The strategic value of IT insourcing: An IT-enabled business process perspective

Although research on the business impact of IT outsourcing abounds, little is known about the relative strategic value of IT outsourcing and IT insourcing. Drawing upon the knowledge-based view of the firm, this study postulates that, compared with IT outsourcing, IT insourcing is more effective for developing IT-enabled business processes (IEBP), which subsequently lead to superior firm performance. Our analysis of the data from InformationWeek and Compustat shows that IT insourcing is positively associated with IEBP, while the relationship between IT outsourcing and IEBP is not statistically significant. We also find that IEBP have a significant influence on firm performance. Finally, the effect of IT sourcing mechanisms on IEBP and the effect of IEBP on firm performance are both moderated by the type of innovation related to IEBP. The results suggest that in order to improve their performance firms should consider IT an integral part of their strategic core and should be proactively involved in the internal development of IT resources. We conclude with managerial implications and directions for future research.     

Understanding critical risks of business process outsourcing from the vendor perspective: A dyadic comparison Delphi study

Business process outsourcing (BPO) enables organizations to enhance operational capability, shorten response time, and gain strategic value. Yet, BPO risks are real and BPO initiatives can and do go awry. While prior research has attempted to understand BPO risks from the client perspective, the critical risks of BPO from the vendor perspective (and how they differ from those of the client perspective) are not well understood. By using the Delphi method, this study identifies and ranks BPO risk factors from the perspective of vendors as well as clients (for comparison purposes) across two countries. We identify a list of 68 BPO risk factors perceived by vendors and clients and top-ranked risk factors perceived by vendors. We categorize these factors into six risk dimensions (i.e., organizational environment, client, complexity, contract, execution, and vendor). Our findings indicate that vendors are concerned about not only the risks that influence their own business, but also those that may impact the business of clients. However, vendors focus more on client and execution risks, whereas clients focus more on vendor and organizational environment risks. Our research contributes to the existing literature by not only investigating the top-ranked risks from the perspective of vendors, but also revealing the similarities and differences in the perceptions of vendors and clients with respect to BPO risk. Our research also has practical utility for BPO vendors and clients.     

A resource oriented integration architecture for the Internet of Things: A business process perspective

The vision of the Internet of Things (IoT) foresees a future Internet incorporating smart physical objects that offer hosted functionality as IoT services. These services when integrated with the traditional enterprise level services form the creation of ambient intelligence for a wide range of applications. To facilitate seamless access and service life cycle management of large, distributed and heterogeneous IoT resources, service oriented computing and resource oriented approaches have been widely used as promising technologies. However, a reference architecture integrating IoT services into either of these two technologies is still an open research challenge. In this article, we adopt the resource oriented approach to provide an end-to-end integration architecture of front-end IoT devices with the back-end business process applications. The proposed architecture promises a programmer friendly access to IoT services, an event management mechanism to propagate context information of IoT devices, a service replacement facility upon service failure, and a decentralized execution of the IoT aware business processes.     

Measuring enterprise IT capability: A total IT capability perspective

The information technology (IT) capability of an enterprise is very important for the efficient execution of its management activities and to improve task performance in an IT environment. Appropriate measures are necessary for a firm to gauge, manage and improve enterprise IT capability. This research presents a 17-item scale that can efficiently measure enterprise IT capability, and verifies its validity and reliability. The theoretical and practical applications of the measure are discussed, including how it can be effectively utilized to improve enterprise IT capability.     

A value-based approach to the ex-ante evaluation of IT enabled business process improvement projects

In this study, we propose a value-based management approach for assessing the potential for process improvements enabled by an information technology (IT) solution. Based on activity based management concepts, we perform a granular, process level analysis on workflow structure and associated resource consumption to provide quantifiable measures of potential improvement prior to system implementation. The proof of concept of this approach is illustrated in a southern United States county in need of integrating different government branches through an ERP implementation. Based on prior research, we first provide a catalog of non-value added (NVA) activities that can be used in management control and governance procedures for the systematic identification of process inefficiencies. Next, by breaking down processes to the level of atomic activities, we show that minimizing NVA activities provides a systematic means to mitigate process inefficiencies. A significant observation is that different NVA activities may impact process performance to varying degrees. Consequently, line items in the request for proposals (RFP) should be weighted accordingly during the vendor selection process, contrary to the common practice of treating all line items equally.     

Us and them: a social capital perspective on the relationship between the business and IT departments

In this paper, a social capital perspective is applied to the relationship between the IT department and the Business organization. IT and Business are conceptualized as different occupational communities, with different understandings of their work. Our focus is on the level of social capital and the process of knowledge sharing between these occupational communities. We analyze the role that these factors play in reaching a mutual understanding within the process of IS development, and the influence this has on the perceived performance of the IT organization. Our study, combining qualitative and quantitative methods, points out that a lack of social capital (structural, relational as well as cognitive) can serve as an explanation for the often problematic relationship between these communities. Our analyses also show that social capital is especially relevant for the Business organization's perception of IT performance, whereas the IT department's perception is that performance is primarily dependent on the exchange of information.     

A case study on consistency management of business and IT process models in banking

Organizations that adopt process modeling often maintain several co-existing models of the same business process. These models target different abstraction levels and stakeholder perspectives. Maintaining consistency among these models has become a major challenge for such organizations. Although several academic works have discussed this challenge, little empirical investigation exists on how people perform process model consistency management in practice. This paper aims to address this lack by presenting an in-depth empirical study of a business-driven engineering process deployed at a large company in the banking sector. We analyzed more than 70 business process models developed by the company, including their change history, with over 1,000 change requests. We also interviewed 9 business and IT practitioners and surveyed 23 such practitioners to understand concrete difficulties in consistency management, the rationales for the specification-to-implementation refinements found in the models, strategies that the practitioners use to detect and fix inconsistencies, and how tools could help with these tasks. Our contribution is a set of eight empirical findings, some of which confirm or contradict previous works on process model consistency management found in the literature. The findings provide empirical evidence of (1) how business process models are created and maintained, including a set of recurrent patterns used to refine business-level process specifications into IT-level models; (2) what types of inconsistencies occur; how they are introduced; and what problems they cause; and (3) what stakeholders expect from tools to support consistency management.     

IT capability and organizational performance: the roles of business process agility and environmental factors

The business value of information technology (IT) has been one of the top concerns of both practitioners and scholars for decades. Numerous studies have documented the positive effects of IT capability on organizational performance but our knowledge of the processes through which such gains are achieved remains limited due to a lack of focus on the business environment. Such a linkage therefore remains the subject of debate in the information systems literature. In this study, we fill this gap by investigating the mediating role of business process agility and the moderating roles of environmental factors. On the basis of matched survey data obtained from 214 IT and business executives from manufacturing firms in China, our analyses show that even though firm-wide IT capability presents the characteristics of rarity, appropriability, non-reproducibility, and non-substitutability, its impact on organizational performance is fully mediated by business process agility. Our results also show that the impact of the environment is multifaceted and nuanced. In particular, environmental hostility weakens the effect of IT capability on business process agility, while environmental complexity strengthens it. The theoretical and practical implications of this study, and its limitations, are also discussed.     

Understanding the impact of business cases on IT investment decisions: An analysis of municipal e-government projects

This study synthesizes the extant literature to derive an integrative developmental framework for IT business cases that can be applied to diagnose the feasibility of technological investments. We then construct a theoretical model that postulates the impact of IT business case elements on the initial cost estimates of technological investments. Subsequently, our theoretical model is subjected to empirical validation through content analysis of IT business cases developed for municipal e-government projects. Findings indicate that the richness of the richness of business cases translates to more initial costs being identified in technological investments, thereby conserving resources for the organization through informed investment decisions.     

CIOs: Pushing the IT business value envelope

Successful businesses understand the needs of customers and their markets, and execute business strategies to establish their competitive positions. Consistent with their business goals, these businesses use extract commodities, make goods, deliver services, and provide other tangibles and intangibles to stay competitive. They also reevaluate their business vision, increase business values, and change to gain advantage over their competitors. IT not only has been essential to business management and operation, but has also provided significant strategic leverage to businesses.     

Post-merger IT integration strategies: An IT alignment perspective

When a company decides to merge with or to acquire another company, a major question is to what extent to integrate the information technologies and the organization. Interpreting merger objectives to proper IT integration strategies is a complex and time-consuming process, due to a lack of explicit understanding of the problems involved. The current literature in this field is meager and has not yet resulted in a theory. For this purpose, we developed a variant of the IT alignment model. In this model, we identify three ambition levels of mergers and IT integration from the literature. Additionally, we describe four integration methods that fit with these ambitions. The relations between these objectives and methods are moderated by contextual factors. Three hospital cases, with different merger and IT integration ambitions, describe the practice of this model. The case studies also add several new variables and relations to it. This result facilitates further research in post-merger IT integration by delivering an empirical research model.     

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.

Bridging IT and business: techno MBAs

As we more fully enter the information age, technology is creating new competitors and new strategic options for business. Moreover, as operations become more critical in a world with shorter product cycles and lead times, the importance of integrated information systems becomes apparent. On the other hand, businesses often have many disparate systems in place for order fulfillment, shop floor management, and accounting. Businesses would like to model this information and have it accessible for coordinated analysis of processes, finances, and business goals. Not surprisingly, suppliers of integrated enterprise systems are seeing tremendous sales growth. In general, companies are struggling to answer the questions: Are investments in information technologies paying off? How do we successfully manage the implementation of these new and complex systems? If you are a supplier of information technology, whether it be software or hardware, are there people in your organization who can help answer such questions? Do you have people who know business, understand technology, and have some feel for the pitfalls that occur when the two worlds collide? To fill the perceived gap, several universities have developed programs to produce these hybrid business managers with one foot in the business world and the other in the IT world     

Understanding the most critical skills for managing IT projects: A Delphi study of IT project managers

The skill requirements for project managers in information technology (IT) projects have not been widely studied in the past, especially in terms of their relative importance. We addressed this gap in the literature by conducting a Delphi study with 19 IT project managers (PMs). Among the list of 48 skills identified, our panelists selected 19 skills as being the most critical for IT PMs and then ranked them based on their relative importance. Follow-up interviews were conducted with selected panelists to gain insights into the importance of the top-ranked IT PM skills. We compare our results with two previous studies of IT PM skills and discuss the implications for research and practice.     

Semantic information assurance for secure distributed knowledge management: a business process perspective

Secure knowledge management for eBusiness processes that span multiple organizations requires intraorganizational and interorganizational perspectives on security and access control issues. There is paucity in research on information assurance of distributed interorganizational eBusiness processes from a business process perspective. This paper presents a framework for secure semantic eBusiness processes integrating three streams of research, namely: 1) eBusiness processes; 2) information assurance; and 3) semantic technology. This paper presents the conceptualization and analysis of a secure semantic eBusiness process framework and architecture, and provides a holistic view of a secure interorganizational semantic eBusiness process. This paper fills a gap in the existing literature by extending role-based access control models for eBusiness processes that are done by using ontological analysis and semantic Web technologies to develop a framework for computationally feasible secure eBusiness process knowledge representations. An integrated secure eBusiness process approach is needed to provide a unifying conceptual framework to understand the issues surrounding access control over distributed information and knowledge resources.