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Realizing business value of agile IT applications: antecedents in the supply chain networks

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Abstract

This research develops a framework for organizational value creation from agile IT applications. Based on the four themes in the business value research—business process perspective, complementarities, application level of analysis, and extent of use—three antecedents (organizational fit, process assimilation, and network adoption) are identified as pre-requisites for realizing the value of agile supply chain applications. Advanced planning and scheduling (APS) systems are used as examples, and two case studies for their implementation in the electronics and consumer goods industry are reported to support the propositions. The theories of diffusion of innovation, complementarities, network externalities, and technology structuration are applied to develop the propositions for fit, assimilation, and network effects. Information sharing and industry clockspeed are identified as the moderating factors in the proposed model. The framework has both managerial and research relevance. The research guides managers regarding ways to more fully realize the value of agile applications and forms a basis for future research on the business value of IT applications.

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Notes

  1. Within complementarities, contingency perspective has been differentiated from the configuration perspective. The latter proposes the treatment of fit with more holistic forms or configurations instead of the individual elements of these configurations (see [70] for discussion).

  2. While some researchers have argued for primary and secondary characteristics to be mutually exclusive [24] others argue that most technology characteristics can have facets of both [25]. The distinction however is not considered relevant for this research.

  3. Wal Mart through its Retail Link program seamlessly connects its suppliers with the point of sale (POS) data.

  4. Organizational IQ is measure of new information age architecture of organization, and is based on their information awareness, decision architecture, knowledge transparency, activity focus and Information age network [42].

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Acknowledgments

The authors acknowledge the feedback and comments from Mike Gallivan, Paul A. Pavlou, Bala Ramesh and other participants at the IFIP WG 8.2. Conference on ‘Business Agility and IT Diffusion’ Aug 8–11 2004 Atlanta.

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Authors and Affiliations

  1. Information Technology Management, Eli Broad Graduate School of Management, Michigan State University, East Lansing, MI, 48824-1122, USA

    Pankaj Setia

  2. Eli Broad Professor of Information Technology, Center for Leadership of the Digital Enterprise, The Eli Broad College of Business, Michigan State University, East Lansing, MI, 48824, USA

    Vallabh Sambamurthy

  3. John H. McConnell Chair in Business Administration, Department of Supply Chain Management, The Eli Broad College of Business, Michigan State University, East Lansing, MI, 48824, USA

    David J. Closs

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  1. Pankaj Setia
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  2. Vallabh Sambamurthy
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  3. David J. Closs
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Correspondence to Pankaj Setia.

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Setia, P., Sambamurthy, V. & Closs, D.J. Realizing business value of agile IT applications: antecedents in the supply chain networks. Inf Technol Manage 9, 5–19 (2008). https://doi.org/10.1007/s10799-007-0028-4

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