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On the Business Value of Information Technology: A Theory of Slack Resources

  • Yasser Rahrovani
  • Alain Pinsonneault
Chapter
Part of the Integrated Series in Information Systems book series (ISIS, volume 28)

Abstract

This chapter provides insights on the business value of IT by theorizing the concept of IT slack and explaining its effects on firm performance. We define IT slack as the cushion of actual or potential IT resources that allow organizational adaptation to internal and external pressures and jolts. We elaborate a typology of IT slack based on two dimensions: the nature of the slack (i.e., IT artifact, human resource, or time) and the type of IT asset (i.e., IT infrastructure vs. IT application). We suggest that IT slack simultaneously affects both organizational effectiveness and efficiency. IT slack is a double-edged sword. While IT slack can improve organizational effectiveness, it might reduce efficiency, because slacks is, by ­definition, excess resources that remain idle until needed. We also suggest that the relationship between IT slack and organizational effectiveness is curvilinear.

Keywords

IT slack Business Value of IT IT Productivity Paradox Organizational Effectiveness Organizational Efficiency 

Abbreviations

CEO

Chief executive officer

CIO

Chief information officer

CRM

Customer relationship management

ERP

Enterprise resource planning

IS

Information systems

IT

Information technology

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© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  1. 1.Desautels Faculty of ManagementMcGill UniversityMontrealCanada

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