An Investigation of the Effects of IT Investment on Firm Performance
The Role of Complementarity
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Information technology (IT) investments have continued toincrease over the last few decades while, concurrently, executivescontinue to question the value being obtained from theseinvestments. In order to address this issue, scholars have recentlyintroduced the concept of complementarity in order to betterunderstand the manner in which IT investments impact firmperformance. However, this concept has been insufficientlydeveloped in the literature and has inherent limitations in itsperspective. This study develops and clarifies our understanding ofcomplementarity and applies this elaborated conce...
Information technology (IT) investments have continued toincrease over the last few decades while, concurrently, executivescontinue to question the value being obtained from theseinvestments. In order to address this issue, scholars have recentlyintroduced the concept of complementarity in order to betterunderstand the manner in which IT investments impact firmperformance. However, this concept has been insufficientlydeveloped in the literature and has inherent limitations in itsperspective. This study develops and clarifies our understanding ofcomplementarity and applies this elaborated conceptto ITperformance research. For the theoretical lens, this researchemployed knowledge-based view of the firm (KBV), which enables oneto identify a boundary of critical complementary constructs thatare mutually reinforcing in enhancing IT performance. Theidentified complementary constructs are empirically tested usingsupply chain management (SCM) and customer relationship management(CRM) technologies. These findings show complementary investmentsare indeed found to be critical in enhancing firm performance fromIT investments.
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