The Influence of IT Governance on Service Processes in Multi-Business Manufacturing Enterprises: Performance Impacts from Structures, Processes, and Relational Mechanisms

In the last 30 years, developing industrial services has emerged as a strategic imperative for most manufacturing firms. However, they struggle with the implementation of appropriate IT solutions. Being widely accepted as a strategic concept in the IT domain, IT governance (ITG) ensures effectiveness and efficiency in the usage of IT in multi-business firms. This paper aims to investigate the service performance impact of ITG. Doing so, the study takes the resource-based perspective, and integrates the economic theory of complementarities and the concept of relatedness. The proposed increase in service process performance is grounded in the generation of sustainable competitive advantage. The framework is investigated by using eight exploratory case studies in multi-business manufacturing organizations. The results suggest that ITG is positively related to service process performance through the mediators of IT relatedness and service process relatedness. Furthermore, ITG levers have been identified which might significantly increase service process performance.

[1]  Blaize Horner Reich,et al.  IT alignment: what have we learned? , 2007, J. Inf. Technol..

[2]  Pieter M. A. Ribbers,et al.  Information technology governance by design: investigating hybrid configurations and integration mechanisms , 2000, ICIS.

[3]  William L. Fuerst,et al.  Information Technology and Sustained Competitive Advantage: A Reourse-Based Analysis , 1995, MIS Q..

[4]  Rajiv Sabherwal,et al.  Alignment Between Business and IS Strategies: A Study of Prospectors, Analyzers, and Defenders , 2001, Inf. Syst. Res..

[5]  Margaret A. Peteraf.  The cornerstones of competitive advantage: A resource‐based view , 1993 .

[6]  Chong Leng Tan,et al.  Empirical analysis of supplier selection and involvement, customer satisfaction, and firm performance , 2001 .

[7]  Young-Gul Kim,et al.  Effect of Partnership Quality on IS Outsourcing Success: Conceptual Framework and Empirical Validation , 1999, J. Manag. Inf. Syst..

[8]  Stephen L. Vargo,et al.  Evolving to a New Dominant Logic for Marketing , 2004 .

[9]  Peter Loos,et al.  Mobile Technologies for Efficient Service Processes: A Case Study in the German Machine and Plant Construction Industry , 2007, AMCIS.

[10]  HullandJohn,et al.  Review: the resource-based view and information systems research , 2004 .

[11]  Anita Wölfl,et al.  The Service Economy in OECD Countries , 2005 .

[12]  Jerry N. Luftman,et al.  An Update on Business-IT Alignment: "A Line" Has Been Drawn , 2007, MIS Q. Executive.

[13]  J. Barney.  Firm Resources and Sustained Competitive Advantage , 1991 .

[14]  J. Robins,et al.  A resource‐based approach to the multibusiness firm: Empirical analysis of portfolio interrelationships and corporate financial performance , 1995 .

[15]  Rachel Davis,et al.  Direct estimation of synergy: a new approach to the diversity-performance debate , 1993 .

[16]  Paul Milgrom,et al.  Complementarities and fit strategy, structure, and organizational change in manufacturing , 1995 .

[17]  Shantanu Dutta,et al.  Customizing Complex Products: When Should the Vendor Take Control? , 2006 .

[18]  P. Williamson,et al.  Related diversification, core competences and corporate performance , 2007 .

[19]  Gerald G. Grant,et al.  Framing the Frameworks: A Review of IT Governance Research , 2005, Commun. Assoc. Inf. Syst..

[20]  Rogelio Oliva,et al.  Managing the transition from products to services , 2003, International Journal of Service Industry Management.

[21]  William L. Fuerst,et al.  Information technology and sustained competitive advantage: a resource-based analysis , 1995 .

[22]  Kenneth L. Kraemer,et al.  Review: Information Technology and Organizational Performance: An Integrative Model of IT Business Value , 2004, MIS Q..

[23]  M. Wade,et al.  Review: the resource-based view and information systems research: review, extension, and suggestions for future research , 2004 .

[24]  F. F. Reichheld,et al.  Zero defections: quality comes to services. , 1990, Harvard business review.

[25]  Moshe Farjoun.  Beyond Industry Boundaries: Human Expertise, Diversification and Resource-Related Industry Groups , 1994 .

[26]  Robert W. Zmud,et al.  Arrangements for Information Technology Governance: A Theory of Multiple Contingencies , 1999, MIS Q..

[27]  R. Peterson.  Crafting Information Technology Governance , 2004 .

[28]  Gautam Ray,et al.  Information Technology and the Performance of the Customer Service Process: A Resource-Based Analysis , 2005, MIS Q..

[29]  Susan S. White,et al.  Linking service climate and customer perceptions of service quality: test of a causal model. , 1998, The Journal of applied psychology.

[30]  Ryan Peterson,et al.  Crafting Information Technology Governance , 2004, Inf. Syst. Manag..

[31]  Steven De Haes,et al.  An Exploratory Study into the Design of an IT Governance Minimum Baseline through Delphi Research , 2008, Commun. Assoc. Inf. Syst..

[32]  Armin Heinzl,et al.  The Impact of IT Governance on Business Performance , 2011, AMCIS.

[33]  J. R. Moore,et al.  The theory of the growth of the firm twenty-five years after , 1960 .

[34]  Louis Raymond,et al.  Resource-based view and competitive strategy: An integrated model of the contribution of information technology to firm performance , 2006, J. Strateg. Inf. Syst..

[35]  Matthias Goeken,et al.  IT-Governance - neue Aufgaben des IT-Managements , 2006, HMD Prax. Wirtsch..

[36]  Peter Weill,et al.  Don't Just Lead, Govern: How Top-Performing Firms Govern IT , 2004, MIS Q. Executive.

[37]  Hüseyin Tanriverdi,et al.  Performance Effects of Information Technology Synergies in Multibusiness Firms , 2006, MIS Q..

[38]  David J. Teece,et al.  Towards an economic theory of the multiproduct firm , 1982 .

[39]  Michael Goold,et al.  Why diversify? Four decades of management thinking , 1993 .

[40]  N. Venkatraman,et al.  Knowledge relatedness and the performance of multibusiness firms , 2005 .

[41]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.