Information technology infrastructure, organizational process redesign, and business value: An empirical analysis

We extend current research examining synergies between information technology, process redesign, and firm performance in three ways: analyze a firm's entire IT and BPR portfolio, examine production and market value performance implications, and conduct analysis using a unique dataset of 228 firms between 1996 and 1999. We find a contingent association between IT, process redesign, and performance. The interaction of IT and BPR portfolios is positively associated with firm productivity and market value. However, we find mixed evidence of a difference in these impacts across different types of BPR. Insights for business investment in IT and process redesign are discussed.

[1]  Eric K. Clemons,et al.  Corporate strategies for information technology: a resource-based approach , 1991, Computer.

[2]  William R. King,et al.  PROCESS REENGINEERING The Strategic Dimensions , 1994 .

[3]  Charles H. Kriebel,et al.  Information Technologies and Business Value: An Analytic and Empirical Investigation , 1995, Inf. Syst. Res..

[4]  Alan R. Dennis,et al.  Breaking the rules: success and failure in groupware-supported business process reengineering , 2003, Decis. Support Syst..

[5]  E. Brynjolfsson,et al.  Computing Productivity: Firm-Level Evidence , 2003 .

[6]  Charlie C. Chen,et al.  Managing ERP Implementation Failure: A Project Management Perspective , 2009, IEEE Transactions on Engineering Management.

[7]  Sirkka L. Jarvenpaa,et al.  An Information Company in Mexico: Extending the Resource-Based View of the Firm to a Developing Country Context , 1998, Inf. Syst. Res..

[8]  Ned Kock,et al.  Communication flow orientation in business process modeling and its effect on redesign success: Results from a field study , 2009, Decis. Support Syst..

[9]  R. Amit,et al.  Human resources management processes: a value-creating source of competitive advantage , 1999 .

[10]  Z. Griliches Market Value, R&D, and Patents , 1981 .

[11]  E. A. Hall,et al.  How to Make Reengineering Really Work , 1994 .

[12]  Thomas H. Davenport,et al.  Process Innovation: Reengineering Work Through Information Technology , 1992 .

[13]  C. Edwards,et al.  Executing Strategic Change: Understanding the Critical Management Elements That Lead to Success , 2009 .

[14]  Abraham B. Shani,et al.  Business process reengineering at Blue Shield of California: the integration of multiple change initiatives , 1998 .

[15]  Chung-ki Min,et al.  The substitution of information technology for other factors of production: a Firm Level Analysis , 1997 .

[16]  Prashant C. Palvia,et al.  The ORION project: staged business process reengineering at FedEx , 1996, CACM.

[17]  Vernon J. Richardson,et al.  Reexamining the Value Relevance of E-Commerce Initiatives , 2004, J. Manag. Inf. Syst..

[18]  Sameer Kumar,et al.  Reengineering: A Focus on Enterprise Integration , 2000, Interfaces.

[19]  Zvi Griliches,et al.  R&D, Patents, and Market Value Revisited: is There Evidence of a Secondtechnological Opportunity Related Factor? , 1988, Economics of Innovation and New Technology.

[20]  T. C. Powell,et al.  Information technology as competitive advantage: the role of human , 1997 .

[21]  Bronwyn H. Hall,et al.  The Stock Market's Valuation of R&D Investment during the 1980's , 1993 .

[22]  Donna B. Stoddard,et al.  Business reengineering at CIGNA Corporation: experiences and lessons learned from the first five years , 1994 .

[23]  Kenneth L. Kraemer,et al.  Information Technology Payoff in E-Business Environments: An International Perspective on Value Creation of E-Business in the Financial Services Industry , 2004, J. Manag. Inf. Syst..

[24]  C. Morrison Assessing the Productivity of Information Technology Equipment in U.S. Manufacturing Industries , 1991, Review of Economics and Statistics.

[25]  John M. Ward,et al.  Using resource-based theory to interpret the successful adoption and use of information systems and technology in manufacturing small and medium-sized enterprises , 2003, Eur. J. Inf. Syst..

[26]  William R. King,et al.  STRATEGIC PLANNINGCREATING A CLIENT/SERVER STRATEGY , 1994 .

[27]  Norma G. Sutcliffe,et al.  Leadership behavior and business process reengineering (BPR) outcomes: An empirical analysis of 30 BPR projects , 1999, Inf. Manag..

[28]  Vijay Gurbaxani,et al.  A process oriented framework for assessing the business value of information technology , 1995, DATB.

[29]  Anandhi S. Bharadwaj,et al.  A Resource-Based Perspective on Information Technology Capability and Firm Performance: An Empirical Investigation , 2000, MIS Q..

[30]  Michael D. Myers,et al.  When success turns into failure: a package-driven business process re-engineering project in the financial services industry , 1999, J. Strateg. Inf. Syst..

[31]  Shouhong Wang,et al.  The Implementation of Business Process Reengineering , 1995, J. Manag. Inf. Syst..

[32]  J. Antony,et al.  A business process change framework for examining the implementation of six sigma: a case study of Dow Chemicals , 2004 .

[33]  M. Terziovski,et al.  Successful predictors of business process reengineering (BPR) in financial services , 2003 .

[34]  Albert H. Segars,et al.  Sustaining Process Improvement and Innovation in the Information Services Function: Lessons Learned at the Bose Corporation , 1996, MIS Q..

[35]  Donna B. Stoddard,et al.  The Reality of Business Reengineering: Pacific Bell's Centrex Provisioning Process , 1996 .

[36]  Kemal Altinkemer,et al.  Business Process Reengineering and Organizational Performance: An Exploration of Issues , 1998 .

[37]  Eric Walden,et al.  The Impact of E-Commerce Announcements on the Market Value of Firms , 2001, Inf. Syst. Res..

[38]  Rajiv Kohli,et al.  Towards developing a framework for measuring organizational impact of IT- enabled BPR: case studies of three firms , 2006, DATB.

[39]  Erik Brynjolfsson,et al.  The Matrix of Change , 1997 .

[40]  Lorin M. Hitt,et al.  Information Technology and Product Variety: Evidence from Panel Data , 2004, ICIS.

[41]  Z. Griliches,et al.  Industry Effects and Appropriability Measures in the Stock Markets Valuation of R&D and Patents , 1987 .

[42]  Sirkka L. Jarvenpaa,et al.  Business Process Redesign: Tactics for Managing Radical Change , 1995, J. Manag. Inf. Syst..

[43]  Niels Bjørn-Andersen,et al.  The Impact of IOS-Enabled Business Process Change on Business Outcomes: Transformation of the Value Chain of Japan Airlines , 1997, J. Manag. Inf. Syst..

[44]  Thomas H. Davenport,et al.  The New Industrial Engineering: Information Technology and Business Process Redesign , 2011 .

[45]  Michael Hammer,et al.  Reengineering Work: Don’t Automate, Obliterate , 1990 .

[46]  Christopher Bull,et al.  Strategic issues in customer relationship management (CRM) implementation , 2003, Bus. Process. Manag. J..

[47]  Mohsen Attaran,et al.  Exploring the relationship between information technology and business process reengineering , 2004, Inf. Manag..

[48]  R. Hall The Stock Market and Capital Accumulation , 1999 .

[49]  Rajiv Kohli,et al.  Information Technology Payoff in the Health-Care Industry: A Longitudinal Study , 2000, J. Manag. Inf. Syst..

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

[51]  M. Hammer,et al.  Reengineering the Corporation , 1993 .

[52]  Barbara Wixom,et al.  Data Warehousing Supports Corporate Strategy At First American Corporation , 2000, MIS Q..

[53]  Izak Benbasat,et al.  Predicting Intention to Adopt Interorganizational Linkages: An Institutional Perspective , 2003, MIS Q..

[54]  Lorin M. Hitt,et al.  Information Technology and Internal Firm Organization: An Exploratory Analysis , 1997, J. Manag. Inf. Syst..

[55]  Mohamed Zairi,et al.  BPR implementation process: an analysis of key success and failure factors , 1999, Bus. Process. Manag. J..

[56]  E. Brynjolfsson,et al.  Beyond Computation: Information Technology, Organizational Transformation and Business Performance , 2000 .

[57]  Varun Grover,et al.  The influence of information technology diffusion and business process change on perceived productivity: The IS executive's perspective , 1998, Inf. Manag..

[58]  Radhika Santhanam,et al.  Issues in Linking Information Technology Capability to Firm Performance , 2003, MIS Q..

[59]  Erik Brynjolfsson,et al.  Intangible Assets: Computers and Organizational Capital , 2002 .

[60]  Ruth Milkman,et al.  The New American Workplace: Transforming Work Systems in the United States. , 1993 .

[61]  C. Prahalad,et al.  Competing for the Future , 1994 .

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

[63]  Roger H. Ballou,et al.  Reengineering at American Express: The Travel Services Group’s Work in Process , 1995 .

[64]  George S. Benson,et al.  Organizing for high performance : employee involvement, TQM, reengineering, and knowledge management in the fortune 1000 : CEO report/ Edward E. Lawler III, Susan Albers Mohrman, George Benson , 2001 .

[65]  Kenneth L. Kraemer,et al.  The productivity impact of information technology across competitive regimes: The role of industry concentration and dynamism , 2007, Decis. Support Syst..

[66]  Peter Weill,et al.  The Implications of Information Technology Infrastructure for Business Process Redesign , 1999, MIS Q..

[67]  Sundar G. Bharadwaj,et al.  Information Technology Effects on Firm Performance as Measured by Tobin's q , 1999 .

[68]  D. Jorgenson,et al.  Raising the Speed Limit: U.S. Economic Growth in the Information Age , 2000 .

[69]  Mark A. Huselid The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance , 1995 .

[70]  Casey Ichniowski,et al.  The Effects of Human Resource Management Practices on Productivity , 1995 .

[71]  Kenneth L. Kraemer,et al.  Research Note - Does Technological Progress Alter the Nature of Information Technology as a Production Input? New Evidence and New Results , 2010, Inf. Syst. Res..

[72]  E. Brynjolfsson,et al.  Information Technology As A Factor Of Production: The Role Of Differences Among Firms , 1995 .