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Studying The Role Of Is Capabilities Information Technology Essay

The modern world is based upon the competition. As explained in Darwinism, in nature, only those survive who have adapted according to need and those will rule who possess the competitive advantage over its competitors. Law of the business is no different than natural law. In business world too, only those business survives and flourish which have adapted according to the market and have competitive advantage to drive market. After the development of the computer science and information and communication technology, modern businesses are trying to incorporate the power of ICT and improve own efficiency and effectiveness and gain advantage. Subjected article, “The role of IS capabilities in delivering sustainable improvements to competitive positioning”, have tried to study the ICT and its role in business in gaining competitive position also with it, tries to study its capabilities in providing sustainable competitive positioning to the business.

Introduction

Information system (IS) is bridge between two different disciplines, computer science and business fields (khanzanchi et al., 2000) [2]. Information system is typically involved in business organization for the sole purpose of improving effectiveness and efficiency of the organization (Silver et al., 1995) [1]. It is capabilities of the IS and organizational characters, peoples, its implementation and development methodologies and work system determines the achievement of that purpose. Much of the effort have been made to better understand the role of IT and its deployment might support improvements to an organization’s operational performance (Brynjolfsson and Hitt, 1996; Hitt et al., 2002) [4] [5]. Some academic and professional researchers are in particular interested to study and explore the innovative implementation of IT and its potential to deliver clear competitive advantage.

Subjected article “The role of IS capabilities in delivering sustainable improvement to competitive positioning” by Neil F. Doherty and Mark Terry also tries to draw resources based theory to explorer the effective deployment of IS capabilities might deliver sustainable improvement to competitive positioning from individual IS initiatives. Authors of the article have showed in their quantitative and qualitative research, sustainable improvements in competitive positioning of organization depends upon its ability to effectively apply an appropriate portfolio of IS capabilities. And more, improvements are more likely in circumstances in IS initiative, which are lacking in both transparency and difficult to replicate.

Importance of the subject study

The subjected research article is document of research conducted upon much debated topic involving Information system and its role on delivering the competitive positioning of organization. Generally, Information system is combination of the information technology, activities of the people who are using the system for supporting operations, management, and decision making and overall business processes. Some argue IS as special work system, in which humans and machine uses ICT resources in production of products or services mainly involving in processing of information (Alter et al.)[3].

The aim of article is to draw upon resources-based theory and use it to explore the possibility to identify a portfolio of IS related resources/capabilities that are necessary to assist the delivery of sustainable improvements in competitive positioning from the implementation of IS. Thus, this research will study the debated topic of the role of the strategic implementation of IS and try to find the real status. Also, to achieve its aim, this article also makes significant departure from previous studies. By using individual IS initiatives as unit of analysis and explore the competitive impacts of IT at the process level, this research is free from legacy impacts of beliefs and perform close study on the business process.

Since importance of the IS in modern organization and business is such huge that it has become not only a tool for the business but part of the business process. In such world of competitive edge, every organization should know the capability of implemented IS in their business and its impact over the organization and its strategic position.

Research Summary

Literature research

Subjected article did extensive amount of the literature review on the past studies and effort made. They mentioned, much of the academic effort in studying the role of IS in organizational performance, are devoted mainly in studying innovative application of IT for delivering competitive advantage. Early work in the fields (Ives and Learmonth, 1984; Porter and Millar, 1986) [6] [7] are based on 'competitive forces’ perspective. According to this perspective, competitive advantages are gained if, IT is innovatively used.

In their literature review, author of the article have reviewed extensive literature and papers available and have arranged under three key points (I) details of resources-based view, (II) resources complementarily and IT enabled competitive advantage and finally (III) research objectives.

In the review, Authors of the article account of (Carr, 2003; Thatcher and Pingry, 2007) [9] [10] using, ‘strategic necessity hypothesis’ to argue that it is unlikely that any individual application of IT will deliver a sustainable competitive advantage. (Melville et al., 2004) [8] Stated it is relatively easy for firms to understand, and then copy their competitor’s systems, and the IT artifact, no matter how innovatively they are applied. Contrary to the above statement, other theory ‘resources based theory’ of the firm is developed and states, it is possible to gain advantage if the adoption of information systems is supported through the deployment of an appropriate portfolio of complementary resources and capabilities (Wade and Hulland, 2004). Article notes from (Day, 1984; Porter, 1985) [12] [13] that, for organization to realize a competitive advantage, it must satisfy a number of conditions, it must be doing something appreciably better than its competitors and it must be valued by the customers and it must not be readily replicated by its competitors. Also they have realized on account of (Day, 1984), this advantage will eventually erode over time. So organization should find new sources of sustainable sources of competitive advantage.

On the over view of the resource-based view of the firm, Penrose (Penrose, 1959, p.7) [14] suggested, a firm should be viewed as ‘a collection of human and physical resources bound together in an administrative framework, the boundaries of which are determined by the area of administrative coordination and authoritative communication’. (Wernerfelt ,1989) noted ‘both strategy scholar & managers often failed to recognize that a bundle of assets rather than a particular product-market combination chosen for its deployment, lies at the heart of their firms competitive positioning.’ Later years, many other literatures accounts RBV and assumes that firms compete on the basis of heterogeneously distributed, ‘unique’ resources that are valuable, rare, inimitable and non-substitutable. The review clearly identifies resources as physical IT assets such as software, applications & infrastructure and capabilities as intangible assets such as leadership, relationships and culture etc to leverage value from the physical IS resources. And thus, with respect to the competitive positioning, the resources which support application of IT effectively rather than technological artifact itself are best suited to sustaining a competitive advantage.

Critics, Problem and Objective identification

Our author have also accounted number of papers where they found many arguments which convincingly states ‘resources-based view of the firm’ as ‘inherently suitable for analyzing the complexity of IT and firm performance’. According to the papers author have noted, RBV puts less focus in role of technical artifact and more on potential of the capabilities needed to support and exploit information systems within the firm.

In the review, author have found some gaps in the literature such as, previous researchers have attempted to assess the economic or competitive impacts on enterprise level, this type of the analysis lead to misleading conclusion. Thus an insight is inferred to use of ‘individual strategic initiatives’ as the unit of analysis. Another problem found in previous researches is empirical evaluation of the competitive impact of IS capabilities. Most studies assess the effect of IT only over three years rather than to attempt to determine the absolute duration of any improvements in competitive positioning. And failed to model the heterogeneity of the contributing IS resources.

The article also accounts of the many insights such as adoption of aggregate-level of analysis might lead research to the mislead conclusion (Barua et al., 1995; Ray et al., 2004). And use of ‘individual strategic initiatives’ as the unit of analysis. Based upon these number of critics and identified gaps, this article have mentioned the objective of the research as

To investigate how the application of individual IS capabilities will leverage improvements in competitive positioning from an IS initiative.

To explore how the transparency and replicability of individual capabilities will affect the sustainability of any improved competitive positioning.

To explore whether the extent to which the competitive positioning of individual processes is affected by the application of IS capabilities.

To determine how the transparency and replicability of IS capabilities will affect the sustainability of any improvement, at the process level.

Research

Research framework

In order to conduct study, researchers have comprised 6 key constraints 4 are measured throughout the study and additional 2 key are not measured but helps to ground the study. Following the insights from the literature, author of article have assumed that an organization’s ability to leverage an improved competitive positioning from the introduction of an ‘IS initiative’ will be dependent upon the deployment of an appropriate portfolio which are the research objective number 1st and 3rd. Also sustainability of any improvement in CP will be dependent upon the extent to which the contributing capabilities are non-transparent and non replicable which are objective number 2nd and 4th.

The framework had been designed by adopting the (wade and hulland, 2004) as it address outwardly facing IS capabilities with commonly considered inwardly. Also framework is designed to model the extent of CP of each process to improve through the introduction of a specific IS initiative. Simply, framework is designed to account sustainability as duration for which any improvement in competitive poisoning can be sustained.

Research methodology

The popular methodology of research at present researches is to combine both methodologies, quantitative and qualitative methodologies. It provides richer and deeper insights of the subject under investigation with validity of the statistical data and explanation of diverging results. The positive aspects of methodology of researchers of article is following (Cavaye’s, 1996) advice and collect quantitative and qualitative data respectively from same source site. Research is incorporate both interpretive and positivist elements as recommended in complex technologies studies. As the goal of the research is gaining knowledge of reality through study of social constructions, initial questionnaire survey was executed using principles of positivistic and later while interview transcript is analyses by interpretive style.

For combining the quantitative and qualitative methodologies, research was divided into two parts by the researchers. At first part, quantitative study was done. Here, detailed design, validation and targeting were performed as any normal quantitative analysis. Detailed questionnaire based on the research model was prepared and used to collect necessary data. As the objective and focus was different, draft questionnaire was passed through rigorous validation process conducted by experienced IS researchers, academics and practicing managers.

After refinement of the questionnaire only, pilot data are collected by involving 57 managers. This provided with valuable insights and analytical implication for the full survey. After receiving the insights in the competitive, primary targets that are managers and executives who are involved in information system initiatives, are recognized as appropriate group of individuals for the survey. And also it was positive act of selecting large, private organizations as small firms may not have in-house IS capabilities. Also since the researcher have realized that any random selection of the participants would be not sufficient as well as it would be greatly inappropriate also. Thus it was wise of the researcher of choosing ‘convenience sampling’ approach, by sampling from managers with professional ties and managers of undergraduate students in placement year and practicing graduated from executive development or MBA.

Researcher have mentioned the commercially sensitive nature of questionnaire have lowered the response from the candidates but 13% of valid response was little disappointing and uncomfortable for research. Perhaps researcher should have follow up the managers who had not respondent and try to increase the responses. Higher percentage of response would provide much wide spectrum of data. But also researcher have reassured by collecting variety of sizes and sectors which will fulfill the need of more data.

Second part of the research, i.e. qualitative study involves revisiting the research propositions with qualitative motive and interviews each agreed responder. This part would provide richer and deeper insights and explain and interpret the result of the quantitative analysis. Responder was selected as per the agreement of the responder themselves during the questionnaire. The interview was prepared from the well designed interview script which was also rigorously checked and rechecked for validation. The analysis was done by recording the interview into tape and then transcribed into digital document and then later imported to NVIVO which will code, edit and then analyze the transcripts.

Use of prepared script for the interview and analyzing the transcribed copy of the interview with NVIVO was appreciative as it will treat each respondent unbiased way.

Results and findings

This section of the article mainly explores the results and findings of conducted research. Main aim of the research is to explore the impact of individual IS capabilities on ICP (improved competitive positioning) and then on sustained ICP. Researchers have tabulated their findings on the report. This provided quick and clear view on the results. They have found new evidence on the theory supporting that appropriate application of IS capabilities can deliver improvements in competitive positioning. And also with that, they have found that outside-in and spanning capabilities have higher influence than inside-out capabilities, although inside-out have above average contribution in delivering ICP. In case of SICP, research have shown that transparency have inverse relation with the SICP which was expected and significance of transparency is more in spanning and outside-in capabilities than in inside-out.

At process level, IS capabilities’ impact have been observed and are also tabulated. Research has observed a pattern between total capability contribution and types of business process. Patterns revealed that, main improvement in CP can be seen in operating processes rather than in management or support process. Similar case was also observed in IS capabilities in eleven business process, transparency and replicability have higher effect on operational process than rather in other process.

In the qualitative analysis of the research also suggest similar results. In majority of the cases, respondent were very positive about the role of IS in leveraging ICP. Many cases were also observed where candidates were providing clear example of how they gain advantage over their competitors. Also with these insights, research also revealed that respondents also have well consensus of leveraging of an SICP depends on utilization of non- transparence and non-replicable capabilities.

In conclusion, researchers found realization upon the SICP from an IS initiative depends upon implementation and utilization of capabilities that are non- transparence and non-replicable. The findings were according to the objective of the research and the methods selected and employed were also appropriately served their purpose.

Conclusion

This study has adopted research strategy, to shed light upon the characteristics of relationship between organizational performance and resource applications. There are some compromises that are made in collection of the data such as using convenience samples in order fix the less respondent percentage and in-access to some of the professionally sensitive data. Other limitation of the study would be use of single informant and some single items in measurement in statistical analyses which must be done in different method. This limitation and previous were well documented in limitations. Thus doing so will certainly help to the other researcher which will perform study on similar scenarios.

Over all the research have done number of important contribution to the information management and strategic management fields. Main achievement of the research is being successful in filling the gaps found in previous literatures and by making significant departure from number of literature, it successfully concluded the hypothesis with selecting wise strategic methodologies.

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