IT Capability Evaluation through the IT Capability Map
Subject Areas : IT Strategymina ranjbarfard 1 * , Seyedeh Reyhaneh Mirsalari 2
1 - Alzahra University
2 - Alzahra University
Keywords: Information technology capability, , Information technology capability evaluation indicators, , Information technology dimensions, , Information technology map,
Abstract :
Organizations are increasingly in search of ways to derive more business values from IT investments and the need for IT capabilities (ITC) is surging. ITC is critical significant to build enterprise agility and promote organizational performance. However, IT capability is always treated as the causal factor already existing and there are few studies on how IT capability is created and evaluated. Appropriate evaluation is necessary for an organization to measure, manage and improve enterprise ITC. This research aims to identify and map the dimensions of an organization's ITC. Using a mixed research method, this paper comprises two sections. The qualitative section adopts a systematic literature review (SLR) approach to identify the dimensions of ITC. The quantitative section employs factor analysis to validate identified ITC dimensions and their indicators in an attempt to develop a more precise model for ITC evaluation. The proposed ITC model includes IT management, IT human resources, IT infrastructure, and implementation of IT solutions dimensions as well as the 25 related indicators. Drawing on the results of this paper, organizations can engage in evaluation and improve/create essential ITCs based on the evaluation results.
References:
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[1] N. A. A. Hamid, C. W. Liew, N. H. Abdullah, and S. S. Omar, “The role of information technology human capability in the implementation of information technology governance (ITG): a systematic literature review on malaysian organizations,” Technology and Engineering Systems Journal, Vol. 4, No. 4, 314-322, 2019.
[2] A. S. Bharadwaj, “A resource-based perspective on information technology capability and firm performance: An empirical investigation,” MIS quarterly, Vol. 24, No. 1, pp.169–196, 2000.
[3] S. Mithas, N. Ramasubbu, M. S. Krishnan and V. Sambamurthy, “Information technology infrastructure capability and firm performance: An empirical analysis. Working paper,” Ross School of Business, University of Michigan, Ann Arbor, 2005.
[4] G. K. Chepkole, and J. Deya, “Effect of strategic capability on competitive advantage of information technology firms in Nairobi City County, Kenya,” International Academic Journal of Human Resource and Business Administration, Vol. 3, No. 5, 104-127, 2019.
[5] C. H. Chen, and T. Cates, T. “The role of information technology capability and innovative capability: An empirical analysis of knowledge management in healthcare,” International Management Review, Vol. 14 No. 1, 5–16, 2018.
[6] J. Luftman, K. Lyytinen, and T. B. Zvi, “Enhancing the measurement of information technology (IT) business alignment and its influence on company performance,” Journal of Information Technology, Vol. 32, No. 1, 26-46, 2018.
[8] P. Mikalef, and A. Pateli, “Information technology-enabled dynamic capabilities and their indirect effect on competitive performance: Findings from PLS-SEM and fsQCA,” Journal of Business Research, Vol. 70, No.1, 1-16, 2017.
[9] M. Queiroz, P. Tallon, R. Sharma, and T. Coltman, “The role of IT application orchestration capability in improving agility and performance, The Journal of Strategic Information Systems,” Vol. 27, No. 1, 4-21, 2018.
[10] M. Zhang, S. Sarker and S. Sarker, “Unpacking the effect of IT capability on the performance of export-focused SMEs: A report from China,” Information Systems Journal, Vol. 18, No. 4, pp.357-380, 2008.
[11] H. Liu, K. Ke, K. Wei and ZH. Hua, “The impact of IT capabilities on firm performance: The mediating roles of absorptive capacity and supply chain agility,” Decision Support Systems, Vol. 54, pp.1452–1462, 2013.
[12] K. J. Ringim, M. R. Razalli and N. Hasnan, N “The relationship between information technology capability and organizational performance in Nigerian banks,” International Journal of Business Research and Development, Vol. 4, No. 2, pp.1- 10, 2015.
[13] H. C. Chae, C. E. Koh and K. O. Park, “Information technology capability and firm performance: Role of industry,” Information and Management, Vol. 55, No. 5, pp.525-546, 2018.
[14] Z. Wang, D. Q. Yao, X. Yue and J. J. Liu, “Impact of IT Capability on the Performance of Port Operation,” Production and Operations Management, Vol. 27, No. 11, pp.1996-2009, 2017.
[15] U. Hameed, M. Shabbir, A. Raza and A. Salman, “Remedies of low performance among Pakistani e-logistic companies: The role of firm’s IT capability and information communication technology (ICT),” Uncertain Supply Chain Management, Vol. 7, No. 2, 2018.
[16] J. Braojos, J. Benitez and J. Llorenz, “How do social commerce-IT capabilities influence firm performance? Theory and empirical evidence,” Information & Management, Vol. 56, No. 2, pp.155–171, 2019.
[17] J. B. Barney, “Firm resources and sustained competitive advantage,” Journal of Management, Vol. 17, No. 1, pp.99–120, 1991. [18] M. Wade and J. Hulland, “Review: the resource-based view and information systems research: review, extension, and suggestions for future research,” MIS Quarterly, Vol. 28, No. 107, 2004.
[19] Y. Lu and K. Ramamurthy, “Understanding the link between information technology capability and organizational agility: an empirical examination,” MIS Quarterly, Vol. 35, No. 4, pp.931–954, 2011.
[20] V. Sambamurthy and R. W. Zmud, “At the heart of success: organization-wide management competencies,” in Steps to the Future: Fresh Thinking on the management of IT-Based Organizational transformation, Sauer, C. and P. Yetton, P. (Eds.), San Francisco, CA: Jossey-Bass Publishers, 1997, pp.143-164.
[21] F. J. Mata, W. L. Fuerst and J. B. Barney, “Information technology and sustained competitive advantage: a resource-based analysis,” MIS Quarterly, Vol. 19, No. 4, pp.487-505, 1995.
[22] B. B. Tyler, “The complementarity of cooperative and technological competencies: a resource-based perspective,” Journal of Engineering and Technology Management, Vol. 18, No. 1, pp.1–27, 2001.
[23] S. H. Huang, C. Ou, C. M. Chen and B. Lin, “An empirical study of relationship between IT investment and firm performance: a resource-based perspective,” European Journal of Operational Research, Vol. 173, No. 3, pp.984-999, 2006.
[24] J. Benitez-Amado and R. M. Walczuch, “Information technology, the organizational capability of proactive corporate environmental strategy and firm performance: A resource-based analysis,” European Journal of Information Systems, Vol. 21, pp.664–679, 2012.
[25] L. Kang, C. H. Tan and J. L. Zhao, “Organizational quest for competitive advantage through innovation: where should IT capability be focused?,” in Twenty-Second Pacific Asia Conference on Information Systems, Yokohama, Japan, 2018.
[26] J. G. Kamau, T. A. Senaji and S. C. Nzioki, “Effect of information technology capability on competitive advantage of the Kenyan banking sector,” International Journal of Technology and Systems, Vol. 4, No. 1, pp.1 – 20, 2019.
[27] D. G. Bhatt and V. Grover, “Types of information technology capabilities and their role in competitive advantage: an empirical study,” Journal of Management Information Systems, Vol. 22, No. 2, pp.253-277, 2005.
[28] C.Y. Yoon, “Measuring enterprise IT capability: a total IT capability perspective,” Knowledge-Based Systems, Vol. 29, No. 7, pp.1-6, 2011. [29] M. Zhang, M. Brodke and J. McCullough, “Cross-cultural reliability and validity of a scale to measure information technology capability,” Journal of Technology Research, Vol. 2, No. 1, pp.1–20, 2010.
[30] J. S. Chen and H. T. Tsou, “Performance effects of IT capability service process innovation and the mediating role of customer service,” Journal of Engineering and Technology Management, Vol. 29, No. 1, pp.71-94, 2012.
[31] J. W. Lainhart, “COBIT: a methodology for managing and controlling information technology risks and vulnerabilities. Journal of Information Systems, Vol. 1, No. 14, pp. 21–25, 2000.
[32] Y. Chen, Y. Wang, S. Nevo, J. Jin, L. Wang, and W. S. Chow, “IT capability and organizational performance: the roles of business process agility and environmental factors,” European Journal of Information Systems, Vol. 23, No. 3, pp.326–342, 2014.
[33] J. W. Ross, C. M. Beath, and D. L. Goodhue, “Develop long-term competitiveness through IT assets,” Sloan Management Review, 38, No. 1, pp.31-45, 1996.
[34] Z. Aiqun, “An IT Capability Approach to Informatization Construction of Higer Education Institutions,” Procedia Computer Science, Vol.131, pp.683-690, 2018.
[35] A. Q. Bataineh, M. G. Al-Abdallah and A. Y. Alhadid, “The role of information technology capabilities in capitalizing market agility in jordanian telecommunications sector,” International Journal of Academic Research in Business and Social Sciences, Vol. 5, No. 8, pp.90-101, 2015.
[36] H. Mao, S. Liu and J. Zhang, “How the effects of IT and knowledge capability on organizational agility are contingent on environmental uncertainty and information intensity,” Information Development, Vol. 31, No. 4, pp.358-382, 2014.
[37] A. S. Bharadwaj, S. G. Bharadwaj and B. R. Konsynski, “Information technology effects on firm performance as measured by Tobin's q,” Management Science, Vol. 45, No. 7, pp.1008-1024, 1999.
[38] H. S. Han, J. N. Lee and Y. W. Seo, “Analyzing the impact of a firm’s capability on outsourcing success: a process perspective,” Information and Management, Vol. 45, No. 1, pp.31–42, 2008.
[39] F. Lai, D. Li, Q. Wang and X. Zhao, “The information technology capability of third-party logistics providers: a resource-based view and empirical evidence from China,” Journal of Supply Chain Management, Vol. 44, No. 3, pp.22-38, 2008.
[40] M. Zhang, “Information systems strategic flexibility and firm performance: an empirical investigation,” Journal of Engineering and Technology Management, Vol. 22, No. 3, pp.163–184, 2005.
[41] B. Kitchenham and S. Charters, Guidelines for performing systematic literature reviews in software engineering (Report No. EBSE-2007-01“School of Computer Science and Mathematics, Keele University, 2007.
[42] I. Bakan and ZH. Sekkeli, “Types of information technology capability and their impacts on competitiveness,” Research Journal of Business and Management, Vol. 4 No. 2, pp.212-220, 2017.
[43] R. Bi, R. M. Davison, B. Kam and K. X. Smyrnios, “Developing Organizational Agility through IT and Supply Chain Capability,” Journal of Global Information Management, Vol. 21, No. 4, pp.38-55, 2013.
[44] B. Boar, “Cost Effective Strategies for Client/ Server Systems. New York, NY: Wiley and Sons, 1996.
[45] M. Broadbent, P. Weill and D. S. Clair, “The implications of information technology infrastructure for business process redesign,” MIS quarterly, Vol. 23, No. 2, pp.159–182, 1999.
[46] T. A. Byrd and D. E. Turner, “Measuring the flexibility of information technology infrastructure: exploratory analysis of a construct,” Journal of Management Information Systems, Vol.1, No.17, pp.167-208, 2000.
[47] Y. Chen, Y. Wang, S. Nevo, J. Benitez-Amado and G. Kou, “IT capabilities and product innovation performance: The roles of corporate entrepreneurship and competitive intensity,” Information & Management, Vol. 52, No. 6, pp. 643-657, 2015.
[48] N. B. Duncan, “Capturing flexibility of information technology infrastructure: A study of resource characteristics and their measure,” Journal of Management Information Systems, Vol. 12, No. 2, pp.37–57, 1995.
[49] R. G. Fichman, “Real options and IT platform adoption: Implications for theory and practice,” Information Systems Research, Vol. 15, No. 2, pp.132–154, 2004.
[50] L. Fink and S Neumann, “Gaining agility through IT personnel capabilities: the mediating role of IT infrastructure capabilities,” Journal of the Association for Information Systems, Vol. 8, No. 8, pp.440–462, 2007.
[51] N. H. Hassan, N. I. Arshad, E. E. Mustapha and J. Jaafar, “A literature review: exploring organizational learning orientation as antecedent of information technology (IT) infrastructure capability to achieve organizational agility. In Third International Conference on Research and Innovation in Information Systems (ICRIIS), Kuala Lumpur, Malaysia, 2013.
[52] M. A. Karimi, A. Amini and M. Latifi, “The impact of information technology capability on firm performance; a focus on employee customer profit chain,” Iranian Journal of Management Studies (IJMS), Vol. 7, No. 1, pp.95-120, 2014.
[53] G. Kim, B. Shin., K. K. Kim and H. G. Lee, “IT capabilities, process-oriented dynamic capabilities, and firm financial performance,” Information Systems, Vol. 12, No. 7, pp.491–492, 2011.
[54] D. M. Lee, E. M. Trauth and D. Farwell, “Critical skills and knowledge requirement of IS professionals: a joint academic and industry investigation,” MIS Quarterly, Vol. 19, No. 3, pp.313–340, 1995.
[55] P. Tallon, “Competing perspectives on the link between strategic information technology alignment and organizational agility: insights from a mediation model,” MIS Quarterly, Vol. 35, No. 2, pp.463-486, 2011.
[56] P. Weill, M. Subramani and M. Broadbent, “Building IT infrastructure for strategic agility,” MIT Sloan Management Review, Vol. 44, No. 1, pp.57–66, 2002.
[57] M. Zhang, “Information Technology Capability, Organizational Culture, and Export Performance. Washington State University, Washington, 2005.
[58] J. W. Ross, P. Weill and D. C. Robertson, “Enterprise architecture as strategy: creating a foundation for business execution. Boston, MA: Harvard Business School Press, 2006.
[59] B. Thompson, “Exploratory and confirmatory factor analysis: Concepts and applications. Washington, DC: American Psychological Association, 2004.
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