IT Business Value Research Articles

Differential effects of information technology on competitive positioning

PurposeInformation technology (IT), combined with complementary resources, can contribute to companies' competitive positioning. However, to assess the contribution of IT to value with respect to the contribution of complementary resources, it is crucial to understand the means by which IT creates value.Design/methodology/approachThis paper synthesizes empirical research on the inherent capabilities of IT and their moderating role to build an integrative model.FindingsWe found that IT creates value through three inherent capabilities: transactional, exchange and codification capabilities. These capabilities can be regarded as moderators of the relationship between IT and competitive advantage. This moderating role of IT in competitive positioning is illustrated by examples from previous empirical publications.Research limitations/implicationsThe paper contributes to IT business value (ITBV) literature by developing an integrative model that (1) conceptualizes an aspect of IT value creation, which, thus far, has received only limited attention (namely, inherent capabilities) and (2) illustrates the moderating role of these capabilities in competitive positioning.Practical implicationsInherent capabilities provide the theoretical foundation for a nuanced understanding of IT contribution with respect to complementary resources. This understanding may support IT executives in deriving adequate measurements and, thus, account for the differential effects of IT.Originality/valueCompared to the literature, the proposed model represents a more coherent and holistic perspective of ITBV. Thus, the model may constitute a foundation for future ITBV research and promote more detailed analytic perspectives of ITBV.

Using confirmatory composite analysis to assess emergent variables in business research

Confirmatory composite analysis (CCA) was invented by Jörg Henseler and Theo K. Dijkstra in 2014 and elaborated by Schuberth et al. (2018b) as an innovative set of procedures for specifying and assessing composite models. Composite models consist of two or more interrelated constructs, all of which emerge as linear combinations of extant variables, hence the term ‘emergent variables’. In a recent JBR paper, Hair et al. (2020) mistook CCA for the measurement model evaluation step of partial least squares structural equation modeling. In order to clear up potential confusion among JBR readers, the paper at hand explains CCA as it was originally developed, including its key steps: model specification, identification, estimation, and assessment. Moreover, it illustrates the use of CCA by means of an empirical study on business value of information technology. A final discussion aims to help analysts in business research to decide which type of covariance structure analysis to use.

Firm-level capabilities towards big data value creation

Big data has played an increasingly important role in using data to improve business value. In response to several big data challenges, the purpose of this study is to identify firm-level capabilities required to create value from big data. The adjacent theories of business process management and IT business value underpinned the study, together with an in-depth case study that led to the identification of twenty-four types of capabilities related to IT, process, performance, human, strategic, and organizational practices. The findings confirmed the application of practices and capabilities of adjacent theories, as well as certain practices and attributes that were both changed and reinforced at the intersection of big data. As an outstanding additional support to the extant big data studies, this work empirically confirms and portrays hitherto unexplored capabilities of big data and set their roles, thus providing a holistic overview of firm-level capabilities that are required for big data value creation.

Increasing the Impacts of Information Technology Usage on Business Value

The purpose of this study is to examine a conceptual model of the relationship between the use of information technology, information technology strategy, and information technology business value and to formulate strategic priorities to increase the business value of information technology. The data of this research were the perceptions of 126 executives of large manufacturing companies in Central Java about indicators of information technology use, information technology strategy, and information technology business value. The analysis used descriptive and explanatory methods with multiple linear regression to explain the causalrelationship of the variables of information technology usage, information technology strategy, and information technology business value. The results show that the use of information technology and information technology strategies has a positive effect on business value. Surprisingly, the information technology strategy was proved to be a moderating variable and was able to increase the effect of information technology usage on business value.

How do agribusinesses thrive through complexity? The pivotal role of e-commerce capability and business agility

The recent COVID-19 pandemic has clearly shown how agricultural foods and e-commerce initiatives are critical for many organizations, regions, and countries worldwide. Despite this vital importance, prior IS research on the business value of IT has not paid enough attention to the potential specificities of the agribusinesses. This study examines the impact of e-commerce capability on business agility in agribusinesses. Using a sample of Chinese agriculture firms, we find that: 1) The e-commerce capability of agribusinesses enables two types of business agility: market capitalizing agility and operational adjustment agility, and 2) while environmental complexity positively moderates the effects of e-commerce capability on the market capitalizing agility and operational adjustment agility, environmental dynamism does not. This study contributes to the IS research on the business value of IT by providing an eloquent theoretical explanation and empirical evidence on how e-commerce capability help agricultural firms to thrive through complexity by enabling market capitalizing agility (strategic focus) and operational adjustment agility (operational focus).

Process Level Social Media Business Value Configuration of SMEs in Saudi Arabia

The key enabler of strategic design based on IT is process level value; however, few researchers have tackled the mechanisms through which small and medium-sized enterprises (SMEs) can create value at the process level. This study sheds light on the mechanism of creating social media business value at the process level by identifying the interaction effects of social media and IT resources and the mediating role of management’s commitment to innovation as an organizational factor. The research model is based on the IT business value approach, quantitative and descriptive methodology is adopted, and the data are analyzed using structural equation modeling. Among the findings based on 301 SMEs in the Kingdom of Saudi Arabia, that management’s commitment to innovation is a necessary condition for social media resources to create dynamic capabilities, and the interaction effects between social media resources and IT resources on social media capability have no impact on the value-generation process at the process level. The result improves the understanding of the theoretical implications of social media business value at the process level, which can be used to guide theorizing about IT business value. SME managers, IT designers, and national decision-makers can use the findings to gain strategic advantage through social media platforms.

Business Benefits of Online-To-Offline Ecommerce: A Theory Driven Perspective

Online-to-offline (O2O) is a rapidly-growing business innovation, yet knowledge on the benefits of adopting O2O remains limited. In particular, theoretically informed studies are scarce. Thus, this study uses the theory of IT business value to examine: which benefits can businesses realise by adopting O2O? Qualitative data (from 24 semi-structured interviews) are analysed using content-analysis techniques, and indicate that O2O benefits businesses through: (1) leveraging complementarities to optimise online–offline resource use and efficiencies, (2) profiling customers’ behaviours to reach potential customers and (3) enlarging customer feedback channels to gain augmented customer understanding. Contrary to the belief that online mode is central to success, we find that leveraging offline business mode is still considered beneficial and an important avenue for building e-commerce activities. Theoretically, the results provide new insight on the benefits of adopting O2O. Managers can use the results for business case development and strategising benefit realisation of adopting O2O.JEL Codes: O33, L86

The value of enterprise information systems under different corporate governance aspects

Enterprise information systems (EIS) improve access to information, process optimization and system integration. Such enhanced information processing capabilities have varying effects on firm financial performance under different corporate governance aspects. We examine such interacting effects with data of Chinese listed companies during 2008 and 2013. Our empirical study shows that EIS implementation is associated with higher financial performance when the firm’s ownership is more concentrated or the CEO assumes a dual role as the chair of the board of directors. EIS implementation is associated with lower financial performance when the firm is a state-owned enterprise or within a business group. This study contributes to literature in IT business value in general and research in enterprise systems in particular by expanding our understandings about the varying impacts of EIS under different corporate governance aspects.

Impact of IT practices and business value of IT measurement

PurposeThe purpose of this paper is to measure the business value of IT (BVIT) and illustrate the relationship between IT practices and BVIT.Design/methodology/approachThe paper uses a case study approach to collect the subject firm data over a period of one year. The data are about various IT systems used in the firm and their associated capital and operational cost components. The derived data are then compared with industry benchmarks.FindingsThe IT practices employed by the firm enable it to achieve a BVIT which is higher than the industry norm, from both strategic and operational perspectives.Research limitations/implicationsIn this study, a year’s worth of data from a single firm is considered. The temporal frame of the research data limits the generalization of the results. To improve the generalizability, data from many years and across many firms may be used.Practical implicationsThe paper provides insights to managers to identify the measures of BVIT. Further, managers can make necessary interventions based on IT practices to derive IT capabilities which, in turn, impact the firm’s performance.Originality/valueThe contribution of the work is manifold: illustration of the relationship between IT practices and BVIT; illustration of a methodology to evaluate firm-level BVIT; and an approach to collect IT expenses – both capital and operational level.

Impact of IT Ambidexterity on New Product Development Speed: Theory and Empirical Evidence

ABSTRACTNew product development (NPD) speed is becoming an important weapon by which firms can gain market share in today's competitive and complex market environments, where consumer preferences change rapidly. Drawing on the information technology (IT)‐enabled organizational capabilities perspective, this study proposes that IT ambidexterity—the simultaneous pursuit of IT exploitation and IT exploration, which has become imperative in modern industry to sustain the business value of IT—enhances NPD speed by facilitating operational agility. We examine the proposed relationship of IT ambidexterity with the potential moderating role of market complexity in a sample composed of 292 British high‐tech firms. Our findings, based on a moderated‐mediation analysis, suggest that the impact of IT ambidexterity on NPD speed is mediated by operational agility and that the mediation effect is especially pronounced in complex markets. The resulting theoretical arguments and empirical evidence yield further insights into the strategic impacts of IT.

Supply Chain Information Integration and Firm Performance: Are Explorative and Exploitative IT Capabilities Complementary or Substitutive?

ABSTRACTDrawing upon organizational information processing theory, we investigate how explorative and exploitative information technology (IT) capabilities independently and interdependently moderate the relationship between supply chain information integration and firm performance. Data collected from 215 firms in China reveal that explorative IT capability positively moderates the relationship between information sharing and firm performance but exerts no moderating effect on the association between collaborative planning and firm performance. By contrast, exploitative IT capability positively moderates the impact of collaborative planning but negatively moderates the influence of information sharing on firm performance. Furthermore, building upon the ambidexterity perspective, we develop and test a three‐way interaction hypothesis that explorative and exploitative IT capabilities would interdependently moderate the relationship between supply chain information integration and firm performance. Our results indicate that explorative and exploitative IT capabilities are complementory in moderating the link between collaborative planning and firm performance but substitutive in moderating the relationship between information sharing and firm performance. By integrating insights from both information systems and operations management, our study thus provides an in‐depth understanding on how and when IT business value can be created in supply chain information integration context.

Investigating IT Governance through the Viable System Model

ABSTRACTThis paper investigates IT governance through the Viable System Model (VSM). We make a theoretical contribution by discussing why IT governance can continue to achieve its purpose of creating and preserving IT business value. Additionally, we demonstrate how the VSM can be used as a lens to describe and diagnose IT governance from a practical perspective, offering insights in how complexity can be unfolded and how complexity engineering takes place to handle changing complexity.

IT maturity model for public agencies in developing countries: The case of Mongolia

As the digital divide between developed and developing countries continues to widen, there have been increasing international attempts to narrow the gap. One such attempt involves assessing the IT maturity level of each developing country and consciously improving the weak areas thus identified. However, the majority of IT maturity evaluation tools, which are the key component of this attempt, are specialized for developed countries or cannot be accessible due to confidentiality. Accordingly, a new IT maturity evaluation methodology needs to be developed that can be shared by developing countries. This study suggests an IT maturity evaluation framework and measurement tools, which could be used by public agencies of a developing country to comprehensively evaluate multi-layered informatization areas. Theoretically based on the Information Orientation Model and the IT Business Value Model, both of which are widely implemented worldwide, an evaluation model and measurement items were developed and applied to Mongolian government agencies in order to verify their validity and reliability. Main dimensions of the model are composed of informatization innovation competence, informatization use competence, informatization foundation competence, and informatization exchange competence. Since the model is a theoretically and practically valid assessment tool reflecting the reality of developing countries, it will be useful in diagnosing IT maturity levels, identifying weak areas, deriving improvement strategies, and establishing development plans in each public agency of developing countries.

Is information technology valuable for automotive production industries An empirical insight from Iranian automotive industries

This research aim to develop a model for measuring information technology business value in automobile production to clarify the findings of previous research in this regard. The research sample included an Iranian automobile producing company, which the process of supply, logistics, and production were selected as case of study. Given the research exploratory and descriptive nature of research, sequential qualitative mixed method was selected. Based on the research findings, the measurement model of information technology business value in automobile production included six categories of business value, strategic perspective, business capabilities, business process, information technology resources, and information technology impacts. Given the research propositions, relationships between different categories and the conceptual model of the research were developed. This article synthesises the prior research, provides new empirical insights that gathered on the basis of IT business value concept, and proposes an innovative construct for IT business value.

Performance measurement and management systems as IT artefacts

PurposeConsidering performance measurement and management systems (PMMS) to be “mission-critical” information systems for many business organisations, calls have been made for researchers to shift from studying the use of such systems to studying their “effective” use, and in so doing to focus on their characterisation as information technology (IT) artefacts. The paper aims to discuss this issue.Design/methodology/approachIn seeking to answer these calls, the authors apply Burton-Jones and Grange’s theoretical framework to study the dimensions, contextual drivers and benefits of the effective use of PMMS. This is done through a field study of 16 PMMS artefacts as used in small- and medium-sized enterprises (SMEs).FindingsIn characterising, contextualising and valuing the effective use of PMMS, this study provides answers to the following questions: What constitutes the effective use of PMMS? What are the user, artefactual and task-related drivers of such use? And what are the benefits for SMEs of using performance measurement and management (PMM) systems effectively?Practical implicationsWith regard to the design of a PMMS artefact, the findings imply that one should concentrate on those artefactual attributes that most enable informed action on the part of owner-managers, as it is these actions have the greater consequences for the realisation of IT business value in SMEs. Moreover, the nomological network resulting from this research provides the theoretical and methodological underpinnings of a diagnostic tool meant to develop the PMM function in SMEs.Originality/valueThis study provides further empirical grounding and understanding. This study provides further empirical grounding and understanding of the concept of effective use, as well as further applicability and actionability to this concept and to the nomological network of its dimensions, contextual drivers and benefits in the case of PMMS and in the context of SMEs.

A partial adjustment valuation approach with stochastic and dynamic speeds of partial adjustment to measuring and evaluating the business value of information technology

This paper extends previous studies to develop a partial adjustment valuation (PAV) approach in which the speeds of partial adjustment are assumed to be stochastic and dynamic over time in measuring and evaluating the values of information technology and others (e.g., e-commerce or EC, brand name, etc.). A practical application is presented to demonstrate the application of the proposed PAV approach and it is compared to the other two existing PAV approaches.

Conceptualizing Information Technology Governance Model for Higher Education: An Absorptive Capacity Approach

Information Technology (IT) governance has been emerging as a central issue in many organizations. This is because IT governance is key to realizing IT business value. Past studies have focused on the three aspects of IT governance, namely, structural capability, process capability and relational capability. At the same time, some studies have suggested that IT governance process should be viewed as a learning process rather than a problem solving process. Based on this scenario, the role of knowledge and knowledge based processes should be the central focus of IT governance. As a learning process, IT governance effectiveness can be determined by how much impact IT governance practices has influenced on decision-makers’ thinking and actions. In this case, knowledge capacity absorbed from IT governance experience reflects a certain level of organizational learning (OL) achieved which later influences the level of IT governance performance. Since studies that adopt this perspective is lacking, this paper proposes a conceptual framework based on absorptive capacity approach for an IT governance performance model in the higher education. The paper contributes theoretically by extending the knowledge of IT governance by exploring a new perspective on OL.

Unpacking the organizational impacts of enterprise mobility using the repertory grid technique

PurposeThe purpose of this paper is to analyze the organizational impacts of enterprise mobility and the configurations of mobile information technology (IT) impacts in companies with various value creation logics.Design/methodology/approachAn exploratory approach combining semi-structured interview and repertory grid method was used to evaluate managers’ perspectives on the effects of mobile technologies.FindingsThe qualitative findings unearth managers’ perspectives about the organizational impacts of enterprise mobility, which are categorized into six intermediary dimensions and two fundamental impacts. A further analysis of material collected from interviews also shows the differential context-related configurations of mobile IT impacts in companies.Research limitations/implicationsThis study contributes to literature on the business value of IT in general and mobile IT in particular by examining managers’ cognitive constructions of the organizational impacts of enterprise mobility and highlighting the complexity and context-related variety of mobile IT impacts.Practical implicationsThis study provides valuable insights for managers and decision makers that enterprise mobility shows promise in enhancing a firm’s operational and marketing performance.Originality/valueDifferent from prior literature, this study is an exploratory attempt to investigate complex enterprise-mobility-performance relationship and preliminarily uncovers that the mechanisms with which mobile IT influences firm performance vary in different organizational contexts.

Does Information Technology Reputation Affect Bank Loan Terms?

ABSTRACT This study investigates whether Information Technology (IT) reputation, captured by the accumulation of consistent IT capability signals, influences bank loan contracting even though banks have access to inside information. We predict that IT reputation is associated with better loan terms because it lowers credit risk via its impact on default and information risks. Results based on 4,218 loan facility-years reveal, as predicted, that firms with a reputation for IT capability tend to have more favorable price and non-price terms for loan contracts and are less likely to have their credit rating downgraded or to report internal control weaknesses than firms with no IT reputation. The study contributes to the banking and IT business value literature by showing that banks incorporate borrowers' nonfinancial characteristics, such as IT reputation, into loan contracting terms. JEL Classifications: G21; G32; M41; O32. Data Availability: All data are available from sources identified in the study.

Defining IT “Business Value” Under Conditions of Economic Uncertainty

Investment in Information Technology (IT) has typically been justified as playing a crucial role in assisting business and other Organisations in conducting their business in a more efficient and effective way. The implied “value” that results from such investments is known as “IT business value” and its definition and measurement under conditions of economic austerity and uncertainty is the main subject of this paper. The question is why, under such conditions, many Organisations fail to realize the positive impacts expected from IT investment, which by itself is then rather scarce and difficult to attain. To answer this question we concentrate in this paper on the issues of IT business value measurement and more specifically we attempt to answer the research question of how best to define the “business value” of IT and what factors may affect it. The paper first puts forward the main definitions used for both “IT” and “Business value” in the literature. It then goes on to present and critically examine the most prominent of the existing methodologies for measuring “IT Business value” again by resorting to a relevant literature search. Then, we examine the special influencing factors that are at work in times of economic austerity and uncertainty and puts forward a framework for analyzing IT Business value under conditions of economic austerity. This framework is presented in terms of its elements and a description of their main characteristics and measures (metrics). Finally, before the conclusions, a list of the critical success factors for IT investment is presented which is based on a previous published work of the author.