LA VISIóN ILUSTR ATIVA: EL TEATRO COmO mUSEO

Diverse conceptual models and frameworks at different levels of analysis have been used by different researchers to study the impact of deploying and using IT resources as factors of production on the organisational performance. Some of the concepts and theories used to formulate and explain the relationships between the strategic application of IT resources and organizational performance include economics, strategy, accounting, and operations research, philosophy, and sociology (Brynjolfsson 1993; Wilson 1995; Brynjolfsson and Yang 1996; Ross et al., 1996; Bharadwaj, 2000; Dehning and Richardson, 2002; Dedrick et al., 2003; Melville et al.,

2004; Piccoli and Ives, 2005).

On the other hand, other researchers have taken an alternative approach in modeling IT Business Value (ITBV) by focusing on the attributes of IT and other organizational resources that together may confer a competitive advantage. For example Bharadwaj (2000) models three key IT resources and their relationship to a firm’s capability to deploy IT for improved performance: IT infrastructure, human IT resources, and IT enabled

intangibles. However, Clemons and Row (1991b) argued that IT is widely available to all firms and can only confer a sustainable competitive advantage if applied to leverage differences in strategic resources. Mata et al., (1995) derive a resource based conceptual framework mapping the attributes of IT to competitive advantage (Melville et al., 2004).

On the other hand, Weill’s model (1992) focuses on the ability of organisations to convert IT assets into organisational performance, identifying several conversion effectiveness factors that mediate the IT- performance relationship. Francalanci and Galal (1998) propose that managerial choices regarding the mix of clerical, managerial, and professional employees mediate the relationship between IT and organisation performance. Soh and Markus (1995) develop a conceptual framework which posits that IT investment leads to IT assets, IT assets to IT impacts, and IT impacts to organizational performance (Melville et al., 2004).

However, most of these constructs do not provide adequate methodologies for measuring and analysing ITBV. Furthermore, there is no specific integrated ITBV model addressing the unique nature of the construction industry. Difficulties in formulating performance measurement have been identified as a contributing factor in the apparent lack of positive findings for IT impact on performance at organisational level (Barau et al., 1995). Most of the early models seem to have focused on an aggregate level of analysis (e.g. Bailly and Chokrabarti, 1988; Jonscher, 1983; Roach, 1987 and Stabell, 1982). Such studies attempt to relate IT expenditure directly to output variables at the organisation level using microeconomic production function as a model; thus, the intermediate processes representing the organisation’s value chain through which IT impacts arise are ignored (Barau et al; 1995). Therefore, it was argued that the effect of deploying IT resources on organisational performance could best be identified through a ‘web of intermediate level contribution’ within the organisation’s processes (Crownston and Tracy, 1986;

Kauffman and Kriebel, 1988a, 1988b; Mukhopadhyay and Cooper, 1992; 1993; Barau et al., 1995); in line with organisational value chain analysis suggested by Porter (1985).

The varieties of theoretical frameworks used in modelling and evaluating the ITBV have led to fractured research streams with many simultaneous but non-overlapping outcomes (Chan, 2000). Thus, in order to accommodate the multiple theoretical frameworks and account for the complex linkage of how IT resources impact on organisational performance, multiple theoretical paradigms were used to conceptualize and model ITBV (Melville et al., 2004).

Therefore, to develop a conceptual model for evaluating ITBV in engineering and construction organisations multi-theoretical perspectives (Qing and Jing, 2005) of process-view (Barau et al., 1995; Porter, 1985; 1998; Melville et al., 2004); resource-based view (Clemons and Row, 1991; Mata

et al., 1995; Powell and Dent-Micallef, 1997; Bharadwaj, 2000; Sambamurthy, Bharadwaj and Grover, 2003; Newbert, 2008) and microeconomic-view (Soh and Markus, 1995; Mooney et al., 1996; Brynjolfsson and Hitt, 1996; Hitt and Brynjolfsson, 1996; Siegel, 1997; Devaraj and Kohli, 2000; Menon et al., 2000; Kohli and Devaraj, 2003) were adapted.

The proposed model is developed at the organisational domain level within the construction industry domain as shown in Figure 3.1. The level of analysis was focal organisations and its related value chain for the delivery of engineering and construction projects. The level analysis used a web of intermediate levels of construction project processes, in line with the value-chain analysis suggested by Porter (1985). Several conference papers (Kassim et al., 2009a; 2009b; 2010a; 2010b; 2010c) were published during the stages of the development and testing of the proposed model. Applying strategic group concept when sampling for data collection minimized the impact of industry structure variations.

Figure 3.1 The Research Domain (Kassim et al., 2009, 2010a)

The economically distinct activities of focal organisations are represented by its value chain within the research domain as depicted in Figure 3.1. Using the process-based Porter (1985) a typical engineering and construction value chain consisting of five primary activities of strategic planning, engineering design, procurement, construction and start-up and operation and maintenance were identified shown in Figure 3.2.

Figure 3.2 Typical Engineering and Construction Value Chain

Based on the literature (O’Connor et al., 1999; Back and Moreau, 2000; O’Connor and Yang, 2004; Yang et al., 2006; Yang 2007) and discussions with managers in field of engineering and construction; the primary activities of the engineering and construction projects value chain were further broken down into work functions as depicted in Figure 3.3 and Table 3.1. The degree of IT resources deployment, utilisation and integration of hard and software applications was measured at the level of the work functions (O’Connor and Yang, 2004).

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Table 3.1 Lists of Primary Activities and Work Functions Primary Activities Work Functions (WFs) ITw 1 2 3 4 5 Strategic Planning

Conduct market analysis Control of bidding process Prepare contract strategy Develop bid packages Review potential bidders Develop manpower plan

Engineering Design

Develop Design Basis Engineering deliverables Preliminary Estimate Project master schedule Execution plan

Interface management Quality and safety issues

Procurement

Material specifications Material requisition Issue Inquiry Bid Evaluation

Delivery and Expediting Inspection C on st ru ct io n & Commissioning

Field document control Safety Management Test packages control System turnover control Fabrication status control Materials inventory

Field request for information

M ai n te n an ce a n d Operation

Conduct pre-operations testing Train facility operators

Track and analyze maintenance history Develop maintenance plans

Monitor & assess equipment operations Track maintenance / modifications requests Update as-built drawings

Monitor/track/control energy usage Monitor environmental impact

Project

Management

Detail schedule preparation Detail cost estimate

Track project progress Document Management Change Management Progress reporting Invoicing process

Figure 3.3 Integrated Value Chain with WFs (Kassim et al., 2009, 2010a)

The value chain concept provides a typical business process of an engineering and construction organisation. The components of the critical activities (Porter, 1985: 37) representing the work functions for each primary activity of the value chain are further developed. A critical activity is one, which has a large impact on the organisational CA. This means that an activity becomes critical if it creates a large potential for cost reduction or differentiation (Michael and Deigan, 1989). Using these guidelines each of the primary activities of the value chain in Figure 3.2 was further broken down at the process level. For example, the primary activity of strategic planning is subdivided into: (a) market research, (b) bidding process, (c) contract strategy, and (d) manpower planning etc. These subdivisions of the primary activities of value chain are referred to as work functions (WFs) in line with O’Conner et al., (2000) and El- Mashaleh et al., (2006). Production processes in engineering and construction organisations are significantly different from those in the manufacturing organisations; thus, work functions where technologies are identified to be applied were adopted (Seaden et al., 2003). The detail breakdown of the primary activities of the construction value chain into the respective critical work functions is presented in Table 3.1. The

breakdown was derived from the literature (O’Connor et al., 1999; O’Connor and Yang, 2004; Yang et al., 2006; Yang 2007) and with extensive discussion with managers in the industry. The individual WFs were validated through the pilot survey through questionnaire as described in Chapter 4.