Business value of IT capabilities: effects on processes and firm performance in a developing country

Abstract

Purpose -This article proposes an integrated three-stage model, which tests the impact of IT capabilities at the firm level.Design/methodology/approach -The measurement model was constructed from the following research phases: i) assessment of the variables by experts in the fields of IS and business; ii) survey pretest; and iii) pilot survey. The full survey was applied to managers from IT and business fields in Brazil's largest organizations, and was analyzed through Structural Equation Modelling.Findings -The results of the full survey allow us to conclude about the relationships that exist between IT capabilities, information quality and performance processes. Performance processes partially mediate the impact of IT capabilities on firm performance.Originality/value -The results presented contribute to the academic and management aspects, for they allow: i) to replicate the model in other research contexts (national, international) and evaluating incremental improvements of IT capabilities on firm performance; ii) the identification of intermediate performance indicators, associated with the use of IT, and the concentration of energy of organizations in the measurement of IT effects on business processes; iii) the adoption of the model for horizontal analysis of IT performance in large companies, from the perspective of business and IT managers.

The role of IT capabilities, IT reconfiguration capability and innovativeness on organizational performance: evidence from the Brazilian public sector

“…In this sense, based on the theory of the Resource-Based View (RBV), the literature presents evidence that IT capabilities, rather than direct investments in technology, can effectively improve organizational performance (Mata, Fuerst, & Barney, 1995;Powell & Dent-Micallef, 1997;Ray, Muhanna, & Barney, 2005;Stoel & Muhanna, 2009;Stratopoulos & Dehning, 2000). The literature points out that IT capabilities provide organizations with several benefits, such as improving business processes and organizational agility, increasing the capacity to innovate, as well as improving organizational performance and offering competitive advantages (Bharadwaj, 2000;Chen & Tsou, 2012;Kim, Shin, Kim, & Lee, 2011;Kmieciak, Michna, & Meczynska, 2012;Liu et al, 2015;Lu & Ramamurthy, 2011;Oliveira et al, 2016;Rai, Pavlou, Im, & Du, 2012).…”

“…First of all, it should be noted that there is a lack of scientific literature in this area, including the theoretical foundations for studying the value of IT in the public sector (Pang et al, 2014). For example, studies that analyze the IT reconfiguration dimension within the public sector as opposed to the private sector are not to be found in the specialized literature, as noted by Oliveira et al (2016). A notable exception to the scarcity of literature on IT capabilities and the public sector is the conceptual study conducted by Pang et al (2014), in which possible theoretical paths for converting IT investments into performance in public organizations are indicated, with a focus on generating value for citizens.…”

“…According to the Dynamic Capabilities Theory, specifically the notion that an organization must have sufficient capability to intentionally create, extend, and modify its resource base (Helfat et al, 2007), the IT literature recognizes the importance of the organizational capability to improvise and reconfigure IT resources (Pavlou & Sawy, 2006. Thus, this study is associated with Oliveira et al (2016) and adds the ability to reconfigure IT as one of the dimensions of IT capabilities.…”

“…The literature recognizes that organizations must have the capability to improvise and reconfigure their IT resources (Pavlou & Sawy, 2006 through the creation, expansion, and modification of organizational resources (Helfat et al, 2007). In this sense, D. L. Oliveira et al (2016) propose and present evidence, from the private sector that IT reconfiguration capability must be one of the factors of organizational IT capabilities. Thus, taking into account Pavlou and Sawy's argument (2010) that the ability to improvise and reconfigure IT resources is fundamental for situations involving new technological applications, and can have a potential positive impact on the organizational innovation process, and given that there is a lack of empirical evidence on this relationship in the public sector, we present the following hypothesis: H 1 : IT reconfiguration capability is a factor underlying organizational IT capability within the scope of the public sector.…”

“…Thus, IT capabilities are a set of resources, skills and knowledge related to IT, which are exercised through business processes with the aim of improving organizational results (Stoel & Muhanna, 2009). In addition, recent advances in the literature point out that organizations that operate in turbulent and constantly changing environments also need to develop a specific aspect of their IT capabilities, i.e., the ability to reconfigure IT resources to deal with unplanned changes and situations (Oliveira, Maçada, & Oliveira, 2016;Pavlou & Sawy, 2010). Public organizations, in turn, are large consumers of IT and need to make ever greater investments, acquiring or contracting more and more software solutions, hardware, cloud storage and processing services, IT management advice, and team training, among other things (Pang et al, 2014).…”