Article Preview
TopIntroduction
A central concern in information systems (IS) strategy is understanding how organizations create value with information technology (IT) (Bakos & Treacy, 1986; Cash & Konsynski, 1985; Galliers & Leidner, 2014; Jarvenppa & Ives, 1991; Leidner, Lo, & Preston, 2011; Porter & Miller, 1985; Seddon, 2014). In the 1980s, a growing body of literature argued that IT can be used to raise barriers to entry, increase bargaining power with suppliers and customers, offer new products and services, or change the rules of competition (McFarlan, 1984; Porter & Miller, 1985). Over the years, however, a number of scholars have noted that sustaining advantages through IT applications may be difficult, because such applications are eventually imitated and appropriated by competitors (Chae, Koh, & Prybutok, 2014; Clemons & Row, 1991; Mata, Fuerst, & Barney, 1995; Sambamurthy & Zmud, 1997). Thus, strategic IT applications eventually become strategic necessities for the continued existence of firms.
The recent popularity of the resource-based view (RBV) of firms has shifted the focus toward the internal resources and competences of firms. A growing body of research in this arena suggests that IT per se may not be the main source of firm-level competitiveness (Mata, Fuerst, & Barney, 1995; Powell & Dent-Micallef, 1997); it is, rather, the management of information and technology (Sambamurthy & Zmud, 1997) and complementary resources (Clemons & Row, 1991; Dutta, 2015; Nevo & Wade, 2011) that determine the competitiveness of firms. In other words, how a firm utilizes its information systems, in combination with other firm-level resources, determines the competitive strength of the firm.
Using the RBV of firms, IS scholars indicate that firms are heterogeneous in developing and nurturing IS competences; therefore, they are likely to have a different potential in leveraging information systems for competitiveness (Barney, 1991, 1997; Onetti, Zucchella, Jones, & McDougall-Covin, 2012; Peteraf, 1993). For example, Mata, Fuerst, and Barney (1995) note that for sustaining and capitalizing IT benefits, a firm must possess managerial IT skills. Ross, Beath, and Goodhue (1996) posit the importance of IT groups that possess both technical and business problem-solving skills. Keen (1991) acknowledges the role of the commitment of top management in leveraging IT for competitiveness. Clemons and Row (1991) argue the benefits of complementary resources for long-term advantages.