Information technology tool use frequency in new product development: The effect of stage-specific use frequency on performance

Abstract

Drawing from the Resource-based View of the firm and based on prior literature, we examine two organizational factors that top management can control (‘executive champion for IT’ and ‘formalized ROI for IT’) for enhancing information technology (IT) tool use during new product development (NPD). Further, we investigate the subsequent effects of IT tool use on NPD task proficiency and performance. Moreover, research on IT use in NPD has matured enough to suggest that the effect of IT tool use on outcomes should be examined with a decompositional approach in order to flesh out the nuances on consequences. Hence, adopting a phase-based approach, we examine the differences in the effects at three separate NPD stages: discovery, development, and commercialization. The model is empirically tested with data collected from large-sized Japanese firms. The results of structural equation modeling show that executive champion for IT positively influences tool usage in all three stages, and formalized ROI for IT has positive effect on enhancing NPD task proficiency in discovery and development. Further, IT tool use frequency enhances NPD task proficiency with varying effect sizes in all three stages, highest in discovery and lowest in commercialization. Finally, concurring with prior literature, task proficiency is found to affect NPD performance positively. Based on these findings, we discuss theoretical and managerial implications as well as provide specific suggestions for future research.