The Impact of Aligning IT Capability and Operations Strategy on Operational Performance

37 Pages Posted: 7 Feb 2015

See all articles by Andrea Masini

Andrea Masini

HEC Paris - Operations Management and Information Technology

Andrea Bacchetti

University of Brescia - Department of Mechanical and Industrial Engineering

Marco Perona

University of Brescia - Department of Mechanical and Industrial Engineering

Massimo Zanardini

University of Brescia - Department of Mechanical and Industrial Engineering

Date Written: January 26, 2015

Abstract

This paper examines the relationship among IT capability, operations strategy decisions and operational performance. Using primary data from a sample of European firms, we test a model of fit between two specific IT capability-building decisions and three competitive priorities, and we analyze the impact of IT capability alignment on several dimensions of process performance. After uncovering three stylized configurations, we note that firms tend to adopt internally coherent IT capability-building decisions but we find only mixed evidence of alignment between IT capability-building decisions and competitive priorities. Interestingly, however, failing to achieve alignment has negative performance consequences but only for firms that develop limited IT capability. Our results suggests that IT plays a central role in the fulfillment of a firm’s operations strategy, not only for firms that pursue differentiation and are interested in improving the effectiveness of their customer-oriented functions, but also for firms seeking efficiency improvements in back-office operations. Although it is, a priori, more expensive, the development of advanced IT capability can support cost leadership strategies more effectively than a frugal approach, as long as IT projects are used to generate operational knowledge and thus improve process efficiency. At the same time, our results cast further doubt on the value of frugal IT capability, even for firms that strive to reduce cost.

Keywords: Operations strategy; IT capability; process performance; configurations; empirical analysis

Suggested Citation

Masini, Andrea and Bacchetti, Andrea and Perona, Marco and Zanardini, Massimo, The Impact of Aligning IT Capability and Operations Strategy on Operational Performance (January 26, 2015). HEC Paris Research Paper No. MOSI-2015-1080. Available at SSRN: https://ssrn.com/abstract=2561166 or http://dx.doi.org/10.2139/ssrn.2561166

Andrea Masini (Contact Author)

HEC Paris - Operations Management and Information Technology ( email )

1, rue de la Liberation
Jouy en Josas, 78351
France

Andrea Bacchetti

University of Brescia - Department of Mechanical and Industrial Engineering ( email )

Via Branze, 38
Brescia, 25123
Italy

Marco Perona

University of Brescia - Department of Mechanical and Industrial Engineering ( email )

Via Branze, 38
Brescia, 25123
Italy

Massimo Zanardini

University of Brescia - Department of Mechanical and Industrial Engineering ( email )

Via Branze, 38
Brescia, 25123
Italy

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