Academic journal article Contemporary Management Research

An Alternative Model of the ICT Value Creation Process Based on Cross-Impact Analysis

Academic journal article Contemporary Management Research

An Alternative Model of the ICT Value Creation Process Based on Cross-Impact Analysis

Article excerpt

INTRODUCTION

Businesses across the world rely on Information Communication Technology1 (ICT) to improve their productivity and efficiency, deliver value to customers, and achieve competitive advantage (Grover & Kohli, 2012; Gregor et al., 2004). A positive relationship between ICT and organisational performance has also been established by researchers (Mithas, Tafti, Bardhan, & Goh, 2012; Kohli & Devaraj, 2003). ICT's impact on organisational performance is its ICT value (Kohli & Grover, 2008; Melville, Kraemer, & Gurbaxani, 2004). Gregor et al. (2004) identified four aspects of ICT value: informational (access to internal and external information), strategic (creation of competitive advantage), transactional (business efficiency) and transformational ICT effects (expanded capabilities).

However, less is known of the process of ICT value creation that occurs only when ICT synergistically operates with other organisational factors (Nevo & Wade, 2010; Kohli & Grover, 2008). In other words, the research methods described in the literature so far have failed to capture the interactions between ICT and other organisational elements. Nor is there a meaningful classification of factors influencing the ICT value creation process. As ICT is a key aspect of business success, understanding this process is of critical importance for providing directions and insights for managing ICT value (Grover & Kohli, 2012). The aim of this paper is to investigate the process of ICT value creation. To this end, systems theory is used to conceptualise this process as a system, and a cross-impact analysis is then used to capture and analyse interactions among the system's elements in three organisations.

The findings presented in this paper clarify the role of different elements in the process of ICT value creation. Moreover, a meaningful and relevant classification of these elements is presented. This is essential for advancing our understanding of ICT value creation and its management. The comparison of results across the three ICT value creation systems led to the development of an alternative model of the ICT value creation process. This model has important implications for IT practitioners and researchers in terms of creation of ICT value.

This paper is organised as follows. The literature on factors influencing ICT value is explored in order to identify these factors. Systems theory and a conceptual model of an ICT value creation system are discussed next. This is followed by sections on methodology and data analysis. Lastly, the findings are presented, limitations of the study are identified and some concluding remarks are made.

FACTORS INFLUENCING ICT VALUE

The Information Technology (IT) literature has identified several factors influencing organisational performance: ICT value. For the purposes of reviewing these factors, they are contextualised as technological, individual, organisational and environmental (Melville et al., 2004).

The technological context contains factors that are related to characteristics of ICT applications. Technology is considered as a form of innovation by Rogers (1995) who identified five attributes of innovations. Among these, ICT compatibility with existing technologies, and complexity or ICT user friendliness that explains the degree to which ICT is difficult to use, are particularly important for achieving ICT value (Davis, 1989). ICT integration affects the realisation of ICT value, as it reflects compatibility between ICT and business processes (Rajagopal, 2002). Finally, ICT flexibility, that is, ICT openness to adaptations and upgrades is another element of ICT value (Kumar, 2004).

The second group of factors influencing ICT value pertains to users, who are characterised by their cognitive and emotional qualities. Davis et al. (1989) introduced users' 'attitude toward using ICT.' ICT knowledge and skills were emphasised by a number of researchers (e. …

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