Skip to main content

Advertisement

Log in

An empirical examination of a process-oriented IT business success model

  • Published:
Information Technology and Management Aims and scope Submit manuscript

Abstract

The value of information technology (IT) to modern organizations is almost undeniable. However, the determination of that value has been elusive in research and practice. We used a process-oriented research model developed using two streams of IT research to examine the value of IT in business organizations. One stream is characterized by examining how IT and non-IT variables affect other so-called IT success variables. The second stream is commonly referred to as IT business value, defined as the contribution of IT to firm performance. The resulting research model is referred to in our paper as the IT business success model. Data was collected from 225 top IS executives in fairly large organizations to empirically examine several hypotheses derived from theory concerning the causal nature of the IT business success model. A set of measures for the IT business success model was developed through an intense investigation of the IT literature. The measures were tested for validity and reliability using confirmatory factor analysis. The hypotheses that resulted from past research and conceptually illustrated in the research model were assessed using structural equation analysis. The implications of these findings and the limitations of the study are discussed in an effort to contribute to building a process-oriented theory base for IT business success at the organizational level of analysis.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Subscribe and save

Springer+ Basic
$34.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  1. J.C. Anderson, An approach for confirmatory measurement and structural equation modeling of organizational properties, Management Science 33(4) (1987) 525–541.

    Google Scholar 

  2. J.C. Anderson, D.W. Gerbing and J.E. Hunter, On the assessment of unidimensional measurement: internal and external consistency, and overall consistency criteria, Journal of Marketing Research 24 (1987) 432–437.

    Article  Google Scholar 

  3. C.P. Armstrong and V. Sambamurthy, Information technology assimilation in firms: The influence of senior leadership and IT infrastructures, Information Systems Research 10(4) (1999) 304–327.

    Google Scholar 

  4. R.D. Banker and R.J. Kauffman, Strategic contributions of information technology: an empirical study of ATM networks, in Proceedings of the Ninth International Conference on Information Systems (1988) pp. 141–150.

  5. A. Barua, C.H. Kriebel and T. Mukhopadhyay, Information technologies and business value: an analytic and empirical investigation, Information Systems Research 6(1) (1995) 3–23.

    Google Scholar 

  6. A. Barua and T. Mukhopadhyay, Information technology and business performance: Past, present, and future, in R.W. Zmud (Ed.), Framing the Domains of IT Management: Projecting the Future Through the Past, Cincinnati, OH, Pinnflex Education Resources (2000) pp. 65–84.

    Google Scholar 

  7. A.S. Bharadwaj, A resource-based perspective on information technology capability and firm performance: an empirical investigation, MIS Quarterly 24(1) (2000) 169–196.

    Article  Google Scholar 

  8. A.S. Bharadwaj, S.G. Bharadwaj and B.R. Konsynski, Information technology effects on firm performance as measured by Tobin’s q., Management Science 45(6) (1999) 1008–1024.

    Google Scholar 

  9. A.C. Boynton, R.W. Zmud and J.C. Jacobs, The influence of IT management practice on IT use in large organizations, MIS Quarterly 18(3) (1994) 299–318.

    Article  Google Scholar 

  10. E. Brynjolfsson, The productivity paradox of information technology, Communications of the ACM 35(12) (1993) 66–77.

    Article  Google Scholar 

  11. E. Brynjolfsson and L.M. Hitt, Paradox lost? Firm-level evidence on the returns to information systems spending, Management Science 42(4) (1996) 541–558.

    Google Scholar 

  12. Business Week, The new business cycle, 3520 (March 31, 1997) 58–68.

  13. T.A. Byrd, Information technology, core competencies, and sustained competitive advantage, Information Resources Management Journal 14(2) (2001) 25–34.

    Google Scholar 

  14. T.A. Byrd and D. Turner, An exploratory analysis of the value of the skills of IT personnel: their relationship to IS infrastructure and competitive advantage, Decision Sciences 32(1) (2001) 21–54.

    Google Scholar 

  15. T.A. Byrd and D. Turner, Measuring the flexibility of information technology infrastructure: Exploratory analysis of a construct, Journal of Management Information Systems 17(1) (2000) 167–208.

    Google Scholar 

  16. Y. Chan, S.L. Huff, D.W. Barclay and D.G. Copeland, Business strategic orientation, information systems strategic orientation, and strategic alignment, Information Systems Research 8(2) (1997) 125–150.

    Google Scholar 

  17. G.A. Churchill, A paradigm for developing better measures of marketing constructs, Journal of Marketing Research 16 (1979) 64–73.

    Article  Google Scholar 

  18. E.K. Clemons and M. Row, Sustaining IT advantage: The role of structural differences, MIS Quarterly 15(3) (1991) 275–292.

    Article  Google Scholar 

  19. D.G. Copeland and J.L. McKenney, Airline reservations systems: lessons from history, MIS Quarterly 12(3) (1988) 353–370.

    Article  Google Scholar 

  20. T. Davenport and J. Linder, Information management infrastructure: the new competitive weapon, in Proceedings of the Twenty-Seventh Hawaii International Conference on Systems Sciences, (1994) pp. 885–896.

  21. Directory of Top Computer Executives (Applied Computer Research, Phoenix, AZ, 1997).

  22. N.B. Duncan, Capturing flexibility of information technology infrastructure: a study of resource characteristics and their measure, Journal of Management Information Systems 12(2) (1995) 37–57.

    Google Scholar 

  23. M.J. Earl, Management Strategies for Information Technologies (Englewood, New Jersey: Prentice Hall, 1989).

    Google Scholar 

  24. C.F. Gibson and R.L. Nolan, Managing the four stages of EDP growth, Harvard Business Review 52(1) (1974) 76– 88.

    Google Scholar 

  25. V. Grover, An empirically derived model for the adoption of customer-based interorganizational systems, Decision Sciences 24(3) (1993) 603–640.

    Google Scholar 

  26. V. Grover, S.R. Jeong and A.H. Segars, Information systems effectiveness: The construct space and patterns of applications, Information and Management 31 (1996) 177–191.

    Article  Google Scholar 

  27. V. Grover, J.T.C. Teng and K.D. Fiedler, IS investment priorities in contemporary organizations, Communications of the ACM 41(2) (1998) 40–48.

    Article  Google Scholar 

  28. S.E. Harris and J.L. Katz, Organizational performance and information technology investment in the insurance industry, Organization Science 2 (1991) 263–296.

    Google Scholar 

  29. D.A. Harrison, P.P. Mykytyn Jr. and C.K. Riemenschneider, Executive decisions about adoption of information technology in small business: Theory and empirical tests, Information Systems Research 8(2) (1997) 171–195.

    Google Scholar 

  30. L.M. Hitt, Information technology and firm boundaries: evidence from panel data, Information Systems Research 10(2) (1999) 134–149.

    Google Scholar 

  31. M.C. Jensen, The modern industrial revolution, exit, and the failure of internal control systems, Journal of Finance XLVIII 3 (1993) 831–881.

    Google Scholar 

  32. F.N. Kerlinger, Foundations of Behavioral Research, 3rd ed (New York: Harcourt Brace Jovanovich, 1986).

    Google Scholar 

  33. W.J. Kettinger, V. Grover, G. Subashish and A.H. Segars, Strategic information systems revisited: A study in sustainability and performance, MIS Quarterly 18(1) (1994) 31– 58.

    Article  Google Scholar 

  34. W.R. King, IT-enhanced productivity and profitability, Information Systems Management 15(1) (1998) 64–66.

    Google Scholar 

  35. A.L. Lederer and V. Sethi, The implementation of strategic information systems planning methodologies, MIS Quarterly 12(3) (1988) 445–461.

    Article  Google Scholar 

  36. B.R. Lewis, C.A. Snyder and R.K. Rainer, An empirical assessment of the information resource management construct, Journal of Management Information Systems 12(1) (1995) 199–223.

    Google Scholar 

  37. J.N. Luftman, P.R. Lewis and S.H. Oldach, Transforming the enterprise: The alignment of business and information technology strategies, IBM Systems Journal 10(1) (1993) 97–122.

    Google Scholar 

  38. N. Menon, B. Lee and L. Eldenburg, Productivity of information systems in the healthcare industry, Information Systems Research 11(1) (2000) 83–92.

    Article  Google Scholar 

  39. T. Mukhopadhyay, F.J. Lerch and V. Mangal, Assessing the impact of information technology on labor productivity, Decision Support Systems 19(2) (1997) 109–122.

    Article  Google Scholar 

  40. R.P. Nayyar, Stock market reactions to related diversification moves by service firms seeking benefits from information asymmetry and economics of scope, Strategic Management Journal 14(8) (1993) 569–591.

    Google Scholar 

  41. M.E. Porter and V.E. Millar, How information gives you competitive advantage, Harvard Business Review 63(4) (1985) 149–160.

    Google Scholar 

  42. A. Rai, R. Patnayakuni and N. Patnayakuni, Technology investment and business performance, Communications of the ACM 40(7) (1997) 89–97.

    Article  Google Scholar 

  43. B.H. Reich and I. Benbasat, An empirical investigation of factors influencing the success of customer-oriented strategic systems, Information Systems Research 1(3) (1990) 325–349.

    Google Scholar 

  44. R. Sabherwal, The relationship between information systems planning sophistication and information systems success: An empirical assessment, Decision Sciences 30(1) (1999) 137–167.

    Google Scholar 

  45. R. Sabherwal and Y.E. Chan, Alignment between business and IS strategies: A study of Prospectors, Analyzers, and Defenders, Information Systems Research 12(1) (2001) 11–33.

    Article  Google Scholar 

  46. R. Sabherwal and W.R. King, An empirical taxonomy of the decision-making processes concerning strategic applications of information systems, Journal of Management Information Systems 11(4) (1995) 177–215.

    Google Scholar 

  47. R.B. Sambharya, Foreign experience of top management teams and international diversification: Strategies of U.S. multinational corporations, Strategic Management Journal 17(9) (1996) 739–746.

    Article  Google Scholar 

  48. V. Sethi and W. King, Development of measures to assess the extent to which an information technology application provides competitive advantage, Management Science 40(12) (1994) 1601–1627.

    Google Scholar 

  49. J.Y.L. Thong, C.S. Yap and K.S. Raman, Top management support, external expertise, and information systems implementation in small businesses, Information Systems Research 7(2) (1996) 248–267.

    Google Scholar 

  50. P.P. Tallon, K.L. Kraemer and V. Gurbaxani, Executives’ perceptions of the business value of information technology: A process-oriented approach, Journal of Management Information Systems 16(4) (2000) 145–173.

    Google Scholar 

  51. N. Venkatraman, IT-enabled business transformation: From automation to business scope redefinition, Sloan Management Review 35(2) (1994) 73–77.

    Google Scholar 

  52. N. Venkatraman, Strategic orientation of business enterprise: The construct, dimensionality, and measurement, Management Science 35(8) (1989) 942–963.

    Google Scholar 

  53. P. Weill and M Broadbent, Leveraging the New Infrastructure (Boston, MA: Harvard Business School Press, 1998)

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Terry Anthony Byrd.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Byrd, T.A., Davidson, N.W. An empirical examination of a process-oriented IT business success model. Inf Technol Manage 7, 55–69 (2006). https://doi.org/10.1007/s10799-006-8100-z

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10799-006-8100-z

Keywords