispersed financial enterprises. The underlying research addresses the problem of financial information capture and representation by utilizing the soft computing characteristics of Fuzzy Cognitive Maps (FCMs). By using FCMs, the proposed mechanism generates a hierarchical and dynamic network of interconnected financial knowledge concepts, simulates the operational efficiency of distributed organizational models with imprecise relationships and quantifies the impact of geographically dispersed activities to the overall business performance. Generic adaptive maps offer an alternative approach to financial management based on strategic level knowledge modeling and integrate hierarchical FCMs into the decision making model of typical financial sector enterprises. Finally, this paper discusses experiments with the proposed mechanism and comments on its usability.     

Sustainable Development and the Sustainability of Competitive Advantage: A Dynamic and Sustainable View of the Firm

Does the need for sustainable development hinder businesses’ ability to create value? Is a firm’s competitiveness negatively affected by considering that need? After quickly reviewing the main literature contributions on the relationship between business and society, and drawing from resource‐based view of the firm and sustainable development literature, this paper presents a proposal for a dynamic and sustainable view of the firm. It shows how considering the changes introduced into the competitive landscape by sustainable development influences the way in which companies develop their resources, capabilities and activities, fostering the persistence of competitive advantages based on knowledge and innovation.     

Revealing performance heterogeneity through knowledge management maturity evaluation: A capability-based approach

The dynamic capabilities view (DCV) focuses on renewal of firms’ strategic knowledge resources so as to sustain competitive advantage within turbulent markets. Within the context of the DCV, the focus of knowledge management (KM) is to develop the KMC through deploying knowledge governance mechanisms that are conducive to facilitating knowledge processes so as to produce superior business performance over time. The essence of KM performance evaluation is to assess how well the KMC is configured with knowledge governance mechanisms and processes that enable a firm to achieve superior performance through matching its knowledge base with market needs. However, little research has been undertaken to evaluate KM performance from the DCV perspective. This study employed a survey study design and adopted hypothesis-testing approaches to develop a capability-based KM evaluation framework (CKMEF) that upholds the basic assertions of the DCV. Under the governance of the framework, a KM index (KMI) and a KM maturity model (KMMM) were derived not only to indicate the extent to which a firm’s KM implementations fulfill its strategic objectives, and to identify the evolutionary phase of its KMC, but also to bench-mark the KMC in the research population. The research design ensured that the evaluation framework and instruments have statistical significance and good generalizabilty to be applied in the research population, namely construction firms operating in the dynamic Hong Kong construction market. The study demonstrated the feasibility of quantitatively evaluating the development of the KMC and revealing the performance heterogeneity associated with the development.     

Can Political Skill Enhance Business and IT Knowledge?

ABSTRACT

We examine whether Chief Information Officers’ (CIOs’) political skill enhances their IT and business knowledge as a means of influencing executive teams’ commitment to strategic and operational IT initiatives. We empirically examine these relationships using data collected from 139 CIOs. The results suggest CIOs’ business and IT knowledge is significantly related to influencing executive team commitment to strategic and operational IT initiatives, but political skill only enhances business knowledge for influencing executive team commitment to operational IT initiatives.