An empirical examination of the relationship between information technology (IT) infrastructure, customer focus, and business advantages
| Date | 02 February 2010 |
| Pages | 4-16 |
| DOI | https://doi.org/10.1108/13287261011032625 |
| Published date | 02 February 2010 |
| Author | Ganesh D. Bhatt,Ali F. Emdad |
| Subject Matter | Information & knowledge management |
JSIT
12,1
4
Journal of Systems and Information
Technology
Vol. 12 No. 1, 2010
pp. 4-16
#Emerald Group Publishing Limited
1328-7265
DOI 10.1108/13287261011032625
An empirical examination of the
relationship between information
technology (IT) infrastructure,
customer focus, and business
advantages
Ganesh D. Bhatt and Ali F. Emdad
Department of Information Science & Systems, Morgan State University,
Baltimore, Maryland, USA
Abstract
Purpose – The purpose of this paper is to present a model that tests the relationship between
information technology (IT) infrastructure, customer focus, and business advantages.
Design/methodology/approach – Customer focus is categorized into: customer responsiveness
and product/service innovation. The data for the study are obtained from 116 executives from a
number of business organizations.
Findings – IT infrastructure is found to have a significant effect on customer responsiveness, but does
not show any significant relationship with product/service innovation. IT infrastructure, customer
responsiveness, and product/service innovation are found to be significantly related business advantages.
Research limitations/implications – The research is useful for academic scholars and managers as
the results of the study show the value of firm-specific resources such as IT infrastructure in business
advantages. The research is also useful as it finds support for the resource-based view (RBV) of the firm.
Originality/value – The paper exemplifies how IT infrastructure can influence customer focus and thus
affects directly and indirectly business advantages.
Keywords Customer orientation, Product innovation, Business excellence,
Communication technologies
Paper type Research paper
Introduction
Since the early-1990s, academic researchers and managers are attempting to find the ways
throughwhich informationtechnology (IT)can create business advantagesfor the firm. In
the 1980s, a growing body of the literature argued that IT can help a firm by raising the
entry barriers, increasing the bargaining power with suppliers and customers, and
offering new products and services (McFarlan, 1984; Porter and Miller, 1985). Research
studies that have analyzed the effect of ITon firm performance fromeconomic lenseshave
used Williamson’s (1995) transaction cost theory. These studies conclude that customers
that make asset-specific investments in unique supplier-based IT and processesare subject
to switching costs. However, over the years, a number of scholars have noted that
sustaining advantages through IT might be difficult, because such applications are
eventually imitated and appropriated by the competitors (Cash et al., 1992; Mata et al.,
1995; Sambamurthy and Zmud, 1997). Although there are theoretical, methodological, and
measurement issues leading to these inconsistent results, there is a growing realization
that IT in itself cannot be a source of the competitive advantages. Instead, it is the firm-
level capability that realizes the benefits from IT. In other words, how a firm leverages IT
for its advantages that becomes the focus of the study (Bhatt and Grover,2005).
Our theoretical framework draws from resource-based view (RBV) of the firm
that purposes that the sustainable competitive advantages are rooted in the use of
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