On managing information technology capabilities

Information technology (IT) plays a critical role of enabler of activities that improve the performance of business processes. This enabling role of IT resources means continuous investment in IT is a strategic necessity. It is established that organizations’ IT-related capabilities leverage the enabling potential of IT resources. Today’s turbulent and challenging business environment requires organizations to do more from their existing and newly acquired IT resources. To achieve this, organizations need to discover ways or establish environments to nourish their existing IT-related capabilities, and develop new IT-related capabilities. We suggest one such environment, a dynamic IT-learning environment that could contribute to nourishing existing IT-related capabilities, and developing new IT-related capabilities. This environment is a product of coordination of four organizational factors that relate to the ways in which IT-related knowledge is applied to business processes, the accompanying reward structures, and ways in which the IT-related learning and knowledge is shared within the organization. Using 216 field survey responses, this paper shows that two IT-related capabilities of top management commitment to IT initiatives, and shared organizational knowledge between the IT and business unit managers has a stronger positive influence on business process performance in the presence of this dynamic IT-learning environment. The study also shows that a marginal IT-related capability, technical IT skills, has a positive and significant influence on business process performance in the presence of this environment. These outcomes imply that organizations’ internal environments could contribute to the management of their IT-related capabilities.