Arun Rai

Specifying formative constructs in information systems research

While researchers go to great lengths to justify and prove theoretical links between constructs, the relationship between measurement items and constructs is often ignored. By default, the relationship between construct and item is assumed to be reflective, meaning that the measurement items are a reflection of the construct. Many times, though, the nature of the construct is not reflective, but rather formative. Formative constructs occur when the items describe and define the construct rather than vice versa. In this research, we examine whether formative constructs are indeed being mistaken for reflective constructs by information systems researchers. By examining complete volumes of MIS Quarterly and Information Systems Research over the last 3 years, we discovered that a significant number of articles have indeed misspecified formative constructs. For scientific results to be valid, we argue that researchers must properly specify formative constructs. This paper discusses the implications of different patterns of common misspecifications of formative constructs on both Type I and Type II errors. To avoid these errors, the paper provides a roadmap to researchers to properly specify formative constructs. We also discuss how to address formative constructs within a research model after they are specified.

Assessing the Validity of IS Success Models: An Empirical Testand Theoretical Analysis

The purpose of the present study is to empirically and theoretically assess DeLone and McLeans (1992) and Seddons (1997) models of information systems (IS) success in a quasi-voluntary IS use context. Structural modeling techniques were applied to data collected by questionnaire from 274 system users of an integrated student information system at a midwestern university. The Seddon structural model and the DeLone and McLean structural model each contained five variables (system quality, information quality, perceived usefulness, user satisfaction, and IS use). Both models exhibit reasonable fit with the collected data. The empirical findings are assessed in the broader theoretical context of the IS success literature, including the Technology Acceptance Model and the Theory of Planned Behavior. Our results support DeLone and McLeans focus on integrated IS success models and their observation that IS success models need to be carefully specified in a given context. The Seddon model conceptually elaborates and clarifies aspects of the DeLone and McLean model, thereby effectively integrating core theoretical relationships espoused in the IS success literature. Our study also supports Seddons three construct categories (system and information quality, general perceptual measures aboutnetbene fts about IS use, and IS behavior), as defining IS success and its impact on nature of IS use.

Firm performance impacts of digitally enabled supply chain integration capabilities

Best practice exemplars suggest that digital platforms play a critical role in managing supply chain activities and partnerships that generate performance gains for firms. However, there is limited academic investigation on how and why information technology can create performance gains for firms in a supply chain management (SCM) context. Grants (1996) theoretical notion of higher-order capabilities and a hierarchy of capabilities has been used in recent information systems research by Barua et al. (2004), Sambamurthy et al. (2003), and Mithas et al. (2004) to reframe the conversation from the direct performance impacts of IT resources and investments to how and why IT shapes higher-order process capabilities that create performance gains for firms. We draw on the emerging IT-enabled organizational capabilities perspective to suggest that firms that develop IT infrastructure integration for SCM and leverage it to create a higher-order supply chain integration capability generate significant and sustainable performance gains. A research model is developed to investigate the hierarchy of IT-related capabilities and their impact on firm performance. Data were collected from 110 supply chain and logistics managers in manufacturing and retail organizations. Our results suggest that integrated IT infrastructures enable firms to develop the higher-order capability of supply chain process integration. This capability enables firms to unbundle information flows from physical flows, and to share information with their supply chain partners to create information-based approaches for superior demand planning, for the staging and movement of physical products, and for streamlining voluminous and complex financial work processes. Furthermore, IT-enabled supply chain integration capability results in significant and sustained firm performance gains, especially in operational excellence and revenue growth. Managerial initiatives should be directed at developing an integrated IT infrastructure and leveraging it to create process capabilities for the integration of resource flows between a firm and its supply chain partners.

How Software Project Risk Affects Project Performance: An Investigation of the Dimensions of Risk and an Exploratory Model*

To reduce the high failure rate of software projects, managers need better tools to assess and manage software project risk. In order to create such tools, however, information systems researchers must first develop a better understanding of the dimensions of software project risk and how they can affect project performance. Progress in this area has been hindered by: (1) a lack of validated instruments for measuring software project risk that tap into the dimensions of risk that are seen as important by software project managers, and (2) a lack of theory to explain the linkages between various dimensions of software project risk and project performance. In this study, six dimensions of software project risk were identified and reliable and valid measures were developed for each. Guided by sociotechnical systems theory, an exploratory model was developed and tested. The results show that social subsystem risk influences technical subsystem risk, which, in turn, influences the level of project management risk, and ultimately, project performance. The implications of these findings for research and practice are discussed.

Technology investment and business performance

relationships between measures of information technology (IT) investment and facets of corporate business performance. The results of our study suggest that IT investments have begun to show results in proving they can make a positive contribution to firm output and labor productivity. However, various measures of IT investment do not appear to have a positive relationship with administrative productivity, showing inconsistent results in terms of business performance. Our analysis suggests that while IT is likely to improve organizational efficiency, its effect on administrative productivity and business performance might depend on such other factors as the quality of a firm’s management processes and ITstrategy links, which can vary significantly across organizations. Measurement of the business value of IT investment has been the subject of considerable debate by academics and practitioners. The term productivity paradox is gaining increasing notoriety as several studies point toward falling productivity and rising IT expenditure in the service sector. Loveman [9] summarizes the research that provides evidence suggesting IT investment produces negligible benefits. Other studies [3] take the position that the “shortfall of evidence” is not “evidence of a shortfall” [3]. Brynjolfsson [3] argues that lack of positive evidence is due to mismeasurements of outputs and inputs, lags in learning and adjustment, redistribution and dissipation of profits, and mismanagement of IT. Our first objective was to reexamine the performance effects of IT investment in light of data collected up to 1994 (see the sidebar, “How the Study Was Done”). We are uncomfortable making such a statement as we have not conducted similar systematic scientific analysis with data later than 1994. We included three measures of IT investments: aggregate IT, client/server systems, including Internet-related systems, and IT infrastructure. We studied firm performance in terms of firm output, measured using value added by the organization and total sales; business results, assessed using return on assets (ROA) and return on equity (ROE) measures of financial performance; and intermediate performance, assessed using labor productivity and administrative productivity. Older studies examining the value of IT investment treat such investment as a monolithic entity. It is reasonable to argue that how investment dollars are differentially allocated among various elements of the IT infrastructure should be examined in tandem with how many dollars are spent cumulatively. Our second objective was to examine the relationships between investments in

Understanding software project risk: a cluster analysis

Understanding software project risk can help in reducing the incidence of failure. Building on prior work, software project risk was conceptualized along six dimensions. A questionnaire was built and 507 software project managers were surveyed. A cluster analysis was then performed to identify aspects of low, medium, and high risk projects. An examination of risk dimensions across the levels revealed that even low risk projects have a high level of complexity risk. For high risk projects, the risks associated with requirements, planning and control, and the organization become more obvious. The influence of project scope, sourcing practices, and strategic orientation on project risk dimensions was also examined. Results suggested that project scope affects all dimensions of risk, whereas sourcing practices and strategic orientation had a more limited impact. A conceptual model of project risk and performance was presented.

Quality management in systems development: an organizational system perspective

We identify top management leadership, a sophisticated management infrastructure, process management efficacy, and stakeholder participation as important elements of a quality-oriented organizational system for software development. A model interrelating these constructs and quality performance is proposed. Data collected through a national survey of IS executives in Fortune 1000 companies and government agencies was used to test the model using a Partial Least Squares analysis methodology. Our results suggest that software quality goals are best attained when top management creates a management infrastructure that promotes improvements in process design and encourages stakeholders to evolve the design of the development processes. Our results also suggest that all elements of the organizational system need to be developed in order to attain quality goals and that piecemeal adoption of select quality management practices are unlikely to be effective. Implications of this research for IS theory and practice are discussed.

Relational Antecedents of Information Flow Integration for Supply Chain Coordination

A new model of competition, where competition is among supply chain networks rather than individual firms, is transforming traditional market-based buyer-supplier relations to one of competition among cooperative sets. In order to integrate and realize performance gains from participating in cooperative supply networks, the importance of information sharing across the supply chain has been emphasized in different literature streams. In this study, we examine the relational antecedents of this critical aspect of supply chain integration—that is, information flow integration. Our objective is to investigate the relationship between relational orientation of the focal firm, as characterized by (1) long-term orientation of its supply chain relationships, (2) asset specificity, and (3) interaction routines and the information flow integration between a firm and its supply chain partners. A research model was developed and data were collected from 110 supply chain and logistics managers in manufacturing and retail organizations. Our results suggest that tangible and intangible resources invested in supply chain relationships enable the integration of information flows with supply chain partners. Specifically, formal and informal interaction routines that take time and effort to develop enable integration of informational flows across a firms supply chain. Investments in relation-specific assets and long-term orientation in relationships enable the development of these interaction routines.

Editorial Notes---The Growth of Interest in Services Management: Opportunities for Information Systems Scholars

Across the global economy, we are witnessing a dramatic transformation toward a services economy. At the same time, advances in information technologies provide significant opportunities for digitization of services and the development of services management thinking within the information systems community. This note aims to stimulate attention toward the promising research and teaching opportunities for information systems scholars in the domain of digitized services innovation, management, and use.

Knowledge Sharing Ambidexterity in Long-Term Interorganizational Relationships

Although past research has investigated the impact of exploration and exploitation on firm performance, there is limited research on these effects in interorganizational relationships. We examine whether the boundary condition for ambidextrous learning can be extended from firms to long-term interorganizational relationships. Specifically, we focus on a particular aspect of learning---namely, explorative and exploitative knowledge sharing---and examine its impact on the performance of long-term relationships. We also theorize how ambidextrous management of the relationship and ontological commitment to span the syntactic, semantic, and pragmatic knowledge boundaries between partners enable knowledge sharing. Our theoretical predictions are tested using data collected from both account managers at customer firms responsible for the relationship with a leading supply chain vendor and account managers at the vendor firm responsible for relationships with customers. The findings suggest that both exploratory and exploitative knowledge sharing lead to relationship performance gains, that such sharing is enabled by the ambidextrous management of the relationship, and that such sharing is facilitated by ontological commitment. Interesting differences in the enablers and consequences of both forms of knowledge sharing are detected between customers and the vendor.