Information Technology and Process Performance: An Empirical Investigation of the Interaction Between IT and Non‐IT Resources*

Abstract

ABSTRACTDrawing on the resource‐based view, we propose a configurational perspective of how information technology (IT) assets and capabilities affect firm performance. Our premise is that IT assets and IT managerial capabilities are components in organizational design, and as such, their impact can only be understood by taking into consideration the interactions between those IT assets and capabilities and other non‐IT components. We develop and test a model that assesses the impact of explicit and tacit IT resources by examining their interactions with two non‐IT resources (open communication and business work practices). Our analysis of data collected from a sample of firms in the third‐party logistics industry supports the proposed configurational perspective, showing that IT resources can either enhance (complement) or suppress (by substituting for) the effects of non‐IT resources on process performance. More specifically, we find evidence of complementarities between shared business–IT knowledge and business work practice and between the scope of IT applications and an open communication culture in affecting the performance of the customer‐service process; but there is evidence of substitutability between shared knowledge and open communications. For decision making, our results reinforce the need to account for all dimensions of possible interaction between IT and non‐IT resources when evaluating IT investments.