Co-creating business value of information technology
| Pages | 53-69 |
| Date | 28 January 2014 |
| Published date | 28 January 2014 |
| DOI | https://doi.org/10.1108/IMDS-04-2013-0171 |
| Author | Yi Jiang,Jing Zhao |
| Subject Matter | Information & knowledge management,Information systems,Data management systems |
Co-creating business value
of information technology
Yi Jiang and Jing Zhao
School of Economics and Management, China University of Geosciences,
Wuhan, China
Abstract
Purpose – IT-based supply chain performance is co-created through inter-organizational business
processes. This research is motivated to explore how business value of IT in supply chain is co-created
in downstream process and probe into the possible complementary effect of relational resources from
retailers and customers during the cooperative process. The paper aims to discuss these issues.
Design/methodology/approach – A model is proposed to conceptualize the process with three
dimensions and six constructs, which emerges a causal link between organization resources
application, e-supply chain capability (ESCC) and process performance. And then the research model
was validated using partial least squares with data collected from 128 manufacturing firms in China.
Findings – The results provide broad support for the following: the casual relationship among
inter-organizational resources interaction, ESCC and process performance; the mediating role of ESCC
in the e-CRM process is more significant than that in e-ordering process; and there is the moderating
effect between relational resources and internal resources in e-CRM process.
Practical implications – It offers guidelines for managers to plan the roles played by resource,
capabilities and performance for e-supply chain success in multi-firm environments.
Originality/value – This study provides a novel perspective and offers important implications for
e-supply chain research and practice, by exploring intermediate factors and shedding light on the
process of co-creating business value of IT in supply chain.
Keywords Co-creation,Business value of IT, E-supply chain capabilities, Process performance
Paper type Research paper
1. Introduction
Innovations enabled by information technology (IT) are creating new ways for firms to
manage supply chain relationships (Sambamurthy et al., 2003) and ge nerate
performance gain. Firms are using IT to coordinate processes along their supply
chains, including upstream procurement and downstream sales and customer services,
as well as overall information sharing and operation collaborating along the supply
chain (Rai et al., 2006; Lee, 2002; Li and Chang, 2004). However, Measuring and
communicating the value provided by the IT function continues to be a challenge for
CIOs (Sabyasachi Mitra et al., 2011). Indeed, it is often difficult to accurately captur e
and describe the business value of IT in supply chain and there are a number of factors
that we accept as important and necessary conditions in the process of value
co-creation (Kohli and Grover, 2008).
The creation of business value of IT is “an indirect role for IT in firm performance”,
and it is particularly beneficial to use intermediate-level dependent variables at the
The current issue and full text archive of this journal is available at
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This research has been supported by grants from the National Natural Science Foundation of
China under Grant 70172034, 70672064, 71072080.
Received 3 April 2013
Revised 1 June 2013
Accepted 8 July 2013
Industrial Management & Data
Systems
Vol. 114 No. 1, 2014
pp. 53-69
qEmerald Group Publishing Limited
0263-5577
DOI 10.1108/IMDS-04-2013-0171
Co-creating
business value
53
business process level (Dong et al., 2009; Wade and Hulland, 2004). From a
resource-based view (RBV), prior literature has identified that e-supply chain
capabilities (ESCC) can serve as a catalyst in transforming IT-related resources into
higher value for a firm (Devaraj et al., 2007; Rai et al., 2006; Zhu and Kraemer, 2005).
However, most research in IS field focused on the individual firm and proved the positive
effects of firm’ resources and capabilities in IT value creation (Kohli and Grover, 2008).
More recently, some research indicated that IS assets and complementary factors affect
each other and can even co-create competitive value (Guido Schryen, 2013). However, the
particular relationships between IS assets and complementary factors, their roles in the
value generation process, and the conditions under which competitive value is created
remain unclear (Guido Schryen, 2013). The literature are less obvious to specify how
business value of IT is co-created and examine the co-creative process in the supply
chain process level. It raises important new issues of co-creating value from IT in
multi-firm environments that cannot easily be addressed by current research. The next
generation of business value of IT studies should focus on the co-creation of value
through IT rather than the IT value by a single firm (Kohli and Grover, 2008).
This study is motivated to study the causal process of co-creating business value of
IT in two supply chain downstream processes (e-ordering and e-CRM). In this paper,
co-creating business value of IT is viewed as that ESCCs drive value co-creation via
e-business process, relying on the interaction effect between the internal resources and
relational resources from retailers and customers. From the e-business process view, a
new IT-based integration process will be generated when IT is embedded in inter -firm
business process, where internet-enabled information flow crosses the organizational
boundary and links participants to improve collaborative activities for achieving
inter-firm business goals. It focuses on the dependency link of potential leverage role of
new ESCCs in internet-enabled process. Inter-firm collaborative activities are embedded
in an e-supply chain process, which not only influences inter-organizational resources
but also the ability to launch partner collaborative synergy. Based on the e-business
process view, we can trace the route of ESCCs generation and IT value co-creation in
multi-firm environment. The primary objectives of this study are as follows:
.Explore how business value of IT in supply chain is co-created in downstream
process. Investigate the existence of causal relationships among inter-
organizational resources interaction, ESCCs, and IT value through
conceptualizing the process of value realization at e-supply chains process level.
.Probe into the possible complementary effect of relational resources from
retailers and customers during the cooperative process.
2. Theoretical foundations
The business value of IT literature is an important starting point for this study’s main
argument. Therefore, a review of prior business value of IT research first allows us to
specify and justify the boundary of our research model. Then, base on the related
theories, we proposed e-business process view to help understand and explain the
causal process of co-creating business value of IT.
2.1 Business value of IT in supply chain
Drawing on recent reviews of the IT business value research stream (Guido Schryen,
2013; Kohli and Grover, 2008; Melville et al., 2004; Oh and Pinsonneault, 2007; Piccoli and
IMDS
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