Organizational performance implications of information technology innovation.

Information Technology Innovation & Organizational Performance

Professor Melville is an expert on the organizational performance implications of information technology innovation. His research has appeared in MIS Quarterly, Information Systems Research, and Communications of the ACM. He is co-editor of Global E-commerce: Impacts of National Environment and Policy (Cambridge University Press 2006). An overview of selected research findings appears below.

• Link between IT and organizational performance is shaped by internal and external factors.  An integrated model and propositions are developed based on the resource-based view of the firm positing that both the internal environment (complementary organizational resources) and the external environment (industry and macro characteristics, trading partners) underlie variation in the economic impact of information technology across firms. This paper has been cited 100 times (Scopus), is the top-cited paper among all MIS Quarterly papers published since its appearance in 2004, and is a top-20 most-cited article in the category of Business, Management, and Accounting on Scopus. [Integrative Model]

• Competitive environment moderates IT-productivity link. Empirical analysis of information technology versus regular capital within Fortune 500 firms finds that IT is more productive in more competitive industries, which is not the case for regular capital. This suggests one reason for the empirical observation that IT producing industries have a greater productivity contribution than others: they are more competitive. [Role of Industry Environment]

• IT enables service innovation for competitive advantage. Firms use IT as a source of continuous service innovation by developing an IT innovation platform, rather than relying on ad hoc moments of creative insight. [IT Innovation Platform]

• Technological progress alters nature of IT as a production input. Empirical analysis spanning the years 1987-1998 - including the advent of e-commerce - illustrates that IT is shifting from being a net substitute for regular capital to being a net complement. The results are especially pronounced in the services sector, an important point given the shift towards a service economy in the U.S. [Technological Progress]

• Innovative data mining for customer value can drive competitive advantage.  State Street created an information advantage for institutional foreign currency trading by consolidating trades on its multibank dealer-to-client platform FX Connect. Innovative aggregation and repackaging of currency trading data generated significant value for its clients, illustrating the transformational capabilities of IT in enabling business model innovation. [Business Model Innovation]
• Macro environment shapes online business practices & performance outcomes. How do global trends such as economic liberalization, technological innovation, and outsourcing influence the diffusion of Internet business practices and associated performance outcomes? These questions are analyzed in the edited volume published by Cambridge University Press: "Global E-commerce: Impacts of National Environment and Policy." According to Richard Mason, Cox School of Business, Southern Methodist University: "The world is not yet flat; it is bumped and dimpled. In this, the first comprehensive study of the international adoption and adaptation of the Internet, the authors find that rates and applications vary among countries. All subsequent research on the globalization of e-commerce must refer to this foundational work."