Information Systems Research

 (Forthcoming in 2008-09)

 

Information Technology in Supply Chains:

The Value of IT-enabled Resources under Competition

Shutao Dong, Sean Xin Xu, Kevin Xiaoguo Zhu

 

Abstract

In this study, we seek to better understand the value of information technology (IT) in supply chain contexts. Grounded in the resource-based theory in conjunction with transaction cost economics, we develop a conceptual model that links three IT-related resources (backend integration, managerial skills, and partner support) to firm performance improvement. The model differs from previous studies by proposing a moderating effect of competition on the resource-performance relationships. Using data of 743 manufacturing firms, our analysis indicates significant contribution of IT to supply chains, which is generated through development of the digitally-enabled integration capability and manifested at the process level along the supply chain. The technological resource alone, however, does not hold the answer to IT value creation. In fact, managerial skills, which enable adaptations on supply chain processes and corporate strategy to accommodate the use of IT, are shown to play the strongest role in IT value creation. Further, backend integration and managerial skills are found to be more valuable in more competitive environments. While commodity-like resources have diminishing value under competition, integrational and managerial resources become even stronger. Overall, our results shed light on the key drivers of IT-enabled supply chains, and provide insights into the contingencies that how competition shapes IT value.

 

Keywords

IT business value, competition, supply chain, resource-based view, moderation effect, intangible resources, backend integration, managerial skills