Management's Contribution to Internet Commerce Benefit - Experiences of Online Small Businesses

The importance of management and Information Technology (IT) success had been repeatedly identified in small business IT studies (for example, DeLone, 1988). When measuring information satisfaction among small firms, top management involvement was found to be one of the most important factors (Montazemi, 1988). The quest for the role of management involvement in Information Systems (IS) success in small firms continued into the 1990s. For example, Yap, Soh, and Raman (1992) studied a group of Singaporean small firms using earlier findings and discovered that CEO involvement was positively related to IS success. CEO involvement such as attending project meetings, involvement in information requirement needs analysis, reviewing consultants’ recommendations and project monitoring are important to IS success. Thong, Yap and Raman (1996) pointed out that although management support was important, in cases where internal IS expertise was lacking, specialist knowledge (for example, engaging IT consultants in projects) was important to success. An in-depth study on motivators and inhibitors for small firms to adopt computing identified managerial enthusiasm as a key motivator (Cragg, 1998). The overseeing role of management during system implementation was found to be important to success. Management support was also found to be an important factor for IT success in the case of personal computing acceptance (Igbaria, Zinatelli, Craig, & Cavaye, 1997). All of these studies suggested that management involvement was critical to IS success regardless of cultural background.

Increasing Business Value of Communications Infrastructure

An Internet-based Virtual Private Network (IVPN) is a system and service that enables secure communication within a controlled user group across the Internet public infrastructure. For the last few years, the Internet-based VPN has been available, providing organizational use for meaningful applications. The paper empirically investigates the value of IVPNs in managing communications among distributed business entities. For this, we conducted two case studies based on the information gathered from two companies. Then, a general decision model of the IVPN is proposed, which could be used for the assessment of its strategic value as well as for the design of virtual telecommunication networks at other organizations.

An Optimization Model for Telecommunication Systems

The Optimization Model for Telecommunication Systems (OMTS) is designed and developed to optimize System Designers and Developers (SD&D) efforts in the Telecommunication Industry (TI). Using the life-cycle process, OMTS continuously evaluates business value and utility of every activity in the systems design and development process. The primary objective of the OMTS is to increase business value of the TI system and improve their performance. Through OMTS, SD&D are able to answer such critical questions as “Do modern telecommunication technologies pay off?” and “How can we best use modern technologies in the TI?” The OMTS is capable of facilitating higher business profitability and productivity by enhancing systems’ strategic goals such as product position, product quality, and customer service.

The Moral and Business Value of Information Technology

This chapter explores the question of the value of information technology from a wider angle than the usual financial perspective. The central thesis is that value is always more than just a financial notion, that it always includes a moral or ethical dimension. From this starting point, the paper investigates the different types of values that play a role in information technology. Due to the multitude of values that determine our dealing with information technology, it is clear that there can be conflicts between them. The paper, therefore, proceeds to introduce a framework that allows the conciliation of competing values by introducing values of a higher order, so-called option values and legacy values. It is then demonstrated that this framework can help solve the problem of value conflicts in IT.

Inventory Productivity Impacts of IT-Enabled Supply Chain Coordination in Manufacturing Environments

This chapter describes an empirical analysis of the mediating effects of supply chain coordination strategy and manufacturing IT infrastructure on the relationship between business complexity and inventory turnover. Business complexity describes the diversity and volatility associated with a firm’s product markets. To cope with this complexity, firms deploy inventory buffers. This deployment should decrease inventory turnover. An extensive manufacturing IT infrastructure can increase a firm’s “sense and respond” capability, reducing the need for buffers, and can thereby improve inventory turnover. As this technology enables enhanced coordination, and as firms’ efforts to reduce buffers within their own organizational boundaries earn diminishing marginal returns, firms attempt to optimize performance across organizational boundaries within the supply chain, i.e., adopt a cooperative supply chain coordination strategy. This supply chain coordination should improve inventory turnover.

Information-Induced Strategic Alignment

The concept of strategic alignment between organizational policies for business and information systems (IS) has not been defined previously in informational terms. In this paper, we define informational aspects of organizational behavior in three semiological dimensions: pragmatics, semantics and syntactics. We also introduce dynamics as a fourth dimension to address time-related changes. We demonstrate the importance of these ideas in the analysis of strategic alignment by taking recent examples to show how informational attributes are often implicitly discussed in the literature. We believe that the precise definition of the informational aspects of alignment is a necessary prerequisite for the advancement of understanding in this important area.

Creating Business Value through E-Commerce

Electronic commerce (E-Commerce) has been the world’s fastest growing industry and has made a big impact on businesses. The impact of e-commerce on industry, businesses and firms’ competitive advantage has been phenomenal. Various business models have evolved in last few years. But, despite of this, the business value returned by e-business environment is being viewed with increasing skepticism by researchers and practitioners. How does e-commerce framework enhance business value? What are the different factors where business value can be measured? These are the kinds of questions addressed in our chapter.

Information Technology Spending and the Value of the Firm

This paper analyzes the relationship between IT expenditure and the monetary value of organizations. Based on the case of the Mexican banking industry from 1982–1992, the paper’s hypotheses test the relationship between IT expenditure and the real and perceived market values of banks. Correlations are performed between annual IT expenditures for a 10 year period —when Mexico’s commercial banks were owned by the federal government— and bank selling prices, when the industry divestiture took place in 1992. The main findings are that IT spending has a positive impact on the value of the firm, when the value of the firm reflects the change of ownership or the control of the firm. Second, firms spending more on IT do not tend to reach higher selling prices. Other findings are presented. The model and its results are discussed in terms of the literature about value of investment and the productivity paradox.

Investigating the Relationship between Strategic Alignment and Information Technology Business Value

Although business executives remain skeptical about the extent of payoffs from investment in information technology (IT), strategic alignment or the alignment of information systems strategy with business strategy continues to be ranked as one of the most important issues facing corporations. In this paper, we report on the results of a process-level study to investigate the relationship between strategic alignment and IT payoffs. An analysis of survey data from 63 firms finds a positive and significant relationship between strategic alignment and IT payoffs, a relationship that holds for all firms, irrespective of their strategic intent or goals for IT. However, in exploring minor differences in strategic alignment between firms with different goals for IT, we uncovered evidence of an alignment paradox. This paradox shows that while strategic alignment can lead to increased payoffs from IT, this relationship is only valid up to a certain point beyond which, paradoxically, further increases in strategic alignment appear to lead to lower IT payoffs. Finally, we offer some suggestions for why this paradox might exist, specifically around issues of environmental uncertainty, industry clock-speed, and the need for organizational flexibility

An Empirical Analysis of Productivity Gains from Information Technology's Reduction of Coordination Costs

Most information systems (IS) research has examined the impact of information technology (IT) on the organization of economic activities by starting from the theoretical speculation that IT reduces coordination costs and improves coordination of economic activities. This theoretical speculation, however, has not been empirically analyzed in the IS field. The value of IT for reducing coordination costs has also not been considered in the studies on IT productivity gains. This study empirically examines the relationship between IT and coordination costs, and the relationship between IT and firm productivity by considering coordination as a factor of production. The results indicate that IT is strongly associated with a decline in coordination costs and that IT and coordination make a substantial and statistically significant contribution to firm output. The results show that IT contributes to firm output by reducing coordination costs and improving coordination; that is, by making a higher level of coordination more efficient.