Business-IT alignment maturity of companies in China
Information and Management
International Journal of Electronic Finance
From green to sustainability: Information Technology and an integrated sustainability framework
The Journal of Strategic Information Systems
Explaining history of egovernment implementation in developing countries: an analytical framework
EGOV'11 Proceedings of the 10th IFIP WG 8.5 international conference on Electronic government
Organizational Learning and Capabilities for Onshore and Offshore Business Process Outsourcing
Journal of Management Information Systems
Firm-level benefits of IT-enabled resources: A conceptual extension and an empirical assessment
The Journal of Strategic Information Systems
An empirical investigation of the relationship of IS strategy with firm performance
The Journal of Strategic Information Systems
IT assets, organization capital and market power: Contributions to business value
Decision Support Systems
Information Systems Frontiers
Information, Technology, and Information Worker Productivity
Information Systems Research
Relational Contracts and Organizational Capabilities
Organization Science
International Journal of Information Technology and Management
Organizational Learning and Capabilities for Onshore and Offshore Business Process Outsourcing
Journal of Management Information Systems
International Journal of Strategic Information Technology and Applications
International Journal of Business Information Systems
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Despite evidence of a positive relationship between information technology (IT) investments and firm performance, results still vary across firms and performance measures. We explore two organizational explanations for this variation: differences in firms' IT investment allocations and their IT capabilities. We develop a theoretical model of IT resources, defined as the combination of specific IT assets and organizational IT capabilities. We argue that investments into different IT assets are guided by firms' strategies (e.g., cost leadership or innovation) and deliver value along performance dimensions consistent with their strategic purpose. We hypothesize that firms derive additional value per IT dollar through a mutually reinforcing system of organizational IT capabilities built on complementary practices and competencies. Empirically, we test the impact of IT assets, IT capabilities, and their combination on four dimensions of firm performance: market valuation, profitability, cost, and innovation. Our results---based on data on IT investment allocations and IT capabilities in 147 U.S. firms from 1999 to 2002---demonstrate that IT investment allocations and organizational IT capabilities drive differences in firm performance. Firms' total IT investment is not associated with performance, but investments in specific IT assets explain performance differences along dimensions consistent with their strategic purpose. In addition, a system of organizational IT capabilities strengthens the performance effects of IT assets and broadens their impact beyond their intended purpose. The results help explain variance in returns to IT capital across firms and expand our understanding of alignment between IT and organizations. We illustrate our findings with examples from a case study of 7-Eleven Japan.