Deriving Business Value from IT Applications in Product Development: A Complementarities-Based Model - Information Technology and Product Development - page 30

despite almost universal agreement on this basic point, considerably less agreement
exists on what “fit” actually means and exactly why it is important. Sometimes, the
nature of “fit” is simply left unspecified, which limits the ability to make specific
predictions or to give managerial guidance. This is where the logic of comple-
mentarities provides value: It gives an explicit definition of what constitutes fit
(complementarities), it gives an explicit test for the presence of fit (i.e., supermod-
ularity), and it provides a clear specification for the organizational impacts of fit
(i.e., magnification of the performance-enhancing potential of IT on some variable
related to business value).
So far as we are aware, there is no definitive list of organizational elements that
can or should be fit to technology. Therefore, based on our review of the litera-
ture, we have developed the following representative set of organizational elements:
strategies, structures, culture, processes, practices, policies, knowledge and skills,
roles, and incentives. To formalize the link between these elements and business
value (link A in Fig. 2.1), we offer the following proposition:
Proposition 1: The effects of IT innovation deployment on business value will be
reinforced by the presence of complementary initiative-specific organizational ele-
ments (strategies, structures, culture, processes, practices, policies, knowledge and
skills, roles, and incentives).
As stated, this proposition is essentially tautological because complementari-
ties, by definition, reinforce effects on the focal performance variable. However,
the tautology falls away when the general proposition is contextualized to a
particular technology, as it must be. This process of contextualization can be accom-
plished by studying technology artifacts, examining accounts of the technology's
nature and goals, meeting with experts, and conducting field studies of actual
implementations.
For example, in the case of PLM application, a complementary strategy may
relate to product portfolio management (Cooper & Kleinschmidt, 2001). Companies
that invest in portfolio-level capabilities may find that their portfolio management
processes reinforce the PLM solution and enable better utilization of critical organi-
zational resources and assets across different projects. Similarly, adoption of process
maturity models (such as the capability maturity model) could create a proac-
tive environment for product development projects and enable better utilization of
data and information sourced through the PLM application. Another complemen-
tary strategy relates to product platforms. A product platform strategy (Gawer &
Cusumano, 2002; Meyer & Lehnerd, 1997) emphasizes modularity and the shar-
ing of components across multiple products. Such a strategy would complement the
data standardization and the cross-project information sharing capabilities achieved
through PLM implementation and that, in turn, would likely enhance the value the
organization derives from the IT solution.
We can identify four specific features that distinguish the complementarities
approach from other theoretical approaches to linking organizational variables to
technology implementation. First, complementarities require the specific designa-
tion of a performance or output variable whose levels increase in the presence of