LA VISIóN CONTR ApUESTA: EL TEATRO COmO pATIO DE RECREO

To increase the understanding of IT business value diffusion, implementation status, areas of application, and the perceived impacts therein in the delivery of value chain of engineering and construction organisations; the research addressed the following question:

What are the outcomes of deploying and utilizing IT resources in the delivery of engineering and construction projects value chains on the measure of the performance metrics including cost, schedule, profitability, safety and customer satisfaction.

In order to answer the research question a set of IT resources and other organisational capabilities and resources are identified based on multiple theoretical perspectives. Using these elements hypotheses were derived. Combining the hypotheses with the concept of the value chain and process view, a schematic conceptual model was developed as depicted in Figure 3.4.

The following sections describe the IT resources and other complementary organisational resources.

3.5.1 IT Shared Infrastructure (ITSI)

IT shared infrastructure (ITSI) is the shared technology that provides reliable shared services across an organization which forms the base foundation of the organisation’s IT capability, and is coordinated centrally, usually by the information group (Will and Broadbent, 2000; Melville et al., 2004; Piccoli and Ives, 2005). As such, the ITSI provides the foundation for the delivery of business applications and services (Broadbent and Weill 1997). ITSI has been described as an important organizational capability that can be an effective source of value (Bharadwaj, 2000; Broadbent and Weill 1997, Ross et al., 2004; Sambamurthy, 2000; Bhatt and Grover, 2005).

ITSI can provide organisations with the ability to share information across different functions, innovate, and exploit business opportunities, and the flexibility to respond to changes in business strategy (Weill et al., 2002). However, the existence of open architectures and standardized enterprise packages suggest that this capability might not be heterogeneously distributed across organisations and / or the access to such infrastructure is not restrictive (Carr, 2003). Therefore, despite some contrary evidence ITSI is argued to be valuable but not a source of competitive advantage (Bhatt and Grover, 2005).

H1: the technological components of ITI are readily available in the marketplace therefore; ITSI may not have significant impact on the performance of engineering and construction organisations.

3.5.2 IT Business Application (ITBA)

IT Business applications (ITBA) refer to any application that is important to running of engineering and construction businesses; this may include administration and decision support, engineering analysis, organisational communication, design and project management computer software. These computer applications are used to execute the work functions of the

primary activities of the focal organisation’s value chain. They may be deployed on standalone computers or as networked integrated systems within the organisation. Due to their direct involvement in the organisational business processes the following hypothesis was put forward, and this is represented by H2 on the conceptual model diagram

in Figure 3.8.

H2: IT business applications (ITBA) will have positive impact on construction

organisation performance.

3.5.3 IT Human Skills (ITHS)

Another category of IT resource is the expertise and knowledge of the IT personnel (Barney 1991), which is termed as IT human resources (Melville

et al., 2004). This denotes both technical and managerial knowledge (Ross

et al., 1996; Bharadwaj 2000; Dehning and Richardson 2002).

Technologies are inherently dissimilar, thus they create unique challenges for organisations. Neverthless, organisations could developed unique sets of IT capabilities over period of time, thorugh experience (McKenney et al.,

1995). Thus, positioning them in a better position than their rivals in using and managing these technologies (Ross et al., 1996; Bharadwaj 2000; Dehning and Stratopoulos 2003; Wade and Hulland 2004; Ross, 2004). IT human resources that have received research attention include technical skills, IT management skills, and relationship assets (Piccoli and Ives, 2005).

IT technical skills refer to the ability to design, develop and implement effective information systems. As such, they include proficiency in system analysis and design, infrastructure design and programming (Ross et al., 1996). Technical IT Skills are typically mobile as it is not difficult for competitors to hire away this value-creating resource from their competitors at their market price (Mata et al., 1995), giving rise to the following hypothesis.

IT Management Skills involve skills in managing IT projects, evaluating technology options, conceiving, developing, and exploiting IT applications

and managing changes. Such skills are developed over time through accumulation of experience in a form of organisational learning. The theoretical concepts of IT management skills lead directly to the following hypothesis represented by H3 on the conceptual model diagram in Figure

3.8.

H3 Superior IT human capabilities (ITHS) will have a positive impact in providing a source for engineering and construction organisations’ competitive advantage

3.5.4 Complementary organisational resources

Although it is possible to apply IT resource for the improvement of organisational performance, according to RBV, in order to have sustainable competitive advantage it requires other complementary organisation resources to be mobilized and be in alignment with the IT- enable strategies. These complementary resources include the organisational policies, rules and work practices, organisational structure, workplace practices, and organisational culture conceptualised as ‘business work environment’ (BWE). This is represented by H4 on the

conceptual model diagram in Figure 3.8:

H4: Complementary organisational resources (BWE) will have positive impact in creating ITBV in engineering and construction organisations

The elements of the four hypotheses above form the inputs into the organisational value chain in the model as depicted in Figure 3.8. The IT and organisational complementary resources constructs form the inputs to the engineering and construction project value chain. The output measures are represented by the project performance metrics, thus establishing the productivity, efficiency and effectiveness of the IT on the value chain leading to the creation of competitive advantage. The model assumes the presence of IT investment within the focal organisations. The measure of the IT investments and the resources in the operationalisation of the model will be based on the level of application and diffusion in the sampled organisations.

Figure 3. 8 Conceptual ITBV Model Scheme for Construction Organisation (Kassim et al., 2009a, 2010c)

Starting from the left-hand side of the model in Figure 3.8, IT infrastructure (ITI) represents the IT resources as input factors to the execution of work functions within the organisation’s value chain. The IT resources are conceptualized in four dimensions: IT shared infrastructure (ITSI), IT Human Skills (ITHS), IT Business Applications (ITBA) applications, and business process (Bhatt, 2000). The measure of the IT resources is conceptualised as level of utilization rather than as a monetary value of the IT investments (Tallon and Kraemer, 2007). The level of IT usage has widely been accepted as an important indicator of IT success within organizations (Mahmood et al., 2001). The next input factor is the organisational complementary resources represented by the business work environment (BWE). Drawing from Porter (1998) value chain concept primary and critical activities of the engineering and construction organisations were proposed. Primary activities consist of strategic planning, engineering design, procurement, construction and start up and operation and maintenance represent the construction business process. These primary activities were further broken down into

work functions. This process was facilitated through the experiences of the researcher in delivering variety of construction projects (Alarco´n and Mourgues, 2002), the literatures such as O’Connor and Yang (2003); O’Connor and Yang (2004) and Yang et al. (2006; 2007) and constructions organisations from different sectors that participated in a pilot study. The performance measures are represented by six variables of schedule performance (SCHD), cost performance (COST), customer satisfaction (CUSTO), growth in contracts (CONTR), safety (SAFETY) and profits (PROFI) mainly hinged on project performance. Variables such as contract growth is included to highlight the extent of IT and business strategies alignment. The selection of the variables was based on a multi-criteria analysis of Analytical Hierarchy Process (AHP) (Saaty, 1990) and attempted to ensure both owner’s and contractor’s perspectives were covered.