The Aftermath of Information Technology Outsourcing: An Empirical Study of Firm Performance Following Outsourcing Decisions

2008 ◽  
Vol 22 (1) ◽  
pp. 125-159 ◽  
Author(s):  
Li Wang ◽  
Kholekile L. Gwebu ◽  
Jing Wang ◽  
David X. Zhu
Keyword(s):  
Information Technology ◽  
Firm Value ◽  
Business Value ◽  
It Outsourcing ◽  
Firm Level ◽  
It Capability ◽  
Positive Effects ◽  
Process Oriented ◽  
The Impact ◽  
Process Level

Increasingly, organizations are jumping onto the information technology (IT) outsourcing bandwagon in an effort to create value. However, evidence indicating the positive economic consequences of such initiatives has been limited. This study attempts to fill this void by synthesizing the process-oriented research in IT business value literature and the resource-based theory to develop an integrative research framework for assessing the value proposition of IT outsourcing. With a process-oriented lens, the framework suggests that the effects of IT outsourcing are best documented at the process level and hence, it is imperative that one takes into consideration the impact of IT outsourcing on performance at both the process level as well as the firm level. Grounded in the resource-based view, the framework also accounts for the complementary role of firms' core IT capability as a critical condition for the value creation of IT outsourcing. Consistent with the process-oriented prediction, the findings suggest that the positive effects of IT outsourcing appear mostly at the process level, but not at the firm level. Moreover, it is found that the level of business value created by IT outsourcing is contingent on firms' core IT capability. Firms with superior core IT capability are found to enjoy an advantage in leveraging their outsourcing initiatives to enhance firm value.

Improving the Business Value of IS

2014 ◽  
pp. 67-81
Author(s):  
Sunghun Chung
Keyword(s):  
Information Technology ◽  
Supply Chain ◽  
Information Systems ◽  
Firm Value ◽  
Market Performance ◽  
Business Value ◽  
It Outsourcing ◽  
Future Research ◽  
Firm Boundaries ◽  
Further Development

This review surveys recent study on the business value of Information Systems (IS). The topics covered include theoretical and empirical evidence on the business value of IS, the productivity using Information Technology (IT), the firm value with IT, IT and firm boundaries, IT outsourcing, and supply chain with IT. This work critically reviews the growing literature on improving market performance through IS, discusses various perspectives, raises conceptual and empirical concerns, underscores challenges for further development of this literature, and provides directions for future research.

scholarly journals Managing and Delivering Information Technology Value

2011 ◽  
Vol 2 (1) ◽  
pp. 72
Author(s):  
Yuliana Lisanti
Keyword(s):  
Information Technology ◽  
Value Creation ◽  
Business Strategy ◽  
Primary Objective ◽  
Business Value ◽  
It Strategy ◽  
Value Innovation ◽  
Capability Maturity ◽  
It Capability ◽  
It Organization

Investment Information Technology (IT) has always been a primary objective of the business which is expected to provide value to businesses through its role as a competitive advantage and the creation of innovation. However, it is ot easy to measure how much value is successfully created, or determine whether the IT strategy is aligned with business strategy, or find out if the IT organization has a strategy that focuses on creating business value. Innovation Value of Institute (IVI) introduces a new concept known as the IT Capability Maturity Framework (IT-CMF) which can help IT organizations to align the business vision with the IT vision so that IT strategy could focus on value creation . the IT-CMF implementation which begins with the assessment of the maturity of IT organization can provide an overall picture, so that organization can prioritize the development of appropriate IT investments to support the value creation for the overall business. 

scholarly journals Understanding the Impact of Relationship Disruptions

2019 ◽  
Vol 84 (1) ◽  
pp. 66-87 ◽  
Author(s):  
Christian Schmitz ◽  
Maximilian Friess ◽  
Sascha Alavi ◽  
Johannes Habel
Keyword(s):  
International Business ◽  
Interpersonal Relationship ◽  
Relationship Management ◽  
Firm Level ◽  
Positive Effects ◽  
Life Cycle Theory ◽  
Overall Performance ◽  
The Impact ◽  
The Relationship ◽  
Business To Business

Personal relationships between salespeople and customers are essential for the success of business-to-business relationships, and research has shown that a change of the salesperson can severely harm financial performance. However, such interpersonal relationship disruptions may also have positive effects by encouraging vitalizing reexplorations of the relationship. Using multilevel loyalty theory and relationship life cycle theory, the authors offer a comprehensive conceptualization of potentially countervailing consequences of relationship disruptions. In particular, disruptions may have different effects on resale revenue (from previously sold products) versus new sale revenue (from newly sold products), contingent on both the history and expected future development of the relationship. Therefore, this study examines moderators on the firm-level relationship prior to disruption and salesperson relationship management afterward. Longitudinal data from 2,040 customers of an international business-to-business firm reveal that a disruption can increase overall performance by more than 29%, depending on the firm-level relationship before disruption and the new salesperson’s relationship management. Managers can use these findings proactively to evaluate and manage the risks and opportunities involved in relationship disruptions.

The Business Value of IT: A Synthesis and Framework of Archival Research

2011 ◽  
Vol 25 (2) ◽  
pp. 81-116 ◽  
Author(s):  
Adi Masli ◽  
Vernon J. Richardson ◽  
Juan Manuel Sanchez ◽  
Rodney E. Smith
Keyword(s):  
Firm Performance ◽  
Balanced Scorecard ◽  
Business Strategy ◽  
Firm Value ◽  
Business Value ◽  
Future Research ◽  
Archival Research ◽  
Accounting Information Systems ◽  
Business Context ◽  
The Impact

ABSTRACT This paper synthesizes recent empirical archival research investigating the link between information technology investment and business value. It examines (1) financial and nonfinancial measures to represent different elements of business value, (2) IT investment measures and links with firm performance, (3) IT and business complementarities that affect firm performance, and (4) the impact of business context and IT alignment with business strategy on resulting performance. The review of prior research is guided by a balanced scorecard framework that places IT in a business context and highlights the role of potential drivers and contextual factors that impact the association between IT and firm value. The paper concludes by proposing several broad avenues of future research that may be of particular interest to archival accounting information systems researchers.

scholarly journals Information technology (IT) productivity paradox in the 21st century

2015 ◽  
Vol 64 (4) ◽  
pp. 457-478 ◽  
Author(s):  
Mahmood Hajli ◽  
Julian M. Sims ◽  
Valisher Ibragimov
Keyword(s):  
Information Technology ◽  
Factor Productivity ◽  
It Investment ◽  
Firm Level ◽  
High Positive Correlation ◽  
Content Type ◽  
Positive Effects ◽  
Productivity Paradox ◽  
It Productivity Paradox ◽  
It Productivity

Purpose – Since the 1970s productivity growth in most economies slowed, while information and communication technology expenditures increased: the “information technology (IT) productivity paradox.” Some researchers reported an end to the paradox, but this is most likely due to IT industry growth approaching the Year 2000 phenomenon. The purpose of this paper is to update IT productivity paradox research. Design/methodology/approach – For comparability this research replicates methods employed by previous studies but employs a two-level approach: first macroeconomic indicators; second labor and multi-factor productivity. Findings – Findings suggest IT investment has high positive correlation with gross domestic product growth, but not labor or multi-factor productivity. This ambiguity suggests the paradox is still poorly understood. Research limitations/implications – The findings are not conclusive; the authors cannot confirm or reject the existence of the productivity paradox. The global recession and banking crisis makes it prudent to wait until recovery before analyzing data from that period. Practical implications – Lack of convincing evidence supporting positive effects from IT investment suggests some firms benefit from IT investment, but not others, and that IT investment has questionable returns. Social implications – Firm level studies might find IT investment benefits some firms, but lack of convincing macroeconomic level evidence of positive effects of IT investment suggests the paradox still exists. Originality/value – This research updates the IT productivity paradox demonstrating the phenomenon is still poorly understood and thus worthy of further study, questioning the benefits of IT investment for industry and national economies.

A Perceptual Measure of Innovation Performance: Firm-Level Evidence from Turkey

2017 ◽  
Vol 14 (06) ◽  
pp. 1750038 ◽  
Author(s):  
Derya Findik ◽  
Berna Beyhan
Keyword(s):  
Factor Analysis ◽  
Small Firms ◽  
Innovation Performance ◽  
Large Firms ◽  
Firm Level ◽  
Process Innovations ◽  
Significant Difference ◽  
Process Oriented ◽  
Product And Process ◽  
The Impact

This paper aims to introduce a qualitative indicator to measure innovation performance of Turkish firms by using firm-level data collected by Turkish Statistical Institute (TURKSTAT) in 2008 and 2009. We propose a new indicator to measure the innovation performance which is simply based on the perception of firms regarding to the impacts of innovation. In order to create performance indicators, we conduct a factor analysis to group the firms’ perceptions on the impacts of innovation. Factor analysis gives us product and process-oriented impacts of innovation. There are significant differences among product innovators, process innovators and firms engaged in both product and process innovations with respect to their perceptions on product and process-oriented impacts of innovation. Among these three groups, product- and process-oriented impacts provide a highest value for the firms that perform both product and process innovations. As far as the link between firm characteristics and the impact of innovation is considered, there is a significant difference between small and large firms with respect to their perceptions on product-oriented impact of innovation. While product-oriented impact is larger for small firms, large firms focus more on process-oriented impact. Anova results also indicate that perceptions on process-oriented impact significantly differ among exporter firms, domestic market-oriented firms and firms being active in internal and external markets. Process-oriented impact generates results in favor of exporting firms.

scholarly journals Does Herding Bias Drive the Firm Value? Evidence from the Chinese Equity Market

2019 ◽  
Vol 11 (20) ◽  
pp. 5583 ◽  
Author(s):  
Shah ◽  
Khan ◽  
Meyer ◽  
Meyer ◽  
Oláh
Keyword(s):  
Behavioral Finance ◽  
Firm Value ◽  
Equity Markets ◽  
Policy Implications ◽  
Stock Exchanges ◽  
Firm Level ◽  
Listed Firms ◽  
Trading Period ◽  
Behavioral Impact ◽  
The Impact

Equity markets play a pivotal role in the sustainability of developing countries, such as China. The literature on the detection of herding biases is confined to the aggregate level (firms, sector/industry and market). The present study adds to the behavioral finance literature by addressing the surprisingly unnoticed phenomena of the behavioral impact of herding bias on firm value (FV) at the firm level, using the sample of A-Shares listed firms at the Shanghai and Shenzhen Stock Exchanges (SSE and SZSE) under panel fixed effect specification. Initially, we detect the existence of investors and managers herding (IHR and MHR) biases at firm-level, and later, we examine their impact (distinct and interactive) upon the FV. The empirical results document the presence of IHR and MHR bias at market, sector and firm-level in both equity markets, which potentially drive the FV, while the impact is more pronounced during the extreme trading period. The findings are robust under different time intervals, and industry classification, therefore, offers useful policy implications to understand the behavioral dynamics of investors and managers.

The Interrelationships Between Information Technology Spending, CEO Equity Incentives, and Firm Value

2014 ◽  
Vol 28 (2) ◽  
pp. 41-65 ◽  
Author(s):  
Adi Masli ◽  
Vernon J. Richardson ◽  
Juan Manuel Sanchez ◽  
Rodney E. Smith
Keyword(s):  
Information Technology ◽  
Firm Value ◽  
Ceo Compensation ◽  
It Governance ◽  
Business Value ◽  
Risky Asset ◽  
Equity Compensation ◽  
Equity Incentives ◽  
Compensation Incentives

ABSTRACT We examine the interrelationships between information technology spending, CEO equity compensation incentives, and firm value. We present two related pieces of evidence. First, we find that CEO equity incentives are associated with IT spending, suggesting that CEOs with higher incentives are more likely to invest in a risky asset such as IT. Second, we find that the association between IT spending and business value is stronger for firms that grant CEOs higher equity incentives. Our study contributes to the CEO compensation and IT governance literatures.

The effects of information technology capability and knowledge base on digital innovation: the moderating role of institutional environments

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shaobo Wei ◽  
Dabao Xu ◽  
Hua Liu
Keyword(s):  
Information Technology ◽  
Knowledge Base ◽  
Government Support ◽  
Institutional Environments ◽  
Moderating Effects ◽  
Digital Innovation ◽  
Content Type ◽  
It Capability ◽  
Knowledge Depth ◽  
The Impact

PurposeBased on the knowledge-based view, this study investigates how firms' information technology (IT) capability broadens and deepens their knowledge base, which consequently improves digital innovation. By further drawing on the institutional theory perspective, this study examines how the relationships between IT capability and knowledge base are moderated by the institutional environments in which the firm operates.Design/methodology/approachThis paper uses 170 samples of Chinese firms and an empirical test conducted by the authors following a hierarchical moderated regression analysis.FindingsThe results find that IT capability positively affects knowledge breadth and knowledge depth, which consequently improves digital innovation. Furthermore, the study reveals the negative moderating effects of enforcement inefficiency on IT capability–knowledge breadth relationship, and the negative moderating effects of government support on IT capability–knowledge depth relationship.Originality/valueThis research is one of the earliest attempts to explore the impact of the institutional environment of emerging economies on IT capability. It also clarifies the impact of knowledge breadth and knowledge depth on digital innovation.

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