Abstract
Many companies that have made considerable investments in IT applications to support their product development activities have realized limited value from such efforts. In this chapter, we argue that a deep understanding of the complementarities that exist in the product development context is critical to ensure that business value is derived from the IT applications. We propose a multi-level complementarities-based model of IT innovation and business value to explain the factors that shape the success of IT-enabled product development. Our model posits that firms will obtain more value from innovative IT investment initiatives when the resulting IT applications are fitted into a system of initiative or product development context-specific complementary organizational elements (strategies, structures, processes, etc.). Further, firms will get more value from IT initiatives when investment is combined with certain firm-level elements such as a business strategy that is especially amenable to IT support, strong IT capabilities, and a modern organizational architecture that incorporates a cluster of practices associated with “digital” organizations. The model can guide researchers and managers in identifying the firm-level pre-conditions for realizing value from investments in IT to support product development and specifying necessary complementary investments in organizational change associated with product development.
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Notes
- 1.
Brynjolfsson’s (2003) typology identifies six factors, but for brevity we combine two closely related factors – skilled labor, and an emphasis on recruitment and training, into a single factor.
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Fichman, R.G., Nambisan, S. (2010). Deriving Business Value from IT Applications in Product Development: A Complementarities-Based Model. In: Nambisan, S. (eds) Information Technology and Product Development. Annals of Information Systems, vol 5. Springer, Boston, MA. https://doi.org/10.1007/978-1-4419-1081-3_2
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