Use and Efficacy of Information Technology in Innovation Processes: The Specific Role of Servitization

Abstract

Innovation activities and, particularly, service innovations, impose high demands on a firm's information processing capabilities. IT tools are supposed to support internal and external information flows, thereby improving a firm's information processing capabilities. However, past research is indecisive about how IT tools influence innovation performance. Furthermore, past research has not considered that services have an increasingly relevant role in a firm's innovation portfolio that can complicate information processing. This study therefore draws on information processing theory and service innovation literature to develop a conceptual model that explains how IT use intensity—depending on the firm's business focus—affects innovation program performance. By using a cross‐industry, multi‐informant sample of the innovation programs of 116 firms, which were collected from 887 informants, this article provides empirical evidence that (i) intensive IT use in order to exchange information with internal and external stakeholders improves the firm‐wide market knowledge, which in turn has a positive impact on a firm's innovation program performance; (ii) the performance impact of market knowledge becomes stronger with increasing degrees of servitization; (iii) a higher degree of servitization reduces IT's use intensity. This research demonstrates the dilemma that servitized firms face: Their business focus hinders the use of IT tools, although the latter will enable them to gain more benefits from the improved market knowledge they create. Practitioner Points Intensive IT use positively influences the firm‐wide innovation performance. The intensive use of IT tools to strengthen internal information flows and IT tools to support exchange with external stakeholders increase a firm's market knowledge, which enhances the innovation program performance. Service innovations have higher information requirements than product innovations and profit therefore more from intensive IT use, but services' complexity hinders IT implementation. Firms with a higher degree of servitization use less IT, although they can profit more from the market knowledge IT tools create. Servitized firms need to install a flexible, modular, and open IT system for efficient IT use and to include all relevant internal and external stakeholders.

Persuasion in Corporate Idea Contests: The Moderating Role of Content Scarcity on Decision‐Making

“…Corporate ideation is defined as a company's internal steps to generate and select ideas for future innovations (Björk and Magnusson, ; Tian and Wang, ). In order to allow ideators to connect and share knowledge, assumptions, and beliefs in a virtual community regardless of time and place, companies increasingly host such platforms online, promising increased opportunities for innovation performance (Kroh, Luetjen, Globocnik, and Schultz, ). Corporate online ideation platforms differ from open platforms in that only employees have access to post ideas or comment on other ideas as part of the community (Björk and Magnusson, ; Bugshan, ).…”

Product-service innovation and performance: unveiling the complexities

“…Chen et al (2016) measured the effect of service innovation in new product performance considering two moderators (i.e., market linking capabilities and market turbulence) that increase the positive effect of service innovation. On contrary, Kroh et al (2018) consider PSI as a moderator that enhances the positive relationship between Information Technology (IT) and market knowledge. As a novelty, these authors offers an index to calculate the degree of servitization by using the mean-centred average scores across all the services offered by the focal industry to calculate the relative intensity of a particular organization.…”

The Influence of Collaborative Information Technology Tool Usage on NPD

“…In fact, over the past decade, the digitalization of R&D activities has accelerated, and specifically the digitalization of collaboration has received renewed interest (Orellana, 2017). But not only the digitalization matters, but also the intensity with which the digital tools are used (Kroh et al 2018). Because NPD has become a global activity (Eppinger and Chitkara, 2006), with teams spanning time zones and continents, CIT has become essential for information and knowledge exchange within and across the R&D team (Carlson, 2012).…”