Deriving Business Value from IT Applications in Product Development: A Complementarities-Based Model - Information Technology and Product Development - page 35

Table 2.2 IT capabilities, IT deployment, and business value

Type of IT
asset How the asset reinforces relationships Examples from the Cisco case

Technology
asset

Reinforcement of IT investment ⇒ IT
deployment:
A robust physical infrastructure can
better accommodate a major
addition in the form of a major new
IT implementation. A poor
infrastructure has to be retrofitted
first, at additional cost and risk.
Reinforcement of IT deployment

Cisco established 100%
standardization at each level of
their architecture: hardware,
operating systems, databases,
networking, and most
applications. This allowed them
unusual speed in rolling out new
applications (essentially
replacing all applications over a
2 year period) and integrating
acquisitions (usually completed
in 60-100 days).

⇒

business value:
A robust physical infrastructure
allows deployed systems to be
operated and maintained more
cheaply. Users will find it easier to
locate and access information
contained in the deployed systems,
thus enhancing the value of those
systems.

Human asset Reinforcement of IT investment ⇒ IT Cisco was able to successfully

implement ERP in 9 months and
replace most of the rest of their
IT infrastructure in 2 years,
which gives a clear indication of
the strength of their IT human
assets. Indications of the skill of
the IT staff can be seen in their
attention to recruiting
top-quality implementation
partners, the decision to
aggressively control the project
scope, and their quick and
effective responses to setbacks
on the project.

deployment:
Large-scale IT deployment requires
considerable knowledge and skills
to orchestrate the project
successfully. IT staff must not only
master the technologies to be
implemented (technical skill), but
also understand how the technology
can be best configured to support
the business (business
understanding) and to be able to
solve the problems that inevitably
arise in any major implementation
(problem-solving orientation).
Reinforcement of IT deployment

⇒

business value:
Firms with strong IT human assets
will be able to operate and maintain
any level of deployed systems more
efficiently, thus lowering the costs.

Relationship
asset

Reinforcement of IT investment ⇒ IT

deployment:
Any major IT implementation today
requires enthusiastic support and
participation from other
departments and from senior
management. Their participation is
required to ensure that the right
systems and features are chosen and
to mobilize the organization.