What Drives Business Value of IT in the Post-Bubble Era? A Multi-Stage Empirical Investigation

Has the strategic importance of IT diminished or increased in the post-bubble e-business environment? A cross-industry investigation tracking IT use by hundreds of Fortune 1000 companies addresses the new wave of debate. The project uses empirical evidence of the scale and characteristics of IT/e-business initiatives and their impact on firm performance. The research addresses questions of:

• What drives business value of IT at the firm level in the post-bubble Internet era?
• Do e-business capabilities, in conjunction with a firm’s IT infrastructure, lead to better firm performance measures such as employee productivity, cost reductions, and supply chain efficiency?
• How does the impact of IT/e-business investments on firm performance differ across companies, industries and country environments?

The Implications of Strategic Alignment for IT Business Value

Strategic alignment, denoting the fit between information technology (IT) and business strategy, remains a dominant managerial concern, even as research finds growing evidence of the link between IT and firm performance. Continuing work on the relationship between strategic alignment and IT business value, this study examines the “strategic alignment paradox”, where tight alignment produces a form of technological rigidity or inflexibility to adapting to a changing environment, through in-depth case studies and interviews with CIOs and business executives. The research addresses the following questions:

• What steps have corporations taken to embed flexibility into their IT investments? What aspects of IT flexibility (connectivity, modularity or compatibility) do they see as most important and why?
• How do corporations use IT flexibility to improve strategic alignment and IT business value? How do they achieve and maintain a balance between IT flexibility and strategic alignment?
• What do corporations see as the cost of IT flexibility and how do they justify that cost?

Licensing and Pricing for Software

With the emergence of utility computing, buyers and sellers must re-examine their current software licensing schemes. This project examines the current state of software licensing to understand key factors that led to the development of such licensing and how this influences the design of products as well as the provision of upgrades and patches. Looking at large scale adoption of utility computing, the research addresses the impact on sellers, including increased competition and predictable revenue stream, and buyers, including increased flexibility, better software quality, reduced switching costs, reduced compliance costs and better cost predictability. Study questions include:

• Under what conditions is it optimal to offer multiple licensing schemes?
• How do we design these licensing schemes to maximize profits and gain a competitive advantage?
• What is the impact of the licensing model used by competitors on the viability of a firm’s offerings?