Title

IT-inhibited competitive advantage and IT capability in SMEs

Abstract

The study presented in this paper investigates the influence of IT capability on the relationship between IT expenditures and long term business performance. To do so, the Resource Based View (RBV) has been used as the theoretical framework, and, within such a framework, the concept of sustainable competitive advantage has been used as a point of reference. IT capability, a term often mentioned in the scientific literature dealing with the applications of RBV in the IS field, has been the subject of this study. Within the IS discipline, IT capability is perceived to have considerable influence on the effect of IT expenditure on the long term results of an organization. However, few studies have identified the extent of this influence and indeed the very definition of IT capability has been so ambiguous that no measurement instrument has been developed and universally accepted.
In this thesis we recognized this lack and carried out a study, to first identify a comprehensive definition of IT capability and then to develop and validate a measure of IT capability and evaluate its role on business performance.
The empirical study was performed within the context of small-medium enterprises (SMEs). 77 SMEs (belonging to the textile and the mechanical industrial districts in Italy) were surveyed and these results analysed and aggregated to form some conclusions with respect to the meaning and influence of IT capability.
This empirical investigation led to highlight that a major requirement for realising the strategic potential of IT investments is to focus on the development of a business orientation in competencies of the IT staff. This result suggests that the traditional (technology focused) competence can lead to make IT a strong inhibitor, rather than an enabler of competitive advantage.

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