Industrial Marketing Management

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Industrial Marketing Management 35 (2006) 493 – 504

The impact of information technology on supply chain capabilities and firm performance: A resource-based view Fang Wu a, Sengun Yeniyurt b, Daekwan Kim c, SR Tamer Cavusgil d,* University of Texas at Dallas, United States University of Nevada, Reno, United States c Florida State University, United States d The John W. Byington Endowed Chair in Global Marketing, Department of Marketing and Supply Chain Management, The Eli Broad Graduate School of Management, Michigan State University, 370 North Business Complex, East Lansing, MI 48824, United States b a

Received 31 January 2005; received in revised form 5 May 2005; accepted 15 May 2005 Available online 11 July 2005

Abstract Organizations increasingly rely on information technology (IT) to improve the supply chain process. Yet, past evidence suggests that the investment in IT per se does not guarantee enhanced organizational performance. Drawing from the resource-based view, this study proposes that IT-enabled supply chain capabilities are firm-specific, and hard-to-copy across organizations. These capabilities can serve as a catalyst in transforming IT-related resources into higher value for a firm. Based on data collected from surveying supply chain and logistics managers in various industries, the present study sheds light on these issues. The findings provide a new perspective in evaluating IT investment in the supply chain process. D 2005 Elsevier Inc. All rights reserved. Keywords: Information technology; Supply chain capabilities; Resource-based view

1. Introduction The use of information technology (IT) in managing the supply chain process has drawn increasing attention in the corporate world. Indeed, a recent study conducted by Forrester Research indicates that U.S. manufacturers are increasingly dependent on the benefits brought about by IT to: improve supply chain agility, reduce cycle time, achieve higher efficiency, and deliver products to customers in a timely manner (Radjou, 2003). However, IT investment in the supply chain process does not guarantee a stronger organizational performance. The debate on the ‘‘IT-productivity’’ paradox and other anecdotal evidence suggests that the impact of IT on firm performance remains unclear (e.g., * Corresponding author. Tel.: +1 517 432 4320; fax: +1 517 432 4322. E-mail addresses: fangwu@msu.edu (F. Wu), yeniyurt@msu.edu (S. Yeniyurt), dkim@garnet.acns.fsu.edu (D. Kim), cavusgil@msu.edu (S.T. Cavusgil). 0019-8501/$ - see front matter D 2005 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2005.05.003

Brynjolfsson, 1993; Lucas & Spitler, 1999). In fact, the adoption of a particular technology is easily duplicated by other firms, and it often does not provide a sustained competitive advantage for the adopting firms (e.g., Powell & Dent-Micallef, 1997). Not surprisingly, determining how IT as a resource can create a sustained competitive advantage for a firm remains to be an unresolved issue (Barney, Wright, & Ketchen, 2001). The primary objective of this paper is to provide some new perspectives in explaining how IT can create a sustained competitive advantage for the firm. In particular, drawing from the resource-based view and supply chain management literature, we propose that IT-enabled supply chain capabilities can serve as a catalyst in transforming ITrelated resources into higher value for a firm. The value of IT can be enhanced when it is embedded throughout the supply chain process (Powell & Dent-Micallef, 1997). The implementation of IT in the supply chain can enable a firm to develop and accumulate knowledge stores about its

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F. Wu et al. / Industrial Marketing Management 35 (2006) 493 – 504

customers, suppliers, and market demands, which in turn influences firm performance (Tippins & Sohi, 2003). Second, we explore two IT-related resources-IT advancement and IT alignment-and their roles in creating higher value for the...
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