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A process-oriented perspective on differential business value creation by information technology: An empirical investigation

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  • Radhakrishnan, Abirami
  • Zu, Xingxing
  • Grover, Varun

Abstract

The relationship between information technology investments and firm value as an area of inquiry has sustained interest among IS researchers over the past decade. More recently, some have challenged the notion differential value among firms through Information Technology (IT) as it evolves into a ubiquitous utility-like set of technologies. This study examines the relationship between IT and business value from a process-oriented perspective, and also helps to identify the underlying links between IT and its differential business value to firms. By drawing upon economic and organizational theories, this paper develops a process framework to assess the intermediate organizational process capabilities and overall performance of firms that effectively deploy and use IT. Using data from over 80 firms, the study finds empirical support for the differential business value created by IT along a number of process oriented dimensions. These findings are discussed as these results set an optimistic tone for IT as a major causal driver of differentiation.

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  • Radhakrishnan, Abirami & Zu, Xingxing & Grover, Varun, 2008. "A process-oriented perspective on differential business value creation by information technology: An empirical investigation," Omega, Elsevier, vol. 36(6), pages 1105-1125, December.
    • Handle: RePEc:eee:jomega:v:36:y:2008:i:6:p:1105-1125
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    2. Gunasekaran, Angappa & Subramanian, Nachiappan & Papadopoulos, Thanos, 2017. "Information technology for competitive advantage within logistics and supply chains: A review," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 99(C), pages 14-33.
    3. Edgardo Bravo Orellana, 2015. "Automating and Informating: Roles to Examine in Technology’s Impact on Performance," Working Papers 15-17, Centro de Investigación, Universidad del Pacífico.
    4. Jin, Yan & Vonderembse, Mark & Ragu-Nathan, T.S. & Smith, Joy Turnheim, 2014. "Exploring relationships among IT-enabled sharing capability, supply chain flexibility, and competitive performance," International Journal of Production Economics, Elsevier, vol. 153(C), pages 24-34.
    5. Tânia Cristina CHIARELLO & Caroline Sulzbach PLETSCH & Alini DA SILVA & Tarcísio Pedro DA SILVA, 2014. "Financial Performance, Intangible Assets And Value Creation Of Brazilian And Chilian Companies Of Information Technology," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 23(4), pages 73-88.
    6. Jan Mendling & Mieke Jans, 2021. "Interview with Varun Grover on "Business Processes, Information Technology and Its Evolution in the Digital Age"," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 63(5), pages 529-532, October.
    7. Brinch, Morten & Gunasekaran, Angappa & Fosso Wamba, Samuel, 2021. "Firm-level capabilities towards big data value creation," Journal of Business Research, Elsevier, vol. 131(C), pages 539-548.
    8. Huigang Liang & Nianxin Wang & Yajiong Xue, 2022. "Juggling Information Technology (IT) Exploration and Exploitation: A Proportional Balance View of IT Ambidexterity," Information Systems Research, INFORMS, vol. 33(4), pages 1386-1402, December.
    9. Bayrak, Tuncay, 2018. "Evaluating large-scale IT investment decisions," Technology in Society, Elsevier, vol. 54(C), pages 128-138.
    10. Brian L. Dos Santos & Zhiqiang (Eric) Zheng & Vijay S. Mookerjee & Hongyu Chen, 2012. "Are New IT-Enabled Investment Opportunities Diminishing for Firms?," Information Systems Research, INFORMS, vol. 23(2), pages 287-305, June.
    11. Adolf Akwei Acquaye & Fred Amofa Yamoah & Taofeeq Ibn-Mohammed & Enoch Quaye & David Eshun Yawson, 2023. "Equitable Global Value Chain and Production Network as a Driver for Enhanced Sustainability in Developing Economies," Sustainability, MDPI, vol. 15(19), pages 1-23, October.
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    13. Lin, Winston T. & Chiang, Chung-Yean, 2011. "The impacts of country characteristics upon the value of information technology as measured by productive efficiency," International Journal of Production Economics, Elsevier, vol. 132(1), pages 13-33, July.

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