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.     

Examining the role of information technology in cultivating firms’ dynamic marketing capabilities

Most prior research has investigated an organization's dynamic capabilities in general and overlooked their effect on critical business functions. Our study considered the role of IT in improving firm's dynamic marketing capabilities. We developed a model consisting of market orientation, IT infrastructure capabilities, and the use of IT in customer relationship management (CRM). With data collected from 135 manufacturing and service firms in Taiwan, our results supported most of our hypotheses. Our results showed important direct effects of a firm's market orientation, use of IT to support CRM, and the functionality of IT infrastructure capabilities on its dynamic marketing capabilities.     

Information technology capability and firm performance: Role of industry

Despite several calls for considering industry in the IS value research, few studies investigated the relationship between benefits of IT and industries. This study extends Chae et al. (2014) by investigating how industry influences the relationship between IT capability and business performance. Unexpectedly, it finds that the control group in the industries in which the "transform" IT strategic role dominates showed superior performance than the IT leader. Also, the IT leaders in the "automate" IT strategic industry did not exhibit better business performance than the control firms. We discuss the implications of these findings.     

Evolution of the impact of e-business technology on operational competence and firm profitability: A panel data investigation

This study examines the evolution of the impact of e-business technology on operational competence and profitability using a panel dataset of 154 Spanish firms. We find that (1) e-business technology has a positive effect on operational competence that decreases over time and (2) the firm’s proficiency in exploiting a portfolio of operational capabilities has a positive impact on profitability that becomes more substantial over time. The findings provide some insights on how the initial and subsequent IT investments affect operational competence and profitability over time. This study methodologically illustrates how to perform a partial least squares estimation using panel data.     

Inside the adaptive enterprise: an information technology capabilities perspective on business process agility

Recent innovations in utility computing, web services, and service-oriented architectures, combined with a growing array of IT skills, have improved firms’ ability to be more agile in responding to change. Using the resource-based view of the firm, prior research suggests that IT resources, in isolation, are unlikely to yield superior performance and so as firms try to boost their agility, the question becomes how to configure IT resources to prepare for, or react to, change. In this paper, we posit that managerial IT capabilities based on IT-business partnerships, strategic planning, and ex-post IT project analysis lead to the development of technical IT capabilities associated with a flexible IT infrastructure which in turn drives agility or a firm’s ability to react to change in its products and markets. Using data from matched surveys of IT and business executives in 241 firms, we find that managerial and technical capabilities affect agility. In further testing, we reveal that in a stable setting, technical IT capabilities are more important to agility than managerial IT capabilities, while in a dynamic setting, the opposite is true. Thus, for firms operating in volatile markets, effective models of managerial IT governance are essential for delivering superior agility or adaptiveness.

Business–IT fit in e-procurement systems: evidence from high-technology firms in China

Abstract.  Because of the influence of globalization and updated information technologies (IT), firms in China face an urgent need to adopt e-procurement systems (EP) to deal with their daily procurement activities. However, implementing EP in China encounters various uncertainties from internal and external business environments. To address this issue, this research aims to examine the fit between business and the IT environment and to study its impact on system performance. The literature review allows the proposal of two internal business environmental uncertainties and two external business environmental uncertainties covering the perspectives of process, knowledge, partnership and environment. Based on a multiple-case study performed in four Chinese firms that supply various personal computer components to a Taiwanese original equipment manufacturer via an EP, it was found that the firms' external and internal uncertainty factors affected the performance of EP. In addition, an EP with a low level of integration – the EP type used most frequently in China – can only achieve great performance when the adopting firms faced a low uncertainty of environment, partnership and process, and had low levels of IT knowledge. It was also observed that lack of fit between the business environment and EP produced extra burdens and costs in the buyer–supplier relationship. This significantly reduced the system performance of the Chinese firms. Hence, the contribution of this research can be twofold. First, practitioners in China can use this framework to diagnose their environmental conditions and then choose the appropriate type of EP to implement. Second, researchers can build upon this model to further examine the impact of fit on EP performance and generalize the results.     

IT capabilities and firm performance: A contingency analysis of the role of industry and IT capability type

Previous empirical studies examining the relationship between IT capability and accounting-based measures of firm performance reported mixed results. We argued that prior work has relied on aggregate overall measures of the firm's IT capability, ignoring the specific type and nature of IT capability; and also has not fully considered important environmental conditions that influence the relationship. Drawing on a resource-based view, we advanced a contingency perspective and proposed that IT capabilities’ impact on firm resources was contingent on the “fit” between the type of IT capability/resource a firm possesses and the demands of the industry in which it competes. Specifically, using publicly available rankings as proxies for two types of IT capabilities (internally and externally focused), we empirically examined the degree to which three industry characteristics (dynamism, munificence, and complexity) influenced the impact of each type of IT capability on measures of financial performance. After controlling for prior performance, we found there was general support for the posited contingency model. The implications of these findings are also discussed.     

Estimating the impact of cloud computing on firm performance: An empirical investigation of listed firms

This study empirically investigates the economic impact of cloud service adoption on firm performance. We exploit the difference-in-differences models coupled with propensity score-based matching to estimate the performance effect of cloud computing on worldwide listed firms that adopted cloud service during 2010–2016. The results indicate that cloud computing has a significant and positive impact on the profitability and market value of listed firms with varying degrees in both short and long time periods. In addition, the magnitude of the performance effect varies with firm size and industry type. This research contributes to empirical examination on the economic values of IT investments.     

An Empirical Analysis of the Relationship Between IT Training Sources and IT Value

Information technology (IT) training has been identified as a key factor for the success of IT applications and the most frequently applied coping mechanism to handle changing IT. However, there is a question as to how IT training has to be conducted to obtain desired outcomes (higher levels of IT value). This paper analyses the presence of IT training sources used by firms and examines the influence on IT business value. Here, IT training is studied according to three IT training sources: in-house IT training, outside IT training, and self IT training by employees. In addition, differences in IT training sources are analysed according to two contingency factors: business size and business industry. Results show a positive relationship between IT training sources (outside and self IT training) and IT business value and confirm that IT training sources are positively related to business size and differ moderately by business industry.     

An examination of the trade-off between internal and external IT capabilities

The business case for hiring external IT consultants is compelling. Consultants can represent a rich source of valuable, short-term capabilities. From a resource-based perspective, however, the fungible nature of these capabilities argues against their long-term strategic value. Furthermore, IT consultants may be at odds with existing internal capabilities. Institutional theory suggests that external consultants may not share the same norms and beliefs held by the internal staff and consequently their efforts in achieving organizational goals may be diluted or compromised. This paper explores the tension between internal and external IT capabilities on the realization of enhanced IT productivity. Drawing on telephone survey data on the adoption of Internet business solutions, the results of the study show that firms see tangible benefits from using external IT consultants, but these benefits are moderated by the level of existing internal IT capabilities.     

A meta-analysis of relationships between organizational characteristics and IT innovation adoption in organizations

Adoption of IT in organizations is influenced by a wide range of factors in technology, organization, environment, and individuals. Researchers have identified several factors that either facilitate or hinder innovation adoption. Studies have produced inconsistent and contradictory outcomes. We performed a meta-analysis of ten organizational factors to determine their relative impact and strength. We aggregated their findings to determine the magnitude and direction of the relationship between organizational factors and IT innovation adoption. We found organizational readiness to be the most significant attribute and also found a moderately significant relationship between IT adoption and IS department size. Our study found weak significance of IS infrastructure, top management support, IT expertise, resources, and organizational size on IT adoption of technology while formalization, centralization, and product champion were found to be insignificant attributes. We also examined stage of innovation, type of innovation, type of organization, and size of organization as moderator conditions affecting the relationship between the organizational variables and IT adoption.     

Exploring the relationships between IT competence,innovation capacity and organizational agility

Business environments today are characterized as being very dynamic and hyper competitive. Organizations in these environments have to be agile in order to adapt their strategies and actions to be successful. While it is recognized that information technology can enable firms to be agile, there is a limited understanding of the mechanisms through and the contexts in which Information Technology (IT) enhances agility. This study examines two key antecedents of organizational agility, namely the IT competence of a firm and its innovation capacity and, examine their independent and joint effects on agility. We test our model using data collected from large firms in the US. The results provide strong support for our model. We found that firms with superior IS capabilities coupled with an aggressive IT investment orientation create digital platforms that enable them to be agile. We also found that the innovation capacity of the firm has a positive relationship with organizational agility and that firms with higher innovation capacity are better able to leverage their digital platforms to enhance agility. Our results indicate that organizational agility has a strong positive impact of firm performance. We interpret and discuss these results and their theoretical and practical implications.     

Assessing the strategic value of Information Technology: An analysis on the insurance sector

Even though companies today are well aware of the pitfalls in making IT investments and that many IT applications have become commodities, IT projects still fail. Obviously IT has a strategic value to firms but they have not determined how IT management capabilities and IT governance schemes explain commonalities and differences in their use of IT.     

Commoditization and IT Product Innovation Strategies from an IT Firm Perspective

Based on a survey (N = 248 business managers) this study confirms that different types of innovation in IT products have a direct positive impact on IT firms’ business performance. The commoditization level of IT markets acts as a moderator dampening this positive relationship. This implies that IT firms should take existing commoditization levels as well as a mix of IT product innovation types into account as part of their innovation strategy.     

Will cloud computing make the Information Technology (IT) department obsolete?

The rapid adoption and growth of cloud computing is creating unprecedented change in the manner in which IT services are procured, managed, and deployed. Cloud computing is forcing firms to rethink traditional IT governance practices while raising new and fundamental questions for scholars and practitioners. This paper identifies the major areas of change and highlights governance issues that arise with the adoption of cloud computing. The focus of this paper is on the organizational impact on IT governance under cloud computing. The paper posits (1) that successful IT departments under cloud computing will transform into new roles that address internal customer‐facing issues and external cloud‐facing issues, (2) firms that mitigate information asymmetry under cloud computing will show higher firm performance, and (3) firms that offer superior cloud‐sourced IT service attributes of internal prices, quality, variety, and competition in the cloud will show higher firm performance.     

The role of information technology in achieving the organisation's strategic development goals: A case study

The role of IT in achieving the organisation's strategic development goals has been an area of constant debate. This paper describes the experiences of John Nicholls Builders Ltd, a Cornish building firm, in their attempt to achieve their strategic development goals through the adoption of IT. The implementation stage of the project involved setting a flexible programme and timescale from the start. The company adopted a bottom up approach whereby potential users were consulted and involved in the process. Also the support of top management staff was crucial for the successful transition to the new system. Although there was no single ready-made solution that could fit the organisations requirements, they were able to identify appropriate construction industry software packages and integrate them through development of an intranet and database system. Now, there is greater management control, all departments have greater access to information, enabling them to function more effectively and efficiently, and since projections are more accurate or now available, management can make long-term strategic plans. These improvements and developments to the business system have improved operational efficiency, turnover and profitability of the organisation.     

Transitioning to a business rule management service model: Case studies from the property and casualty insurance industry

As the volume, sources and types of business rules continue to grow, so do the needs of organizations to accurately, consistently and effectively manage rules. Increasingly, firms seek business rules management systems (BRMS) for assistance. Although studies have examined BRMS technical considerations, few have examined management considerations of deploying and managing BRMS projects. This study addresses this gap through examination and comparative analysis of BRMS deployments. Qualitative case study methods are employed and findings suggest a common deployment methodology and emergence of tightly structured services model. Participant's adoption drivers, consequences of deployment, IT alignment and transitions to IT service-orientations are provided.     

An analysis of the business characteristics of adopters and non‐adopters of World Wide Web technology

The World Wide Web has received considerable media attention in recent times. Little is known concerning the technology’s appeal for commercial applications, and the topic deserves investigation. This study aims to analyze the differences between adopter and non‐adopter businesses according to their organizational characteristics. Six characteristics consistently associated with the adoption of technology, business size, age, industry, use of an IT support unit and IT budget, and degree of technology experience, are selected from the literature. A sample of 245 adopter businesses is gathered using on‐line directories and “keyword” searches of the World Wide Web. A sample of 245 non‐adopter businesses is obtained from the state business telephone directory. The study finds a number of interesting associations. No significant relationship is found between business size and World Wide Web adoption. Adopters tend to be younger yet more experienced with technology than non‐adopters. Businesses that made use of IT budgets and IT support units also tended to be adopters, however adoption did not rely on the existence of these two factors. The study raises a number of additional findings that are of interest but are not directly related to this work. These findings merit further research. This revised version was published online in July 2006 with corrections to the Cover Date.     

The dual role of IT capabilities in the development of digital products and services

Past research on the business value of information technologies (IT) has demonstrated the positive contribution of IT capabilities (IT-C) to product innovation performance. However, with the advent of digital technologies, a new kind of product innovations gained importance: digital product and service innovations (DPI). As a consequence of their idiosyncratic characteristics, the usefulness and validity of existing product innovation management concepts cannot be transferred to the context of DPI without further ado. Accordingly, this study reinvestigates the role of IT-C in the specific context of DPI. Therefore, we begin with a differentiation of DPI from traditional, non-digital product innovation. Then, we propose that IT-C affect the performance of DPI projects via two paths. First, based on the notion that DPI rely on the use of innovative IT, we assume that IT-C directly impact DPI performance. Second, following prior research that has argued that the performance contribution of IT-C is mediated by other organizational intermediaries, we assume that IT-C also indirectly contribute to DPI performance through their positive influence on other organizational capabilities. One such organizational capability that mediates the influence of IT-C on DPI performance is a firm’s DPI capabilities (DPI-C). DPI-C allow firms to deploy their digital resources for DPI purposes and, thus, are an important antecedent for DPI performance. To test our assumptions, we use partial least squares–structural equation modeling technique and analyze survey data collected from DPI projects across different industries in Germany, Austria, and Switzerland.