From IT Assets to Business and Economic Value

This study conceptually develops a Business Value if IT (BVIT) model, conjointly and innovatively using four theoretical frameworks, the Resource-Based View(RBV) of the firm, Knowledge-Based View (KBV), Contingency theory, and the Strategic Alignment Model. The developed model proposes that IT-enabled knowledge and communication capabilities, which actually create IT-enabled economic value (EVIT), can be driven by organizational strategy and resources via their impact on IT strategy and resources. The study contributes to the extant body of knowledge by developing three new IT-driven business value constructs: Know-Tech, Com-Tech, and EVIT along with theoretical grounding and implications about empirical measurements. It is thus suggested that IT-enabled knowledge and communication capabilities mediate the effects of organizational and IT strategies and resources on EVIT, thereby illustrating the paths that lead from IT components to IT-embedded capabilities and to EVIT. The model implies that IT matters in modern knowledge-based turbulent and dynamic competitive environments by contributing to the acquisition of organizational IT-Embedded knowledge and communication capabilities that can drive sustainable economic value. The proposed model also shows the paths by which IT contributes to eventual organizational economic gains albeit indirectly through deeply embedded, inimitable, dynamic and valuable organizational knowledge and communication capabilities. This research paves the way to an empirical investigation of 'ITEmbeddedness' as recently called for by scholars.