Revisiting IS business value research: what we already know, what we still need to know, and how we can get there

Abstract

The business value of investments in Information Systems (IS) has been, and is predicted to remain, one of the major research topics for IS researchers. While the vast majority of research papers on IS business value find empirical evidence in favour of both the operational and strategic relevance of IS, the fundamental question of the causal relationship between IS investments and business value remains partly unexplained. Three research tasks are essential requisites on the path towards addressing this epistemological question: the synthesis of existing knowledge, the identification of a lack of knowledge and the proposition of paths for closing the knowledge gaps. This paper considers each of these tasks. Research findings include that correlations between IS investments and productivity vary widely among companies and that the mismeasurement of IS investment impact may be rooted in delayed effects. Key limitations of current research are based on the ambiguity and fuzziness of IS business value, the neglected disaggregation of IS investments, and the unexplained process of creating internal and competitive value. Addressing the limitations we suggest research paths, such as the identification of synergy opportunities of IS assets, and the explanation of relationships between IS innovation and change in IS capabilities.

Useful business cases: value creation in IS projects

“…Previous research has examined the substantial body of IS literature on value and criticized how the discussion frays into many lines of thought in various directions that make the value construct ambiguous and fuzzy (Schryen, 2013). Our action research found that this characterization is also prevalent in practice (particularly in public organizations).…”

“…In the substantial body of IS literature on value, the discussion frays into many lines of thought in various directions that 4 make the value construct ambiguous and fuzzy (Schryen, 2013). In addition to construct ambiguity, Schryen (2013) points to a neglected disaggregation of IS investments and that the value creation process is a grey box. In the following, we present the literature on IS value according to three dimensions that reflect key differences in the fundamental assumptions and understandings of IS value.…”

“…Creating business value with information systems (IS) is a central topic in IS research (Kohli & Grover, 2008;Schryen, 2013). The topic covers challenges related to IS justification and funding (Peffers & Dos Santos, 2013), operational alignment practices (Vermerris et al, 2014), and executives' perception of what IS business value is (Tallon, 2014).…”

“…The topic covers challenges related to IS justification and funding (Peffers & Dos Santos, 2013), operational alignment practices (Vermerris et al, 2014), and executives' perception of what IS business value is (Tallon, 2014). The substantial IS literature on this topic presents an ambiguous and fuzzy IS value construct with a creation process that is a grey box (Schryen, 2013). Business executives and researchers continue to question the value of IS investment (Kohli & Grover, 2008) and some researchers accordingly seek to quantify the substantial amount of IS-related intangible assets in firms (Saunders & Brynjolfsson, 2016).…”

Transforming decision-making processes: a research agenda for understanding the impact of business analytics on organisations

“…In particular, researchers have identified that the effects of investments on indicators of value creation such as stock returns and stock risk are not direct; rather, those effects are mediated by their effects on variables such as customer satisfaction (Fornell et al, 2006(Fornell et al, , 2009. Researchers have also documented the value of being a data-driven organisation and shown that organisations with better information management capabilities achieve improved performance in many different ways (Mithas et al, 2011;Mithas et al, 2012;Saldanha et al, 2013;Schryen, 2013). Mithas et al (2013) and Gillon et al (2014) identify six pathways to value through the use of analytics-based capabilities, namely, Adding volume and growth, Differentiating, Reducing costs, Optimising risks, Improving industry structure (also innovating with products and services), and Transforming business models and business processes for continued relevance in a changing landscape (captured in the acronym ADROIT).…”