Systemic capabilities: the source of IT business value

Purpose – The purpose of this paper is to develop, and explicate the significance of the need for a systemic conceptual framework for understanding IT business value. Design/methodology/approach – Embracing a systems perspective, this paper examines the interrelationship between IT and other organisational factors at the organisational level and its impact on the business value of IT. As a result, a systemic conceptual framework for understanding IT business value is developed. An example of enhancing IT business value through developing systemic capabilities is then used to test and demonstrate the value of this framework. Findings – The findings suggest that IT business value would be significantly enhanced when systemic capabilities are generated from the synergistic interrelations among IT and other organisational factors at the systems level, while the system’s human agents play a critical role in developing systemic capabilities by purposely configuring and reconfiguring organisational factors. Practical implications – The conceptual framework advanced provides the means to recognise the significance of the need for understanding IT business value systemically and dynamically. It encourages an organisation to focus on developing systemic capabilities by ensuring that IT and other organisational factors work together as a synergistic whole, better managing the role its human agents play in shaping the systems interrelations, and developing and redeveloping systemic capabilities by configuring its subsystems purposely with the changing business environment. Originality/value – This paper reveals the nature of systemic capabilities underpinned by a systems perspective. The resultant systemic conceptual framework for understanding IT business value can help us move away from pairwise resource complementarity to focusing on the whole system and its interrelations while responding to the changing business environment. It is hoped that the framework can help organisations delineate important IT investment considerations and the priorities that they must adopt to create superior IT business value

IT and dynamic capabilities

Organisations are involved in a continuous process of change in order to renew capabilities and achieve a competitive advantage in a hypercompetitive setting. This paper proposes a model for the creation of dynamic capabilities and studies the complementary role of Information Technology Capabilities in supporting this creation process: 1) Identifying the firm's repertory of capabilities (over time and space); 2) maintaining a capabilities catalogue; and, 3) assisting the transformation of existing capabilities and internal transfer of new synthesised capabilities throughout the organisation

IT Capabilities – Quo Vadis?

The successful management of IT capabilities and their complex interdependencies with other organizational capabilities constitutes an important source of competitive advantage for many organizations today. The role of IT capabilities in enabling competitive actions is well-researched. By reviewing a large number of IT capabilities-focused research articles, the authors seek to answer the questions, “What have we learned? What do we still need to learn?” This research-in-progress article presents key findings regarding IT capabilities, highlighting current research limitations, and providing propositions and recommendations regarding future research

THE EFFECT OF IT CAPABILITIES ON CROSSFUNCTIONAL CAPABILITIES

Research in both the strategy and information systems (IS) areas has identified capabilities as key to competing effectively in dynamic and turbulent environments. Firms realize benefits by adopting complementary combinations of capabilities. We draw on Grant’s hierarchy of capabilities to develop a model that explains how a firm’s information technology (IT) capabilities can enhance the intangible value of the firm through their effect on a set of cross-functional capabilities. Using a sample of 394 firms drawn from industry ranking surveys, our preliminary results suggest that some cross-functional capabilities have a positive impact on the long term, intangible performance of a firm as measured by Tobin’s q

Gaining Agility through IT Personnel Capabilities: The Mediating Role of IT Infrastructure Capabilities

This study develops a research model of how the technical, behavioral, and business capabilities of IT personnel are associated with IT infrastructure capabilities, and how the latter are associated with IT-dependent organizational agility, which is conceptualized as comprising IT-dependent system, information, and strategic agility. Analysis of cross-sectional data collected from 293 IT managers generally corroborates the hypothesized relationships, showing that the technical and behavioral capabilities of IT personnel have a positive effect on infrastructure capabilities. The analysis also provides evidence that the effect of infrastructure capabilities on IT-dependent strategic agility is direct, as well as mediated by IT-dependent system and information agility. The validity of the findings is strengthened by demonstrating that the hypothesized research model fits the data better than two alternative theoretically-anchored models describing different relationships between the same constructs. This study advances understanding of the interrelationships between two major subsets of IT capabilities, and their relationships with the agility afforded by IT

IT CAPABILITIES IN GLOBAL ENTERPRISES

Organizations are globalizing rapidly for growth. However, with globalization they constantly struggle with the often competing objectives of global scale and responsiveness to local conditions and global trends. Prior research suggests that IT capabilities are critical to achieving organizational goals; however there has been relatively little research that explicitly examines IT capabilities in the MNC context. This paper examines in-depth the IT capabilities in a global organization. Drawing on recent research that suggests a goal-oriented approach to IT capabilities, we identify MNC capabilities of Global Scale, Global-Local Responsiveness and Global Coordination. The paper also notes the distinction between resources and processes in the conceptualization of capabilities, and provides empirical support for the resources and associated processes that comprise each of the global IT capabilities

IT Capabilities, Process-Oriented Dynamic Capabilities, and Firm Financial Performance

More and more publications are highlighting the value of IT in affecting business processes. Recognizing firm-level dynamic capabilities as key to improved firm performance, our work examines and empirically tests the influencing relationships among IT capabilities (IT personnel expertise, IT infrastructure flexibility, and IT management capabilities), process-oriented dynamic capabilities, and financial performance. Process-oriented dynamic capabilities are defined as a firm’s ability to change (improve, adapt, or reconfigure) a business process better than the competition in terms of integrating activities, reducing cost, and capitalizing on business intelligence/learning. They encompass a broad category of changes in the firm’s processes, ranging from continual adjustments and improvements to radical one-time alterations. Although the majority of changes may be incremental, a firm’s capacity for timely changes also implies its readiness to execute radical alterations when the need arises. Grounded on the theoretical position, we propose a research model and gather a survey data set through a rigorous process that retains research validity. From the analysis of the survey data, we find an important route of causality, as follows: IT personnel expertise -\u3e IT management capabilities -\u3e IT infrastructure flexibility -\u3e process-oriented dynamic capabilities -\u3e financial performance. Based on this finding, we discuss the main contributions of our study in terms of the strategic role of IT in enhancing firm performance

Effect of IT Skills on IT Capabilities and IT-Business Alignment

How to create competitive advantage through information technology (IT) in the turbulent environment is an important issue to most organizations. This study contributes to the information systems (IS) literatures by help gaining a greater understanding of whether and how IT skills that an IT department possesses influence the firm’s IT capabilities and IT-business alignment. This study proposes a theoretical model to investigate how soft skills and hard skills of the IT department influence a firm’s IT capabilities, and how these IT capabilities in turn affect its IT-business alignment. The study identifies three IT capabilities related to the IS development context: IT-user collaboration, IT adaptability, and IT innovativeness. The empirical data collected from 120 IT directors showed that both soft IT skills and hard IT skills positively affect the three IT capabilities simultaneously, IT adaptability and IT-user collaboration significantly affect the IT-business alignment, and IT-user collaboration has significant effect on IT adaptability. Yet the result failed to support the role of IT innovativeness in facilitating IT-business alignment, nor the effect of IT-user collaboration on IT innovativeness. Our findings confirm the importance of IT-related resources and capabilities possessed by the IT department. The implications and limitations of this study are provided