Firm Performance Impacts of Digitally Enabled Supply Chain Integration Capabilities

Best practice exemplars suggest that digital platforms play a critical role in managing supply chain activities and partnerships that generate performance gains for firms. However, there is limited academic investigation on how and why information technology can create performance gains for firms in a supply chain management (SCM) context. Grant’s (1996) theoretical notion of higher-order capabilities and a hierarchy of capabilities has been used in recent information systems research by Barua et al. (2004), Sambamurthy et al. (2003), and Mithas et al. (2004) to reframe the conversation from the direct performance impacts of IT resources and investments to how and why IT shapes higher-order process capabilities that create performance gains for firms. We draw on the emerging IT-enabled organizational capabilities perspective to suggest that firms that develop IT infrastructure integration for SCM and leverage it to create a higher-order supply chain integration capability generate significant and sustainable performance gains. A research model is developed to investigate the hierarchy of IT-related capabilities and their impact on firm performance. Data were collected from 110 supply chain and logistics managers in manufacturing and retail organizations. Our results suggest that integrated IT infrastructures enable firms to develop the higher-order capability of supply chain process integration. This capability enables firms to unbundle information flows from physical flows, and to share information with their supply chain partners to create information-based approaches for superior demand planning, for the staging and movement of physical products, and for streamlining voluminous and complex financial work processes. Furthermore, IT-enabled supply chain integration capability results in significant and sustained firm performance gains, especially in operational excellence and revenue growth. Managerial initiatives should be directed at developing an integrated IT infrastructure and leveraging it to create process capabilities for the integration of resource flows between a firm and its supply chain partners

Understanding the Antecedents of SCM Process Performance: The Perspective of IT-Enabled Resources

This study aims to better understand how a firm’s resources can be used to improve performance of supply chain. Extending prior research on the resources-based view, this study develops an integrated model, which delineates the relationship among three IT-related resources, absorptive capacity, and supply chain (SC) process performance. Through a field survey of 205 managers from Taiwan’s firms, most proposed hypotheses are supported, showing that IT-related resources in terms of managerial skills and partner support affect absorptive capacity, which in turn influences performance. This paper offers a new perspective on using firms’ resources from which their SC performance can be improved

HOW DOES INFORMATION TECHNOLOGY ENABLE INNOVATION IN SUPPLY CHAINS?

The paper explores a mechanistic understanding of IT-enabled innovation in a context of supply chain. Based on the innovation dynamics perspective and resource-based view, it links IT resources for supply chain management and IT-enabled innovation via e-business capability with supply chain partners. A conceptual model is formulated to explain how and why IT can enable product and process innovations along the supply chain, and is empirically validated by the data from 676 manufacturing firms in six countries. It was found that IT resources for supply chain management are capable of achieving IT-enabled innovation through both upstream and downstream e-business capability to collaborate with suppliers and customers. The paper contributes to the literature of digitally enabled supply chain management and IT business value. It also allows important managerial implications to firms, especially those in manufacturing sector, about how to chase IT-enabled innovation in supply chains to overcome today’s depression

Employee-related Critical Success Factors for Utilization of Digitally-Enabled Supply Chain Management

IT embeddedness has created considerable opportunities for organizations to effectively manage and streamline their supply chain. User involvement acts as an important role in the current e-service era for supply chain management. In this article, we aim to explain the impact of leadership style and knowledge-centred processes on utilization of Digitally-Enabled SCM applications and generated value for employees. We will then discuss potential contributions and implications, and also indicate future research directions. This study is conducted from the employees’ perspective, and it will deepen a foundation for Digitally-Enabled SCM practices and learning, knowledge sharing in knowledge-centred processes as well as leadership style

Essays on digitalization among small and medium-sized firms : Complementary and contingent approaches

This dissertation explains how and under what circumstances the operational performance of small and medium-sized (SME) firms is most likely to benefit from digitalization. This topic will be examined by combining the resource-based view (RBV) and contingency theory, that is, using the contingency RBV, which remains relatively rarely used in current research. The perspective permits an examination of the impact of various resources and capabilities in the presence of situational factors. The dissertation consists of five papers dealing with digitalization in SMEs operating in various areas. The research relies on two surveys involving Finnish SMEs from manufacturing industries, the first of which provides cross-sectional data. Together the two datasets provide the longitudinal data informing the dissertation. The research shows that the contingency RBV provides a comprehensive framework that can assist in examining how and in what circumstances SMEs can benefit from digitalization, that benefit being measured from an operational improvement perspective. Previous research on SMEs is limited, so the first result of this thesis involves testing a theoretical framework for SMEs in the context of their digitalization. The research results show that the benefits of digitalization for operational performance arise through two different mechanisms, and digitalization alone does not affect the firm's success. The effect of digitalization on SMEs’ operational performance emerges from the complementarity between digitalization and firms’ organizational attributes, factors, or resources that enhance performance. The second mechanism relates to environmental and situational factors and shows that both the firm's internal and external environment determine the level of the impact of digitalization. Among Finnish SMEs, digitalization produces value in the form of improved operational performance when digitalization, resources, and capabilities bolster each other in internal and external environments conducive to digitalization.Tässä väitöskirjassa selvitetään miten ja missä tilanteessa pienet ja keskisuuret (pk) yritykset pystyvät todennäköisemmin hyötymään digitalisoitumisestaan operatiivisen suorituskyvyn näkökulmasta. Aihetta tarkastellaan yhdistämällä resurssi- ja tilannetekijäteoria eli tässä työssä hyödynnetään tilanteista resurssiteoriaa, joka on nykyisessä tutkimuskentässä vielä varsin rajallisesti käytetty. Näkökulman mukaan erilaisten resurssien ja kyvykkyyksien vaikutusta voidaan tarkastella tilannetekijöiden ollessa läsnä. Väitöskirja muodostuu viidestä artikkelista, joissa käsitellään yritysten digitalisoitumista. Väitöskirjassa käyte¬tään kahta eri kyselytutkimusta, joihin suomalaiset valmistavan teollisuuden pk-yritykset ovat osallistuneet. Ensimmäinen aineisto on poikkileikkausaineisto ja aineistot yhdessä muodostavat toisen, pitkittäisen, aineiston. Tutkimustulokset osoittavat, että tilanteinen resurssiteoria muodostaa kattavan viitekehyksen, jonka perusteella voidaan lähestyä sitä, miten ja missä tilanteissa pk-yritykset pystyvät hyötymään digitalisoitumisesta parantuneen operatiivisen suorituskyvyn näkökulmasta. Aikaisempi pk-yrityksiin keskittynyt tutkimus on ollut vähäistä, joten tämän väitöskirjan ensimmäisenä tuloksena voidaan pitää teoreettisen viitekehyksen testaamista nimenomaan pienillä ja keskisuurilla yrityksillä niiden digitalisoitumisen kontekstissa. Tutkimustulokset osoittavat, että digitalisoitumisen hyöty operationaaliseen suoriutumiseen syntyy kahden erilaisen mekanismin kautta eli digitalisoituminen ei yksin vaikuta yrityksen menestymiseen. Ensimmäinen mekanismi muodostuu niin kutsutusta täydentävästä suhteesta, joka tarkoittaa sitä, että yrityksen digitalisoituminen vaikuttaa yrityksen muihin resursseihin ja kyvykkyyksiin vahvistavasti, ja yhdessä digitaaliset tekijät yrityksen resurssien ja kyvykkyyksien kanssa parantavat yrityksen suoriutumista. Toinen mekanismi liittyy kontingenssivaikutukseen, jossa tilannetekijät vaikuttavat yritysten digitalisoitumisesta syntyvään hyötyyn. Tulokset osoittavat, että mikäli yrityksen sisäinen ympäristö on suotuisa yrityksen digitalisoitumiseen, sillä on positiivisia vaikutuksia digitalisoitumisesta saatavaan hyötyyn. Tulosten mukaan myös ulkoinen ympäristö vaikuttaa yrityksen digitalisoitumisesta saatavaan hyötyyn. Suomalaisten pk-yritysten digitalisoituminen tuottaa yrityksille arvoa parantuneena operatiivisena suorituskykynä silloin, kun yritysten digitalisoituminen ja resurssit sekä kyvykkyydet vahvistavat toisiaan digitalisoitumiselle suotuisassa sisäisessä ja ulkoisessa ympäristössä.fi=vertaisarvioitu|en=peerReviewed

Leveraging Open-standard Interorganizational Information Systems for Process Adaptability and Alignment: An Empirical Analysis

PurposeThe purpose of this paper is to understand the value creation mechanisms of open-standard inter-organizational information system (OSIOS), which is a key technology to achieve Industry 4.0. Specifically, this study investigates how the internal assimilation and external diffusion of OSIOS help manufactures facilitate process adaptability and alignment in supply chain network.Design/methodology/approachA survey instrument was designed and administrated to collect data for this research. Using three-stage least squares estimation, the authors empirically tested a number of hypothesized relationships based on a sample of 308 manufacturing firms in China.FindingsThe results of the study show that OSIOS can perform as value creation mechanisms to enable process adaptability and alignment. In addition, the impact of OSIOS internal assimilation is inversely U-shaped where the positive effect on process adaptability will become negative after an extremum point is reached.Originality/valueThis study contributes to the existing literature by providing insights on how OSIOS can improve supply chain integration and thus promote the achievement of industry 4.0. By revealing a U-shaped relationship between OSIOS assimilation and process adaptability, this study fills previous research gap by advancing the understanding on the value creation mechanisms of information systems deployment

Blockchain for Supply Chain Management: Practice-Based View

In the context of supply chain management, technological and strategic management practices play a critical role in managing supply chain processes that generate operational performance gains for firms. In this paper, we investigate the potential implications of blockchain for both supply chain management and operational processes management practices to develop the higher-order capability of information system integration. This capability enables firms to manage information flow from operational processes and allows information sharing with supply chain partners. From the perspective of practice-based view (PBV), we developed our research model and propositions to address the authenticity of food safety issues and sustainability in the context of the supply chain. We also highlight the need for blockchain implementation within the food industries that create an information-based approach for better operational performance

Effect of Digital Enablement of Business-to-Business Exchange on Customer Outcomes: The Role of Information Systems Quality and Relationship Characteristics

This study extends our understanding of how information systems impact business value creation by examining the effect of digital enablement of business-to-business exchange on customer outcomes. We shed light on the connection between information technology investment and firm performance by focusing on how information technology is used (Devaraj and Kohli 2003) in an industrial services context and by highlighting the importance of indirect effects (Mittal and Nault 2009). A conceptual model is developed that combines a customer centric perspective (Sheth et al. 2000) with elements from the information systems success framework (DeLone and McLean 1992, DeLone and McLean 2003). Mediating factors are identified in the chain of effects from information technology specific business-to-business service quality characteristics to customer outcomes. In addition, we consider two contextual factors, relationship duration and customer dependence, which are known to alter the nature of buyer-supplier relationships but which have received little attention in research on digital enablement of business-to-business exchange. An empirical test of hypothesized relationships was performed using subjective and objective archival data from business-to-business exchange relationships for a logistics services vendor. All expected main effects were confirmed. Customer satisfaction was found to be a significant mediator in the chain of effects from information technology specific business-to-business service quality characteristics to customer outcomes. In addition, logistics service quality was found to mediate the relationships between system quality and customer satisfaction and between information quality and customer satisfaction. The hypothesized moderating effects, however, were not found to be significant. Robustness of the findings was confirmed by testing model hypotheses using data from exchange relationships with customers in two different industries, manufacturing and wholesale trade. Differences in analysis results are consistent with industry differences. This study contributes to the literatures on interorganizational information systems (Rai et al. 2006) and information technology business value (Melville et al. 2004) by identifying mediating mechanisms in the chain of effects from digital enablement of exchange to customer outcomes. Explication of mediating mechanisms improves our understanding about the indirect nature of impacts from information technology. This study also contributes to the literature on information systems by extending DeLone and McLean\u27s (2003) model of information systems success to the context of business-to-business exchange relationships. In addition, this study contributes to the literature on services marketing (Zeithaml and Bitner 2003, Berry and Parasuraman 1993) by showing how system quality and information quality impact logistics service quality and customer satisfaction in a business-to-business exchange context

Need for Speed in the Sharing Economy: How IT capability drives Innovation Speed?

Though innovation is considered to be the lifeblood of business, speed of innovation is more critical than innovation itself. IT plays a critical role in the process of open innovation as it is based upon collaborating with suppliers and customers. IT enables increased collaboration and generation of insights across the firm’s partner network. We examine the role of IT-enabled capabilities in determining the speed of innovation. We hypothesize that collaboration with customers is more effective than collaboration with suppliers for firms to speedily innovate. Further, a firm’s digital collaboration with customers is more effective when Business Intelligence systems are used. Econometric analyses of data from 249 U.S. firms yields strong support for our hypotheses. While both customer-side and supplier- side digital collaboration are positively associated with innovation speed, the effect of customer-side digital collaboration on innovation speed is stronger. Furthermore, Business Intelligence systems use amplifies the effect of customer-side digital collaboration