An Investigation of the Effects of IT Investment on Firm Performance

Information technology (IT) investments have continued toincrease over the last few decades while, concurrently, executivescontinue to question the value being obtained from theseinvestments. In order to address this issue, scholars have recentlyintroduced the concept of complementarity in order to betterunderstand the manner in which IT investments impact firmperformance. However, this concept has been insufficientlydeveloped in the literature and has inherent limitations in itsperspective. This study develops and clarifies our understanding ofcomplementarity and applies this elaborated conceptto ITperformance research. For the theoretical lens, this researchemployed knowledge-based view of the firm (KBV), which enables oneto identify a boundary of critical complementary constructs thatare mutually reinforcing in enhancing IT performance. Theidentified complementary constructs are empirically tested usingsupply chain management (SCM) and customer relationship management(CRM) technologies. These findings show complementary investmentsare indeed found to be critical in enhancing firm performance fromIT investments.

Autorentext
Yong-Mi Kim is an assistant professor in the School ofLibraries and Information Studies at the University of Oklahoma.She obtained her Ph.D. in MIS at the University of Oklahoma. Herresearch interests are IT-based firm performance, IT outsourcing,and knowledge management. Her work appears in MIS Quarterly andInformation Systems Research

Klappentext
Information technology (IT) investments have continued to increase over the last few decades while, concurrently, executives continue to question the value being obtained from these investments. In order to address this issue, scholars have recently introduced the concept of complementarity in order to better understand the manner in which IT investments impact firm performance. However, this concept has been insufficiently developed in the literature and has inherent limitations in its perspective. This study develops and clarifies our understanding of complementarity and applies this elaborated concept to IT performance research. For the theoretical lens, this research employed knowledge-based view of the firm (KBV), which enables one to identify a boundary of critical complementary constructs that are mutually reinforcing in enhancing IT performance. The identified complementary constructs are empirically tested using supply chain management (SCM) and customer relationship management (CRM) technologies. These findings show complementary investments are indeed found to be critical in enhancing firm performance from IT investments.