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HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM ...
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Re cord: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
1
2
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE: CONJECTURE
AND EMPIRICAL EVIDENCE1
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT investm ...
RESEARCH NOTEHOW INFORMATION TECHNOLOGY STRATEGY ANDINVE.docxaudeleypearl
RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]} {[email protected]}
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between revenue expansion and cost reduction, but at
higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity increasingly pays off.
Keywords: Information technology strategic emphasis, IT ambidexterity, IT strategic ambidexterity, firm
performance, profitability, IT investments, revenue growth, cost reduction, dual emphasis
Introduction1
Firms spend significant sums of money on information tech-
nology (IT) resources, yet they are often challenged in
developing appropriate strategies to direct these resources to
realize business value (for a discussion, see Kohli and
Devaraj 2004). Previous research has studied either the im-
pact of IT investments on firm performance (e.g., Barua and
Mukhopadhyay 2000; Dedrick et al. 2003; Hoadley and Kohli
2014; Kohli and Devaraj 2003; Kohli et al. 2012) or the effect
of IT strategic emphasis on firm performance (e.g., Leidner et
al. 2011; Oh and Pinsonneault 2007; Tallon 2007; Tallon et
al. 2000). However, few studies focus on the effect of IT
investments and IT strategic emphasis simultaneously. Given
that profit is equal to revenue minus cost, it is clear that there
are three strategic paths from IT to firm performance: IT can
be used to (1) reduce costs by improving productivity and
efficiency; (2) increase revenues by fully exploiting oppor-
tunities through existing customers, channels, and products/
services and by finding or creating new customers, channels,
and products/services; or (3) reduce costs and increase
revenues simultaneously. W ...
Week 6 Post Menopausal and Sexuality Issues in the Maturing and O.docxhelzerpatrina
Week 6: Post Menopausal and Sexuality Issues in the Maturing and Older Adult Discussion
No unread replies. No replies.
Students will not receive credit for any discussions posted after Sunday 11:59pm MT.
Ageism and gender bias can affect who and how we ask about sexual health, sexual activity, and concerning symptoms. Depending on your own level of comfort and cultural norms this can be a tough conversation for some providers. But this is an important topic and as our videos discussed, women are wanting us to ask about sexual concerns. This week we also reviewed sexually transmitted diseases and the effects of ageism on time to diagnosis so it is necessary to ask these questions and provide good education for all patients. You will not know any needs unless you ask.
Discussion Questions:
· Review the required NAMS videos. What was the most surprising thing you learned about in the videos? Explain why it was surprising.
· What is GSM? What body systems are involved? How does this affect a woman's quality of life?
· What treatment does Dr Shapiro recommend?
· Review one aspect of treatment that Dr Shapiro recommends and include an EBP journal article or guideline recommendation in addition to referencing the video in your response.
Sexuality and the older adult
· What is your level of comfort in taking a complete sexual history? Is this comfort level different for male or female patients? If so, why?
· How will this information impact the way you will interact with your mature and elderly clients?
RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]} {[email protected]}
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between revenue expansion ...
JUSTIFICATION OF, AND BENEFITS REALIZATION BEYOND IT INVESTMENTS: ANALYSIS F...ijmvsc
This work looked at the justification of IT investments in general, to draw important conclusions that could
be beneficial to IT project managers and professionals, and then zero in on the angle of benefits realization
beyond IT investments.About 30 categories/sets of research outputs or articles out of more than 60 articles
reviewed were used for this work. No primary data was employed for this work. Articles were sourced from
databases such as Google Scholar, Research Gate, Academia.edu, Google search engine, Elsevier, and so
on. The main themes used for the search were IT investments, Justification for IT investments, IT
investments benefit determination, value creation beyond IT investments, and so on. The results showed
that justification is unique to every firm, it is contextual, and so stakeholders must take into consideration
environmental factors, corporate and strategic goals, experience and expertise of stakeholders, and so on,
to design its framework and measures to justify IT investments. Zeroing on benefits realization, two things
run through all the discussions: benefits realization of IT investments must take into consideration the
organization's strategic objectives and that they do not simply emerge, as if by magic. Their realization has
to be planned, delivered, reviewed, and exploited to ensure value realization on a more consistent/constant
basis.
This document discusses the evolving relationship between business strategy and IT strategy. It notes that executives now recognize IT's strategic potential and its ability to impact top-line growth. As a result, IT is increasingly involved in strategic discussions and helping shape business strategy through new technologies. However, effective strategy development still requires addressing challenges such as aligning business and IT strategies and ensuring the right people are involved from both business and IT. The document also outlines four critical success factors for developing IT strategy: revisiting the business model, having strategic themes, involving the right people, and working in partnership between business and IT.
15C h a p t e r2 Developing IT Strategy for Business V.docxnovabroom
15
C h a p t e r
2 Developing IT Strategy for Business Value1
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and S. Singh.
“Developing IT Strategy for Business Value.” Journal of Information Technology Management XVIII, no. 1 (June
2007): 49–58. Reproduced by permission of the Association of Management.
Suddenly, it seems, executives are “getting” the strategic potential of IT. Instead of being relegated to the back rooms of the enterprise, IT is now being invited to the boardrooms and is being expected to play a leading role in delivering top-
line value and business transformation (Korsten 2011; Luftman and Zadeh 2011; Peslak
2012). Thus, it can no longer be assumed that business strategy will naturally drive IT
strategy, as has traditionally been the case. Instead, different approaches to strategy
development are now possible and sometimes desirable. For example, the capabilities
of new technologies could shape the strategic direction of a firm (e.g., mobile, social
media, big data). IT could enable new competencies that would then make new busi-
ness strategies possible (e.g., location-based advertising). New options for governance
using IT could also change how a company works with other firms (think Wal-Mart
or Netflix). Today new technologies coevolve with new business strategies and new
behaviors and structures (see Figure 2.1). However, whichever way it is developed, if
IT is to deliver business value, IT strategy must always be closely linked with sound
business strategy.
Ideally, therefore, business and IT strategies should complement and support each
other relative to the business environment. Strategy development should be a two-way
process between the business and IT. Yet unfortunately, poor alignment between them
remains a perennial problem (Frohman 1982; Luftman and Zadeh 2011; McKeen and
Smith 1996; Rivard et al. 2004). Research has already identified many organizational
challenges to effective strategic alignment. For example, if their strategy-development
processes are not compatible (e.g., if they take place at different times or involve differ-
ent levels of the business), it is unlikely that the business and IT will be working toward
the same goals at the same time (Frohman 1982). Aligning with individual business
units can lead to initiatives that suboptimize the effectiveness of corporate strategies
(McKeen and Smith 1996). Strategy implementation must also be carefully aligned to
16 Section I • Delivering Value with IT
ensure the integration of business and IT efforts (Smith and McKeen 2010). Finally, com-
panies often try to address too many priorities, leading to an inadequate focus on key
strategic goals (Weiss and Thorogood 2011).
However, strategic alignment is only one problem facing IT managers when they
develop IT strategy. With IT becoming so much more central to the development and
delivery of business strategy, much mor.
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVESTM...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets (independent variables) and some specified benefits/value creation (dependent variables), beyond Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175 questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana, and analyzed,the following findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be innovative with IT. Again, the results showed that most of the complementary assets employed in this work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the strongest positive relationships was found to exist between “supportive organizational culture that values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
This document presents a study that develops a model to assess the value-based contribution of information technology (IT) to firm performance. The study aims to address contradictory findings from prior research on the productivity paradox by taking a process-oriented approach. The model proposes that IT business value can be measured through its impact on processes within a firm's value chain. Survey data from 180 executives is used to test the model, with structural equation modeling confirming that perceptual ratings of IT's impact on value chain processes can provide a measure of IT business value at the organizational level.
Title:
Authors:
Source:
Document Type:
Subject Terms:
Author-Supplied Keywords:
Abstract:
Re cord: 1
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7 Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to choose between revenue expansion and cost
1
2
Author Affiliations:
Full Text Word Count:
ISSN:
Accession Number:
Database:
Section:
reduction, but at higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright holder's express written permission. However, users
may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND INVESTMENTS INFLUENCE FIRM PERFORMANCE: CONJECTURE
AND EMPIRICAL EVIDENCE1
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT investm ...
RESEARCH NOTEHOW INFORMATION TECHNOLOGY STRATEGY ANDINVE.docxaudeleypearl
RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]} {[email protected]}
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between revenue expansion and cost reduction, but at
higher levels of IT investment, dual-emphasis in IT strategy or IT strategic ambidexterity increasingly pays off.
Keywords: Information technology strategic emphasis, IT ambidexterity, IT strategic ambidexterity, firm
performance, profitability, IT investments, revenue growth, cost reduction, dual emphasis
Introduction1
Firms spend significant sums of money on information tech-
nology (IT) resources, yet they are often challenged in
developing appropriate strategies to direct these resources to
realize business value (for a discussion, see Kohli and
Devaraj 2004). Previous research has studied either the im-
pact of IT investments on firm performance (e.g., Barua and
Mukhopadhyay 2000; Dedrick et al. 2003; Hoadley and Kohli
2014; Kohli and Devaraj 2003; Kohli et al. 2012) or the effect
of IT strategic emphasis on firm performance (e.g., Leidner et
al. 2011; Oh and Pinsonneault 2007; Tallon 2007; Tallon et
al. 2000). However, few studies focus on the effect of IT
investments and IT strategic emphasis simultaneously. Given
that profit is equal to revenue minus cost, it is clear that there
are three strategic paths from IT to firm performance: IT can
be used to (1) reduce costs by improving productivity and
efficiency; (2) increase revenues by fully exploiting oppor-
tunities through existing customers, channels, and products/
services and by finding or creating new customers, channels,
and products/services; or (3) reduce costs and increase
revenues simultaneously. W ...
Week 6 Post Menopausal and Sexuality Issues in the Maturing and O.docxhelzerpatrina
Week 6: Post Menopausal and Sexuality Issues in the Maturing and Older Adult Discussion
No unread replies. No replies.
Students will not receive credit for any discussions posted after Sunday 11:59pm MT.
Ageism and gender bias can affect who and how we ask about sexual health, sexual activity, and concerning symptoms. Depending on your own level of comfort and cultural norms this can be a tough conversation for some providers. But this is an important topic and as our videos discussed, women are wanting us to ask about sexual concerns. This week we also reviewed sexually transmitted diseases and the effects of ageism on time to diagnosis so it is necessary to ask these questions and provide good education for all patients. You will not know any needs unless you ask.
Discussion Questions:
· Review the required NAMS videos. What was the most surprising thing you learned about in the videos? Explain why it was surprising.
· What is GSM? What body systems are involved? How does this affect a woman's quality of life?
· What treatment does Dr Shapiro recommend?
· Review one aspect of treatment that Dr Shapiro recommends and include an EBP journal article or guideline recommendation in addition to referencing the video in your response.
Sexuality and the older adult
· What is your level of comfort in taking a complete sexual history? Is this comfort level different for male or female patients? If so, why?
· How will this information impact the way you will interact with your mature and elderly clients?
RESEARCH NOTE
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE AND EMPIRICAL EVIDENCE1
Sunil Mithas and Roland T. Rust
Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742 U.S.A. {[email protected]} {[email protected]}
In this paper, we develop conjectures for understanding how information technology (IT) strategy and IT
investments jointly influence profitability and the market value of the firm. We view IT strategy as an expres-
sion of the dominant strategic objective that the firm chooses to emphasize, which can be revenue expansion,
cost reduction, or a dual emphasis in which both goals are pursued. Using data from more than 300 firms in
the United States, we find that at the mean value of IT investments, firms with a dual IT strategic emphasis have
a higher market value as measured by Tobin’s Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT strategic emphasis plays a significant role in moder-
ating the relationship between IT investments and firm performance. Dual-emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms. Dual-emphasis firms also have a stronger IT–
profitability relationship than either revenue- or cost-emphasis firms. Overall, these findings imply that, at low
levels of IT investment, the firm may need to choose between revenue expansion ...
JUSTIFICATION OF, AND BENEFITS REALIZATION BEYOND IT INVESTMENTS: ANALYSIS F...ijmvsc
This work looked at the justification of IT investments in general, to draw important conclusions that could
be beneficial to IT project managers and professionals, and then zero in on the angle of benefits realization
beyond IT investments.About 30 categories/sets of research outputs or articles out of more than 60 articles
reviewed were used for this work. No primary data was employed for this work. Articles were sourced from
databases such as Google Scholar, Research Gate, Academia.edu, Google search engine, Elsevier, and so
on. The main themes used for the search were IT investments, Justification for IT investments, IT
investments benefit determination, value creation beyond IT investments, and so on. The results showed
that justification is unique to every firm, it is contextual, and so stakeholders must take into consideration
environmental factors, corporate and strategic goals, experience and expertise of stakeholders, and so on,
to design its framework and measures to justify IT investments. Zeroing on benefits realization, two things
run through all the discussions: benefits realization of IT investments must take into consideration the
organization's strategic objectives and that they do not simply emerge, as if by magic. Their realization has
to be planned, delivered, reviewed, and exploited to ensure value realization on a more consistent/constant
basis.
This document discusses the evolving relationship between business strategy and IT strategy. It notes that executives now recognize IT's strategic potential and its ability to impact top-line growth. As a result, IT is increasingly involved in strategic discussions and helping shape business strategy through new technologies. However, effective strategy development still requires addressing challenges such as aligning business and IT strategies and ensuring the right people are involved from both business and IT. The document also outlines four critical success factors for developing IT strategy: revisiting the business model, having strategic themes, involving the right people, and working in partnership between business and IT.
15C h a p t e r2 Developing IT Strategy for Business V.docxnovabroom
15
C h a p t e r
2 Developing IT Strategy for Business Value1
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and S. Singh.
“Developing IT Strategy for Business Value.” Journal of Information Technology Management XVIII, no. 1 (June
2007): 49–58. Reproduced by permission of the Association of Management.
Suddenly, it seems, executives are “getting” the strategic potential of IT. Instead of being relegated to the back rooms of the enterprise, IT is now being invited to the boardrooms and is being expected to play a leading role in delivering top-
line value and business transformation (Korsten 2011; Luftman and Zadeh 2011; Peslak
2012). Thus, it can no longer be assumed that business strategy will naturally drive IT
strategy, as has traditionally been the case. Instead, different approaches to strategy
development are now possible and sometimes desirable. For example, the capabilities
of new technologies could shape the strategic direction of a firm (e.g., mobile, social
media, big data). IT could enable new competencies that would then make new busi-
ness strategies possible (e.g., location-based advertising). New options for governance
using IT could also change how a company works with other firms (think Wal-Mart
or Netflix). Today new technologies coevolve with new business strategies and new
behaviors and structures (see Figure 2.1). However, whichever way it is developed, if
IT is to deliver business value, IT strategy must always be closely linked with sound
business strategy.
Ideally, therefore, business and IT strategies should complement and support each
other relative to the business environment. Strategy development should be a two-way
process between the business and IT. Yet unfortunately, poor alignment between them
remains a perennial problem (Frohman 1982; Luftman and Zadeh 2011; McKeen and
Smith 1996; Rivard et al. 2004). Research has already identified many organizational
challenges to effective strategic alignment. For example, if their strategy-development
processes are not compatible (e.g., if they take place at different times or involve differ-
ent levels of the business), it is unlikely that the business and IT will be working toward
the same goals at the same time (Frohman 1982). Aligning with individual business
units can lead to initiatives that suboptimize the effectiveness of corporate strategies
(McKeen and Smith 1996). Strategy implementation must also be carefully aligned to
16 Section I • Delivering Value with IT
ensure the integration of business and IT efforts (Smith and McKeen 2010). Finally, com-
panies often try to address too many priorities, leading to an inadequate focus on key
strategic goals (Weiss and Thorogood 2011).
However, strategic alignment is only one problem facing IT managers when they
develop IT strategy. With IT becoming so much more central to the development and
delivery of business strategy, much mor.
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVESTM...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets (independent variables) and some specified benefits/value creation (dependent variables), beyond Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175 questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana, and analyzed,the following findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be innovative with IT. Again, the results showed that most of the complementary assets employed in this work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the strongest positive relationships was found to exist between “supportive organizational culture that values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
This document presents a study that develops a model to assess the value-based contribution of information technology (IT) to firm performance. The study aims to address contradictory findings from prior research on the productivity paradox by taking a process-oriented approach. The model proposes that IT business value can be measured through its impact on processes within a firm's value chain. Survey data from 180 executives is used to test the model, with structural equation modeling confirming that perceptual ratings of IT's impact on value chain processes can provide a measure of IT business value at the organizational level.
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVES...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets
(independent variables) and some specified benefits/value creation (dependent variables), beyond
Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175
questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana,
and analyzed,thefollowing findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to
help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be
innovative with IT. Again, the results showed that most of the complementary assets employed in this
work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the
strongest positive relationships was found to exist between “supportive organizational culture that
values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
This research essay descriptively details what is meant by Information Technology Strategy and why in increasingly automated business environment of today, successful firms are those that not only have an established IT strategy but also keep updating the same based on changes that may be encountered. Further explained in extreme detail are the reasons that necessitate the need for organizations of today to have an established and implemented IT strategy other than the competition that may be faced from other organizations which have an IT strategy. Also detailed are the values and benefits that may be derived by organizations by having an IT strategy and what qualities and elements of an IT strategy would need to be established in order to derive the maximum amount of value from an IT strategy.
Chapter 3Linking IT to Business Metrics From the first time IT.docxwalterl4
Chapter 3
Linking IT to Business Metrics
From the first time IT started making a significant dent in corporate balance sheets, the holy grail of academics, consultants, and business and IT managers has been to show that what a company spends on IT has a direct impact on its performance. Early efforts to do this, such as those trying to link various measures of IT input (e.g., budget dollars, number of PCs, number of projects) with various measures of business performance (e.g., profit, productivity, stock value) all failed to show any relationship at all (Marchand et al. 2000). Since then, everyone has prop- erly concluded that the relationship between what is done in IT and what happens in the business is considerably more complex than these studies first supposed. In fact, many researchers would suggest that the relationship is so filtered through a variety of “conversion effects” (Cronk and Fitzgerald 1999) as to be practically impossible to demonstrate. Most IT managers would agree. They have long argued that technology is not the major stumbling block to achieving business performance; it is the business itself—the processes, the managers, the culture, and the skills—that makes the differ- ence. Therefore, it is simply not realistic to expect to see a clear correlation between IT and business performance at any level. When technology is successful, it is a team effort, and the contributions of the IT and business components of an initiative cannot and should not be separated.
Nevertheless, IT expenditures must be justified. Thus, most companies have concentrated on determining the “business value” that specific IT projects deliver. By focusing on a goal that matters to business (e.g., better information, faster transaction processing, reduced staff), then breaking this goal down into smaller projects that IT can affect directly, they have tried to “peel the onion” and show specifically how IT delivers value in a piecemeal fashion. Thus, a series of surrogate measures are usually used to demonstrate IT’s impact in an organization. (See Chapter 1 for more details.)
More recently, companies are taking another look at business performance met- rics and IT. They believe it is time to “put the onion back together” and focus on what
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and C. Street. “Linking IT to Business Metrics.” Journal of Information Science and Technology 1, no. 1 (2004): 13–26. Reproduced by permission of the Information Institute.
1
27
28 Section I • Delivering Value with IT
really matters to the enterprise. This perspective argues that employees who truly understand what their business is trying to achieve can sense the right ways to per- sonally improve performance that will show up at a business unit and organizational level. “People who understand the business and are informed will be proactive and ... have a disposition to create business value every day in many.
2C h a p t e r1 Developing and Delivering on the it Va.docxBHANU281672
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter 1 • Developing and Delivering on the IT Value Proposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Th.
2C h a p t e r1 Developing and Delivering on the it Va.docxgilbertkpeters11344
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter1 • DevelopingandDeliveringontheITValueProposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Thirty years .
If the CIO is to be valued as a strategic actor, how can he bring.docxTatianaMajor22
If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Is there a lack of information on strategic planning? Nope. I think the process of planning is poorly understood, and rarely endorsed. The reasons are simple enough. Planning requires a commitment of resources (time, talent, money); it requires insight; it requires a total immersion in the corporate culture. While organizations do plan, planning is invariably attached to the budget process. It is typically here that the CIO lays out his/her vision for the coming year Now a few years ago authors began writing on the value of aligning IT purpose to organizational purpose. They wrote at a time when enterprise architectural planning was fairly new, and enterprise resource management was on the lips of every executive. My view is that alignment is a natural process driven by the availability of the tools to accomplish it. Twenty years ago making sense of IT was more about processing power, and database management. We are in a new age of IT, and it is the computer that is the network, not the network as an independent self-contained exchange of information. If you will spend some time reviewing the basic materials I provided on strategic planning and alignment, we can begin our discussions for the course. Again, here is the problem I would like for us to tackle: If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Most of the articles I bundled together for this week are replete with tables and charts. These can be a heavy read. Your approach should be to review these articles for the "big ideas" or lessons that are take away. I think these studies are significant enough that we will conclude our first week with an understanding of the roles between executive leaders, and how they see Information Technology playing a role in shaping a business strategy.
Read the articles to answer the question. Please No Plagerism or verbatim but you are allowed to quote from the article.
Achieving and Sustaining
Business-IT Alignment
Jerry Luftman
Tom Brier
I
n recent decades, billions of dollars have been invested in intormation tech-
nology (IT). A key concern of business executives is alignment—applying IT
in an appropriate and timely way and in harmony with business strategies,
goals, and needs. This issue addresses both how IT is aligned with the busi-
ness and how the business should be aligned with IT Frustratingly, organizations
seem to find it difficult or impossible to harness the power of information tech-
nology for their own long-term benefit, even though there is worldwide evi-
dence that IT has the power to transform whole industries and markets.' How
can companies.
81119, 10(43 AMOriginality ReportPage 1 of 7httpsucum.docxblondellchancy
8/11/19, 10(43 AMOriginality Report
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SafeAssign Originality Report
Summer 2019 - InfoTech in a Global Economy (ITS-… • Week 14 - Written Assignment
%%98To t a l S c o r eTo t a l S c o r e:: High risk
Sunil Kumar Reddy Donuru
Submission UUID: ea534ac2-fa80-4378-4f9a-810b5a16c7a4
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I n s t i t u t i o n a l d a t a b a s eI n s t i t u t i o n a l d a t a b a s e ( (33))
M y p a p e rM y p a p e r S t u d e n t p a p e rS t u d e n t p a p e r S t u d e n t p a p e rS t u d e n t p a p e r
G l o b a l d a t a b a s eG l o b a l d a t a b a s e ( (11))
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To p s o u r c e sTo p s o u r c e s ( (33))
E x c l u d e d s o u r c e sE x c l u d e d s o u r c e s ( (00))
View Originality Report - Old Design
Word Count: 944
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11 M y p a p e rM y p a p e r 44 S t u d e n t p a p e rS t u d e n t p a p e r 22 S t u d e n t p a p e rS t u d e n t p a p e r
University of the Cumberlands
Sunil Reddy Donuru
Prof: Dr Jess Schwartz
The main purpose of this article is to show how the IT strategic emphases and IT investments can affect a firm’s profitability level and market
value. To further show the clear effect, the author used empirical tests founded from the documented information collected from over 300
firms in U.S. on this clear picture, the author concludes that organizations with a dual emphasis in their IT system have a higher Tobin's Q
than firms with an income or a cost emphasis at its mean estimation ventures. The author suggests that firms may decide on using IT strategic
emphasis for one reason alone and that is to moderate the strong correlation between IT investments and firm performance. The major
discovery of the research was that firms that have adopted dual-emphasis on IT strategies have a stronger IT–profitability relationship than sin-
gle-emphasis firms, these firms also have a stronger IT–Tobin’s Q relationship than firms that have adopted the revenue-emphasis strategy.
The conclusions from this research has been used all over the world by managers and business owners to help them in making informed deci-
sions on how to allocate assets for IT strategies that can efficiently support the overall goal of an organization. For average levels of IT ex-
penditure, a dual emphasis in IT strategy satisfies as long as a higher firm valuation, and a larger amount of IT speculations are made with d ...
Fueling Innovation through InformationTechnology in SMEsb.docxhanneloremccaffery
Fueling Innovation through Information
Technology in SMEs*
by Clay Dibrell, Peter S. Davis, and Justin Craig
This paper describes a study that investigates the mediating effects of information
technology (IT) on the relationships among product and process innovations and firm
performance (measured in multiple profitability and growth rate metrics). Using
structural equation modeling on a sample of 397 small and medium-sized enterprises
(SMEs), we find evidence that (1) increases on the strategic emphasis placed on
innovation, both product and process, positively impact the prominence managers
place on IT; (2) the impact of innovation (both product and process) on performance
(both profitability and growth) is primarily indirect, felt via the mechanism of the
importance managers place on IT; and (3) an increased emphasis on IT abets
managers’ perception of their firms’ performance, as compared with that observed
among peer firms (other SMEs).
A commitment to innovation has long
been considered to be important to the
success of entrepreneurial ventures and
small firms (Fiol 1996). Research has
shown that innovation stimulates ven-
tures’ growth (e.g., Wolff and Pett
2006; Motwani et al. 1999; Hax and
Majluf 1991) and also provides a key
source of competitive advantage in the
absence of scale economies (Lewis et al.
2002). Considered from the resource-
based view of the firm (Barney 1991),
successful innovation may be dependent
on the presence of other organization-
*The authors wish to thank Don Neubaum and the anonymous reviewers for their helpful
comments and direction. Financial support was provided by the Austin Family Business
Program in the College of Business at Oregon State University.
Clay Dibrell is associate professor of strategic management in the College of Business at
Oregon State University and research fellow at Bond University.
Peter S. Davis is professor and chair of the Department of Management in the Belk College
of Business at the University of North Carolina–Charlotte.
Justin Craig is associate professor of family business and entrepreneurship at Bond
University.
Address correspondence to: Clay Dibrell, 200 Bexell Hall, College of Business, Oregon State
University, Corvallis, OR 97331. Tel: (541) 737-6061. E-mail: [email protected]
Journal of Small Business Management 2008 46(2), pp. 203–218
DIBRELL, DAVIS, AND CRAIG 203
mailto:[email protected]
specific skills and capabilities. For
example, substantial evidence has begun
to accumulate that suggests that appro-
priate strategic employment of informa-
tion technology (IT) may be essential
in translating strategies (e.g., innovation)
into enhanced firm performance (e.g.,
Ray, Muhanna, and Barney 2005;
Sakaguchi, Nicovich, and Dibrell 2004).
A direct linkage between IT and firm
performance was established by Powell
and Dent-Micallef (1997). Bharadwaj
(2000) found that high IT-capable firms
(those that invest heavily in IT) outper-
form competitors that do not inve ...
Challenges in Business and IT AlignmentVidur Pandit
The document discusses challenges with aligning business and IT. It provides context on the importance of business-IT alignment and defines key concepts. The phases of the business-IT alignment cycle are also outlined, including plan, model, manage and measure. The goal of alignment is to ensure IT supports business strategies and processes efficiently.
The art of value creation with information technology potentials in business ...Alexander Decker
This document discusses the role of strategic information systems in business value creation. It defines value creation as activities that reduce costs and increase profits through efficiency. Strategic information systems involves using information technology and managerial skills to identify business problems and create solutions that help organizations achieve their objectives. The document analyzes how strategic information systems can help realize value by focusing on business processes and capturing value through technologies like the internet, business intelligence, and collaboration systems. It argues that information systems strategy is important for competitive advantage and should be integrated with business strategy for organizations to effectively create value.
This document summarizes a study that explores the relationship between IT outsourcing (ITO) and business and IT alignment. The study aims to provide recommendations for how outsourcing relationships can support business and IT alignment. Through a literature review and analysis of four case studies, the study found that higher levels of motivation for outsourcing, relationship between outsourcer and provider, and alignment maturity of the outsourcer can lead to positive effects of ITO on business and IT alignment. Organizational turbulence on either side can negatively impact the relationship. Service providers also tended to assess relationships more positively than outsourcers.
Research articleFactors affecting the successful realisati.docxrgladys1
Research article
Factors affecting the successful realisation
of benefits from systems development
projects: findings from three case studies
Neil F Doherty1, Colin Ashurst2, Joe Peppard3
1The Business School, Loughborough University, Loughborough, UK;
2The Business School, Durham University, Durham, UK;
3Cranfield School of Management, Cranfield, Bedfordshire, UK
Correspondence:
NF Doherty, The Business School, Loughborough University, Loughborough, LE11 3TU, UK.
Tel: þ 44 01509 223328;
Fax: þ 44 01509 223960;
E-mail: [email protected]
Abstract
The return that organisations derive from investments in information systems and
technology continues to disappoint. While there is a very significant body of literature on
the factors that should facilitate a successful outcome from systems development, there is
growing concern that these prescriptions are not having their desired effect. In this paper,
we argue that the success of a systems development project should be measured in terms
of its ability to deliver meaningful benefits, rather than the timely delivery of a technical
artefact, and therefore organisations should adopt an explicit and proactive benefits
realisation approach when investing in IT. Consequently, we sought to explore those
actionable factors that might facilitate the effective realisation of benefits from systems
development initiatives. Three organisations were identified that claimed to adopt a
proactive approach to benefits realisation, and detailed studies of their systems
development practices were conducted. Our analysis found that whilst one organisation
had been successful in its adoption of a benefits realisation perspective, the other two had
not, and this allowed us to identify those factors that helped to explain this difference in
outcomes. In short, this paper makes an important contribution by identifying how a sub-
set of traditional systems success factors might be enhanced, to give them a more explicit
benefits realisation orientation. Moreover, it presents a coherent set of principles that can
be used for deriving other factors and practices.
Journal of Information Technology (2012) 27, 1–16. doi:10.1057/jit.2011.8
Published online 9 August 2011
Keywords: IT development projects; benefits realisation; organisational change; ISD success factors;
value
Introduction
T
he context for the research reported in this paper is the
continued high failure rate of investments in information
systems/information technology (IS/IT): a considerable
amount of time, money, effort and opportunity can be wasted
upon IT investments that ultimately fail to deliver benefits
(Fortune and Peters, 2005; Peppard and Ward, 2005).
Estimates of the level of failure may vary, but over the past
30 years they have tended to stay uncomfortably high. More
specifically, it has been suggested that in the late 1970s only
20% of the projects ‘achieved something like their intended
benefits’ (Eason, 1988), and that by the late 1980s, it .
This document discusses connecting IT strategy to business value. It argues that IT should not be seen merely as an infrastructure utility, but rather as a strategic enabler. The value of IT is negotiated between IT providers and business users. For IT to have strategic value, it must be integrated with business needs and processes. The document examines different views on IT strategy and discusses balancing operational effectiveness with strategic positioning of IT.
CHAPTER-1 Discussion 11) DiscussionCOLLAPSEIT value Infor.docxmccormicknadine86
CHAPTER-1 Discussion 1
1)
Discussion
COLLAPSE
IT value: Information Technology is used everywhere in the world. Information technology provides many services to other organizations and ends users such as by providing computer services, network services, hosting the applications and sites and other engineering applications. IT organizations price their services from their clients and customers. Many clients think that service providers are costing them more because they only know a few benefits about the services they are taking. For this service providers need to communicate and explain IT value with their customers, the benefits and features they are getting in it.
The IT value is realized when every product and service is analyzed and its benefits are used completely by the organization. This helps to make decisions about investment in new technology.
Reference:
Meyer, N. D. (2007, December 1). IT Value: What It Really Means. Retrieved from https://www.cio.com/article/2437551/it-value--what-it-really-means.html.
2)
Week 1 - Discussion Attachment
COLLAPSE
IT value is defined as capturing and understanding the business value derived from both financial and economical in information technology which consists of various components and systems. IT value consists of various category which include revenue quantity quality and cost. IT value is determined based on the organizational performance and the impact of information technology both at a higher level and medium level and organization hierarchy (John, 2003). IT value comprises of efficiency impact and competitive level impact. The IT value is understood by various means of technologies like using business intelligence and other data science technology is to understand the customer and what can be provided to create value internally as well as to any client. The organization's ethics and industrial standards will elevate the IT value of a company. IT value provides detailed information about the organization process and their correlation between the employees and their ideas and approach towards implementation and other projects.
Information technology is realized when the organization is not performing as per their industrial standards, The rectification is can be made by the senior executives and other decision-makers whether the IT value is being fulfilled internally and externally. The most important thing about IT realization is organization is justifying the services to the client (John, 2003)
References:
Glaser, John. (2003). Analyzing information technology value. Healthcare financial management : journal of the Healthcare Financial Management Association. 57. 98-100, 102, 104.
Lee, Byungtae & Menon, Nirup. (2000). Information Technology Value Through Different Normative Lenses.. J. of Management Information Systems. 16. 99-120. 10.1080/07421222.2000.11518267.
CHAPTER-1 Discussion 2
3)
Week 1 Discussion
Principles for delivering value
In almost all sections, IT can be d ...
Total IT spending as a percentage of revenue, total IT spending per user, and total IT spending per PC are three useful metrics for managing an IT organization and benchmarking against other companies. Total IT spending as a percentage of revenue indicates how efficiently a company spends on IT compared to industry standards and allows identification of opportunities for improvement. Total IT spending per user and per PC provide additional perspectives beyond total spending as a percentage of revenue to account for factors like shared devices. Benchmarking against other companies using these metrics helps identify best practices and areas for process improvement to increase efficiency and reduce costs.
Managing It Innovation: Recessionary and Post-Recessionary Service and Staffi...IJMIT JOURNAL
Information Technology (IT) service and staffing models were increasingly reduced in the wake of
recession, which often limits focus for long-term innovation, as the remaining services and staff are focused
on producing short-term requirements. Despite these cutbacks, organizations must continue to innovate and
provide contributions to the set of stakeholders. In addition as the post-recessionary timeframe begins,
organizations that continued to innovate throughout the recession, must retain human capital and take
advantage of their prior investments. Organizations that focus on innovation during recessionary
timeframes, are more likely to emerge in a superior competitive position during post-recessionary
timeframes. This paper explores identified industry best practices for IT service and staffing models that
can be utilized to ensure adequate resources are dedicated to achieving innovation, and management
implications for post-recessionary methods. In addition, a review of the capacities and capabilities which
fall under the new IT service and staffing models are developed in the form of an innovation matrix. This
approach reduces IT requirements to focus on key strategic service areas, with considerations for reduced
staffing needs during periods of economic downturn, and staffing retention during the following economic
upturn.
MANAGING IT INNOVATION: RECESSIONARY AND POST-RECESSIONARY SERVICE AND STAFFI...IJMIT JOURNAL
This document discusses managing IT innovation through recession and post-recession service and staffing models. It proposes a framework involving establishing an IT service catalog, optimizing application portfolios, aligning service-oriented architectures, identifying emerging services, and generating sustainability. During recessions, IT budgets and staffing are often cut, limiting innovation; however, organizations that continue innovating through downturns will be better positioned post-recession. The framework is intended to help organizations dedicate resources to innovation through various economic cycles.
This document outlines a technology management plan for the fictitious company Krafty Solutions. The plan emphasizes that technology integration should be business-driven and measure success through key performance indicators tied to business goals. It recommends strategic initiatives to analyze, develop, implement and maintain information systems that support business decisions through necessary IT integration. The plan also stresses the importance of organizational structures, communication, information security, and using tools like decision support systems to help managers make effective, data-driven decisions. It advocates periodic reviews to ensure the technology management plan remains aligned with business needs and strategic vision.
This document discusses two main perspectives on how information technology contributes to business performance: the market-driven perspective and the resource-based view. It proposes a model that combines these perspectives by showing how both IT support for business strategy and IT support for firm assets impact firm performance. The model was tested via a survey of 96 small and medium enterprises.
1. Report contentThe report should demonstrate your understa.docxblondellchancy
1. Report content
The report should demonstrate your understanding of good project management and health and safety management as appropriate within the context of your chosen project and event.
The report will present the context/background of the chosen project, describe the project, and present student’s critical reflection and thoughts on the management of one particular event/issue of project. The impacts of the event/issue on (1) people, (2) cost, (3) time, (4) health and safety, (5) sustainability, and (6) Ethics will be explored. Using the theory and tools presented in the lectures across the module as well as their own independent research, students should suggest and discuss solutions to (1) overcome the challenges and manage the risks associated with the event/issue, and (2) improve the efficiency, sustainability and ethics of the management of the event/issue.
Appendices and references must be used to demonstrate study that has been undertaken and to provide sources for points made in the body of the report. This will include copies of any individual or group student work undertaken during the module.
The student should refer to the learning materials and readings provided across the module, but are also recommended to give appropriate regard to any additional useful material available online in terms of theory and practice.
.
1. Research the assessment process for ELL students in your state. W.docxblondellchancy
1. Research the assessment process for ELL students in your state. What is the process your district goes through to properly identify students for ESL program placement?
2. Planning for effective instruction is the key to academic success for students. Using data to inform instruction is a regular process. Discuss how teachers can use longitudinal data along with other formative classroom assessments to design effective instruction.
200-300
.
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Similar to 8132019 EBSCOhosthttpsweb.b.ebscohost.comehostdeliv.docx
COMPLEMENTARY ASSETS AND VALUE CREATION BEYOND INFORMATION TECHNOLOGY INVES...ijmvsc
This work was aimed at analyzing the relationships between some selected complementary assets
(independent variables) and some specified benefits/value creation (dependent variables), beyond
Information Technology (IT) investments in an organizational setting. The purpose was to determine
significant complementary assets that impact greatly on value creation beyond IT investments.With 175
questionnaires sent to IT project and program managers of companies in the Telecom industry in Ghana,
and analyzed,thefollowing findings were revealed: for value creation beyond IT investments to be
achieved, the staff must be computer literate, there must be the availability of experts and firms around to
help in resolving IT problems quickly and timely that crop up, and the staff must be empowered to be
innovative with IT. Again, the results showed that most of the complementary assets employed in this
work, tend to favor benefits of Improved staff morale and Improved business processes. Also, one of the
strongest positive relationships was found to exist between “supportive organizational culture that
values efficiency and effectiveness” as predictor variable and “service/product quality” as response
variable.
This research essay descriptively details what is meant by Information Technology Strategy and why in increasingly automated business environment of today, successful firms are those that not only have an established IT strategy but also keep updating the same based on changes that may be encountered. Further explained in extreme detail are the reasons that necessitate the need for organizations of today to have an established and implemented IT strategy other than the competition that may be faced from other organizations which have an IT strategy. Also detailed are the values and benefits that may be derived by organizations by having an IT strategy and what qualities and elements of an IT strategy would need to be established in order to derive the maximum amount of value from an IT strategy.
Chapter 3Linking IT to Business Metrics From the first time IT.docxwalterl4
Chapter 3
Linking IT to Business Metrics
From the first time IT started making a significant dent in corporate balance sheets, the holy grail of academics, consultants, and business and IT managers has been to show that what a company spends on IT has a direct impact on its performance. Early efforts to do this, such as those trying to link various measures of IT input (e.g., budget dollars, number of PCs, number of projects) with various measures of business performance (e.g., profit, productivity, stock value) all failed to show any relationship at all (Marchand et al. 2000). Since then, everyone has prop- erly concluded that the relationship between what is done in IT and what happens in the business is considerably more complex than these studies first supposed. In fact, many researchers would suggest that the relationship is so filtered through a variety of “conversion effects” (Cronk and Fitzgerald 1999) as to be practically impossible to demonstrate. Most IT managers would agree. They have long argued that technology is not the major stumbling block to achieving business performance; it is the business itself—the processes, the managers, the culture, and the skills—that makes the differ- ence. Therefore, it is simply not realistic to expect to see a clear correlation between IT and business performance at any level. When technology is successful, it is a team effort, and the contributions of the IT and business components of an initiative cannot and should not be separated.
Nevertheless, IT expenditures must be justified. Thus, most companies have concentrated on determining the “business value” that specific IT projects deliver. By focusing on a goal that matters to business (e.g., better information, faster transaction processing, reduced staff), then breaking this goal down into smaller projects that IT can affect directly, they have tried to “peel the onion” and show specifically how IT delivers value in a piecemeal fashion. Thus, a series of surrogate measures are usually used to demonstrate IT’s impact in an organization. (See Chapter 1 for more details.)
More recently, companies are taking another look at business performance met- rics and IT. They believe it is time to “put the onion back together” and focus on what
1 This chapter is based on the authors’ previously published article, Smith, H. A., J. D. McKeen, and C. Street. “Linking IT to Business Metrics.” Journal of Information Science and Technology 1, no. 1 (2004): 13–26. Reproduced by permission of the Information Institute.
1
27
28 Section I • Delivering Value with IT
really matters to the enterprise. This perspective argues that employees who truly understand what their business is trying to achieve can sense the right ways to per- sonally improve performance that will show up at a business unit and organizational level. “People who understand the business and are informed will be proactive and ... have a disposition to create business value every day in many.
2C h a p t e r1 Developing and Delivering on the it Va.docxBHANU281672
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter 1 • Developing and Delivering on the IT Value Proposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Th.
2C h a p t e r1 Developing and Delivering on the it Va.docxgilbertkpeters11344
2
C h a p t e r
1 Developing and Delivering on the it Value Proposition1
1 This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
It’s déjà vu all over again. For at least twenty years, business leaders have been trying to figure out exactly how and where IT can be of value in their organizations. And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.
Chapter1 • DevelopingandDeliveringontheITValueProposition 3
This chapter first looks at the nature of IT value and “peels the onion” into its
different layers. Then it examines the three components of delivering IT value: value
identification, conversion, and value realization. Finally, it identifies five general
principles for ensuring IT value will be achieved.
Peeling the OniOn: Understanding it ValUe
Thirty years .
If the CIO is to be valued as a strategic actor, how can he bring.docxTatianaMajor22
If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Is there a lack of information on strategic planning? Nope. I think the process of planning is poorly understood, and rarely endorsed. The reasons are simple enough. Planning requires a commitment of resources (time, talent, money); it requires insight; it requires a total immersion in the corporate culture. While organizations do plan, planning is invariably attached to the budget process. It is typically here that the CIO lays out his/her vision for the coming year Now a few years ago authors began writing on the value of aligning IT purpose to organizational purpose. They wrote at a time when enterprise architectural planning was fairly new, and enterprise resource management was on the lips of every executive. My view is that alignment is a natural process driven by the availability of the tools to accomplish it. Twenty years ago making sense of IT was more about processing power, and database management. We are in a new age of IT, and it is the computer that is the network, not the network as an independent self-contained exchange of information. If you will spend some time reviewing the basic materials I provided on strategic planning and alignment, we can begin our discussions for the course. Again, here is the problem I would like for us to tackle: If the CIO is to be valued as a strategic actor, how can he bring to the table the ethos of alignment, bound to the demands of process strategic planning to move IT to the forefront of the organization's future? Most of the articles I bundled together for this week are replete with tables and charts. These can be a heavy read. Your approach should be to review these articles for the "big ideas" or lessons that are take away. I think these studies are significant enough that we will conclude our first week with an understanding of the roles between executive leaders, and how they see Information Technology playing a role in shaping a business strategy.
Read the articles to answer the question. Please No Plagerism or verbatim but you are allowed to quote from the article.
Achieving and Sustaining
Business-IT Alignment
Jerry Luftman
Tom Brier
I
n recent decades, billions of dollars have been invested in intormation tech-
nology (IT). A key concern of business executives is alignment—applying IT
in an appropriate and timely way and in harmony with business strategies,
goals, and needs. This issue addresses both how IT is aligned with the busi-
ness and how the business should be aligned with IT Frustratingly, organizations
seem to find it difficult or impossible to harness the power of information tech-
nology for their own long-term benefit, even though there is worldwide evi-
dence that IT has the power to transform whole industries and markets.' How
can companies.
81119, 10(43 AMOriginality ReportPage 1 of 7httpsucum.docxblondellchancy
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11 M y p a p e rM y p a p e r 44 S t u d e n t p a p e rS t u d e n t p a p e r 22 S t u d e n t p a p e rS t u d e n t p a p e r
University of the Cumberlands
Sunil Reddy Donuru
Prof: Dr Jess Schwartz
The main purpose of this article is to show how the IT strategic emphases and IT investments can affect a firm’s profitability level and market
value. To further show the clear effect, the author used empirical tests founded from the documented information collected from over 300
firms in U.S. on this clear picture, the author concludes that organizations with a dual emphasis in their IT system have a higher Tobin's Q
than firms with an income or a cost emphasis at its mean estimation ventures. The author suggests that firms may decide on using IT strategic
emphasis for one reason alone and that is to moderate the strong correlation between IT investments and firm performance. The major
discovery of the research was that firms that have adopted dual-emphasis on IT strategies have a stronger IT–profitability relationship than sin-
gle-emphasis firms, these firms also have a stronger IT–Tobin’s Q relationship than firms that have adopted the revenue-emphasis strategy.
The conclusions from this research has been used all over the world by managers and business owners to help them in making informed deci-
sions on how to allocate assets for IT strategies that can efficiently support the overall goal of an organization. For average levels of IT ex-
penditure, a dual emphasis in IT strategy satisfies as long as a higher firm valuation, and a larger amount of IT speculations are made with d ...
Fueling Innovation through InformationTechnology in SMEsb.docxhanneloremccaffery
Fueling Innovation through Information
Technology in SMEs*
by Clay Dibrell, Peter S. Davis, and Justin Craig
This paper describes a study that investigates the mediating effects of information
technology (IT) on the relationships among product and process innovations and firm
performance (measured in multiple profitability and growth rate metrics). Using
structural equation modeling on a sample of 397 small and medium-sized enterprises
(SMEs), we find evidence that (1) increases on the strategic emphasis placed on
innovation, both product and process, positively impact the prominence managers
place on IT; (2) the impact of innovation (both product and process) on performance
(both profitability and growth) is primarily indirect, felt via the mechanism of the
importance managers place on IT; and (3) an increased emphasis on IT abets
managers’ perception of their firms’ performance, as compared with that observed
among peer firms (other SMEs).
A commitment to innovation has long
been considered to be important to the
success of entrepreneurial ventures and
small firms (Fiol 1996). Research has
shown that innovation stimulates ven-
tures’ growth (e.g., Wolff and Pett
2006; Motwani et al. 1999; Hax and
Majluf 1991) and also provides a key
source of competitive advantage in the
absence of scale economies (Lewis et al.
2002). Considered from the resource-
based view of the firm (Barney 1991),
successful innovation may be dependent
on the presence of other organization-
*The authors wish to thank Don Neubaum and the anonymous reviewers for their helpful
comments and direction. Financial support was provided by the Austin Family Business
Program in the College of Business at Oregon State University.
Clay Dibrell is associate professor of strategic management in the College of Business at
Oregon State University and research fellow at Bond University.
Peter S. Davis is professor and chair of the Department of Management in the Belk College
of Business at the University of North Carolina–Charlotte.
Justin Craig is associate professor of family business and entrepreneurship at Bond
University.
Address correspondence to: Clay Dibrell, 200 Bexell Hall, College of Business, Oregon State
University, Corvallis, OR 97331. Tel: (541) 737-6061. E-mail: [email protected]
Journal of Small Business Management 2008 46(2), pp. 203–218
DIBRELL, DAVIS, AND CRAIG 203
mailto:[email protected]
specific skills and capabilities. For
example, substantial evidence has begun
to accumulate that suggests that appro-
priate strategic employment of informa-
tion technology (IT) may be essential
in translating strategies (e.g., innovation)
into enhanced firm performance (e.g.,
Ray, Muhanna, and Barney 2005;
Sakaguchi, Nicovich, and Dibrell 2004).
A direct linkage between IT and firm
performance was established by Powell
and Dent-Micallef (1997). Bharadwaj
(2000) found that high IT-capable firms
(those that invest heavily in IT) outper-
form competitors that do not inve ...
Challenges in Business and IT AlignmentVidur Pandit
The document discusses challenges with aligning business and IT. It provides context on the importance of business-IT alignment and defines key concepts. The phases of the business-IT alignment cycle are also outlined, including plan, model, manage and measure. The goal of alignment is to ensure IT supports business strategies and processes efficiently.
The art of value creation with information technology potentials in business ...Alexander Decker
This document discusses the role of strategic information systems in business value creation. It defines value creation as activities that reduce costs and increase profits through efficiency. Strategic information systems involves using information technology and managerial skills to identify business problems and create solutions that help organizations achieve their objectives. The document analyzes how strategic information systems can help realize value by focusing on business processes and capturing value through technologies like the internet, business intelligence, and collaboration systems. It argues that information systems strategy is important for competitive advantage and should be integrated with business strategy for organizations to effectively create value.
This document summarizes a study that explores the relationship between IT outsourcing (ITO) and business and IT alignment. The study aims to provide recommendations for how outsourcing relationships can support business and IT alignment. Through a literature review and analysis of four case studies, the study found that higher levels of motivation for outsourcing, relationship between outsourcer and provider, and alignment maturity of the outsourcer can lead to positive effects of ITO on business and IT alignment. Organizational turbulence on either side can negatively impact the relationship. Service providers also tended to assess relationships more positively than outsourcers.
Research articleFactors affecting the successful realisati.docxrgladys1
Research article
Factors affecting the successful realisation
of benefits from systems development
projects: findings from three case studies
Neil F Doherty1, Colin Ashurst2, Joe Peppard3
1The Business School, Loughborough University, Loughborough, UK;
2The Business School, Durham University, Durham, UK;
3Cranfield School of Management, Cranfield, Bedfordshire, UK
Correspondence:
NF Doherty, The Business School, Loughborough University, Loughborough, LE11 3TU, UK.
Tel: þ 44 01509 223328;
Fax: þ 44 01509 223960;
E-mail: [email protected]
Abstract
The return that organisations derive from investments in information systems and
technology continues to disappoint. While there is a very significant body of literature on
the factors that should facilitate a successful outcome from systems development, there is
growing concern that these prescriptions are not having their desired effect. In this paper,
we argue that the success of a systems development project should be measured in terms
of its ability to deliver meaningful benefits, rather than the timely delivery of a technical
artefact, and therefore organisations should adopt an explicit and proactive benefits
realisation approach when investing in IT. Consequently, we sought to explore those
actionable factors that might facilitate the effective realisation of benefits from systems
development initiatives. Three organisations were identified that claimed to adopt a
proactive approach to benefits realisation, and detailed studies of their systems
development practices were conducted. Our analysis found that whilst one organisation
had been successful in its adoption of a benefits realisation perspective, the other two had
not, and this allowed us to identify those factors that helped to explain this difference in
outcomes. In short, this paper makes an important contribution by identifying how a sub-
set of traditional systems success factors might be enhanced, to give them a more explicit
benefits realisation orientation. Moreover, it presents a coherent set of principles that can
be used for deriving other factors and practices.
Journal of Information Technology (2012) 27, 1–16. doi:10.1057/jit.2011.8
Published online 9 August 2011
Keywords: IT development projects; benefits realisation; organisational change; ISD success factors;
value
Introduction
T
he context for the research reported in this paper is the
continued high failure rate of investments in information
systems/information technology (IS/IT): a considerable
amount of time, money, effort and opportunity can be wasted
upon IT investments that ultimately fail to deliver benefits
(Fortune and Peters, 2005; Peppard and Ward, 2005).
Estimates of the level of failure may vary, but over the past
30 years they have tended to stay uncomfortably high. More
specifically, it has been suggested that in the late 1970s only
20% of the projects ‘achieved something like their intended
benefits’ (Eason, 1988), and that by the late 1980s, it .
This document discusses connecting IT strategy to business value. It argues that IT should not be seen merely as an infrastructure utility, but rather as a strategic enabler. The value of IT is negotiated between IT providers and business users. For IT to have strategic value, it must be integrated with business needs and processes. The document examines different views on IT strategy and discusses balancing operational effectiveness with strategic positioning of IT.
CHAPTER-1 Discussion 11) DiscussionCOLLAPSEIT value Infor.docxmccormicknadine86
CHAPTER-1 Discussion 1
1)
Discussion
COLLAPSE
IT value: Information Technology is used everywhere in the world. Information technology provides many services to other organizations and ends users such as by providing computer services, network services, hosting the applications and sites and other engineering applications. IT organizations price their services from their clients and customers. Many clients think that service providers are costing them more because they only know a few benefits about the services they are taking. For this service providers need to communicate and explain IT value with their customers, the benefits and features they are getting in it.
The IT value is realized when every product and service is analyzed and its benefits are used completely by the organization. This helps to make decisions about investment in new technology.
Reference:
Meyer, N. D. (2007, December 1). IT Value: What It Really Means. Retrieved from https://www.cio.com/article/2437551/it-value--what-it-really-means.html.
2)
Week 1 - Discussion Attachment
COLLAPSE
IT value is defined as capturing and understanding the business value derived from both financial and economical in information technology which consists of various components and systems. IT value consists of various category which include revenue quantity quality and cost. IT value is determined based on the organizational performance and the impact of information technology both at a higher level and medium level and organization hierarchy (John, 2003). IT value comprises of efficiency impact and competitive level impact. The IT value is understood by various means of technologies like using business intelligence and other data science technology is to understand the customer and what can be provided to create value internally as well as to any client. The organization's ethics and industrial standards will elevate the IT value of a company. IT value provides detailed information about the organization process and their correlation between the employees and their ideas and approach towards implementation and other projects.
Information technology is realized when the organization is not performing as per their industrial standards, The rectification is can be made by the senior executives and other decision-makers whether the IT value is being fulfilled internally and externally. The most important thing about IT realization is organization is justifying the services to the client (John, 2003)
References:
Glaser, John. (2003). Analyzing information technology value. Healthcare financial management : journal of the Healthcare Financial Management Association. 57. 98-100, 102, 104.
Lee, Byungtae & Menon, Nirup. (2000). Information Technology Value Through Different Normative Lenses.. J. of Management Information Systems. 16. 99-120. 10.1080/07421222.2000.11518267.
CHAPTER-1 Discussion 2
3)
Week 1 Discussion
Principles for delivering value
In almost all sections, IT can be d ...
Total IT spending as a percentage of revenue, total IT spending per user, and total IT spending per PC are three useful metrics for managing an IT organization and benchmarking against other companies. Total IT spending as a percentage of revenue indicates how efficiently a company spends on IT compared to industry standards and allows identification of opportunities for improvement. Total IT spending per user and per PC provide additional perspectives beyond total spending as a percentage of revenue to account for factors like shared devices. Benchmarking against other companies using these metrics helps identify best practices and areas for process improvement to increase efficiency and reduce costs.
Managing It Innovation: Recessionary and Post-Recessionary Service and Staffi...IJMIT JOURNAL
Information Technology (IT) service and staffing models were increasingly reduced in the wake of
recession, which often limits focus for long-term innovation, as the remaining services and staff are focused
on producing short-term requirements. Despite these cutbacks, organizations must continue to innovate and
provide contributions to the set of stakeholders. In addition as the post-recessionary timeframe begins,
organizations that continued to innovate throughout the recession, must retain human capital and take
advantage of their prior investments. Organizations that focus on innovation during recessionary
timeframes, are more likely to emerge in a superior competitive position during post-recessionary
timeframes. This paper explores identified industry best practices for IT service and staffing models that
can be utilized to ensure adequate resources are dedicated to achieving innovation, and management
implications for post-recessionary methods. In addition, a review of the capacities and capabilities which
fall under the new IT service and staffing models are developed in the form of an innovation matrix. This
approach reduces IT requirements to focus on key strategic service areas, with considerations for reduced
staffing needs during periods of economic downturn, and staffing retention during the following economic
upturn.
MANAGING IT INNOVATION: RECESSIONARY AND POST-RECESSIONARY SERVICE AND STAFFI...IJMIT JOURNAL
This document discusses managing IT innovation through recession and post-recession service and staffing models. It proposes a framework involving establishing an IT service catalog, optimizing application portfolios, aligning service-oriented architectures, identifying emerging services, and generating sustainability. During recessions, IT budgets and staffing are often cut, limiting innovation; however, organizations that continue innovating through downturns will be better positioned post-recession. The framework is intended to help organizations dedicate resources to innovation through various economic cycles.
This document outlines a technology management plan for the fictitious company Krafty Solutions. The plan emphasizes that technology integration should be business-driven and measure success through key performance indicators tied to business goals. It recommends strategic initiatives to analyze, develop, implement and maintain information systems that support business decisions through necessary IT integration. The plan also stresses the importance of organizational structures, communication, information security, and using tools like decision support systems to help managers make effective, data-driven decisions. It advocates periodic reviews to ensure the technology management plan remains aligned with business needs and strategic vision.
This document discusses two main perspectives on how information technology contributes to business performance: the market-driven perspective and the resource-based view. It proposes a model that combines these perspectives by showing how both IT support for business strategy and IT support for firm assets impact firm performance. The model was tested via a survey of 96 small and medium enterprises.
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1. Review the three articles about Inflation that are of any choice.
2. Locate two JOURNAL articles which discuss this topic further. You need to focus on the Abstract, Introduction, Results, and Conclusion. For our purposes, you are not expected to fully understand the Data and Methodology.
3. Summarize these journal articles. Please use your own words. No copy-and-paste. Cite your sources. in 1200 words
.
1. Read the RiskReport to see what requirements are.2. Read the .docxblondellchancy
1. Read the RiskReport to see what requirements are.
2. Read the Interim Risk Assessment to see the current state of paper that needs to be revised.
3. Use the RiskReport and the details below on what is missing to revise paper.
Feedback on changes needed to the Risk Assessment Plan
Risk Assessment Plan: Purpose does not make reference to BRI at all. Provide context. Scope, assumptions and constraints appear reasonable, but you can add an assumption or constraint regarding budget.
Need to elaborate on how risk is determine using the qualitative approach.
1. Title
IT Security Risk Assessment
2. Introduction
You are employed with Government Security Consultants, a subsidiary of Largo Corporation. As a member of IT security consultant team, one of your responsibilities is to ensure the security of assets as well as provide a secure environment for customers, partners and employees. You and the team play a key role in defining, implementing and maintaining the IT security strategy in organizations.
A government agency called the Bureau of Research and Intelligence (BRI) is tasked with gathering and analyzing information to support U.S. diplomats.
In a series of New York Times articles, BRI was exposed as being the victim of several security breaches. As a follow up, the United States Government Accountability Office (GAO) conducted a comprehensive review of the agency’s information security controls and identified numerous issues.
The head of the agency has contracted your company to conduct an IT security risk assessment on its operations. This risk assessment was determined to be necessary to address security gaps in the agency’s critical operational areas and to determine actions to close those gaps. It is also meant to ensure that the agency invests time and money in the right areas and does not waste resources. After conducting the assessment, you are to develop a final report that summarizes the findings and provides a set of recommendations. You are to convince the agency to implement your recommendations.
This learning activity focuses on IT security which is an overarching concern that involves practically all facets of an organization’s activities. You will learn about the key steps of preparing for and conducting a security risk assessment and how to present the findings to leaders and convince them into taking appropriate action.
Understanding security capabilities is basic to the core knowledge, skills, and abilities that IT personnel are expected to possess. Information security is a significant concern among every organization and it may spell success or failure of its mission. Effective IT professionals are expected to be up-to-date on trends in IT security, current threats and vulnerabilities, state-of-the-art security safeguards, and security policies and procedures. IT professionals must be able to communicate effectively (oral and written) to executive level management in a non-jargon, executive .
1. Quantitative According to the scoring criteria for the BAI, .docxblondellchancy
1. Quantitative: According to the scoring criteria for the BAI, a score of 21 or below indicates very low anxiety. What percentage of each group’s scores falls below that clinical cutoff?
Qualitative: Based on the qualitative responses, what percentage of the participants articulated a feeling of improvement?
.
1. Prof. Lennart Van der Zeil’s theorem says that any programmin.docxblondellchancy
1. Prof. Lennart Van der Zeil’s theorem says that any programming language is
complete
if it can be used to write a program to compute any computable number.
a. What is a computable number?
b. What is a non-computable number?
c. If all existing programming languages are complete why do we need more than one?
2. Two methodologies are used to transform programs written in a
source language
(also known as a
programmer-oriented language
, or a horizontal language, or a high-level language) into a
target language
(also known as a machine language, or a vertical language, or a low-level language). There is a static method called
translation
and a dynamic method called
interpretation
. Yet FORTRAN while 98% static ., uses interpretation for the Formatted I/O statement, similarly COBOL uses interpretation for the MOVE and MOVE CORRESPONDING statements; on the other hand, Java is fully interpretative except that in some programs and certain data sets it may invoke a JIT (Just In Time) compiler to execute a bit of static code
. Why do language designers mix these modalities if either is complete?
Hint: This is a long question with a short answer.
3. C and C++ store numerical arrays (matrices) in
row major
order and each index range must begin with 0; whereas FORTRAN stores arrays in
column major
order and the (default) index range starts (almost always) with 1. Engineers and scientists are often faced with the problem of converting a working program, or much more often a subroutine, from one language to another. Unfortunately, due to the index range difference (0 to n-1) in C/C++ and (1 to N) in FORTRAN, viewing one array as simply the transpose of the other will not suffice. What steps would you take to convert such a subroutine to compute the product of two matrices A(N,M) and B(M,N) to produce C(N,N) from FORTRAN to C++?
4. What was the major reason Jim Gosling invented Java? Did he succeed?
5. What are the four major features of C++ that were eliminated in Java? Why were they taken out? Why do we not miss them?
6. What was Kim Polese’ role at SUN Microsystems and why did she think Java should be positioned as a general purpose computer programming language? How did she accomplish this truly incredible feat, not done since Captain (later Admiral) Grace Murray Hopper, USN standardized COBOL in the early 1960s.
7. Describe briefly the role of women in the development of computer programming and computer programming languages. (Ada Lovelace, Betty Holberton, Grace Hopper, Mandaly Grems, Kim Polese, Laura Lemay)
8. What are the pros and cons of overloaded operators in C++? Java has only one, what is it?
9. State your own arguments for allowing mixed mode arithmetic statements. (See Ch 7)
10. What is BNF and why are meta-languages like BNF and EBNF used?
.
1. Review the results of your assessment using the explanation.docxblondellchancy
1. Review the results of your assessment using the explanation below.
2. Write at least 200 words describing the results, how you learn best, and how you will modify your study techniques to fit your learning style.
What do the results mean? Barbara Soloman, Coordinator of Advising, First Year College, North Carolina State University explains:
· Active Learners: tend to retain and understand information best by doing something active with it like discussing or explaining it to others. They enjoy group work.
· Reflective Learners: prefer to think about it quietly first. They prefer to work alone.
· Sensing Learners: tend to like learning facts. They are patient with details and good at memorizing things. They are practical and careful.
· Intuitive Learners: prefer discovering possibilities and relationships. They are good at grasping new concepts and are comfortable with abstractions and mathematical formulations. They are innovative and creative.
· Visual Learners: remember best what they see--pictures, diagrams, flowcharts, timelines, films, and demonstrations.
· Verbal Learners: get more out of words--written and spoken explanations. Everyone learns more when information is presented both visually and verbally.
· Sequential Learners: tend to gain understanding in linear steps, with each step following logically from the previous one. They follow logical steps when finding solutions.
· Global Learners: Global learners tend to learn in large jumps, absorbing material almost randomly without seeing connections, and then suddenly "getting it." They may be able to solve complex problems quickly or put things together in novel ways once they have grasped the big picture, but they may have difficulty explaining how they did it.
.
1. Search the internet and learn about the cases of nurses Julie.docxblondellchancy
1. Search the internet and learn about the cases of nurses Julie Thao and Kimberly Hiatt.
2. List and discuss lessons that you and all healthcare professionals can learn from these two cases.
3. Describe how the principle of beneficence and the virtue of benevolence could be applied to these cases. Do you think the hospital administrators handled the situations legally and ethically?
4. In addition to benevolence, which other virtues exhibited by their colleagues might have helped Thao and Hiatt?
5. Discuss personal virtues that might be helpful to second victims themselves to navigate the grieving process.
All discussion boards should be submitted in APA style (7th edition
.
1. Qualitative or quantitative paperresearch required(Use stati.docxblondellchancy
1. Qualitative or quantitative paper/research required(Use statistics and numbers or facts.
2. Apply Statistics, numbers, research
3. Primary Sources explained
4. APA Formatting(Do not use the word “I”, do not use opinions in papers do not use “we”or pronouns)
5. Write a 5 page paper (8 in total-cover page and reference page), you can go over
APA FORMAT
5 scholarly sources
.
1. Prepare a one page paper on associative analysis. You may researc.docxblondellchancy
This document instructs the reader to prepare two one-page papers, with the first focusing on associative analysis and the second focusing on either decision trees or discriminant analysis with a comparison of the two. Both papers should be double spaced, cite sources using APA format, and allow for internet research to supplement the information provided.
1. Prepare a comparative table in which you contrast the charact.docxblondellchancy
1. Prepare a comparative table in which you contrast the characteristics and details of the origins and development of social work in the United States, Europe, Latin America and the Caribbean. Bring your comparison chart to the workshop to participate in a collaborative activity. The student will identify the most significant historical events in the United States that influenced the development and evolution of the Social Work profession.
2. Look for information on the following agencies:
1. National Association of Social Workers (NASW)
2. International Federation of Social Work (IFSW)
3. Association of Social Work Boards (ASWB)
4. Council on Social Work Education (CSWE)
Be prepared to participate in a collaborative activity during the workshop.
3. Write a reflective essay of at least two pages, and elaborate on the following aspects:
1. What is the current state of Social Work in the United States?
2. What do you focus on and what are the functions of current (modern) social work in the United States?
3. Explain the historical events that impacted the different ways of practicing social work.
Remember that an essay is made up of three basic parts: introduction, body or middle, and conclusion. In a reflective essay, the student must effectively combine the concepts and foundations of the discipline of study (definitions, history, prominent figures) with their experiences applicable to the topic of discussion or the guiding questions.
.
1. Portfolio part II a) APRN protocol also known as collab.docxblondellchancy
1.
Portfolio part II
a) APRN protocol also known as collaborative agreement with supervising physician(s).
b.) business proposal (refer to portfolio explanation/examples found on your BB lecture section.
There is an example of a business proposal. Use the example to create a brief business proposal with no more than two pages word or power point as your choice;
c.) Create a LinkedIn page and send me a proof of you creating the link.
.
1. Post the link to one news article, preferably a piece of rece.docxblondellchancy
1. Post the link to
one
news article, preferably a piece of recent news (2 points)
2. Explain
A) Which concepts (in which chapters) we learn in class is this news related to (4 points).
B) Specifically, how this concept is demonstrated in the news in your perspective (11 points).
.
1. Please explain fixed and flexible budgeting. Provide an examp.docxblondellchancy
1. Please explain fixed and flexible budgeting. Provide an example of budgeting for three
consecutive periods in which safety margin is included for flexibility
2. Explain statement of cash flows proforma and its significance in budgeting. Provide a
hypothetical example of a statement of cash flows in a manufacturing enterprise.
.
1. Open and print the Week 6 Assignment.2. The assignment .docxblondellchancy
1. Open and print the "Week 6 Assignment".
2. The assignment has four parts: A, B, C, and D.
(Part A has been created for use of the Access program where the data source recipients are to be created. However, if you do not have the Access program then you will need to create the data source recipients with the Excel program before you begin keying the letters for the mail merge. Also, If you are using Excel then be certain to create the label headers in each column with the data source recipient information beneath the headers. Whether you use Access or Excel you MUST save the data source in the Week 6 folder in which you will upload.
If you do not save the data source recipients in the folder then I am not able to grade your assignment
.)
3. Create a folder: [your last name]-Week6 (be sure to save to a disk device/hard drive NOT the desktop area.)
5. Complete the assignment as instructed and Save all work in [your last name]-Week6 folder.
6. Zip the folder and upload in the Week 6 Assignment Upload. DO NOT ATTACH THE FOLDER TO EMAIL, IT WILL NOT BE ACCEPTED. I will review the assignment and send you comments about the graded work.
.
1. Plato’s Republic takes as its point of departure the question of .docxblondellchancy
1. Plato’s Republic takes as its point of departure the question of the nature of:
A. JusticeB. ImmortalityC. TimeD. Equality
2. The most accurate way to describe Thrasymachus’ intervention onto the scene in Book I is:
A. He maintains that happiness is unattainable.B. He maintains that only the gods are just. C. He maintains that justice is the advantage of the strong.D. He maintains that justice and injustice are figments of the imagination.
3. In Book I, Thrasymachus’ ironic argument ad hominem is :
A. Socrates needs a wet-nurse.B. Socrates is ugly.C. Socrates should put himself to bed.D. Socrates should not have gone to last night’s banquet.
4. In Book II, Glaucon tells the myth of a ring, the point of which is to illustrate:
A. That we prize material goods above all else.B. That the rich decide what is just and unjust.C. That anyone will commit injustice when they can get away without punishment.D. That myth-telling is essential to philosophy.
5. In Book III, Socrates suggests the city adopt a noble lie, according to which:
A. There are three sorts of beings: humans, angels, and demons.B. Into our natures were mixed one of three metals: gold, silver, or bronze. C. Everyone will live virtuously in a just city.D. The just city lasts forever.
.
1. Objective Learn why and how to develop a plan that encompasses a.docxblondellchancy
1. Objective: Learn why and how to develop a plan that encompasses all components of a security system.
Use the information found at http://nces.ed.gov/pubs98/safetech/chapter5.asp
to research how determining possible physical threats may affect the choice of physical security countermeasures while planning new or updated security systems.
2. Objective: Determine the placement of physical barriers in integration with other components of the security system.
Research the different types of physical barriers and how they fit the needs of different types of facilities. Use the information found at
http://www.fs.fed.us/t-d/phys_sec/deter/index.htm.
APA Format , references & citations.
.
1. Open the attached Excel Assignment.xlsx” file and name it LastN.docxblondellchancy
1. Open the attached “Excel Assignment.xlsx” file and name it “LastName_FirstInitial - Excel Assignment.xlsx”. 2. Set the page orientation to landscape. Change the student name(s) to your name(s). 3. Wrap the text in the column headings A4:J4 and A14:H14 in Sheet 1 and set the column width to (approximately) 10 for columns B to J. 4. Calculate the Gross Pay (F5:F9) using the following formula: Pay Rate times Regular Hours plus 1.5 times Pay Rate times O/T Hours. 5. Display the Taxable Benefits (G5:I9) in the following way: apply a formula/function to allocate and return the appropriate weekly amount of Dental, Insurance, and Medical based on his/her Benefits Level and the corresponding taxable benefit to this code in Sheet 2. The assumptions, the taxable benefit rates, and the tax rates (all in Sheet 2) may be subject to changes, so all formulas should be created in a way so that they would reflect any changes in Sheet 2 automatically. 6. Calculate the Taxable Income (Gross Pay plus Taxable Benefits). 7. Use the Taxable Income (J5:J9) to automatically locate the Federal and Provincial Tax withholdings from the Tax Table on Sheet 2. For example: Federal Tax = Taxable Income * Federal Tax %. 8. Calculate the Employ. Insurance and Govt. Pension contributions based on the Gross Pay (Note: Gross Pay not Taxable Income). The contribution percentages are located in the Assumption area in Sheet 2. Calculate the Total Deductions as a sum of all deductions (Federal Tax, Provincial Tax, Employ. Insurance, and Govt. Pension). 9. Calculate the Net Amount by subtracting the Total Deductions from the Gross Pay. 10. Calculate the totals in B20:G20 11. Insert cheque number 121 in H15 and create a formula that will automatically number all the rest of cheques in sequence. 12. Format the title as Arial 16 pt., bold, italic and merge and centre it across columns A:J. 13. Format all dollar values as: number, 2 decimal places, 1,000 separators and no dollar sign. 14. Centre the contents of the Benefits Level (B5:B9) and the Cheque No. (H15:H19) columns. 15. Format the borders and headings as shown in the example below.
.
1. must be a research article from either pubmed or google scholar..docxblondellchancy
1. must be a research article from either pubmed or google scholar.
2. the article you select must have an abstract, introduction/ background, materials &methods, results, conclusion
3. summarize the article you selected
4. no plagiarism
5. must include reference
.
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
Beyond Degrees - Empowering the Workforce in the Context of Skills-First.pptxEduSkills OECD
Iván Bornacelly, Policy Analyst at the OECD Centre for Skills, OECD, presents at the webinar 'Tackling job market gaps with a skills-first approach' on 12 June 2024
A workshop hosted by the South African Journal of Science aimed at postgraduate students and early career researchers with little or no experience in writing and publishing journal articles.
This presentation was provided by Steph Pollock of The American Psychological Association’s Journals Program, and Damita Snow, of The American Society of Civil Engineers (ASCE), for the initial session of NISO's 2024 Training Series "DEIA in the Scholarly Landscape." Session One: 'Setting Expectations: a DEIA Primer,' was held June 6, 2024.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Training: ISO/IEC 27001 Information Security Management System - EN | PECB
ISO/IEC 42001 Artificial Intelligence Management System - EN | PECB
General Data Protection Regulation (GDPR) - Training Courses - EN | PECB
Webinars: https://pecb.com/webinars
Article: https://pecb.com/article
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A review of the growth of the Israel Genealogy Research Association Database Collection for the last 12 months. Our collection is now passed the 3 million mark and still growing. See which archives have contributed the most. See the different types of records we have, and which years have had records added. You can also see what we have for the future.
Main Java[All of the Base Concepts}.docxadhitya5119
This is part 1 of my Java Learning Journey. This Contains Custom methods, classes, constructors, packages, multithreading , try- catch block, finally block and more.
How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
In this slide, we'll explore how to set up warehouses and locations in Odoo 17 Inventory. This will help us manage our stock effectively, track inventory levels, and streamline warehouse operations.
2. HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND EMPIRICAL
EVIDENCE1.
Mithas, Sunil [email protected]
Rust, Roland T. [email protected]
MIS Quarterly. Mar2016, Vol. 40 Issue 1, p223-246. 24p. 7
Charts, 4 Graphs.
Article
*INFORMATION technology
*FINANCE
*MARKET value
*BUSINESS revenue
*TOBIN'S Q ratio
*COST control
cost reduction
dual emphasis
firm performance
Information technology strategic emphasis
IT ambidexterity
IT investments
IT strategic ambidexterity
profitability
revenue growth
In this paper, we develop conjectures for understanding how
information technology (IT) strategy and IT
investments jointly influence profitability and the market value
of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm
chooses to emphasize, which can be revenue
expansion, cost reduction, or a dual emphasis in which both
3. goals are pursued. Using data from more than
300 firms in the United States, we find that at the mean value of
IT investments, firms with a dual IT strategic
emphasis have a higher market value as measured by Tobin's Q
than firms with a revenue or a cost
emphasis, but they have similar levels of profitability. Of
greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT
investments and firm performance. Dual-emphasis
firms have a stronger IT–Tobin's Q relationship than revenue-
emphasis firms. Dual-emphasis firms also have
a stronger IT– profitability relationship than either revenue- or
cost-emphasis firms. Overall, these findings
imply that, at low levels of IT investment, the firm may need to
choose between revenue expansion and cost
reduction, but at higher levels of IT investment, dual-emphasis
in IT strategy or IT strategic ambidexterity
increasingly pays off. [ABSTRACT FROM AUTHOR]
Copyright of MIS Quarterly is the property of MIS Quarterly
and its content may not be copied or emailed to
multiple sites or posted to a listserv without the copyright
holder's express written permission. However, users
may print, download, or email articles for individual use. This
abstract may be abridged. No warranty is given
about the accuracy of the copy. Users should refer to the
original published version of the material for the full
abstract. (Copyright applies to all Abstracts.)
Professor, Robert H. Smith School of Business, University of
Maryland
Visiting Chair, Marketing Research, Erasmus University
15379
0276-7783
4. 112750564
Academic Search Complete
RESEARCH NOTES
HOW INFORMATION TECHNOLOGY STRATEGY AND
INVESTMENTS INFLUENCE FIRM PERFORMANCE:
CONJECTURE
AND EMPIRICAL EVIDENCE1
In this paper, we develop conjectures for understanding how
information technology (IT) strategy and IT investments jointly
influence profitability and
the market value of the firm. We view IT strategy as an
expression of the dominant strategic objective that the firm
chooses to emphasize, which can
be revenue expansion, cost reduction, or a dual emphasis in
which both goals are pursued. Using data from more than 300
firms in the United
States, we find that at the mean value of IT investments, firms
with a dual IT strategic emphasis have a higher market value as
measured by Tobin’s
Q than firms with a revenue or a cost emphasis, but they have
similar levels of profitability. Of greater importance, IT
strategic emphasis plays a
significant role in moderating the relationship between IT
investments and firm performance. Dual-emphasis firms have a
stronger IT–Tobin’s Q
relationship than revenue-emphasis firms. Dual-emphasis firms
also have a stronger IT– profitability relationship than either
revenue- or cost-
1
5. 2
1
2
8/13/2019 EBSCOhost
https://web.b.ebscohost.com/ehost/delivery?sid=a4f02db1-be61-
4ac6-bd56-57bacea902b5%40pdc-v-
sessmgr06&vid=1&ReturnUrl=https%3a%2f%2fweb.b.ebs…
2/19
emphasis firms. Overall, these findings imply that, at low levels
of IT investment, the firm may need to choose between revenue
expansion and cost
reduction, but at higher levels of IT investment, dual-emphasis
in IT strategy or IT strategic ambidexterity increasingly pays
off.
Keywords: IT ambidexterity; IT strategic ambidexterity; firm
performance; profitability; IT investments; revenue growth; cost
reduction; dual
emphasis; Information technology strategic emphasis
Introduction
Firms spend significant sums of money on information
technology (IT) resources, yet they are often challenged in
developing appropriate strategies
to direct these resources to realize business value (for a
discussion, see Kohli and Devaraj 2004). Previous research has
studied either the impact
of IT investments on firm performance (e.g., Barua and
6. Mukhopadhyay 2000; Dedrick et al. 2003; Hoadley and Kohli
2014; Kohli and Devaraj 2003;
Kohli et al. 2012) or the effect of IT strategic emphasis on firm
performance (e.g., Leidner et al. 2011; Oh and Pinsonneault
2007; Tallon 2007; Tallon
et al. 2000). However, few studies focus on the effect of IT
investments and IT strategic emphasis simultaneously. Given
that profit is equal to
revenue minus cost, it is clear that there are three strategic
paths from IT to firm performance: IT can be used to ( 1) reduce
costs by improving
productivity and efficiency; ( 2) increase revenues by fully
exploiting opportunities through existing customers, channels,
and products/ services and
by finding or creating new customers, channels, and
products/services; or ( 3) reduce costs and increase revenues
simultaneously. What is not clear
is the relative degree to which these strategies and IT
investments jointly influence firm performance. In other words,
despite significant progress in
the literature with regard to understanding the business value of
IT, little is known about how IT strategy moderates the
relationship between IT
investments and firm performance.
This study seeks to answer the following research question:
How do IT strategic emphasis and investments in IT resources
affect firm performance?
To answer this question, we propose conjectures that link IT
strategy and IT investments with firm performance. Although
firm performance is a
multidimensional concept (Richard et al. 2009), following
recent work (Kohli et al. Ow 2012), we use two complementary
measures of firm
performance in this study (profitability and market value) which
relate to both fundamentals and stock market assessment (for a
7. discussion, see
Blanchard et al. 1993; Henwood 1997). We empirically test the
conjectures using archival data from more than 300 U.S. firms.
Our work is related to but distinct from prior research linking
IT investments with profitability and Tobin’s Q (Bharadwaj et
al. 1999; Kohli et al. 2012;
Mithas et al. 2012; Tafti et al. 2013) because we also consider
the effect of IT strategy, perhaps for the first time using a data
set that has information
on both IT investments and IT strategy. Our contribution is to
show that the firm’s IT strategic emphasis moderates the
relationship between IT
investments and firm performance; firms with a dual emphasis
have higher profitability and market value at higher levels of IT
investments. In other
words, successful dual IT emphasis appears to require higher
levels of IT investments. A key insight from our results is that
IT investments and IT
strategy should not be viewed separately from each other and
that firms need to synchronize their IT investment levels and
their IT strategies for
improved performance. The study has implications for firms as
they consider adopting dual strategies in increasingly turbulent
markets. Thus, this
study not only answers an interesting and managerially relevant
empirical research question but also provides directions for
motivating a program of
research to clarify and elaborate the findings through further
theoretical or empirical work.
Background and Theory
Background
Our review of prior literature suggests that despite much
8. progress in the business value of IT literature, two opportunities
for contributions remain.
First, although prior studies have discussed the relationship
between IT strategy and performance, and IT investments and
performance, few
studies focus on how IT strategic emphasis and investment level
jointly affect performance. We define IT strategic emphasis as
the dominant
strategic objective that the firm chooses to emphasize in its IT
strategy, which can be revenue expansion, cost reduction, or a
dual-emphasis in
which both goals are pursued. Other studies have used other
terms such as IT strategic orientation and IT strategic focus to
refer to similar ideas.
Among prior information systems (IS) research on the direct
effects of strategic emphasis on firm performance, Tallon et al.
(2000) find that
executives in firms with more focused IT goals (e.g., operations
focus, market focus, dual focus) perceive greater payoffs from
IT across the value
chain. Subsequently, Tallon (2007) uses Treacy and Wiersema’s
(1993) typology (operational excellence, customer intimacy, and
product
leadership) and finds that IT business value is the highest in
firms with a multifocused business strategy and lowest in those
with a single focus. Oh
and Pinsoneault (2007) study the strategic value of IT in terms
of the deployment of IT applications (cost reduction, quality
improvement, and
revenue growth) and find that contingency approaches better
explain the impact of cost-related applications while a resource-
centered perspective
better predicts the impact of IT on revenue and perceived
profitability; however, they do not study the effect of dual or
mixed emphases. Leidner et
al.’s (2011) exploratory results suggest that IS ambidextrous
9. firms (firms pursuing an IS innovator and an IS conservative
strategy at the same time)
had higher perceived organizational performance. None of these
studies investigates how IT strategic focus moderates the
relationship between IT
investments and firm performance, which is the focus of the
current study.
Second, although prior research in marketing provides useful
insights for the effect of strategic emphases in terms of quality
strategy or customer
focus on firm performance, the extent to which their findings
apply to IT strategy is an open empirical question. For example,
Rust et al. (2002) show
that firms with a revenue growth emphasis in their quality
strategy outperform firms with a cost reduction emphasis, and
firms with a primary
emphasis on either revenue growth or cost reduction outperform
firms that attempt a dual emphasis. Further research (Rust et al.
2016) shows that
a revenue emphasis and cost emphasis are cultivated in different
ways, with a revenue emphasis propagating “bottom up” and a
cost emphasis
propagating “top down.” These results illustrate the
complexities of quality management, and are generally
consistent with the notion of trade-offs
among different strategic emphases in the strategy literature
(Porter 1980). Mittal et al. (2005) study the moderating effect
of dual emphasis on the
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association between customer satisfaction and long-term
performance and report that association between customer
satisfaction and Tobin’s Q is
positive and relatively stronger for firms that successfully
achieve a dual emphasis.
With this backdrop, our work seeks to advance our
understanding of how IT strategic emphasis and investments in
IT resources affect firm
performance. We conceptualize IT strategy in terms of revenue
focus and cost focus. Our approach is consistent with recent
studies that have
articulated strategic focus in terms of objective metrics, such as
revenues or costs in a firm’s income statement, to more directly
assess the impact
of such cost- or revenue-focused strategies on firm performance
(Kohli 2007; Oh and Pinsonneault 2007; Rust et al. 2002). Chief
information
officers (CIOs) also find this revenue and cost typology more
useful, as reflected in comments by AstraZeneca’s CIO (Hickins
2012):
The key to winning approval from executive management and
boards…is to talk about IT projects in terms of the business
opportunities they afford.
“Are you going to generate additional revenue or are you going
to reduce the cost structure” of the organization.
Recent IS research has acknowledged this need to use business-
oriented metrics as IT increasingly takes on a more strategic
role in corporations,
and research suggests that use of business terms “helps IT
personnel focus even more clearly on business value” (Mitra et
11. al. 2011, p. 57).
Besides, such objective metrics lend themselves for better
target-setting and monitoring of progress to enable timely
corrective actions that are
directly tied to firm performance.
Although IT, being a general-purpose technology, can be
viewed as being capable of both increasing revenues and
reducing costs, does this mean
that firms no longer have to choose a strategic emphasis?
Choosing a particular strategy implies making some trade-offs
(Hindo 2007; Skinner
1986)—that is, choosing some goals and functionalities while
forsaking others in the hope that the overall combination of
choices will ensure a
better fit for organizational activities in the value chain and will
make that fit less replicable for competitors (Porter 1996).
Accordingly, firms often
choose between revenue expansion or cost reduction in their
strategic IT emphasis. For example, the CIO of FedEx, Robert
Carter, contrasts
FedEx’s approach to IT with that of UPS in the following way:
We tend to focus slightly less on operational technology. We
focus a little more on revenue-generating, customer-
satisfaction-generating, strategic-
advantage technology. The key focus of my job is driving
technology that increases the top line (Colvin 2006).
In other words, in Carter’s view, FedEx has a revenue emphasis
while UPS has a cost emphasis. Kohli’s (2007) work with UPS
suggests that the
company may be using IT for revenue growth as well. However,
at the 2014 Frontiers in Service Conference, Romaine Seguin,
President of UPS
Americas Region, indicated in a question-and-answer session
12. following her keynote presentation that the FedEx (revenue
emphasis) versus UPS
(cost emphasis) distinction was essentially correct, lending
credence to Carter’s view. There are other firms, such as
Johnson & Johnson (Mithas
and Agarwal 2010) and Coca-Cola (see Levin 2013), in which
CIOs have tried to emphasize revenue growth in their IT
strategy. As we have noted,
FedEx and UPS do not have to restrict themselves to either
revenue growth or cost reduction; alternatively, they can adopt
a dual emphasis.
Consider some examples. While customer relationship
management (CRM) systems can enable some cost savings if
they help reduce the costs of
maintaining customer relationships, the primary reason for
deploying these systems is often to increase revenues by either
attracting new customers
or enabling cross-selling, upselling, or repeat sales from
existing customers (Mithas et al. 2005, 2016; Saldanha et al.
2016). If firms use CRM
systems to help with revenue growth and cost reduction in equal
measure, then such an approach could be characterized as a
dual-focus
investment. Likewise, in an academic setting, systems used to
maintain alumni development and relationships may be
characterized primarily as
revenue enhancing, while systems related to the automation of
class scheduling or course bidding systems (as opposed to
manual processes) can
be viewed as cost reducing (Kohli and Melville 2009).
Among cost-focused applications, firms often use reverse
auctions and many other supply chain management applications
primarily to reduce their
procurement costs (Mithas and Jones 2007). As another example
13. of a cost-focused project, UPS linked bar-code data on its
packages (called
Package Level Detail) but retained the capability to provide
seamless tracking information to its customers while
outsourcing some rural deliveries to
the U.S. Postal Service (USPS) to lower its overall costs (Kohli
2007). A similar opportunity for cost reduction was provided by
UPS’s Geographical
Information Systems, which enabled the firm to get its
customers to do some data entry themselves, further reducing
UPS’s costs. UPS also used
its integrated supply chain assets to do customers’ work for
them, which helped realize revenue opportunities; in this case,
we could characterize
the investment as being revenue-focused (Kohli 2007). It is also
likely that some systems can initially be deployed for their cost-
saving potential or to
streamline internal processes, but later they may provide
revenue benefits. For example, UPS’s Delivery Intercept
Service, which has the capability
to locate and intercept any package within 15 minutes, was
initially deployed to improve UPS’s internal processes through
the use of XML, but it
also enabled revenue growth over time through additional fee-
based services (Kohli 2007).
We argue that it is not so much which applications firms use but
rather what their strategic objectives are for deploying those
applications, in that
managerial beliefs and strategic posture shape an organization’s
IT governance and management of IT projects to create business
value. This logic
applies to IT assets, which are mostly general in nature and,
with some customization and appropriate changes in business
processes, training, and
incentive structures, can be targeted to achieve strategic
14. objectives defined by managers. These changes in business
processes and reengineering
efforts are often shaped by the firm’s overarching IT strategic
objectives (Barua et al. 1996; Cederlund et al. 2007; Kohli and
Grover 2008; Kohli and
Hoadley 2006; Kohli and Johnson 2011). In other words, while
any individual IT system presents potential opportunities to
reduce costs or to
enhance revenue, or both, we argue that it is perhaps more
useful to think of the portfolio of IT applications that firms
want to create to
operationalize their strategic emphasis by instantiating
necessary configurations of individual IT applications.
Why IT Strategic Emphasis Moderates the Relationship Between
IT Investments and Firm Performance
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To understand how IT strategic emphasis and IT investments
jointly influence profitability and market value, we first
articulate why we expect a firm’s
IT strategic emphasis to affect firm performance at typical
levels of IT investments. A firm’s strategic emphasis affects the
firm’s choices with respect
to the types of technologies and applications it acquires and the
types of governance processes and firm performance metrics it
uses. The comment
of the CIO of FedEx, referred to previously, provides support
15. for this idea (see Colvin 2006). We recognize that, ultimately,
any strategy needs to be
instantiated through appropriate combinations of IT systems to
result in firm performance. In other words, strategy execution
can be viewed as the
actualization of a specific configuration of systems.
We argue that a dual emphasis in IT strategy may lead to better
firm performance than a single emphasis in IT strategy, despite
some risks in
executing a dual-emphasis strategy. We draw on prior theories
in the IS literature such as the resource-based view, the
accounting literature
(Dehning et al. 2006), and the emerging literature on
ambidexterity which empha-sizes the power of stretch targets
(Bartlett and Ghoshal 1995;
Birkinshaw and Gibson 2004; Gibson and Birkinshaw 2004; Im
and Rai 2008; Markides 2013; Raisch and Birkinshaw 2008) to
frame our arguments
(see Table 1). We use a broader conceptualization of
ambidexterity here, similar to such usage by Markides (2013)
and Kude et al. (2015), as a way
to frame the simultaneous pursuit of two seemingly opposing
ideas.
First, following RBV (Barua et al. 1996; Barua and Mukho-
padhyay 2000; Piccoli and Ives 2005), a dual-emphasis IT
strategy (compared with either
a revenue- or a cost-emphasis IT strategy) is likely to lead to
potentially superior firm performance due to ( 1) greater social
complexity, ( 2) greater
causal ambiguity, ( 2) greater path dependence, and ( 4) organi-
zational learning. Let us consider these four mechanisms (social
complexity, causal
ambiguity, path dependence, and organizational learning) based
on RBV in turn.
16. Social Complexity: The social complexity of a dual-emphasis
strategy comes from its relatively ambitious scope of trying to
achieve two goals at
the same time. Because of the complexity and breadth of
applications that a dual-emphasis strategy requires, it is much
more difficult for
competitors to replicate the successful execution of such a
strategy than it is to replicate a revenue- or a cost-emphasis
strategy. Prior research in
the quality management literature provides support for this idea.
As Flynn et al. (1995, p. 666) note, “simultaneous pursuit” of
several competitive
advantages can lead to a stronger performance because
competing on “several fronts simultaneously” makes it more
difficult for competitors to
replicate such configurations. In addition to the breadth and
variety of IT applications needed in a dual-emphasis IT
strategy, it also requires much
more reconfiguration or restructuring of business processes,
thus contributing to the greater social complexity inherent in
such an emphasis.
Causal Ambiguity: It may be more difficult to disentangle and
attribute the advantages resulting from a dual-emphasis IT
strategy from publicly
available information because firms following a dual-emphasis
strategy defy conventional logic and their initiatives and
resulting competitive
advantages are harder to classify or are more ambiguous to
decipher for competitors.
Path Dependence: A dual strategic emphasis may have an
inherent path dependence that is relatively more difficult to
replicate compared with
that in either a revenue or a cost emphasis. For example, for a
17. firm employing a dual strategic emphasis, cost-reduction efforts
may provide
opportunities to target new market segments, such as the bottom
of the pyramid, which in turn could enable the firm to realize
higher revenue
growth than if it were to focus only on cost reduction without a
link to its revenue growth strategy or only on revenue growth by
focusing on
premium market segments. Tighter coupling between strategic
options, such as revenue growth and cost reduction, is much
less replicable by
competitors than only one such option. Likewise, firms with a
dual strategic emphasis can use outsourcing and offshoring for
both cost reduction
(through arbitrage) and revenue expansion (through sales in
foreign markets by adapting offerings in those markets)
(Ghemawat 2007).
Organizational Learning: Dual emphasis firms may have higher
levels of organizational learning because learning spans many
more interrelated
business processes, routines, and IT systems that are more tacit,
complex, and novel than that for a single-emphasis strategy
(Cederlund et al.
2007). Together, the greater social complexity, causal
ambiguity, path dependence, and organizational learning of a
dual-emphasis IT strategy
can provide effective ex post limits to competition and can
protect a firm against resource imitation, transfer, and
substitution (Barney 1991; Wade
and Hulland 2004), thereby making firms with a dual strategic
emphasis more profitable and more valuable.
Table 1. Risks and Rewards of a Dual IT Strategic Emphasis
Key
18. Mechanisms
Rewards of a Dual IT Strategic Emphasis Risks of a Dual IT
Strategic
Emphasis
Relevant literature
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Key
Mechanisms
Rewards of a Dual IT Strategic Emphasis Risks of a Dual IT
Strategic
Emphasis
Relevant literature
1. Resource-
based view
(RBV)
• Social
Complexity
• Barriers to
the Erosion of
Competitive
Advantage
• Path
19. Dependence
and/or Asset
Stock
Accumulation
•
Organizational
Learning
Much higher social complexity of IT because of its role in
enhancing the breadth and depth
of relationships. For example, firms will need to work on both
the front end with customers to
create one-to-one customer relationships through CRM and on
the back end with suppliers
to create highly responsive yet lowcost delivery mechanisms.
The scope of activities spanning business processes that touch
customers and suppliers
create higher barriers to erosion along several dimensions
simultaneously due to the cross-
functional nature of IT initiatives
Much greater path dependence and/or asset stock accumulation
because IT capabilities that
evolve gradually through integration with many business
processes are likely to be more tacit
and sustainable over a longer time.
Higher levels of organizational learning because learning spans
many more interrelated
business processes, routines, and IT systems that are more tacit,
complex, and novel than
that for a single-emphasis strategy.
Firms may not be able to realize
complex interrelationships among IT
systems.
Cross-functional IT projects are more
prone to coordination problems.
20. Firms may get locked into poor and
incompatible systems due to inertia.
The organization may suffer from
information overload, leading to
reduced learning.
Resource-based view
(RBV) (Barney 1991)
RBV (Cederlund et al.
2007; Grover et al.
2009; Piccoli and Ives
2005)
RBV (Eisenhardt and
Martin 2000; Teece et
al. 1997)
RBV (Bharadwaj 2000;
Cederlund et al. 2007;
Dierickx and Cool
1989)
2. Reduced
Diminishing
Returns in
Opportunity
Space
Plentiful “low-hanging fruit” to increase revenues and reduce
costs. Firms may lose the ability to spot
fundamental transformations or avoid
reaching for “higherhanging fruit” that
may be rewarding in the long run.
Accounting literature
(Dehning et al. 2006)
3. Stretch
21. Targets
Stretch targets can motivate managers toward high performance.
Too much stretch can be debilitating. Ambidexterity literature
(e.g., Bartlett and
Ghoshal 1995; Gibson
and Birkinshaw 2004)
Second, a dual emphasis opens up many more “low-hanging”
positive-return investment opportunities than either single
emphasis would, thereby
creating more options for profitable growth (see Dehning et al.
2006). Firms with a dual emphasis are likely to have lower
cycle times in product
development, supply chain management, and customer
relationship management processes for realizing their revenue
and cost targets and thereby
have accelerated cash flows. Finally, dual-emphasis firms may
have less variability in cash flows because their IT-enabled cash
flows have two
sources (both revenue growth and cost reduction), while firms
with a primary emphasis on either revenue growth or cost
reduction have only one
source of IT-enabled cash flow (Porter 1985).
Third, a dual strategic emphasis, being more ambitious in its
scope, might provide stretch targets to employees and
implementation partners for
higher revenues and lower costs, thereby improving the chances
of getting more from the same levels of investments (Gibson
and Birkinshaw 2004;
Kaplan and Norton 2006). In turn, that will lead to higher levels
of cash flows, profits, and market value.
There are, however, potential risks inherent to a dual strategic
emphasis, and despite the potential of IT to enable firms to
22. achieve both revenue
growth and cost reduction goals, there are reasons firms may be
better off focusing on only one of these overarching goals.
Compared with revenue
expansion or cost reduction strategic emphases, it may be more
difficult for firms to follow a dual strategic emphasis because
the latter entails
greater complexity and risk in ensuring fit between all of the
IT-related decisions the firm must make. First, focusing on two
goals simultaneously can
be confusing in terms of target setting and performance metrics
that managers across business units pursue. Second, dual-
emphasis firms may end
up having a portfolio of IT systems that do not allow seamless
integration of data and information flow. One example of this
comes from the financial
services industry: Some observers argue that one reason for the
credit crisis may be that while firms were pursuing revenue
growth from a business
perspective as reflected in their quest for additional revenues,
even with some disregard for prudent risk management, they
were emphasizing cost
reduction in the IT function (Sviokla and McGilloway 2008).
Finally, focusing on two goals simultaneously can make it
difficult for managers to agree
on prioritizing IT projects (Ross and Beath 2002).
Ultimately, whether the advantages of a dual strategic emphasis
outweigh the disadvantages and risks is largely an empirical
question; we do not
make a specific prediction at typical levels of IT investments
because we argue that a more complete understanding of the
effect of IT strategic
emphasis requires taking into consideration how a dual strategic
emphasis moderates the relationship between IT investments
and firm
23. performance.
We first consider profitability. Why will a firm’s strategic
emphasis affect the relationship between IT investments and
firm profitability? As we noted
previously, a firm’s strategic emphasis affects its choices with
respect to the types of technologies and applications it acquires,
its IT governance
mechanisms, and its metrics for firm performance. Firms with a
dual emphasis may have more diverse IT resources for revenue
growth as well as
cost reduction. Managing these diverse resources requires hiring
a larger number of IT employees and having greater managerial
expertise in
managing diverse projects, which in turn may require using a
more diverse network of external IT implementation partners.
Together, managing
diverse IT infrastructure elements and IT human resources in
dual-emphasis firms will require a higher degree of management
attention, bandwidth,
and focus than if the firm were to focus on only revenue growth
or cost reduction. However, despite these challenges and risks,
firms are likely to
benefit more from IT spending if they adopt a dual strategic
emphasis (than if they adopt only a revenue growth or a cost
reduction emphasis)
because of differences in expectations and targets that managers
set for their IT implementations.
Next, we consider the moderating effect of a firm’s strategic
emphasis on the relationship between IT investments and market
value (measured by
Tobin’s Q). The strategic emphasis of a firm can moderate the
influence of IT investments on market value because of the
types of technologies and
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risks associated with each strategic emphasis. We argue that
firms with a dual emphasis are likely to have lower cycle times
in product
development, supply chain management, and customer
relationship management processes for realizing their revenue
and cost targets and thereby
have accelerated cash flows. Dual-emphasis firms may also
have higher levels of cash flows because of simultaneous targets
for higher revenues
and lower costs. Finally, dual-emphasis firms may have less
variability in cash flows because their IT-enabled cash flows
have two sources (both
revenue growth and cost reduction), while firms with a primary
emphasis on either revenue growth or cost reduction have only
one source of IT-
enabled cash flow (Porter 1985). Due to the diversification of
sources of cash flows, the overall variability of cash flows is
likely to be lower for dual-
emphasis firms.
On the basis of the foregoing discussion, we offer the following
formal conjectures: We expect that ( 1) IT investments will
have a stronger positive
association with profitability for firms with a dual strategic
emphasis than for firms with a single strategic emphasis, and (
2) IT investments will have
a stronger positive association with Tobin’s Q for firms with a
25. dual strategic emphasis than for firms with a single strategic
emphasis. As a corollary,
we also expect these effects to apply when we disaggregate
single strategic emphasis into revenue or cost emphasis.
Method
Data
We obtained our independent and dependent variables from
separate sources: an InformationWeek survey and Compustat.
We obtained data
collected by InformationWeek, a leading and widely circulated
IT publication in the United States, from their survey of top IT
managers (e.g., vice
presidents, CIOs, directors) of more than 300 Fortune 500 firms
in North America. InformationWeek has published reports of its
annual surveys
since 1986. Although in the initial years these reports provided
firm-level IT spending data, since 1997, due to confidentiality
reasons,
InformationWeek publishes only aggregate data at the industry
level. The data used in this study include information about
firms’ IT spending and IT
strategic emphases during the 2003–2004 period. Information
Week is considered a reliable source of information, and prior
academic studies have
also used data from InformationWeek surveys (e.g., Bharadwaj
et al. 1999; Mithas et al. 2005; Rai et al. 1997). We
complemented the
InformationWeek data with firm performance (Tobin’s Q,
profitability) and industry data from Compustat.
Table 2 provides the definitions, variable constructions, and
sources for all of the variables used in this research.
26. Table 3 provides descriptive statistics by IT strategic emphasis.
It shows that, on average, firms spend approximately 4.1
percent of their revenue on
IT investments and have a profitability (operating income
before depreciation as a percentage of sales revenue) of
approximately 17 percent and a
Tobin’s Q of 1.4 during the study period. In addition,
approximately 90 percent of the firms have either a dual
emphasis or a cost reduction emphasis
in their IT strategy (with almost equal distribution of firms
among these emphases) while the remaining firms have a
revenue-enhancing emphasis.
On average, firms with a revenue or dual emphasis have higher
values of Tobin’s Q, profitability, and IT expenses (as a
percentage of revenue) than
firms with a cost emphasis.
Table 4 shows correlations among variables. As expected, IT
investments show a positive correlation with profits and Tobin’s
Q. We also observe
that a dual emphasis has a positive correlation with Tobin’s Q
but a statistically insignificant correlation with profit.
Empirical Models and Econometric Considerations
We specify standard cross-sectional models of the following
form:
Yi= Xiβ + εi ( 1)
where Y represents endogenous variables such as Tobin’s Q or
profitability; X represents a vector of firm characteristics, such
as IT strategic
emphasis, IT investments, and control variables, β is a vector of
the parameters to be estimated; and ε is the error term
associated with each
27. observation i.
We follow relevant prior literature subject to availability of
data and use parsimonious models similar to Oh and Pinson-
neault (2007), Rust et al.
(2002), Tallon (2007), and Tallon et al. (2000) to retain
comparability of findings to the extent possible and for clear
interpretation of results. We
account for firm-level heterogeneity by including relevant
factors such as firm size, industry sector, industry
concentration, and time period in our
models, and we provide an extensive discussion of other
robustness checks to provide confidence in our findings. We
implicitly control for firm size
in our models because we use IT investments normalized by
sales revenues of firms as our measure of IT Investments. We
control for sector
differences (manufacturing versus services) to account for
sectoral differences in IT investments, IT strategies, and firm
performance. We also
include a dummy for the year 2004 to account for any
systematic difference across the two years studied (2003 and
2004) in InformationWeek
survey data or firm performance. Subsequently, we report
robustness checks when we include additional and/or alternative
control variables in our
models such as research-and-development (R&D) and
advertising intensity; non-IT sales; selling, general, and
administrative (SG&A) expenditures;
industry concentration; and one-digit North American Industry
Classification System (NAICS) industry dummies (instead of a
service-sector dummy
variable), which indirectly account for many industry-level
variables, such as industry capital intensity, industry
concentration, average Tobin’s Q, and
industry regulation.
28. Accordingly, we specify our empirical models for testing our
conjectures for a dual versus single strategic emphasis as
follows:
Table 2. Variable Definitions and Data Sources
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Variable
Name
Variable Construction/ Definition SourceVariable
Name
Variable Construction/ Definition Source
Tobin’s Q Ratio of the market value of the firm divided by the
replacement cost of assets. We calculated the market value of a
firm by adding the market
value of its common equity, the liquidated value of preferential
stock, and total debt. We used total assets as a measure of
replacement cost of
assets.
Compustat
Profit Operating income before depreciation divided by sales
(expressed in percentage) Compustat
29. IT
Investment
The level of IT investment as a percentage of the firm’s sales
revenue InformationWeek
IT
Strategic
Emphasis
“Has your organization’s business-technology strategy in the
past 12 months been primarily focused on generating new
revenue, or on cost
cutting and streamlining operations?” (choose one)
Cost emphasis = 1 if the firm chooses “cost cutting/streamlining
operations” and zero otherwise.
Revenue emphasis = 1 if the firm chooses “generating new
revenue” and zero otherwise.
Dual emphasis = 1 if the firm chooses “about the same emphasis
on both” and zero otherwise.
InformationWeek
Service Whether the firm belongs to the manufacturing or the
services sector (services = 1, manufacturing = 0). Based on
NAICS
classification
Table 3. Descriptive Statistics by IT Strategic Emphasis
Tobin’s Q Profit IT Investment Service
Revenue Emphasis Mean 1.65 20.45 6.97 0.79
SD 0.86 19.39 15.06 0.41
30. N 43 61 61 61
Cost Emphasis Mean 1.18 15.53 3.25 0.48
SD 0.79 11.75 5.31 0.5
N 188 210 210 210
Dual Emphasis Mean 1.53 17.97 4.09 0.65
SD 1.04 14.3 3.86 0.48
N 185 240 240 240
Total Mean 1.38 17.26 4.09 0.6
SD 0.94 14.12 6.82 0.49
N 416 511 511 511
Table 4. Pairwise Correlations Among Variables
1 2 3 4 5 6
* Significant at the 5% level.
1. Profit 1.00
2. Tobin’s Q 0.42* 1.00
3. Dual Emphasis 0.00 0.14* 1.00
4. IT Investments 0.19* 0.12* -0.01 1.00
5. Service 0.04* -0.08 0.08* 0.13* 1.00
31. 6. Year Dummy for 2004 0.03 0.01 0.13* 0.03 0.01 1.00
7. Industry Concentration -0.13* 0.02 0.14 0.02 0.37* -0.01
We disaggregate the single IT strategic emphasis further into
revenue or cost strategic emphasis to test our conjectures at a
more granular level:
We use ordinary least squares (OLS) to estimate Equations 2–5
because the focal explanatory variables (i.e., IT strategic
emphasis and IT
investments) are exogenous in an econometric sense
(Wooldridge 2003b).
We do not assume that IT strategic emphasis and IT investments
are independent of each other, and our models account for any
potential
correlation between these variables. These correlations are
relatively small in our sample. Table 4 shows that the
correlation between a dual-
emphasis strategy and profitability is zero and between a dual-
emphasis strategy and Tobin’s Q is 0.14. Such correlations do
not create
endogeneity, because regression models account for correlations
among explanatory variables (including the variables involved
in interaction
terms).
Because of the presence of interaction terms in our models, we
mean-centered the value of IT investments for easier
interpretation of results. To
estimate Equations 4 and 5, instead of omitting one of the
dummy variables for a strategic emphasis (as is commonly done
in estimating regression
models with dummy variables), we retain all three dummy
32. variables and the interactions involving IT investments with
these dummy variables in
Equations 4 and 5, but we suppress the constant term. This
estimation strategy lends itself to a more direct interpretation of
results without affecting
parameter estimates or their statistical significance (for a
similar approach, see Anderson et al. 2006). Note that
suppression of constant results in
increased R-squared value for models in Table 5 but it does not
affect hypothesis tests for our key parameters of interest.
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Table 5 shows the results of our estimation of Equations 2 and
3, and Table 6 shows the results of our estimation of Equations
4 and 5. We used
heteroskedasticity-consistent robust standard errors for
statistical tests (Froot 1989; Rogers 1993; Williams 2000;
Wooldridge 2003a). Use of the
robust standard errors, coupled with a large sample size to
justify the assumption of asymptotic normality of residuals, is
likely to yield conservative
tests of statistical significance. We tested for multicollinearity
by computing the variance inflation factors and condition
indices. The highest variation
inflation factor and condition index in our models were less
than 2.7 and 4.3, respectively, indicating that multicollinearity
is not a serious concern.
33. We performed several diagnostic and robustness checks to
ascertain the stability of our results. First, although we use
conservative
heteroskedasticity-consistent robust standard errors for
statistical testing, we nevertheless evaluated kernel density
plots of residuals, and while
they show positive skewness and kurtosis, they appear to be
approximately normally distributed.
Second, we evaluated the stability of our results by removing
approximately 1 percent of observations that have IT
investments in excess of three
standard deviations. While this leads to a loss in efficiency of
estimates as one would expect, the results remain qualitatively
similar to the ones
reported previously. Third, we included a squared term for IT
investments in our profitability models to avoid omitted
variable bias due to exclusion of
higher-order terms of independent variables. Because we
obtained broadly similar results, albeit with higher standard
errors due to the presence of
a quadratic term, we report our main results without higher-
order terms for easier interpretation of results.
Fourth, we also assessed the stability of our results by
estimating the models after log-transforming the dependent
variables. Because these
estimates yielded essentially similar results, we continue with
interpreting the results from original nontransformed dependent
variables for a simpler
and more managerially relevant interpretation. Finally, because
the error terms of the profitability and Tobin’s Q equations may
be correlated for the
same firm, we allowed for these potentially correlated errors to
obtain consistent and efficient estimates of parameters by using
the seemingly
34. unrelated regression (SUR) estimation technique (Zellner 1962).
Note that gains in efficiency do not accrue if equations in the
SUR model use same
regressors, as is the case here (as the estimated coefficients are
identical to OLS); thus, the SUR estimation technique is used
only as a robustness
check here. These SUR models use only those observations for
which both profitability and Tobin’s Q measures are available.
Although this caused
the loss of observations for which we had only the profitability
measure but not the Tobin’s Q measure, we obtained broadly
similar results as
reported previously. In summary, we used several tests to assess
the stability of our results, and broadly similar results across
our tests provide
confidence in the robustness of our results.
Table 5. How a Dual Versus Single Strategic Emphasis
Influences Profits and Tobin’s Q
(1) Profit (2) Tobin’s Q
Robust p-values are in parentheses.
*** p < 0.01
** p < 0.05
* p < 0.1 (one tailed tests for IT investments and IT strategy,
and two-tailed tests for other variables).
Dual Emphasis �11 0.762 �21 0.308*
(0.263) (0.001)
Dual Emphasis * Mean-Centered IT Investmentst-1 �12
35. 1.115*** �22 0.0432**
(0.006) (0.047)
IT Investmentst-1 �13 0.295* �23 0.0139**
(0.083) (0.014)
Service �14 4 284*** �24 -0.214*
(0.003) (0.074)
Year Dummy for 2004 �15 0.660 �25 -0.0270
(0.315) (0.642)
Constant �10 12 84*** �20 1.329***
(0.000) (0.000)
Observations 511 416
R-squared 0.126 0.056
Table 6. How Dual, Revenue, and Cost Strategic Emphasis
Influence Profits and Tobin’s Q
(1) Profit (2) Tobin’s Q
Robust p-values are in parentheses.
*** p < 0.01
** p < 0.05
* p < 0.1 (one tailed tests for IT investments and IT strategy,
36. and two-tailed tests for other variables).
Dual Emphasis �31 15.13*** �41 1.738***
(0.000) (0.000)
Revenue Emphasis �32 16.49*** �42 1.857***
(0.000) (0.000)
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(1) Profit (2) Tobin’s Q
Robust p-values are in parentheses.
*** p < 0.01
** p < 0.05
* p < 0.1 (one tailed tests for IT investments and IT strategy,
and two-tailed tests for other variables).
Cost Emphasis �33 13.85*** �43 1.369***
(0.000) (0.000)
Dual Emphasis * Mean-Centered IT Investments t-1 �34 1
417*** �44 0.0580**
37. (0.000) (0.011)
Revenue Emphasis * Mean-Centered IT Investments t-1 �35
0.211 �45 0.0010
(0.188) (0.363)
Cost Emphasis * Mean-Centered IT Investmentst-1 �36 0.426**
�46 0.0474***
(0.029) (0.003)
Service �37 3.938*** �47 -0.260**
(0.006) (0.028)
Year Dummy for 2004 �38 0.470 �48 -0.0597
(0.501) (0.316)
Observations 511 416
R-squared 0.652 0.716
Results
Before presenting the results of the tests of our conjectures, we
first discuss how IT strategic emphasis affects firm performance
at the mean levels
of IT investments. We find that at the mean value of IT
investments, firms with a dual emphasis do not have higher
profitability than firms with a
revenue or cost emphasis (see Table 5; β11 = 0.762, n.s.).
However, we find that firms with a primary emphasis on
revenue or cost with respect to
38. their IT investments will have lower market value than firms
with a dual emphasis, at the mean value of IT investments
(Table 5; β21 = 0.308, p <
0.01). The effects are not only statistically significant but also
appear to be economically significant because dual emphasis
firms have Tobin’s Q
that is 0.31 higher than single-emphasis firms (see Table 5),
which is a very large value considering that it implies about
one-third increase in market
value over the replacement cost of assets of firms in our sample
(this magnitude is about one-third of the standard deviation of
Tobin’s Q in our
sample). Taken together, the market appears to value dual-
emphasis firms higher than revenue- or cost-emphasis firms,
even though these firms
have similar profitability at the mean levels of IT investments.
We now describe the results of the tests of our conjectures. We
find support for the first conjecture, which predicted that dual-
emphasis firms will
have a stronger positive association between IT investments and
profitability than firms with either a revenue emphasis or a cost
emphasis alone.
Indeed, we find that IT investments have a positive and
statistically significant association with profitability for dual-
emphasis firms (refer to column 1
of Table 5; β12 = 1.115, p < 0.01); this result is higher than that
for revenue- or cost-emphasis firms.
We also find support for the second conjecture, which predicted
that dual-emphasis firms will have a stronger positive
association between IT
investments and Tobin’s Q than firms with either a revenue
emphasis or a cost emphasis alone. Indeed, we find that IT
investments have a positive
and statistically significant association with Tobin’s Q for dual-
39. emphasis firms (Table 5; β22 = 0.043, p < 0.05).
We find support for the corollaries based on the results of our
Wald tests (refer to Table 7). IT investments have a positive and
statistically significant
association with profitability for dual-emphasis firms (refer to
column 1 of Table 6; β34 = 1.417, p < 0.01), which is higher
than that for revenue-
emphasis firms (β35 = .211, n.s.) or cost-emphasis firms (β36 =
.426, p < 0.05). Likewise, Table 7 shows support for our
prediction that IT
investments have a greater impact on market value (as measured
by Tobin’s Q) for dual-emphasis firms than for cost-emphasis
firms. IT
investments have a positive and statistically significant
association with Tobin’s Q for dual-emphasis firms (refer to
column 2 of Table 6; β44 = 0.058,
p < 0.05), a nonsignificant association with Tobin’s Q for
revenue-emphasis firms (β45 = 0.001, n.s.), and a positive and
statistically significant
association with Tobin’s Q for cost-emphasis firms (β46 =
0.047, p < 0.01). Dual-emphasis firms have a steeper and more
statistically significant IT–
Tobin’s Q relationship than revenue-emphasis firms (see Table
6). However, we did not find support for the prediction that IT
investments have a
greater impact on market value (as measured by Tobin’s Q) for
dual-emphasis firms than for cost-emphasis firms (see Table 7).
We plotted the results in Tables 5 and 6 to show how the effect
of IT investments on firm performance varies by IT strategic
emphasis. Figure 1
shows that at the mean value of IT investments (shown by a
vertical line), dual-emphasis firms do not have higher
profitability than single-emphasis
firms (i.e., revenue or cost). This figure suggests that although
40. profitability is approximately the same at the mean value of IT
investments, the
differences can be much larger at higher levels of IT
investment. In particular, at higher levels of IT investment,
dual-emphasis firms can significantly
outperform single-emphasis firms (i.e., revenue or cost).
Conversely, at low levels of IT investments, single-emphasis
firms (i.e., revenue or cost)
may have higher profitability than dual-emphasis firms.
Figure 2 shows that at the mean value of IT investments (shown
by a vertical line), dual-emphasis firms have a significantly
higher market value
than single-emphasis firms (i.e., revenue or cost). As with
profitability, the market values dual-emphasis firms even higher
than single-emphasis
firms
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(i.e., revenue or cost) when firms spend significantly more than
the mean levels of IT investments. Notably, the market values
dual-emphasis firms
more than single-emphasis firms even at lower levels of IT
investments, despite the lower profitability of dual-emphasis
firms.
While Figures 1 and 2 show how profitability and market value
vary for dual- or single-emphasis firms, Figures 3 and 4
41. disaggregate the single
strategic emphasis into its constituent elements (i.e., revenue
and cost) to glean deeper insights. Specifically, Figure 3 shows
that at the mean value
of IT investments (shown by a vertical line), revenue-emphasis
firms and dual-emphasis firms have approximately the same
profitability as cost-
emphasis firms. Again, although profitability may be
approximately the same at the mean value of IT investments, the
differences can be much
larger at higher levels of IT investment. In particular, at higher
levels of IT investments, dual-emphasis firms can significantly
outperform revenue-
and cost-emphasis firms. Figure 4 shows that at the mean value
of IT investments (shown by a vertical line), revenue-emphasis
firms and dual-
emphasis firms have a higher market value than cost-emphasis
firms. From this figure, it appears that the market has a
generally favorable
assessment of dual- and revenue-emphasis firms over a
significantly large range of IT investments.
Table 7. Summary of Results
Conjectures and Corollaries Test Supported
n.s. = not statistically significant
*** p < 0.01
** p < 0.05
* p < 0.1 (all one-tailed tests).
Conjectures: Single Versus Dual Emphasis
42. Conjecture 1: IT investments have a stronger positive
association with profitability for dual-emphasis firms than for
single-emphasis firms (revenue
growth or cost reduction).
�12 = 0 Yes**
Conjecture 2: IT investments have a stronger positive
association with Tobin’s Q for dual-emphasis firms than for
single-emphasis firms (revenue
growth or cost reduction).
�22 = 0 Yes**
Corollaries: Disaggregating Single Strategic Emphasis into
Revenue or Cost Emphasis
Corollary 1a: IT investments have a greater impact on
profitability for dual-emphasis firms than for cost-emphasis
firms. �34-036 =
0
Yes**
Corollary 1b: IT investments have a greater impact on
profitability for dual-emphasis firms than for revenue-emphasis
firms. �34-035 =
0
Yes***
Corollary 2a: IT investments have a greater impact on market
value (as measured by Tobin’s Q) for dual-emphasis firms than
for cost-emphasis
firms.
43. �44-046 =
0
n.s.
Corollary 2b: IT investments have a greater impact on market
value (as measured by Tobin’s Q) for dual-emphasis firms than
for revenue-emphasis
firms.
�44-045 =
0
Yes**
Among other results for which we did not pose specific
conjectures, firms in the service sector appear to have higher
profitability but a lower Tobin’s
Q compared with firms in the manufacturing sector (see Tables
5 and 6). As the coefficient of the year dummy indicates, we
fail to observe any
statistically significant differences in firm performance in 2004
compared with 2003.
We conducted additional analyses for robustness. First, we
included R&D and advertising investments (as percentage of
sales) as additional control
variables in the models. However, because many firms do not
report R&D and advertising investments, to avoid data loss, we
used the mean value
of R&D and advertising intensity for missing data. These
models provide broadly similar results. Second, because SG&A
expenditures may be
correlated with IT investments and because they may also affect
outcome variables, we included a variable we refer to as non-IT
SG&A (= SG&A –
44. IT) in our models. Because of missing data for the SG&A
variable in Compustat, the sample size in these models is less
than the sample size in the
models without this control variable, thus affecting the
statistical significance of the variables. Nonetheless, on the
whole, the results are broadly
similar to those we report in Table 6, with some minor
differences. In these models, the stock market values dual- and
revenue-emphasis firms more
than cost-emphasis firms at the mean value of IT investments,
even though the differences in profitability are not significant at
the mean value of IT
investments. Again, dual-emphasis firms have a steeper IT–
profitability relationship than cost-emphasis firms.
Third, we conducted our analyses using raw (i.e.,
untransformed) and standardized values of IT investments and
obtained qualitatively similar
results. Fourth, we controlled for industry concentration (using
the Herfindahl Index) in our models and obtained broadly
similar results. Finally,
instead of using a service-sector dummy variable, we also used
one-digit NAICS industry dummies in the models. Use of these
industry dummies
accounts for many variables that are calculated at the industry
level, such as industry capital intensity, industry concentration,
average Tobin’s Q,
and industry regulation, and these models also yielded broadly
similar results, thus providing confidence in the robustness of
results.
Discussion
Main Findings
Our goal in this study was to conceptualize why a revenue, cost,
45. or dual strategic emphasis in IT strategy will affect firm
performance and moderate
the returns to IT investments. We test the resulting conjectures
using archival data from more than 300 large U.S. firms. We
found that firms with a
dual emphasis in their IT strategy have a higher Tobin’s Q than
firms with a revenue or a cost emphasis at the mean value of IT
investments; these
differences in market value arise despite no statistically
significant differences in profitability.
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Why does the market reward dual strategies over single focus
strategies? We believe that the possible reasons may be because
markets may
perceive dual strategies to be less replicable because of ( 1)
RBV mechanisms such as greater social complexity, causal
ambiguity, path
dependence, and organizational learning, ( 2) reduced
diminishing returns and plentiful low-hanging fruits in
opportunity space, and ( 3) stretch
targets in two key areas related to revenues and costs, as we
argued in the “Background and Theory”section. Together these
mechanisms may
allow dual emphasis firms to have more sustainable, higher, and
accelerated cash flows because of simultaneous targets for
higher revenues and
lower costs, with less variability in cash flows because cash
46. flows have two sources (both revenue growth and cost
reduction), while firms with a
primary emphasis on either revenue growth or cost reduction
have only one source of IT-enabled cash flow.
Taken together, these findings foreground the importance of IT
strategic emphasis because such strategies influence market
valuations even if they
do not yield measurable profitability differences at the mean
value of IT investments. Of greater importance, IT strategic
emphasis plays a significant
role in moderating the relationship between IT investments and
firm performance. We find that dual-emphasis firms have a
stronger IT–profitability
relationship than single-emphasis (revenue or cost emphasis)
firms. Dual-emphasis firms also have a stronger IT–Tobin’s Q
relationship than
revenue-emphasis firms. In general, our findings and plots show
that a dual IT strategic emphasis yields better profitability and
market value
outcomes when such a strategic emphasis is combined with high
levels of IT investments. At the same time, a dual emphasis can
backfire if not
supported by adequate levels of IT investments because at lower
levels of IT investments, it is outperformed by other strategic
emphases. Our
results are consistent with the view that firms can realize
significant performance benefits when they combine higher
levels of IT investments with
the more sophisticated management and governance capabilities
that firms may need to realize the dual strategic emphasis of
both cost reduction
and revenue enhancement (Aral and Weill 2007; Weill and Ross
2009). These findings extend prior literature by showing, for the
first time, how IT
investments and IT strategic emphasis jointly influence firm
47. performance. They also provide important implications for
practice, while suggesting the
need for developing stronger theory (e.g., in the area of IT
strategic ambidexterity) and more precise empirical tests in
further work.
Before considering implications, however, we discuss some
limitations. First, our study uses a cross-sectional analysis and,
although we performed
an extensive set of analyses, we do not claim causality and treat
our results as associational; longitudinal studies with several
years of panel data
would help validate our findings to increase their
generalizability and to enable stronger claims related to
causality. Longitudinal studies could also
help sort out the extent to which the stock market is efficient in
recognizing the improvements in fundamentals due to
managerial interventions and
strategic choices. Second, although we used a perceptual single-
item measure for primary emphasis in IT strategy—which is not
a major limitation
per se, as other studies have also used similar measures (Rust et
al. 2002; Tallon 2007, 2008) and such measures can be
preferred in certain
contexts to elicit appropriate response behavior and clearer
interpretation of findings (Drolet and Morrison 2001; Rossiter
2002; Wanous et al. 1997)
—further studies with alternative operationalizations using
multi-item scales might be helpful.
Third, we used two of many possible measures of organi-
zational performance, future research should use a more
comprehensive approach for
assessing the effect of IT strategies and IT investments on
performance (see Richard et al. 2009). In particular, although
some may question
48. whether Tobin’s Q, developed in 1969, is a relevant metric in
today’s dynamic business environment, to the extent that a large
share of top
managers’ compensation is tied to stock performance, focusing
on Tobin’s Q is still informative and is in line with recent
research linking IT with firm
performance (e.g., Tafti et al. 2013). Fourth, although this study
provides useful insights by leveraging data on both IT
investments and IT strategic
emphasis, richer conceptualizations and theorizing along the
lines in other studies (e.g., Oh and Pinnsonneault 2007; Tallon
2007) can be
illuminating. Fifth, our findings are more likely to apply to
single-business firms or strategic business units where a
dominant IT strategic emphasis
can be clearly identified because it may be harder to identify a
dominant IT strategic emphasis in conglomerates or multi-
business firms that are
much more dominant in emerging economies but are sometimes
considered relevant even in the West as reflected in Google’s
reorganization in
2015 (The Economist 2014, 2015; Mithas 2015). Nevertheless,
the findings are still useful for the strategic business units
within such
conglomerates. Finally, and perhaps most importantly, although
we provide plausible arguments for the likely mechanisms that
drive our results, we
did not directly test those mechanisms; we discuss this issue in
the research implications section to motivate a program of
research.
Implications for Research
Several important conclusions result from the conjectures
motivated by Table 1 and tested in our empirical analyses.
These conclusions generate
49. implications for developing a program of research that explains,
extends, or clarifies our findings. First, our findings suggest
that the overall effect of
IT strategic emphasis on firm performance depends on the type
of strategic emphasis, levels of IT investments, and specific
measures of firm
performance. Unlike Rust et al. (2002), who report the effect of
strategic quality emphasis on profitability, our findings show
that IT strategic
emphasis does not influence profitability at the mean level of IT
investments, and no one strategic emphasis is unconditionally
superior in terms of
profitability at all levels of IT investments. While Rust et al. do
not investigate the effect of quality-based strategic emphasis on
Tobin’s Q, we find
that firms with a revenue or dual IT strategic emphasis have a
higher Tobin’s Q than firms with a cost emphasis, at the mean
value of IT
investments. These differences in findings across studies
investigating an emphasis on quality and IT strategy highlight
the need for similar
investigations of emphases in other functional strategies or
governance processes such as exploitation versus exploration
(O’Reilly and Tushman
2004), prospector versus defender (Miles et al. 1978), autonomy
versus control (Tafti et al. 2007), centralization versus
decentralization (Xue et al.
2014), regulation- versus consensus-based governance (Lazic et
al. 2014), standardization versus integration (Weill and Ross
2009), focused
versus broad search (Leiponen and Helfat 2010), flexibility
versus efficiency (Adler et al. 1999) and their implications for
firm performance. We
recognize that some functional strategies may not have a dual
focus in the sense of the revenue and cost emphases used in this
paper.
50. Second, although our focus in this study was on IT strategic
emphasis, IT strategic emphasis is not completely independent
of the overall strategy of
a firm and strategic emphases in other areas (e.g., marketing,
operations, capital projects). There is a need for further
research to better understand
the linkages and interactions between strategic emphases across
functional areas, how they relate to IT strategy and the overall
strategy of firm,
and the implications for firm performance.
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Third, although we find that the dual strategic emphasis alone is
associated with a higher Tobin’s Q, and stronger IT– Tobin’s Q
and IT–profitability
relationships, there remains the need to quantify the risks
associated with adopting dual strategies and higher IT
investments. The complexities and
path dependence of a dual-emphasis strategy can also make
firms more rigid and reduce their flexibility to compete
successfully if the environment
changes suddenly.
Fourth, in terms of implications for future theoretical work, our
study suggests a need for analytical work on the one hand and a
deeper unpacking of
the notion of IT ambidexterity and its implications on the other
51. hand, beyond some nascent work in the IS literature that has
begun to examine
various notions of ambidexterity at multiple levels (Cao et al.
2013-14; Gregory et al. 2015; Im and Rai 2008; Khuntia et al.
2014; Kude et al. 2015;
Lee et al. 2015; Schmidt et al. 2014; Tiwana 2010). In
particular, theorizing and testing how diversity of IT systems,
stretch targets, and specific
combinations or configurations of specific IT systems allow
firms to develop IT ambidexterity is an attractive area of
inquiry. There are also
opportunities to study IT ambidexterity at the project or
application level, perhaps using a case study approach
(Cederlund et al. 2007; Kohli and
Hoadley 2006; Ramasubbu et al. 2014). Such case studies might
facilitate better opportunities for theory-building and for
understanding the
performance implications of fit between strategic objectives of
that project and the application capabilities. It is also likely that
some projects that
initially offer cost reduction opportunities might subsequently
provide revenue growth opportunities. For example, UPS
introduced its Delivery
Intercept Service because its existing IT infrastructure enabled
them to do so. While the original system facilitated cost
reduction, the same
technology enabled UPS to increase revenue subsequently. Such
options (previously unknown) provide opportunities from
existing infrastructures
that cannot be easily classified into a narrow bucket. Although
we recognize that theory-building is an important undertaking
in and of itself, we call
for an equally important consideration of operational issues,
such as how theoretical constructs will be measured in a
practical and unobtrusive
manner to test theories and to generate insights for
52. practitioners.
Finally, we call for further research to articulate the boundary
conditions of when dual-emphasis is likely to be rewarding and
when it may be
deleterious, in the spirit of “pursuing failure” to prune theories
(Gray and Cooper 2010). Although the jury is still out on some
of the arguments that
Gray and Cooper make as they themselves acknowledge, we can
add that scientific enterprise is just as well served by curiosity-
and problem-driven
research (Lawrence 1992) in a context where organizations are
best viewed as tools instead of natural objects that are
susceptible to laws,
experimental controls are lacking, and regularities are often
context and time-dependent (Davis 2010). How might one go
about testing as to which
theory or mechanism (or a combination of mechanisms) among
those listed in Table 1 provides the best explanation for why
dual-emphasis in IT
strategy and its interaction with IT investments is associated
with superior performance? We can envision a research program
for operationalizing
the mechanisms, collecting data on them from secondary or
primary sources and then testing their relative explanatory
power. While prior literature
on RBV may provide guidance for operationalizing some of
these mechanisms, some new measures may have to be
developed for opera-tionalizing
reduced diminishing returns (for example, by counting total
number and types of revenue expansion and cost reduction IT
projects that are part of
an organization’s consideration set in a year) and stretch targets
across revenue and cost domains (for example, number of
revenue and cost
metrics used by the IT department of an organization). Although
53. creating new scales will be useful, in some cases, researchers
may come across
archival but unobtrusive data that may proxy for some of the
underlying ideas in Table 1 for initial tests of competing
mechanisms. Like other tests of
organizational theories (for a discussion, see Davis 2010), it is
unlikely that any one study or method of enquiry can provide a
definitive test of the
conjectures or implications arising from our research or the
ideas listed in Table 1. However, we hope that multiple studies
across varying contexts
with differing approaches will give us a vantage point to make
sense of the contours of the richness and complexity of
organizational strategies,
resources, and associated performance outcomes to develop
useful insights and generalizations.
Implications for Practice
Our most important managerial implication is that a dual or
revenue emphasis in IT strategy pays off in terms of firm
valuation, as measured by
Tobin’s Q, even though profitability is not improved at the
mean level of IT investments. We also find that firms with a
dual emphasis in IT strategy
are more profitable and have a higher Tobin’s Q when they
invest more in IT. At lower IT budget levels, it is best for the
firm to choose one strategy
or the other—either revenue expansion or cost cutting—as its
primary IT emphasis. How would Tobin’s Q vary if a dual-
emphasis firm did not spend
higher amounts on IT? The answer to this counterfactual
question would require a randomized field trial involving the
assignment of low and high IT
investments to dual-emphasis firms. However, in the absence of
such a field trial, our observational study leverages variation in
54. IT investments
across dual-emphasis firms in our sample to provide a
preliminary answer. Figures 1–4 show that at lower levels of IT
investments, dual-emphasis
firms do about as well as single-emphasis firms in terms of
profitability, although they do slightly better than single-
emphasis and particularly cost-
emphasis firms in terms of Tobin’s Q (see Figure 4).
In a broader sense, our study provides an assessment of the
implications of IT strategic emphasis for multiple measures of
firm performance. Our
results suggest that IT strategic emphases have a significant
impact on market value at the mean value of IT investments,
despite no differences in
profitability at those levels of IT investments. Our results are
not only statistically but also economically or practically
significant because Tobin’s Q
for dual-emphasis firms is 0.31 higher (because these are large
firms, a Tobin’s Q of 0.31 means 31 percent of replacement cost
of assets of the
large firms in our sample which is an economically large
quantity) at the mean level of IT investments (see Aguinis et al.
[2010] for further discussion
of statistical versus practical significance; see also Fornell et al.
[2009]). Managers need to understand the trade-offs involved in
pursuing a
particular strategic emphasis in a functional area, and depending
on the strategic goals, they can choose a particular IT strategic
emphasis that
meets their needs. In particular, because adoption of a particular
strategic emphasis affects market value without affecting
profitability, managers
need to consider the market value implications of their actions
and strategic choices carefully even if they do not appear to
affect profitability (Kohli
55. et al. [2012] make similar observations). It is also possible that
strategic emphases in different functional areas have different
implications for
managing profitability and Tobin’s Q, and by combining the
strategic choices across various functional areas, managers may
be able to select a
portfolio of strategic options to meet their desired performance
objectives.
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Another managerial implication of our findings pertains to
tactical actions and investments in discretionary expenditures
such as advertising, R&D,
and IT investments to operationalize the strategic emphasis in a
functional area. Although managers can view IT investments as
providing the firm
with the capabilities to become ambidextrous and agile for
improved firm performance, this does not mean that all IT
systems and applications can
help with revenue growth or cost reduction. As we argue in the
“Background” section, it is not so much which applications
firms use but rather what
their overall strategic objectives are for deploying the
applications that is more critical, because we argue that
managerial beliefs, mental models,
and strategic posture shape an organi-zation’s IT governance
and management of IT projects to create business value (Mithas
et al. 2013). This
56. means that managers can choose a suitable portfolio or
combinations of appropriate IT applications (each of which may
only provide either revenue
growth or cost benefits to a greater degree, with some
exceptions such as business analytics systems that may provide
dual capabilities) that are
consistent with their strategic objective. For example, while
CRM systems may help firms improve customer satisfaction
(Mithas et al. 2005, 2016)
and, in turn, repurchase intentions and sales (Lariviere et al.
2016); eProcurement and RFID (radio-frequency identification)
systems may help firms
reduce costs (Mithas and Jones 2007; Whitaker et al. 2007).
Thus, managers need to synchronize their IT strategic emphasis
with related IT
applications to achieve their strategic objectives.
Conclusion
To conclude, this research empirically tested the effect of IT
strategic emphases and IT investments on firm profitability and
market value. Using
archival data from a broad cross-section of more than 300 U.S.
firms, we find that at the mean value of IT investments, dual-
emphasis firms have a
higher Tobin’s Q than firms with a revenue or a cost emphasis,
without any statistically significant differences in profitability
due to strategic
emphases. Of greater importance, IT strategic emphasis plays a
significant role in moderating the relationship between IT
investments and firm
performance. Dual-emphasis firms have a stronger IT–
profitability relationship than single-emphasis firms, and dual-
emphasis firms have a stronger
IT–Tobin’s Q relationship than revenue-emphasis firms.
Overall, while this research provides useful insights into the
57. effects of IT-related strategic
emphasis on firm performance, the findings imply that the
effects of strategic emphasis (revenue growth, cost reduction, or
a dual emphasis) on firm
performance can vary significantly and are conditional on levels
of IT investments. For typical levels of IT expenditure, a dual
emphasis in IT
strategy pays off in terms of a higher firm valuation, and a
higher level of IT investments makes a dual emphasis
increasingly attractive, with respect
to both profitability and Tobin’s Q. These findings should help
managers craft their IT strategies and better allocate resources
for IT systems to
achieve or sustain competitive advantage.
Acknowledgments
We thank Rajiv Kohli (the senior editor), Andrew Burton-Jones
(the associate editor), the three anonymous reviewers of MIS
Quarterly, and seminar
participants at the Marketing Strategy Meets Wall Street
Workshop (January 24-29, 2009) at Goizueta Business School,
Emory University, for
helpful comments to improve this work. We also acknowledge
helpful discussions with Andrew Baer, former CIO of Comcast,
to inform our thinking
and arguments.
Footnotes
1 Rajiv Kohli was the accepting senior editor for this paper.
Andrew Burton-Jones served as the associate editor.
2 Although the lagged value of an endogenous independent
variable is not a perfect instrument, it is often used in the
absence of better instruments
(Kennedy 1994). Prior studies in the business value of IT
58. literature have justified or used similar instruments (Han and
Mithas 2013; Hitt and
Brynjolfsson 1996; Kohli, Devaraj and Ow 2012; Mithas et al.
2012).
3 Overall strategy of a firm may be determined by its industry,
and we account for that correlation to some extent but we
acknowledge that future
research should explore controls for a firm’s overall strategy.
4 In addition to the instrumental variable approach, there are
other methods that can be used to assess the causal nature of
treatment effects and
sensitivity of parameter estimates. These include propensity
score matching, impact threshold for a confounding variable,
and regression
discontinuity approaches (Kim et al. 2014; Kohli et al. 2012;
Mithas and Krishnan 2009), among others. However, the use of
such methods is
context dependent on the type of research questions and data to
which researchers have access.
5 Prior studies in the business value of IT literature have also
used similar lagged values as the instrumental variable,
although the exact
operationalization is always subject to data limitations and
somewhat context-specific. Therefore, conceptually and
empirically our choice of
instrument is consistent with prior literature (Han and Mithas
2013; Hitt and Brynjolfsson 1996; Kohli et al. 2012; Mithas et
al. 2012).
6 Sometimes researchers use multiple instruments and report
some statistical tests to provide confidence in usage of such
multiple instruments.
Such instruments have often been criticized because they also
59. come with unexplained or non-verifiable assumptions.
GRAPH: Figure 1. IT–Profitability Relationship for Dual-
Versus Single-Emphasis Firms (Revenue or Cost) (other
variables are at their mean value)
GRAPH: Figure 2. IT–Tobin’s Q Relationship for Dual- Versus
Single-Emphasis Firms (Revenue or Cost) (other variables are at
their mean value)
GRAPH: Figure 3. IT–Profitability Relationship by Dual,
Revenue, and Cost IT Strategic Emphasis (other variables are at
their mean value)
GRAPH: Figure 4. IT–Tobin’s Q Relationship by Dual,
Revenue, and Cost IT Strategic Emphasis (other variables are at
their mean value)
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DIAGRAM: HOW INFORMATION TECHNOLOGY
STRATEGY AND INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND
EMPIRICAL EVIDENCE1
DIAGRAM: HOW INFORMATION TECHNOLOGY
STRATEGY AND INVESTMENTS INFLUENCE FIRM
PERFORMANCE: CONJECTURE AND
EMPIRICAL EVIDENCE1
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