IT Business Value and Competitive Advantage: Integrating a Customer-Based View

ABSTRACT

This research expands our understanding of IT value by adding a customer-based view (CBV) to the prevalent resource-based view (RBV). Founded on a template analysis, this article suggests an integrated definition for IT value consisting of two complementary facets: monetary customer value and non-monetary organizational value. Value from IT investments can have direct or indirect effects on firm performance. This research also discusses the relationship between IT value, firm performance, and competitive advantage.

Abbreviation: CBV: Customer-based view; CI: Customer intimacy (customer-value category); ER: External relations (initial organizational-value category); ESC: Enhanced skills and capabilities (organizational-value category); FX/A: Flexibility, agility (organizational-value category); IS: Information systems; IT: Information technology; K/C: Knowledge and control (initial organizational-value category); OE: Operational excellence (customer-value category); PL: Product leadership (customer-value category); RBV: Resource-based view; SA/SR: Strategic alliances/supplier relationships (organizational-value category); SP/DM: Strategic planning/informed decision-making (organizational-value category)

KEYWORDS:

• IT/IS business value
• customer-based view
• resource-based view
• competitive advantage
• strategic IT/IS planning
• firm performance

Acknowledgments

We are thankful to the anonymous reviewers that provided valuable comments for the improvement of this work.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. The terms information technology (IT) and information systems (IS) are used synonymously for ease of readability (e.g., to avoid slashes like “IT/IS”). IT can be considered as assets and IS may be understood as a capability from the use of IT (Wade & Hulland, 2004); here, IT implies both aspects.

Additional information

Funding

This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

Notes on contributors

Christof Gellweiler

Christof Gellweiler is an independent IT management consultant with more than 25 years of industrial experience in the IT-infrastructure field. He holds a diploma in telecommunications engineering (TH Bingen), a Kellogg-WHU Executive MBA, a PhD in Management (Aarhus University) and is certified by the Project Management Institute, scrum.org, and Cisco Systems. Christof’s consulting focus is on strategic alignment and project management. He is also visiting professor at Vilnius University and provides workshops/trainings to IT managers.

Lakshman Krishnamurthi

Lakshman Krishnamurthi is the A. Montgomery Ward Distinguished Professor of Marketing at the Kellogg School of Management at Northwestern University. His teaching spans Marketing Management, Marketing Strategy, Pricing, Marketing Research and Multivariate Statistics. Professor Krishnamurthi has received several awards for his teaching both in the Kellogg MBA program and in the Executive MBA program. He has also won several awards for his research, including the prestigious John Little, Donald Lehmann and Paul Green awards for papers published in Marketing Science and the Journal of Marketing Research. He has also consulted widely for many organizations.