Factors influencing the moving up the value chain by Indian IT service organisations

Abstract

Indian information technology (IT) service organisations that were providing low value-added services are moving up the value chain of IT services to overcome threats of competition and automation. The purpose of this study is to evaluate the impact of Indian IT service organisations' capabilities on moving up the value chain. Using a resource-based view perspective, this research examines the influence of the service provider's capabilities on moving up the value chain. The research was conducted by collecting responses from 188 employees of Indian IT service organisations. The data were analysed using structural equation modelling. The study shows that the service provider's capabilities, namely, relationship management capability, project management capability, domain understanding and IT advancement positively impact service quality and innovativeness. The service provider's service quality and innovativeness, and the absorptive capacity of the client enhance the effectiveness in moving up the value chain.