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.     

Impacts of internal and interorganizational information systems on the outsourcing of manufacturing

Drawing on transaction cost economics, this paper looks at the relationship of IT use to the outsourcing of manufacturing using survey data from US manufacturers. We find that greater use of interorganizational systems (IOS) is associated with greater outsourcing, but we do not find any main effects between internal IT and outsourcing. A negative interaction effect is found between measures of internal IT and IOS, suggesting that the two may be substitutes rather than complements. This distinction between internal IT and IOS, and the relationship of the two, offers scholars a more nuanced understanding of the nature and impacts of IT. It provides managers insight into how different types of IT can support different sourcing options.     

Does it pay to align a firm’s competitive strategy with its industry IT strategic role?

While researchers have increasingly recognized the importance of information technology (IT) in leveraging a firm’s competitive strategy for achieving superior firm performance, our understanding of the nature of how a firm’s competitive strategy aligns with its industry IT strategic role and how such alignment influences firm performance remains limited. Drawing upon strategic alignment perspective, this study aims to theorize and empirically test how the firm’s competitive strategy (i.e., cost leadership, differentiation, and dual strategy) aligns with its industry IT strategic role to improve firm performance. Based on the data of Chinese publicly listed firms during 2009–2015, our results indicate that different competitive strategy aligns with different industry IT strategic roles for achieving superior performance. Specifically, cost leadership strategy aligns with automate IT strategic role, dual strategy aligns with informate IT strategic role, and differentiation strategy aligns with transform IT strategic role in generating superior firm performance. We also discuss the theoretical and practical implications of the current study.     

Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance

The contribution of IT to business performance has been studied from two main perspectives: a ‘strategy as positioning perspective,’ which underlines a market power imperative, and a resource-based view perspective, which conceptualizes the enterprise as a ‘bundle of unique resources.’ The objective of the present study is to improve our understanding of the contribution of IT to firm performance in building upon the complementarity between the two perspectives. To do so, a model proposed by [Spanos, Y.E., Lioukas, S. 2001. An examination into the causal logic of rent generation: contrasting Porter's competitive strategy framework and the resource-based perspective. Strategic Management Journal 22(10), 907–934], which comprises both a competitive strategy framework and the resource-based perspective was adapted to reflect the role played by IT. More precisely, the model encapsulates the effects of both IT support for business strategy and IT support for firm assets on firm performance. To test the model, a survey of 96 small- and medium-sized enterprises (SME) was conducted.     

The competitive impact of information technology: can commodity IT contribute to competitive performance?

Despite polarizing arguments on the strategic potential of information technology (IT), academic research has yet to demonstrate clearly that information systems initiatives can lead to sustained competitive performance (CP). We investigate this question using data from 165 hotels affiliated with two brands of an international lodging chain. We study the effect of successful use and unreliability of an incremental IT-enabled self-service channel on overall CP. We find that the effect of the incremental service channel depends on the firm’s organizational resources. We also show that different organizations experience significantly different use and unreliability rates. Further, we find that the positive association between the use of an IT-enabled self-service channel and CP endures over a 2-year period, despite competitors’ widespread adoption of the technology enabling the incremental service channel (self-service kiosks). Our findings corroborate research on the strategic role of IT resources when appropriately coupled with complementary resources. They lead us to question the notion that IT is a strategic commodity. Indeed, the findings suggest that IT-dependent strategic initiatives have the potential to generate sustained CP, even when the technology that enables them appears ‘simple’. These findings suggest the need for a theoretical explanation of the complementarities and interaction among the elements of IT-dependent strategic initiatives.     

Trust, planning and benefits in a global interorganizational system

Abstract. Trust has been shown by many researchers to be an important factor in the success of interorganizational systems (IOS). In this paper, we describe an example of an IOS developed as part of a strong inter‐firm relationship. In 1999, Vodafone of the UK embarked on a transformation to globalize its relationship with Ericsson of Sweden, moving from a set of in‐country relationships to a global relationship mediated through an IOS. As of 2002, the IOS is heavily used, and continues to evolve as part of the overall relationship. Vodafone and Ericsson pursued a journey‐oriented approach to globalization and development, freed from any formal project plan, and identified asymmetric benefits. Using a model previously developed by Gallivan & Depledge (2003), we explore the roles and dynamics of trust, planning and benefits. We posit that a journey or improvisational approach to IOS development works where a relationship is strong and levels of inter‐firm trust are high. We suggest that the nature of the inter‐firm relationship is more important than the approach to IOS development.     

Digital systems and competitive responsiveness: The dynamics of IT business value

The mechanics of competition involve perception and reaction to competitor moves. Both incur delays that can be reduced by digital systems. Using system dynamics and the Red Queen paradigm, we modeled the impact of IT investments on response delays and business value, with the following results: (a) value has significant transient components; (b) value depends on investment level and the relative delays of competitors; and (c) relative delays affect the first-mover advantage. These results show that when assessing the value of IT investments, it is important to consider (a) the temporal pattern of benefits, not just their total magnitude, and (b) the impact of ongoing moves by competitors.     

Developing relationship-specific memory and absorptive capacity in interorganizational relationships

Drawing on the studies of relationship-specific memory and absorptive capacity, this study examines whether physical and human IT resources deployed in interorganizational relationships influence the development of a firm’s IT-enabled capabilities, namely relationship-specific memory and absorptive capacity. In addition, the study explores whether these capabilities increase firm performance and also examines the relationship between relationship-specific memory and absorptive capacity. To test the hypotheses, we conducted a partial least squares analysis using data collected from 115 firms. The results demonstrate that firms enhanced their relationship-specific memory and absorptive capacity by leveraging their physical and human IT resources invested in interorganizational relationships and that these two capabilities increased their performance. Moreover, our results indicate that relationship-specific memory served as a knowledge base for the development of absorptive capacity. The results offer empirical evidence on how firms could improve their performance by internally managing the relational knowledge obtained through their interorganizational relationships.     

Streams of digital data and competitive advantage: The mediation effects of process efficiency and product effectiveness

Firms can achieve a competitive advantage by leveraging real-time Digital Data Streams (DDSs). The ability to profit from DDSs is emerging as a critical competency for firms and a novel area for Information Technology (IT) investments. We examine the relationship between DDS readiness and competitive advantage by studying the mediation effect of product effectiveness and process efficiency. The research model is tested with data obtained from 302 companies, and the results confirm the existence of the mediation effects. Interestingly, we confirm that competitive advantage is more significantly impacted by IT investments affecting product effectiveness than those affecting process efficiency.     

Interorganizational dependence,information transparency in interorganizational information systems,and supply chain performance

To explain the large disparity between the potential and practice of interorganizational information systems (IOSs), this study investigates asymmetric information transparency in an IOS from a dyadic perspective. When there is asymmetric dependency in a dyad, an IOS may not completely eliminate asymmetric information transparency between supply chain (SC) partners but may change the nature of information asymmetry. Consistent with resource dependence theory, this study includes joint dependence and dependence asymmetry as antecedents of information transparency in an IOS. The data used in this study were collected from 111 matched pairs of intermediate component manufacturers and their immediate suppliers in heavy manufacturing industries. The results show that asymmetric information transparency in an IOS is prevalent in SC relationships. Regarding the antecedents of information transparency in an IOS, both joint dependence and each partner’s dependence advantage are significant. Furthermore, information transparency in an IOS positively influences SC performance measured by SC relationship quality and relationship-specific performance, whereas asymmetric information transparency negatively influences joint profit performance.     

An empirical investigation of the antecedents of telecommunication-based interorganizational systems

Interorganizational information systems (IOS) utilising telecommunications technology are commonly used to gain a strategic advantage or to compete with IOS developed by the firm's competitors. The use of telecommunication-based links with customers and suppliers provides such potential benefits as improved internal operations, greater interorganizational efficiency and increased bargaining power. Although this importance of telecommunication links with customers and suppliers is widely recognised, there has been little empirical research on the factors that may affect the use of telecommunication-based IOS. In this paper we investigate the effects of four key factors – environmental uncertainty, product information intensity, value chain information intensity and information system (IS) maturity – on the use of telecommunication links with customers and suppliers, and the impact such links have on organizational performance. Nine hypotheses relating these antecedent variables to the use and impact of interorganizational telecommunication links are proposed. Data were collected through a survey of eighty-four medium-sized companies. In addition, the measures of the impact of telecommunication links on organizational performance and environmental uncertainty were validated using a second respondent and secondary data respectively. Results suggest that environmental uncertainty permits the use of telecommunication links with suppliers. Product information intensity and value chain information intensity were positively associated with the use of telecommunication links with customers and suppliers respectively. IS maturity did not seem to enhance the use of interorganizational telecommunication links, but it did facilitate the impact these links had on organizational performance. Some implications of this study for future research and practice are examined.     

Impact of IT integration on the firm’s knowledge absorption and desorption

This paper examines the impact of the integration of IT systems with other organizations (IT integration) on the knowledge absorption and desorption of the focal firm. We ran an empirical study in Spain and found that IT integration enables the firm to absorb and desorb knowledge with other organizations, which in turn improves firm performance. This research provides two key contributions to the IS discipline: 1) We introduce the concept of desorptive capacity in the IS research and provide a scale for its measure, 2) we provide a theory of IT integration impact on the firm’s knowledge absorption and desorption.     

Proactive or reactive IT leaders? A test of two competing hypotheses of IT innovation and environment alignment

When does it benefit a firm to take a lead in innovation with information technology (IT)? How should a firm align its IT innovation with a dynamic industry? In addressing these questions we present a typology of IT Innovation and Environment Alignment (ITIEA) based on a firm's IT innovation strategic orientation and the industry environment. The traditional ‘fit’ perspective predicts that a firm that matches its IT innovation with a dynamic environment would obtain performance benefits. In contrast, the ‘options’ perspective suggests that a firm that takes advantage of a stable environment to proactively pursue IT innovation and develop IT capability as real options would obtain performance advantage. We employ a quasi-experiment design to test these two competing hypotheses using archival data of IT leaders over a time frame of 6 years. We perform a longitudinal analysis of the performance change trajectories of proactive and reactive IT leaders over time. The results indicate a general support for the ‘options’ perspective that proactive IT leaders that lead in innovation with IT in relatively stable environments are found to consistently outperform reactive IT leaders in overall performance, allocative efficiency, and cost efficiency in management process. However, interestingly, the results also show a partial support for the ‘fit’ perspective that reactive IT leaders that emphasize intensive deployment of IT innovation in dynamic environments are found to obtain a cost advantage in production and operation process over time. The findings offer practical implications for managers to better engage in IT innovations to create and sustain competitive advantage. Synthesizing options thinking and dynamic capability perspective, we provide a framework to better understand IT innovation, dynamic environment, and performance outcomes. The findings also shed useful light on whether, when, and how to innovate with IT for sustained competitive advantage.     

A methodology of constructing a decision path for IT investment

Information Technology (IT) may be used for organizational efficiency, but should also be flexible to adapt to the rapidly changing competitive business environment. In competitive business circumstances, management continually asks: (1) How flexible must the firm be in investing in IT in order to meet unknown business needs in the future? At the same time, how efficient must the firm be in order to meet current business needs?; (2) How well must the firm align its business strategy with IT investment in order for it to support its strategic goals?; (3) how to construct a decision path for IT investments with respect to flexibility, efficiency and alignment between business strategy and IT investments?Although many researchers have struggled to answer these questions, they generally provide no means for incorporating these factors into the IT investment decision process.This paper suggests a method that identifies the degree of flexibility required (α-value), and accounts for and incorporates the α-value in making IT investments. The proposed method is based on a product development method called Quality Function Deployment (QFD). It will be applied to a real case of the “H-company” in Korea to validate and evaluate the proposed methodology.     

Interorganizational and organizational determinants of planning effectiveness for Internet-based interorganizational systems

Internet-based interorganizational systems (IIOS) planning is based on a portfolio of systems that integrate organizational and interorganizational processes and assist a firm in realizing its objectives. However, very limited empirical research has been performed to evaluate the factors that influence IIOS planning effectiveness. Research from trading partnerships, organizational theory, and the literature were used to identify two interorganizational variables (competitive pressure and trading partner readiness) and three organizational variables (top management support, organizational centralization, and technology competence) that are important in planning success. This study then examined the influence of these five variables on IIOS planning effectiveness. Data gathered from 202 CIOs in large Taiwanese organizations were employed to test the relationships between the research model constructs using a structural equation modeling (SEM) approach; the study provided strong support for the hypotheses: certain factors related to interorganizational and organizational factors were found to influence IIOS planning effectiveness. The implications of this finding are discussed.     

Classifying the multi robot path finding problem into a quadratic competitive complexity class

We explore two motion planning problems where a group of mobile robots has to reach a target located in an a priori unknown environment while on-line planning the next step. In the first problem the target position is unknown and should be found by the robots, while in the second problem the target position is known and only a path to it should be found. We focus on optimizing the cost of the task in terms of motion time, which, under the assumption of uniform velocity of all the robots, correlates to the path length passed by the robot which reaches the target. The performance of an on-line algorithm is usually expressed in terms of Competitiveness, the constant ratio between the on-line and the optimal off-line solutions. Specifically, the ratio between the lengths of the actual path made by the robot which reached the target to the shortest path to the target. We use generalized competitiveness, i.e., the ratio is not necessarily constant, but could be any function. Classification of a motion planning task in the sense of performance is done by finding an upper and a lower bounds on the competitiveness of all algorithms solving that task. If the two bounds belong to the same functional class this is the Competitive Complexity Class of the task. We find the two bounds for the aforementioned common on-line motion planning problems, and classify them into competitive classes. It is shown that in general any on-line motion planning algorithm that tries to solve these problems must have at least a quadratic competitive performance. This is a lower bound of the problems. This paper describes two new on-line navigation algorithm which solve the problems under discussion. The first is called MRSAM, short for Multi-Robot Search Area Multiplication, and the second is called MRBUG, short for Multi-Robot BUG which extends Lumelsky famous BUG algorithm. Both algorithms have quadratic upper bounds, which prove that the problems they solve have quadratic upper bounds. Thus it is shown that navigation in an unknown environment by a group of robots belongs to a quadratic competitive class. MRSAM and MRBUG have a quadratic competitive performance and thus have optimal competitiveness. The algorithms’ performance is simulated in office-like environments.     

An exploratory examination of the relationship between flexible IT infrastructure and competitive advantage

Information technology (IT) professionals have discussed the potential value of an organization’s IT infrastructure. Unique characteristics of this infrastructure determine its value to the organization. One characteristic, flexibility, has captured the attention of managers in organizations. A flexible IT infrastructure has even been touted by some as the next competitive weapon. Despite this suggestion, empirical evidence has been sparse. The purpose of this paper is to offer an exploratory analysis into the relationship between flexible IT infrastructure and competitive advantage. A canonical correlation analysis is used to explore this relationship. The findings support the view that there is a positive relationship between flexible IT infrastructure and competitive advantage.     

IT strategies: beyond competitive advantage

During the 1980s, we saw considerable energy being expended in the search for the Holy Grail of competitive advantage from information technology (IT). There were many academic papers published on the topic and consultants grew rich from their efforts to persuade companies to invest in strategic information systems. The topic itself rose to become one of the top two information systems management issues identified by IT directors and senior IT executives in the USA, and many organizations sought to replicate the success stories of American and United Airlines, Thomson Holidays, Frito-Lay, Otis Elevators, Mrs Field's Cookies and all the other celebrated cases that have entered the information systems mythology.In the cold light of the 1990s, however, much of this mythology has begun to pale. Were the success stories as real as they were first reported? Where is the sustainable advantage from IT? And if the stories were indeed real, to what extent were they planned or merely serendipitous?This editorial reflects on some of the more recent evidence available and raises some key points for debate in this important aspect of information systems management. It attempts to answer the question: What comes after competitive advantage? in terms of the on-going development of the topic ‘IT strategy’.     

With or without you: The countervailing forces and effects of process standardization

Process standardization is defining a new era of business process revolution across many industries and contexts in electronic commerce in which the impetus for cooperation is greater than the drivers of competition. As industries consolidate and competition rises, firms are increasingly pursuing process standardization to further enhance process management and reap the benefits of standards. The current literature explores and analyzes standards and standardization at the IT, firm, and industry levels. The complex nature of process standardization requires a reorientation of the existing approaches to analysis to understand the countervailing forces and effects. This article introduces a robust framework that captures the dynamics of process standardization across four levels of analysis: IT innovation, firm, industry, and economy. It also presents the cascading effects that occur as we traverse through the different levels. We use this framework to draw conclusions for appropriate directions in research that will enable greater theoretical and managerial understanding of the related issues.     

Alignments between the depth and breadth of inter-organizational systems deployment and their impact on firm performance

This paper explores the performance impact of alternative deployment alignment strategies for inter-organizational systems (IOS) in supply chains. Based on the asset orchestration perspective, we consider two deployment alignment strategies, namely, balanced alignment and reinforcing alignment, which represent strategic choices made by firms in relation to the emphases placed on depth and breadth of IT deployment in supply chain operations. The results of our empirical study show that the depth and breadth of IOS deployment enhance a firm's competitive performance through operational improvement, and the balanced alignment between IOS depth and breadth enhances the firm's competitive performance.