[Study] On the assessment of the strategic value of information technologies: conceptual and analytical approaches

With years of intensive research, no consensus about strategic value of IT reached. This may due to lack of divergent theoretical frameworks applied.

2 predominant conceptual bases are:

1. Resource-centered view (IT as a strategic resource that when combined with other strategic resources directly influence org. performance)
• Production function view: Scale of IT resources [size of IT investments]: consider IT capital and labor to be independent production inputs that can affect a broad range of financial measures.
• Resource-based view: Scope of IT resources [nature or uniqueness of IT applications]: resources confer a competitive advantage to a firm only when they are firm-specific, valuable, rare, inimitable, and nonsubstitutable.

=> strategic resource can produce important benefits for firms (reducing costs and improving revenues)

1. Contingency-based view (IT business alignment)

• IT resources per se may add little value and play a major role in improving a firm's performance only when they are planned and used to support a firm's main strategic objectives.
• A possible explanation for the inconsistent findings presented could be that different studies have used different approaches to conceptualize SAIT and measure its effect on org. performance.

=> fit: the degree to which the needs, demands, goals, objectives, and/or structure of one component are consistent with the needs, demands, goals, objectives and/or structure of another component. Extent:

• Adaptation (personal - org)
• Compatibility (individual-org)
• Assimilation (org - org)
• Coupling (inter-exter org)

=> focusing on how IT strategy is developed and implemented in conjunction with business strategy => which the IT portfolio of IT applications is aligned with the business objectives of the firm.

The relationship between alignment and organizational performance is typically assumed to be linear.

The dynamics of unpredictable environments call for a research approach that can fully capture the relationship between bus. strategy, IT strategy and performance.

Components of SAIT:

1. Cost-reduction: most efficient producer (minimize operation
2. Quality-improvement:
3. Revenue-growth:

=> IT alignment with cost reduction strategy generate more immediate and tangible benefits for firms than IT-strategy alignment that aims to facilitate revenue growth.
=> extracting benefits from strategic IS resources designed to help firms grow is more difficult than extracting benefits from operational IS resources developed to cut costs.

Bibliography:

Oh, Wonseok, and Alain Pinsonneault. "On the assessment of the strategic value of information technologies: conceptual and analytical approaches."MIS quarterly (2007): 239-265.