Is information quality a key factor in improving competitive advantages and performance of engineering, procurement and construction companies?

Abstract

The study examines the effect of information quality on competitive advantage and company performance. This is a survey study conducted in engineering, procurement and construction (EPC) companies in Indonesia throughout the year 2020. Out of 189 questionnaires submitted to 63 EPC companies, 96 questionnaires from 49 companies were returned and processed. The unit of analysis is the organization, and the directors of the company are the respondents. The research instrument was built based on the operationalisation of variables developed by previous research. The research results are explained descriptively and verified by using structural equation modelling (SEM). The data were processed with the use of the LISREL 8.8 statistical software. The results showed that information quality had a significant positive effect on the company’s competitive advantage, but did not have a significant effect on the company’s performance. Information quality can have a positive impact on the company’s performance when mediated by the company’s competitive advantage. Other findings show that the company’s competitive advantage has a significant impact on its performance. The findings indicate that EPC companies in Indonesia need information quality to create corporate excellence. A competitive advantage can also improve the company’s performance. EPC companies should invest heavily in IT, because information quality is the biggest determining factor in increasing their competitive advantage and performance, particularly as the application of artificial intelligence technology can be an alternative solution in the increasing competitiveness with the global EPC firms.