Information Technology Payoff in E-Business Environments: An International Perspective on Value Creation of E-Business in the Financial Services Industry

By Kevin Zhu, Kenneth L. Kraemer, Sean Xin Xu, Jason L. Dedrick. Journal of Management Information Systems, 2004

830 citations recorded by the source corpus.

Grounded in the technology-organization-environment (TOE) framework, we develop a research model for assessing the value of e-business at the firm level. Based on this framework, we formulate six hypotheses and identify six factors (technology readiness, firm size, global scope, financial resources, competition intensity, and regulatory environment) that may affect value creation of e-business. Survey data from 612 firms across 10 countries in the financial services industry were collected and used to test the theoretical model. To examine how e-business value is influenced by economic environments, we compare two subsamples from developed and developing countries. Based on structural equation modeling, our empirical analysis demonstrates several key findings: (1) Within the TOE framework, technology readiness emerges as the strongest factor for e-business value, while financial resources, global scope, and regulatory environment also significantly contribute to e-business value. (2) Firm size is negatively related to e-business value, suggesting that structural inertia associated with large firms tends to retard e-business value. (3) Competitive pressure often drives firms to adopt e-business, but e-business value is associated more with internal organizational resources (e.g., technological readiness) than with external pressure to adopt. (4) While financial resources are an important factor in developing countries, technological capabilities become far more important in developed countries. This suggests that as firms move into deeper stages of e-business transformation, the key determinant of e-business value shifts from monetary spending to higher dimensions of organizational capabilities. (5) Government regulation plays a much more important role in developing countries than in developed countries. These findings indicate the usefulness of the proposed research model and theoretical framework for studying e-business value. They also provide insights for both business managers and policy-makers.

Subfields: Information Systems and Management, Management Science and Operations Research, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/0fa0c7404dcd98f03bebefed15f023926594e8ed

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Citations in the corpus

Revisiting IS business value research: what we already know, what we still need to know, and how we can get there (2013, background): “Industry Swierczek & Shrestha (2003) and Zhu et al (2004).”
The Complementarity of Information Technology Infrastructure and E-Commerce Capability: A Resource-Based Assessment of Their Business Value (2004, neutral): “how to measure the Internet-based e-commerce initiatives in the first place [5, 64].”
The Process of Innovation Assimilation by Firms in Different Countries: A Technology Diffusion Perspective on E-Business (2006, methodology): “E-business routinization requires concerted efforts to mutually adapt corporatewide information systems, organizational structures, and business processes (Devaraj and Kohli 2003, Zhu et al. 2004).”
SMEs' adoption of enterprise applications: A technology-organisation-environment model (2013, background): “In the organisational context, size (Zhu and Kraemer, 2005), top management support (Grover, 1993), and organisational readiness (Zhu et al., 2004) have also been confirmed to be significant.”
Determinants of the Adoption of Enterprise Resource Planning within the Technology-Organization-Environment Framework: Taiwan's Communications Industry (2008, neutral): “[47] found that technology readiness (the strongest factor), financial resources, global scope and the regulatory environment contribute significantly to e-business value.”
FinTech and the transformation of the financial industry (2018, background): “From this B an extensive network of interrelation-ships that is more complex, reciprocal, and less linear than traditional manufacturing and retailing industries ^ resulted (Zhu et al. 2004, p. 21).”
Impact of eBusiness technologies on operational performance: The role of production information integration in the supply chain (2007, methodology): “…eBusiness capabilities EBUSCUST (1) Customer buying online Frohlich and Westbrook (2002), Lancioni et al. (2000), Mukhopadhyay and Kekre (2002) and Zhu et al. (2004) (2) Customer configuration/customization Barua et al. (2004), Pflughoeft et al. (2003), Ranganathan et al. (2004) and Zhu and…”
Understanding e-business adoption across industries in European countries (2010, background): “Earlier studies argue that firms using e-business may obtain benefits such as sales increase, new market penetration, and cost reduction (Zhu and Kraemer, 2002; Zhu et al., 2004).”
Exploring the relationships between IT competence, innovation capacity and organizational agility (2017, background): “…studies have argued that the declining technology costs should be weighed against the first mover advantages when investing in IT (Demirhan et al., 2005) and, that the competitive intensity of the industry would have to be considered in such decisions (Dewan and Mendelson, 1998; Zhu et al., 2004).”
Measuring the effects of business intelligence systems: The relationship between business process and organizational performance (2008, methodology): “In addition, Zhu et al. (2004) decompose the performance impact of IT measure into upstream (procurement costs and coordination with suppliers) internal dimension (including efficiency of internal processes and staff productivity), and downstream impact (including effect on sales and customer…”
Augmented reality in support of Industry 4.0 - Implementation challenges and success factors (2019, background): “External support and synergy effects e.g. within an industry can provide knowledge assets supporting the technology implementation [93].”