Firm-level benefits of IT-enabled resources: A conceptual extension and an empirical assessment

  • Authors:

  • Saggi Nevo;Michael Wade

  • Affiliations:

  • Information Technology Management, School of Business, University at Albany, 1400 Washington Ave., Albany, NY 12222, USA;Operations Management & Information Systems, Schulich School of Business, York University, 4700 Keele Street, Toronto, ON, Canada M3J 1P3

  • Venue:
  • The Journal of Strategic Information Systems
  • Year:
  • 2011

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Abstract

While the business value of IT (BVIT) is central to the IS discipline, only recently a possible chain of causation from IT assets (i.e., fungible, widely available, commodity-like, technology-based products) to firm performance has been conceptually specified. Furthermore, little empirical evidence exists regarding IT assets' business value. In light of this paucity, this paper makes several contributions to IS research and practice. First, it advances the BVIT literature by empirically testing a model that traces a path from IT assets through IT-enabled resources to firm performance. Second, it extends the BVIT and resource-based view (RBV) literatures by explicating and testing the impact of a firm's external environment on its IT-enabled resources. Third, it builds on recent literature to argue for, and test, two distinct forms of firm-level outcome: operational and strategic benefits. Finally, the paper contributes to managers' and IS practitioners' knowledge by demonstrating the transformative capacity of IT assets on the strategic potential of organizational resources. Empirically, the paper develops and employs valid and reliable scales to test the research model using survey data on IT-enabled customer service departments. The findings demonstrate that when an IT asset is combined with an organizational resource, the extent of synergy borne out of the resulting relationship can positively impact the strategic potential of the ensuing IT-enabled resource. This IT-enabled resource, in turn, is positively associated with firm-level benefits. Further, the external environment is shown to exert a positive effect on the strategic potential of outside-in IT-enabled resources. In sum, this paper offers several important conceptual and empirical contributions to a stream of research that is at the core of the IS discipline.