Paths to IT Performance:

A Configurational Analysis of IT Capabilities

François Bergeron

, Anne-Marie Croteau

, Louis Raymond

and Sylvestre Uwizeyemungu

Teluq, Université du Québec, 455 rue du Parvis, Québec, Québec, Canada

John Molson School of Business School, Concordia University, 1450 Guy St., Montréal, Québec, Canada

INRPME, Université du Québec à Trois-Rivières, 3351 Boul. des Forges, Trois-Rivières, Québec, Canada

Keywords: IT Performance, Environmental Uncertainty, IT Strategic Orientation, IT Capability, Qualitative Comparative

Analysis, QCA, SME.

Abstract: This study seeks to describe and explain the manner by which the environmental uncertainty, IT strategic

orientation and IT capabilities of manufacturing SMEs contribute to their IT performance, that is, to their

realization of benefits from the use of IT. A qualitative comparative analysis (QCA) allows to unveil three IT

capability configurations associated to high-IT performance firms. Dependent upon the configuration, the

core causal conditions involve an IT Defender strategic orientation, and various combinations of IT

managerial, functional, informational and technological capabilities. These results support the idea of a

gestalt alignment threshold for the IT capabilities of high-IT performance firms, that is, the idea that different

IT capability configurations can be equally effective.

1 INTRODUCTION

The need for information technology (IT) investment

in business enterprises keeps increasing and makes

growing demands on the information and

communication function of these organizations. This

is particularly true of manufacturing SMEs, who

recognize the challenge of investing in information

systems that provide the capacity to process the data

and generate the information that derive from their

dealings with their customers and other business

partners (Raymond et al., 2015). Many SMEs are

aware that investing in IT enables their survival and

competitiveness in a global, knowledge-based

economy, and allows them to benefit from their

product and process innovations (Marbert et al.,

2003). While IT-based solutions have considerably

increased the productivity and improved the

manufacturing process of these firms, they have also

provided them with greater flexibility by removing

the constraints of space and time, and by reinventing

organizational ways of doing business (Dibrell et al.,

2018)

With the opening of worldwide markets, SMEs

are affected by ongoing changes resulting in greater

environmental uncertainty and turbulence. If flexible

enough, IT can be a major change agent, allowing

SMEs to face uncertainty and quickly adapt to

changing market needs (Henderson and

Venkatraman, 1999). However, given the inherently

fragile nature of SMEs, the strategic role of IT is not

always fully exploited, giving rise to new managerial

challenges for these firms (Cragg, 2010). The barriers

to entry into emerging or existing markets are now

lower due to online offers and to customers being

more demanding and informed. In this context, IT

investments may quickly become obsolete

(Riemenschneider and Mykytyn, 2000).

Given the extensive investments in IT made by a

number of manufacturing SMEs, it is necessary to

anticipate the opportunities and threats that are

associated with these technologies, to discover the

mechanisms best suited to control and operate IT, and

to analyze their importance for the efficiency and

profitability of these enterprises (Kohli and Grover,

2008). The increasingly strategic role of IT within the

organization may give rise to problems related to the

management of IT that are not merely technical, but

also strategic and organizational in nature (Caldeira

and Ward, 2003). Therefore, it is of critical

importance for SMEs to have an understanding of

how their IT capabilities can provide them with the

294

Bergeron, F., Croteau, A-M., Raymond, L. and Uwizeyemungu, S.

Paths to IT Performance: A Conﬁgurational Analysis of IT Capabilities.

DOI: 10.5220/0006346702940305

In Proceedings of the 19th International Conference on Enterprise Information Systems (ICEIS 2017) - Volume 3, pages 294-305

ISBN: 978-989-758-249-3

most business value from their investment in IT

(Clark et al., 1997, 2010).

In this regard, various configurations of IT

managerial, functional, informational and

technological capabilities (Raymond et al., 1995,

Sanders and Premus, 2005) should emanate from the

uncertainty perceived by an SME in its business

environment and the strategic role it assigns to IT,

that is, its IT strategic orientation (Philip and Booth,

2001, Venkatraman, 1994). Therefore, our research

question is the following: what are the appropriate

configurations of IT capabilities that allow SMEs to

be IT performing in various contexts of environmental

uncertainty and various types of IT strategic

orientation?

2 CONCEPTUAL FRAMEWORK

Given our research question, the conceptual

framework of this study combines theoretical

elements that underlie and integrate the following

notions in a configurational approach: IT

sophistication, to which are related environmental

uncertainty, IT strategic orientation and IT

performance. The theoretical background of this

study emanates first and foremost from Henderson

and Venkatraman’s conceptualization of the strategic

alignment of IT which means that the dynamic

coherence of the added-value obtained from IT is due

to an interplay between an organization’s business

strategy, organizational infrastructure, IT strategy

and IT infrastructure (Henderson and Venkatraman,

1999). These authors’ strategic alignment model

(SAM) emphasizes the need for coherence between

internal and external business activities in order to

meet the firm’s strategic objectives and improve its

organizational performance. While it has been

demonstrated that coherence between business

strategy and IT strategy contributes to both IT

performance and organizational performance

(Croteau and Bergeron, 2001, Kyobe, 2008), few

empirical studies have taken contextual factors into

account, i.e. factors that relate to the firm itself, its

business environmental, and its technological

context, that is, the well-known “TOE” framework

emanating from Tornatsky and Fleischer’s (1990)

work. While a number of empirical studies have

provided an understanding of the various contexts in

which the strategic alignment of IT contributes to the

attainment of business value from IT and to

organizational performance, many aspects of this

alignment have yet to be explored, such as the

alignment at the managerial, functional,

informational and technological levels (Bergeron et

al., 2004). Such a specific study of the alignment of

the IT capabilities has not been researched in the past

and filling this research gap will contribute to a better

management and use of IT in SMEs.

Our research aims to find efficient configurations

of IT capabilities, environmental uncertainty, and IT

strategic orientation that allow SMEs to attain

business value from IT. Hence, our main research

objective is to discover the various IT capability

configurations appropriate for various IT strategic

orientation of SMEs in contexts of high and low

environmental uncertainty that allow SMEs to realize

benefits from their use of IT, that is, to achieve IT-

business value.

2.1 IT Sophistication

The notion of IT sophistication refers to the way IT is

managed and used by an organization, including the

manner by which IT is aligned with the firm’s

strategic objectives (Henderson and Venkatraman,

1999). Raymond, Paré and Bergeron (1995) were

among the first to define the concept of IT

sophistication and validate its measurement. Their

conceptualization of IT sophistication was

subsequently used by other researchers (Iacovou et

al., 1995, Pflughoest et al., 2003, Rai et al., 2006). IT

sophistication is a notion that is meant here to

encompass the diverse nature and interrelationships

of the SME’s IT capabilities (Bharadwaj, 2000, p.

171). Within this conceptualization, IT sophistication

addresses four complementary IT capabilities: the

managerial, functional, informational, and

technological capabilities.

The firm’s IT managerial capability comprises

the planning, control and evaluation mechanisms

required to manage its IT-based applications portfolio

(Raymond et al., 1995). For its part, the IT functional

capability is related to the autonomy of the IT

function and the location of this function within the

organization (Blili and Raymond, 1993).

The firm’s IT informational capability refers to

the transactional and managerial nature of the

implemented applications as well as its coverage of

the functional organization areas. This capability also

refers to the quality of the information, its use and its

integration (Marbert et al., 2003). For its part, the IT

technological capability refers to the number or

variety of technologies used by manufacturing SMEs

for operational and managerial purposes, its

communication networks and the IT security

mechanisms (Riemenschneider and Mykytyn

, 2000).

While the concept of sophistication has been used

Paths to IT Performance: A Conﬁgurational Analysis of IT Capabilities

295

in earlier research on the IT function, it has not been

used to measure the appropriateness of specific IT

capabilities and to test for the fit of these IT

capabilities in a context of environmental uncertainty

and specific IT strategy orientation in manufacturing

SMEs. This research intends to fill this knowledge

gap.

2.2 Environmental Uncertainty

As an exogenous determinant of IT sophistication,

environmental uncertainty increases an SME’s need

for external information (Christopher and Lee, 2004,

Fiss, 2011, Liu et al., 2012, Raymond et al., 2015). To

better understand the way organizations should

handle such a need to maintain or even increase the

business value of their IT investment, we refer to

information processing theory, viewed initially as an

integrating concept in organizational design

(Tushman and Nadler, 1978). This theory posits that

in a case of disequilibrium between information

processing requirements and information processing

capabilities, which can occur after a change in

environmental uncertainty, performing firms must

properly fulfil the information requirements by

appropriate IT capabilities to keep an acceptable (or

high) level of organizational performance (Dutot et

al., 2014). Information processing theory also posits

that as environmental uncertainty increases,

information requirements intensify and thus the need

to enhance the sophistication of the organization’s IT

capabilities. An organization will thus perform better

when there is a “fit” between its information

requirements and its response in terms of

management and use of IT (Cegielski et al., 2012;

Dutot et al., 2014). The information requirements of

an organization thus rely on the level of uncertainty

related to various internal and external factors.

However, it is unknown what specific IT capabilities

should be enhanced and to what extent they should be

improved to respond to changes in environmental

uncertainty.

2.3 IT Strategic Orientation

As an endogenous determinant of its IT

sophistication, the IT strategic orientation of a SME

refers to the centrality and criticality of IT in the

achievement of its business goals and the

implementation of its strategies (Philip and Booth,

2001). This notion is thus focused on the “core

business” and success of these organizations

(Venkatraman, 1994). In this regard, Ward, Taylor

and Bond (1996) proposed that the firm’s IT strategic

orientation evolves in a three-period growth cycle: 1)

operational efficiency, 2) management and control of

the firm, and 3) strategic IS development. Similarly,

in the evolutionary model of the strategic role of IT

proposed by Philip and Booth (2001), each firm has

specific expectations with regard to IT that are

dependent upon its capacity to “align” these

technologies with its strategic goals. This alignment

may be difficult to attain given the ambidextrous

resolution strategies opposing short- and long-term IT

goals and IT project and program needs (Gregory,

2015). Although Miles and Snow (2003) suggest that

Prospectors differ from Defenders in their low

structure and low cost strategy (Fiss, 2011), it is still

unknown which IT capabilities or combinations of IT

capabilities should be enhanced to support Prospector

versus Defender types of strategy.

2.4 IT Performance

The performance of the organization’s IT function

lies in its realization of business value from IT

investments and is thus the expected outcome of its

IT capabilities (Guillemette and Paré, 2012). Given

the complexity of assessing the benefits gained from

IT, specifically in relation to organizational

performance, a SME must consider the technical

obsolescence of software, the declining cost of work

units and operating software, development flows, and

operating costs when it evaluates its IT costs (Kan et

al., 2016). In this regard, DeLone and McLean (2003)

observed that user satisfaction is the dimension that

remains most important to assess IT performance.

The user here may be a SME manager or other

employee. Furthermore, for SMEs in particular, user

satisfaction is usually associated with managerial and

organizational benefits, that is, to IT-business value

(Pflughoest et al., 2003, Shi et al., 2005). Despite this

possibility to measure performance, it is still a

challenge for many enterprises to quantify the

benefits obtained from organizational and

infrastructural changes, better follow-up of customers

or even improved internal and external

communications (Guillemette and Paré, 2012).

3 RESEARCH MODEL

As illustrated in Figure 1, our research model views

IT sophistication as an alignment (“fit”) of IT

managerial, functional, informational and

technological capabilities, a gestalt perspective of

alignment being taken here. In this perspective,

different internally consistent capability

ICEIS 2017 - 19th International Conference on Enterprise Information Systems

296

configurations may be equally effective (Bergeron et

al., 2001). This is in line with Fiss’s observation that

in an organizational context, several causal paths to

an outcome may lead to equifinal configurations,

each resulting in effective performance. Following

the developments presented in the conceptual

framework, the environmental uncertainty and its

strategic orientation with regard to IT are posited in

this research to be critical components of this gestalt,

while IT performance is posited to its outcome.

Consistent with the information processing theory

(Dutot et al., 2014, Gattiker, 2007, Venkatraman,

1994), our research model assumes that the level of

sophistication of IT capabilities is associated to the

level of environmental uncertainty. In the context of

high environmental uncertainty, be it market-related,

technological or competitive, the ambiguity

surrounding future increases in information

requirements pushes firms to develop a more

sophisticated management and usage of IT in order to

meet these requirements. Uncertainty can cause

actions, routines and practices to mutate (Miner,

1990). In the case of high uncertainty, a high IT

sophistication of capabilities could be needed even

with a high rate of change in the environment. In the

case of low environmental uncertainty, a lower level

of IT sophistication may be sufficient to meet

information requirements, given the relative stability

of the business environment. Based on literature, it is

not clear however when precisely and under which

circumstances a high or higher level of IT

sophistication is needed and which specific IT

capabilities should be altered in situations of high

versus low environmental uncertainty. This research

aims to clarify this specific research question by

providing evidence to support the link between the

sophistication of IT capabilities and the level of

environmental uncertainty.

IT strategic orientation is defined by analogy to

Miles and Snow’s (2003) typology which is deemed

to be the most appropriate to conceptualize and

operationalize strategic orientation in the context of

SMEs (Escribá-Esteve, 2009). At the core of this

typology is the adaptive cycle through which a firm

continuously realigns its decisions with regard to the

entrepreneurial problem (the firm’s product-market

domain), to the engineering problem (technologies

and processes for production and distribution), and to

the administrative problem (establishment of roles,

relationships, and business processes). To parallel

Miles and Snow’s typology, we label as IT

Prospectors SMEs that are inclined to strategically

consider IT as necessary means to enable their new

product/market endeavours. In the same way, IT

Defenders are SMEs that strategically conceive the

role of IT as one of supporting activities directed

towards satisfying the needs of current customers,

and ensuring production and organizational

efficiency. To some extent, the IT strategic

orientation is related to the environment forces and is

implemented through IT capabilities. Some gestalt

configurations will therefore be more effective than

others dependent upon the organizational context.

In the research model, we assume that a SME’s IT

strategic orientation will be associated to the

sophistication of its IT capabilities. More precisely,

IT Prospectors will be more likely to adopt or develop

IT aligned with product innovation and

organizational flexibility. By nature, IT Prospectors

are expected to experiment with a greater number of

technologies than IT Defenders, and to do so

effectively, they will need to enhance their

informational and technological capabilities. These

enhancements would aim at offering an effective but

not necessarily efficient response to the information

requirements given the exploratory nature of IT

Prospectors and the need to have short term effective

solution since projects can change on a regular basis.

Another point of view is that IT Prospectors should

be more inclined to enhance their managerial and

functional IT capabilities.

For a SME, the strategic alignment of IT

informational and technological capabilities should

be associated to the level of IT sophistication needed

to attain IT performance. Evolving in stable markets

in which they intend to reinforce their position, IT

Defender SMEs will likely less venture beyond the IT

solutions that have been well-proven within their

markets. However, in their quest for reliability and

efficiency with these IT solutions, they will need

greater IT managerial and functional sophistication.

The research model also suggests that the SME’s

IT performance is associated to the sophistication of

its IT capabilities. More precisely, the level of IT

performance achieved is linked to the firm’s

development of an appropriate mix of IT managerial,

functional, informational and technological

capabilities in line with its IT strategic orientation and

environment uncertainty. This calls upon the notion

of alignment which has been central for decades in

previous research on IT business value (e.g.,

Bergeron and Raymond, 1995, Charoensuk et al.,

2014) but limited itself to the management and use of

IT capabilities, without specifying which of the four

IT capabilities should be enhanced under various

organizational and extra-organizational conditions.

Following previous studies that have mainly

demonstrated the positive impact of IT strategic

Paths to IT Performance: A Conﬁgurational Analysis of IT Capabilities

297

alignment on IT business value, we surmise that

SMEs will achieve higher levels of IT performance

than the industry insofar as they develop the “right”

combination of IT capabilities, befitting both their IT

strategic orientation as well as their environmental

uncertainty. Higher environmental uncertainty

requires higher levels of IT sophistication, and we

expect that SMEs operating in highly uncertain

environments that have developed more sophisticated

IT to meet their information requirements will

achieve higher levels of IT performance than SMEs

that have not responded positively to these new

organizational needs. Independently of environment

uncertainty, higher levels of IT performance are

expected from IT Prospector SMEs that have

developed higher levels of IT usage sophistication

(i.e., informational and technological needs) in

response to their IT strategic needs. Similarly, IT

Defender SMEs that have developed higher levels of

IT managerial and functional sophistication to match

their IT strategic orientation are expected to achieve

higher levels of IT performance than IT Defender

SMEs that have not done so.

Synthesizing these considerations, it is expected

that various causal relationships between

organizational (environmental uncertainty and IT

strategic orientation) and IT capabilities can be

observed in SMEs whose attain high-IT performance.

Earlier studies have not considered the interaction,

moderation and mediation effects of all causal

conditions simultaneously. This complex interplay

can hardly be observed with conventional statistical

approaches that assume linearity (Ganter and Hecker,

2014, Ragin, 2000). Thus, given our research

question, objective and model, a QCA (qualitative

comparative analysis) approach is appropriate and is

used to unveil the gestalt of organizational and

ITcapability configurations that characterize high-IT

performance firms.

4 METHODOLOGY

4.1 QCA Approach

This study uses a set-theoretic approach based on

QCA, an analytic technique that provides suitable

means to accommodate complex complementarities

and nonlinear relationships among constructs

(Escribá-Esteve et al., 2009, Ragin, 2000, Rihoux and

Ragin, 2009, Woodside, 2013). As reported by Kan,

et al. (2016), scholars “now use QCA beyond its

original purposes in political and sociological

sciences and apply this method of analysis in the field

of management”. These authors add that “QCA

ITManagerial

Capability

ITInformational

Capability

FIT

(gestalt)

ITPerformance

ITFunctional

Capability

Environmental

Uncertainty

ITStrategic

Orientation

ITTechnological

Capability

ITSophistication

account ing,financeandHRM

applicationbenefits

logistics,productionand

distributionapplicationbenefits

marketing,salesandservice

applicationbenefits

e‐business,InternetandWeb

applicationbenefits

ITManagementSophistication ITUsageSophistication

Figure 1: Research model.

ICEIS 2017 - 19th International Conference on Enterprise Information Systems

298

extends beyond an empirical technique and this

method offers a genuine formalization of qualitative

analysis, which opens new ways of knowledge

production in management scholarship”. This type of

analysis is based on a configurational understanding

of how conditions or causes combine to produce a

specific outcome. QCA uses an approach to solve

causality that investigates an outcome as the product

of how conditions combine together. In seeking to

explain why certain cases have specific outcomes,

QCA uses Boolean algebra and algorithms that

change numerous complex causal conditions into a

reduced set of configurations leading to an outcome.

It combines the benefits of case-oriented and

variable-based methods (such as regression

techniques), and is particularly suited for small

sample sizes (Ragin, 1987, 2000, 2008). In QCA

terms, we report in this study the “parsimonious”

solutions produced by this analysis, wherein “core”

and “peripheral” conditions are presented. The truth

table algorithm used is the one described by Ragin

(2008), the originator of QCA. In terms of solution

coverage, we consider all configurations

characterized by one or more empirical observations.

The use of qualitative comparative analysis in

management is relatively new. Most research using

this method has been published since the year 2000.

Although the bulk of research using QCA has been

conducted in the fields of general management,

marketing, innovation, strategy, human resources,

and organization studies, only a few were applied to

production & operations, and public management.

Only one research addressed the sustainability issue

(Rekik and Bergeron, 2017). As reported by Kan et

al. (2016), the field of information systems, finance

and operations research reported only one research

each. Thus, it can still be considered as an innovation

to use the QCA method of analysis in information

systems. Since it is particularly appropriate for small

to medium sample, it offers a worthy perspective to

study IT capabilities configurations in an

organizational setting.

4.2 Data Collection

Data was provided by a database developed by a SME

research center for purposes of IT benchmarking and

IT management research. This database was created

in collaboration with business owner-managers

belonging to chambers of commerce in the Rhône-

Alpes region of France. These owner-managers as

well as their management team were solicited to

respond to a questionnaire on their firm’s IT strategy,

IT structure, IT management and usage practices, and

IT performance. The database thus contains

information gathered from forty-four SMEs whose

main activity is in manufacturing. The survey was

completed by the firms’ CEO or CFO, operations

manager, sales and marketing manager, and IT

manager. In this study, a SME is determined to have

more than 9 and less than 299 employees (median size

=38 employees). Various industry sectors are

represented, including metal products (27%), food

products (16%), wood products (9.5%), plastics

(8.5%), textile products (7%), mineral products (5%),

and various others (27%).

4.3 Measures

IT sophistication. The assessment of the

sophistication of IT capabilities emanates from

previously validated measures of IT management

sophistication and IT usage sophistication found in

the extant literature (Pflughoest et al., 2003,

Riemenschneider and Mykytyn, 2000). These

measures have been refined and validated to refer to

the sophistication of the SME’s IT functional,

managerial, informational and technological

capabilities. The IT managerial capability is

measured by six Likert-type items (see Table 1. The

IT functional capability is based on two categorical

items. The IT informational capability is measured

with six items. The IT technological capability is

formed of three Likert-type items (Riemenschneider

and Mykytyn, 2000).

Environmental uncertainty. This variable was

measured with 5 Likert-type items adapted from an

instrument validated by Miller and Dröge (1986)

evaluating the rate of change inside and outside the

firm.

IT strategic orientation. The strategic orientation

of the SME with regard to IT was assessed through a

self-typing measure developed on the basis of Philip

and Booth’s (2001) and Venkatraman’s (1994) stage

models. The chief executives were asked to choose

one statement among four that best describes their

understanding of the role that is assigned to

information technology-based applications (IT apps)

in their firm. The scale used is as follows. For IT

Defenders: IT applications are used to improve

managerial control and monitoring of the firm’s

manufacturing operations (IT strategy 1), or IT

applications are used to increase the flexibility of the

firm’s manufacturing operations and better respond to

its customers’ needs (IT strategy 2). For IT

Prospectors: IT applications are used to accelerate

and facilitate the firm’s development of new products

and to increase its market share (IT strategy 3), or IT

Paths to IT Performance: A Conﬁgurational Analysis of IT Capabilities

299

applications are used to increase the integration of the

firm’s manufacturing and business processes and to

improve relations with its business partners (IT

strategy 4). The statements were coded to form a

“crisp set” (0,1) in QCA terms (47).

IT performance. This variable is measured by the

level of attainment of the benefits associated with

four types of IT-based applications, following a

process-based approach wherein the respondents

evaluate the business value of IT for their firm

(Venkatraman, 1994). A list of expected benefits

specific to each type of application is presented to the

chief executive or to the concerned executive who

indicates on a 5-point scale the extent to which the

applications implemented contribute to the

attainment of such benefits.

5 RESULTS

The descriptive statistics of the research variables are

presented in Table 1. The discriminant validity of the

IT sophistication constructs was confirmed by two

principal component analysis (PCA). The first PCA

was applied to IT managerial and functional

capabilities as two sub-factors (constructs) grouped

under the more general concept of IT management

sophistication (Raymond et al., 1995). The second

PCA was applied to IT informational and

technological capabilities as two sub-factors grouped

under the more general concept of IT use

sophistication. In both cases, the two pairs of IT

sophistication constructs revealed to be orthogonal,

with each factor showing adequate reliability,

unidimensionality and convergent validity.

IT performance is conceptualized here as a

formative construct composed of four measures that

relate to the average benefits obtained from each type

of IT-based application. There was no

multicollinearity among these formative measures,

the highest correlation among them being equal to

0.19 (p > 0.1), thus confirming the last construct’s

validity. Furthermore, as presented in Table 2,

Cronbach’s α and intercorrelation values for the eight

research constructs confirm their internal consistency

and discriminant validity.

The aim of this study is to determine the causal

conditions associated with high-IT performance, i.e.

the IT capability configurations that, in line with the

SME's perceived environmental uncertainty and IT

strategic orientation, enable it to realize the most

benefits from its investment in IT. In order to test the

Table 1: Descriptive statistics of research variables.

Variable mean s.d. range

Environmental Uncertainty

2.6 2.6 1.0 - 4.6

IT Strategic Orientation

- - 1 - 4

IT Functional Capability

designated manager for IT

org. level of the IT function

.73

.55

0 - 1

IT Managerial Capability

IT development

IT evaluation

user participation

IT resources and competencies

IT support and appropriation

external consultants

3.0

2.8

2.9

3.4

3.7

2.4

0.8

1.2

0.9

0.8

1.8

1.0 - 5.0

0.0 - 5.0

1.0 - 5.0

1.2 - 5.0

1.7 - 5.0

0.0 - 5.0

IT Technological Capability

# of uses of IT

# of uses of e-bus/Internet/Web

quality of IT security

4.8

6.0

4.4

1.8

3.3

0.9

2 - 10

0 - 15

2.0 - 6.0

IT Informational Capability

# of accounting/fin./HRM apps

# of logistics/prod./distrib. apps

# of mark./sales/cust.serv. apps

# of ERP system modules

information output quality

user-system interaction quality

6.0

7.0

3.8

2.8

3.6

3.5

2.8

3.1

2.0

2.5

0.8

0.9

0 - 11

2 - 16

0 - 7

1.4 - 4.6

1.5 - 5.0

IT Performance

acc./fin./HRM app. benefits

log./prod./distrib. app. benefits

mark./sales/serv. app. benefits

e-bus./Net/Web app. benefits

3.3

3.0

2.6

1.2

0.6

1.1

0.7

0.0 - 5.0

2.0 - 5.0

0.0 - 5.0

0.0 - 4.1

1: IT for control (n = 14) 2: IT for flexibility (n = 9)

3: IT for product and market development (n = 4)

4: IT for internal and external integration (n = 17)

1: yes (n = 32) 0: no (n =12)

1: supervised by the chief-executive (n = 24)

0: supervised by another manager (n = 20)

Table 2: Intercorrelations of the research constructs.

research model, the sample was divided in three tiers

based on IT performance. The first tier represents the

high-IT performance firms (n=15), and the third tier,

the low-IT performance firms (n=15). The second-

tier is not used in the tests. In this research, the high-

IT performance firms are compared to low-IT

performance firms. This approach to forming sub-

samples is based on Fiss’ (2011) approach to study

organizational performance using QCA.

The variables were calibrated using crisp sets and

binary variable

inappropriate for formative constructs

Nota. Correlations greater than .25/.40/.45 are significant at p < .05/.01/.001.

ICEIS 2017 - 19th International Conference on Enterprise Information Systems

300

the truth tables were generated using the fs/QCA

software. The overall solution coverage indicates the

proportion of cases that are covered by all reported

configurations. The overall solution consistency

assesses the degree to which capability configurations

are subsets of the outcome (Ragin, 2008). In this

study, the consistency cut-off point was set at 0.80

and the minimum frequency equal to 1. All

configuration consistency values are equal to 1 and

the overall solution consistency is equal to 1,

satisfying the consistency threshold of 0.8 set by

Ragin (2000). The overall solution coverage is equal

to 0.93, indicating that these IT capability

configurations (or gestalts) represent the large

majority of SMEs that show a high level of IT

performance. The presence or absence of each IT

capability was determined by the level of

sophistication of each IT capability split in two

groups based on the median value and which was then

used to form crisp sets (0,1). The IT strategic

orientation used a crisp set classification: 1 for IT

Prospectors; 0 for IT Defenders. The black filled

circle means SMEs have an IT Prospective strategy

whereas the white crossed-out circle means SMEs

have an IT Defender strategy. The environmental

uncertainty and IT performance also used crisp sets

classification based on the median value of the scales.

The results presented in Table 3 show three solutions

for achieving high-IT performance. The first solution

(#1) is characterized by three core conditions: an IT

Defender strategy, an IT informational capability and

the absence of (or unsophisticated) IT technological

capability. This solution has a raw coverage of 0.33

and a unique coverage of 0.13. The second solution

(#2) shows the absence of environmental uncertainty

as a peripheral condition and the presence of an IT

functional capability and an IT informational

capability as core conditions. This solution has a raw

coverage of 0.73 and a unique coverage of 0.40. The

third solution (#3) is also characterized by the

absence of environmental uncertainty as a peripheral

condition and the presence of a Defensive IT strategy,

an IT managerial capability and an IT informational

capability as core conditions. This solution has a raw

coverage of 0.33 and a unique coverage of 0.06.

We used the notation for solution tables

introduced by Ragin (2008), as used for example by

El Sawy et al. (2010) and Fiss (2011) (see Legend in

Table 3). A test of necessary and sufficient conditions

indicated that the IT informational sophistication is a

necessary condition in all reported configurations for

the outcome to exist (consistency = 1.0 and coverage

= 0.88). Note that a consistency threshold of 0.80

Table 3: Configurations for achieving high IT performance.

satisfied this condition (Ragin, 2008). The sufficient

conditions were identified by the configurations (or

solutions in QCA terms) obtained from the

parsimonious solutions generated to test the research

model, as presented in Table 3. Three IT

configurations were associated to high-IT

performance firms as parsimonious solutions.

6 DISCUSSION

The results revealed that the most frequent solution,

observed in 73% of the cases, is the solution #2. It is

not specific to any IT strategic orientation and thus

applies to both type of IT strategic orientation, be it

of a Defender or a Prospector one. Each of the two

other solutions (#1 and #3) are observed in 33% of the

cases and apply specifically to the IT Defender type.

While the presence (and absence) of IT capabilities as

core conditions and environmental uncertainty as a

peripheral condition differ among solutions, the

presence of IT informational capability is common to

all configurations. This indicates that there exist

various configurations for achieving high IT

performance and that the concept of a gestalt

Paths to IT Performance: A Conﬁgurational Analysis of IT Capabilities

301

alignment applies.

A first consideration in explaining these results

relates to the IT strategic types. One finds out at the

outset that two out of the three solutions (#1 and #3)

concern SMEs with an IT Defender strategic

orientation (i.e., crisp set where presence = IT

Prospector orientation, and absence = IT Defender

orientation) while no specific conclusion could be

drawn concerning IT Prospector strategic orientation

(#2). It might mean that IT Defender SMEs can define

more precisely what information they need and they

can be successful optimizing their management of the

information (through the IT managerial capability)

and their use of the information (through the IT

informational capability) of the information. This is

slightly different to what is reported by Miles and

Snow (2003) whose theory is that an organizational

Defender strategy should target a low cost strategy

and focus on the management of IT. Based on Miles

and Snow’s theory, IT Prospector SMEs evolve in

continuously changing markets, economic conditions

and organizational conditions, and should focus on

the use of IT capabilities which includes IT

informational and technological capabilities. This is

not observed here.

While all the solutions include the presence of IT

informational capability, these solutions do not relate

to any specific IT strategic orientation. Indeed,

solution #2 reports that IT informational capability is

a core condition of IT performance without

distinction for the IT strategic orientation. While the

presence of IT informational capability is in line with

the Miles and Snow’s theory for IT prospectors, the

IT functional capability should not be a characteristic

of IT Prospectors. This diversity in the configurations

of the two types of strategy has already been observed

by Fiss (2011) in a QCA research on large

organizations. He discussed his findings by reporting

that, at some point, there is no absolute configuration

for any strategic orientation and that variations may

exist among and within strategic types. Another

explanation is that the IT strategic orientation is not a

core causal condition to achieve high-IT performance

as long as the IT functional and informational

capabilities are present. This conclusion applies to the

solution #2 firms who represent a large majority of

the firms surveyed.

A second observation is that all solutions display

a necessary condition to be rated as a high-IT

performance SME. This core condition is the IT

informational capability. It is reported here as an

important characteristic of SMEs following an IT

Defender strategy. In set theoretic vocabulary, the IT

informational capability is a necessary (but not

sufficient) condition to be in the group of high-IT

performance organizations. It is a necessary

condition, in the sense that without IT informational

capability, no SME can be IT performing. It is not

sufficient since, as presented in the three solutions,

the IT informational capability has to be associated

with other characteristics. Note that these

characteristics differ among solutions. Again,

although the IT informational capability is a

characteristic of Miles and Snow’s Prospector

strategy, it is not a characteristic of Miles and Snow’s

Defender strategy. These results diverge from extant

theory.

In addition to the IT informational capability as a

necessary condition, the presence of IT managerial

and functional capabilities are core conditions in two

different solutions (#2 and #3). This corroborates the

importance of IT management capability as found in

earlier research (Raymond et al., 1995). However, it

could be noted that they are not simultaneously

present in the two solutions giving rise to a possibility

of only a partial alignment among IT capabilities to

be associated with high-IT performance SMEs as

long as the IT informational capability is present.

The IT technological capability is also reported as

a characteristic of one solution (#1) but in this case

(the IT Defender strategy), the solution indicates that

it is its absence that makes of it a core causal

condition. In this solution, an unsophisticated IT

technological capability characterize organizations

with an IT Defender orientation. In this case, the

absence of IT technological capability is in line with

what is reported in the literature (Miles and Snow,

2003).

The absence of environmental uncertainty is

another characteristic, of a peripheral type in this

case, of two (#2 and #3) out of three solutions for

high-IT performance SMEs. It means that among

high-IT performance firms, two observed solutions

concern SMEs in low environmental uncertainty. No

solution concerns a high environment uncertainty.

The gestalt form of alignment is appropriate for

the tested model since it allows to define three

different configurations of environmental

uncertainty, IT strategic orientation and IT

managerial, functional, informational and

technological capabilities, associated to high-IT

performance. As a necessary condition, the IT

informational capability matches the definition of a

moderator variable (Bergeron et al., 2004). In terms

of alignment of specific causal conditions, an IT

Defender strategy (as a core condition) (remind here

that in table 3, the “absence” of an IT strategic

orientation means the “presence” of firms with an IT

ICEIS 2017 - 19th International Conference on Enterprise Information Systems

302

Defensive strategy as a core condition), a low level of

environmental uncertainty (as a peripheral condition)

and various IT capabilities support a gestalt form of

alignment. The presence of a high level of

environmental uncertainty and an IT Prospector

strategic orientation did not show up as core

conditions in any of the three solutions. Moreover, the

simultaneous presence of all IT capabilities is not

necessary to achieve a high level of IT performance.

Indeed, each configuration relies on the alignment of

various combinations of IT capabilities, with two

capabilities suffice to allow an alignment of the

components. One configuration carry no specific IT

strategic orientation (be it Defender or Prospector),

and no specific level of environmental uncertainty (be

it high or low). Still, a partial level of alignment

between the presence of IT informational capability,

a necessary condition, and only one of the three other

IT capabilities is needed to be in the high-IT

performance SMEs. In all cases, it is the presence

(and not the absence) of IT capabilities that allow the

alignment while in one case (solution #1), it is the

absence (of sophistication) of a capability (the IT

technological capability) that allows the alignment.

This confirms that it is a mix of conditions that form

specific configurations, thus a gestalt type of

alignment.

7 IMPLICATIONS

In being among the first to answer El Sawy et al.’s

(2010) call for information systems researchers to

better study digital ecodynamics by using

configuration theory, this research has provided

evidence of a “holistic confluence” among

environmental uncertainty, IT strategic orientation

and IT capabilities in the context of manufacturing

SMEs. In so doing, we have gained initial insights as

to which types of IT strategy and IT capabilities are

critical to the IT performance of these firms in

uncertain (and more certain) business environments.

The three equifinal gestalts solutions identified

through the QCA approach were shown to constitute

a more likely source of IT performance for

manufacturing SMEs than any single type of IT

strategy and IT capability, given the complex

relationships and various interactions involved (Fiss,

2011).

This research contributes to the understanding of

the contribution of IT to firm performance. For

practitioners, it explains that there is no “one best

way” to perform in the management and use of IT.

SMEs have the choice of which IT capabilities they

want to emphasize and they do not need to attain a

high level on all four IT capabilities to become high-

IT performing firms. Instead, a gestalt perspective of

alignment wherein some IT capabilities are highly

developed while others are not is the solution. For

researchers, the results underline the analytical

possibilities offered by QCA to study small-sized

samples. QCA allows the researcher to achieve a

deeper understanding of the complexity faced by

SMEs when they attempt to strategically align their

management and use of IT. While specific results are

obtained for IT Defender SMEs, additional thoughts

should be made toward the appropriate capability

configurations for IT Prospector firms since no

specific configuration conclusion could be drawn that

would differentiate high-IT performance firms from

other firms. Finally, the gestalt alignment perspective

combined with QCA unveils results that have not

been observed before using traditional statistical

analysis. As noted by Fiss (2007, p. 1180), by using

QCA “researchers take a systemic and holistic view

of organizations where patterns or profiles rather than

individual independent variables are related to an

outcome such as performance”. Based on these

results, we call for more QCA research in the

management of information technology.

8 LIMITATIONS AND

CONCLUSION

As in all empirical research, this study has some

limitations. Given the size of the sample, its

representativeness in relation to manufacturing SMEs

is necessarily limited. A potential selection bias might

orient the results toward SMEs that are more

sophisticated in their management and use of IT. A

longitudinal study could also be needed for an in-

depth study of the IT alignment process. A more

complete formative model for measuring IT

performance could include information quality,

system quality, service quality and individual

benefits, in addition to organizational benefits. Its

limitations notwithstanding, this study has provided

further insight on the manner by which the

environmental uncertainty, IT strategic orientation

and IT sophistication of manufacturing SMEs

contribute to their IT performance, i.e. to their

realization of benefits from their investment in - and

use of - information technology.

In summary, the QCA approach allowed us to

unveil sets of core causal conditions characterizing

various solutions associated to a high level of IT-

Paths to IT Performance: A Conﬁgurational Analysis of IT Capabilities

303

business value for manufacturing SMEs. Among the

important observations are first, a sophisticated IT

informational capability as a necessary (but not

sufficient) causal condition for SMEs to realize the

most benefits from their investment in IT

independently from their IT strategic orientation and

the environmental uncertainty. Second, the strategic

alignment of all the IT capabilities (managerial,

functional, informational and technological) is a

condition that does not have to be fulfilled completely

to attain a high level of IT performance, as we

observed that only two of the four capabilities suffice.

Finally, two high-IT performance configurations

were identified for IT Defenders.

REFERENCES

Bergeron, F. and Raymond, L. (1995). The Contribution of

IT to the Bottom Line: A Contingency Perspective of

Strategic Dimensions. Proceedings of the 16th

International Conference on Information Systems,

Amsterdam, pp. 167- 181.

Bergeron, F., Raymond, L. and Rivard, S. (2004). Ideal

patterns of strategic fit and business performance,

Information & Management, 41 (8), pp. 1003-1020.

Bergeron, F., Raymond, L. and Rivard, S. (2001). "Fit in

Strategic Information Technology Management

Research: An Empirical Comparison of Perspectives",

Omega, 29 (2), pp. 125-142.

Bharadwaj, A. S. (2000). A resource-based perspective on

information technology capability and firm

performance: An empirical investigation. MIS

Quarterly, 24 (1), pp.169-196

Blili, S. and Raymond, L. (1993). Information technology:

Threats and opportunities for SMEs. International

Journal of Information Management, 13 (6), pp. 439-

448.

Caldeira, M.M. and Ward, J.M. (2003). Using resource-

based theory to interpret the successful adoption and

use of information systems and technology in

manufacturing small and medium-sized enterprises.

European Journal of Information Systems, 12, pp. 127-

141.

Cegielski, C. G., Jones-Farmer, L. A., Wu, Y. and Hazen,

B. (2012). Adoption of cloud computing technologies

in supply chains: An organizational information

processing theory approach. International Journal of

Logistics Management, 23 (2), pp. 184–211.

Charoensuk, S., Wongsurawat, W. and Khang, D. B.

(2014). Business-IT Alignment: A Practical Research

Approach. Journal of High Technology Management

Research, 25 (2), pp. 132-147.

Christopher, M. and Lee, H. (2004). Mitigating supply

chain risk through improved confidence. International

Journal of Physical Distribution & Logistics

Management, 34 (5), pp. 388–396.

Clark, C. E., Cavanaugh, N. C., Brown, C. V. and

Sambamurthy, V. (1997). Building Change-Readiness

Capabilities in the IS Organization: Insights from the

Bell Atlantic Experience. MIS Quarterly, 21 (4), pp.

425-455.

Cragg, P.B., Mills, A. and Suraweera, T. (2010).

Understanding IT management in SMEs. Electronic

Journal of Information Systems Evaluation, 13 (1), pp.

27-34.

Croteau, A.-M. and Bergeron, F. (2001). An information

technology trilogy: Business strategy, technological

deployment and organizational performance, Journal of

Strategic Information Systems, 20 (2), pp. 77-99.

DeLone, W.H. and McLean, E.R. (2003). The DeLone and

McLean model of information systems success: a ten-

year update. Journal of Management Information

Systems, 19 (4), pp. 9-30.

Dibrell, C., Davis, P.S. and Craig, J. (2008). Fueling

innovation through information technology in SMEs,

Journal of Small Business Management, 46 (2), pp.

203-218.

Dutot, V., Bergeron, F., Raymond, L., (2014). Information

management for the internationalization of SMEs: An

exploratory study based on a strategic alignment

perspective. International Journal of Information

Management, 34 (5), pp.672-681.

El Sawy, O.A., Malhotra, A., Park, Y. and Pavlou, P.A.

(2010). Seeking the Configurations of Digital

Ecodynamics: It Takes Three to Tango. Information

Systems Research, 21 (4), pp. 835-848.

Escribá-Esteve, A., Sánchez-Peinado, L. and Sánchez-

Peinado, E. (2009). The Influence of Top Management

Teams in the Strategic Orientation and Performance of

Small and Medium-Sized Enterprises. British Journal

of Management, 20 (4), pp. 581-597.

Fiss, P. C. (2011). Building better causal theories: a fuzzy

set approach to typologies in organizational research.

Academy of Management Journal, 54 (2), pp. 393-420.

Fiss, P.C. (2007), A set-theoretic approach to

organizational configurations, Academy of

Management Review, 32 (4), pp. 1180-1198.

Flynn, B. B. and Flynn, E. J. (1999). Information processing

alternatives for coping with manufacturing

environmental complexity. Decision Sciences, 30 (4),

pp. 1021–1052.

Ganter, A and Hecker, A. (2014). Configurational paths to

organizational innovation: qualitative comparative

analyses of antecedents and contingencies, Journal of

Business Research, 67, pp. 1285-1292.

Gattiker, T. F. (2007). Enterprise resource planning (ERP)

systems and the manufacturing-marketing interface: An

information-processing theory view. International

Journal of Production Research, 45 (13), pp. 2895–

2917.

Guillemette, M.G. and Paré, G. (2012). Toward a new

theory of the contribution of the IT function in

organizations. MIS Quarterly, 36 (2), pp. 529-551.

Gregory, R.W., Keil, M., Muntermann, J., and Mähring, M.

(2015), Paradoxes and the Nature of Ambidexterity in

ICEIS 2017 - 19th International Conference on Enterprise Information Systems

304

IT transformation Programs, Information Systems

Research, 26 (1), pp. 57-80.

Henderson, J.C. and Venkatraman, N. (1999). Strategic

alignment: Leveraging information technology for

transforming organizations. IBM Systems Journal, 38

(2&3), pp. 472-484.

Kan, A.K.S., Adegbite, E., El Omari. S., and Abdellatif

(2016). On the use of qualitative comparative analysis

in management, Journal of Business Research, 69 (4),

pp. 1458-1463

Kohli, R. and Grover, V. (2008). Business value of IT: An

essay on expanding research directions to keep up with

the times. Journal of the Association for Information

Systems, 9 (1), pp. 23-39.

Kyobe, M. (2008). The influence of strategy-making types

on IT alignment in SMEs. Journal of Systems and

Information Technology, 10 (1), pp. 28-35.

Liu, G., Shah, R. and Babakus, E. (2012). When to mass

customize: The impact of environmental uncertainty.

Decision Sciences, 45 (5), pp. 851–887.

Marbert, V.A., Soni, A. and Venkataramanan M.A. (2003).

The impact of size on enterprise resource planning

(ERP) implementation in the US manufacturing sector.

Omega, 31, pp. 235-246.

Miles, R.E. and Snow, C.C. (2003). Organizational

Strategy, Structure, and Process, Stanford, California:

Stanford University Press.

Miller, D. and C. Dröge (1986). Psychological and

Traditional Determinants of Structure. Administrative

Science Quarterly 31, pp. 539–560.

Miner, A.S. (1990). Structural evolution through

idiosyncratic jobs: the potential for unplanned learning,

Organization Science, 1 (2), pp. 195 -210.

Pflughoest K.A., Ramamurthy, K., Soofi, E.S., Yasai-

Ardekani, M. and Zahedi, F. (2003). Multiple

conceptualizations of small business Web use and

benefit, Decision Sciences, 34 (3), pp. 467-512.

Philip, G. and Booth M.E. (2001). A new six ‘S’ framework

on the relationship between the role of information

systems (IS) and competencies in ‘IS’ management.

Journal of Business Research, 51, pp. 233-247.

Ragin, C.C. (1987). The Comparative Method, University

of California Press: Berkeley.

Ragin, C.C. (2000). Fuzzy Set Social Science, Chicago

University Press: Chicago.

Ragin, C.C. (2008). User’s Guide to Fuzzy-set / Qualitative

Comparative Analysis, Department of Sociology,

University of California.

Rai, A., Tang, X., Brown, P. and Keil, M. (2006).

Assimilation patterns in the use of electronic

procurement innovations: A cluster analysis.

Information & Management, 43, pp. 336-349.

Raymond, L., Bergeron, F., Croteau, A.-M. and St-Pierre,

J. (2015). Developing absorptive capacity through e-

business: The case of international SMEs. Journal of

Small Business Management, 53 (S1), pp. 75-94.

Raymond, L., Paré, G. and Bergeron, F. (1995). Matching

information technology and organizational structure:

Implications for performance. European Journal of

Information Systems, 4 (1), pp. 3- 6.

Rekik, L. and Bergeron, F. (2017). Green practices

motivators and performance in SMEs: A qualitative

comparative analysis, Journal of Small Business

Strategy, 27(1), pp. 1-17.

Riemenschneider, C.K. and Mykytyn, P.P. (2000). What

small business executives have learned about managing

information technology. Information & Management,

37, pp. 257-269.

Rihoux, B. and Ragin, C. (2009). Configurational

comparative methods: Qualitative comparative analysis

(QCA) and related techniques, Los Angeles: Sage.

Tornatsky, L.G. and Fleischer, M. (1990), The processes of

technological innovation, Lexington, Massachusetts:

Lexington Books.

Tushman, M. and Nadler, D. A. (1978). Information

processing as an integrating con-cept in organization

design. Academy of Management Review, 3 (3), pp.

613–624.

Venkatraman, N. (1994). IT-enabled business

transformation: From automation to business scope

redefinition, Sloan Management Review, 35 (2), pp. 73-

87.

Ward, J., Taylor, P. and Bond, P. (1996). Evaluation and

realisation of IS/IT benefits: An empirical study of

current practice. European Journal of Information

Systems, 4 (4), pp. 214-226.

Woodside, A.G. (2013) Moving beyond multiple regression

to algorithms: Calling for adoption of a paradigm shift

from symmetric to asymmetric thinking in data analysis

and crafting theory, Journal of Business Research, 66,

pp. 463-472.

Paths to IT Performance: A Conﬁgurational Analysis of IT Capabilities

305