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Management commitments that maximize business impact from IT

  • Research Article
  • Published:
Journal of Information Technology

Abstract

As digitization becomes pervasive, many organizations struggle to drive value from the growing number of IT-related opportunities. We show how the drivers of IT value creation can be framed as firm-wide commitments to a set of IT capabilities. On the basis of 20 published case studies, we identify a small set of IT decisions that organizations must make to use IT to successfully enhance their impact. We group these decisions into a framework of four commitments. Making these commitments helps organizations reinforce what really matters over time, which in turn helps focus the attention of their employees. We demonstrate, via a survey of 210 publicly traded firms, that firms which are more effective in making these four commitments have higher business impact from IT, which in turn correlates with higher financial performance. We suggest the construct of commitment is a step toward unifying the IT value literature and creating an overarching concept that brings together many of the important management practices identified in previous work.

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Notes

  1. The issue of culture is often mentioned as an important factor in organizational performance. While ‘culture’ as such is difficult to operationalize, we see commitment as a key aspect of organizational culture that is measurable, and thus what we have chosen to focus on in this paper (thanks to two anonymous reviewers for this point).

  2. Several of these practices are also analyzed in other models. For example, Sledgianowski et al. (2006) focus on the relationship of alignment and impact from IT, and ask about some of these practices. We feel that alignment and commitment are two different ways to frame how impact from IT can be achieved, and therefore we would expect to see some correlation among these models.

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Acknowledgements

An earlier version of this paper was presented at ICIS 2011: Quaadgras, A.L., P. Weill, and J.W. Ross (2011). Management Commitments that Maximize Business Impact from IT. International Conference on Information Systems. Shanghai, China.

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Authors and Affiliations

  1. MIT Sloan Center for Information Systems Research, Cambridge, MA, USA

    Anne Quaadgras, Peter Weill & Jeanne W Ross

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  1. Anne Quaadgras
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This research was made possible by the support of MIT CISR sponsors and patrons.

Appendices

Appendix A

Table A1

Table A1 Cases used for commitment cross case analysis
Full size table

Appendix B

Survey questions

  1. 1)

    To what extent has your enterprise made the following strategic choices: (1=not at all; 5=to a great extent):

    1. a)

      Specified which business processes should be standardized across the enterprise (e.g., order to cash, marketing, supply chain, customer service, billing, risk management)?

    2. b)

      Specified the classes of enterprise information (e.g., customer, order) to be shared across the enterprise?

    3. c)

      Specified how all digital assets (e.g., business processes, digital products, data, CAD, process control, infrastructure) will be coordinated?

    4. d)

      Specified the critical business activities to be performed inside the enterprise vs by other firms?

    A platform is a coherent set of standardized, digitized business processes along with supporting infrastructure, applications, and data.

  2. 2)

    To what extent has your enterprise created the following platform elements (1=not at all; 5=to a great extent):

    1. a)

      An efficient, reliable, scalable technology infrastructure?

    2. b)

      A digitized platform(s) that supports the enterprise’s key business processes?

    3. c)

      A data asset specifying enterprise master data, transaction data, and historical data?

    4. d)

      Standardized electronic links to external parties?

  3. 3)

    To what extent does your enterprise do the following (1=not at all; 5=to a great extent):

    1. a)

      Empower operational decision makers with useful information?

    2. b)

      Empower operational decision makers with clear business rules?

    3. c)

      Create and revise business rules based on business analytics?

  4. 4)

    To what extent does your enterprise have the following (1=not at all; 5=to a great extent):

    1. a)

      A small set of business metrics focused on enterprise-wide goals?

    2. b)

      Incentives that balance enterprise and local goals?

    3. c)

      Feedback that relates individuals’ actions to the enterprise’s goals (e.g., scorecards, sales/profit reports)?

    4. d)

      Findings from post-implementation reviews that inform future projects?

  5. 5)

    How important are the following business outcomes to your enterprise (1=not important; 5=very important):

    1. a)

      Effective use of IT for business growth?

    2. b)

      Effective use of IT to help the enterprise best use all its assets?

    3. c)

      Effective use of IT for business agility?

  6. 6)

    How successful is your enterprise at achieving these business outcomes (1=not successful; 5=very successful):

    1. a)

      Effective use of IT for business growth?

    2. b)

      Effective use of IT to help the enterprise best use all its assets?

    3. c)

      Effective use of IT for business agility?

Appendix C

Table C1

Table C1 Measurement model indicator loadings (standardized regression weights)
Full size table

Appendix D

Table D1

Table D1 Squared multiple correlations (full path model)
Full size table

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Quaadgras, A., Weill, P. & Ross, J. Management commitments that maximize business impact from IT. J Inf Technol 29, 114–127 (2014). https://doi.org/10.1057/jit.2014.7

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