INFORMATION TECHNOLOGY CAPABILITIES AND COMPETITIVE ADVANTAGE: A REVIEW

Abstract

Purpose: The purpose of this review is to examine the relationship between information technology (IT) capabilities of enterprises and their ability to gain competitive advantage through IT resources, based on underpinning theories and empirical studies.

Methodology: The approach to the review was to conduct extensive literature searches in the fields of strategic management and information technology management, as a result of which four supporting models and perspectives, that is, technology acceptance model (TAM), unified theory of acceptance and use of technology (UTAUT), the IT capability theory, and RBV, and seven empirical studies that linked IT capability dimensions of IT infrastructure; IT human resources; and IT knowledge management and competitive advantage were eventually reviewed.

Findings: The review provides indications to better understand the relationship between IT capabilities and competitive advantage. The RBV was discovered to be a very popular and useful underpinning theory favored by many scholars in explaining the relationship. Evidence from empirical studies showed a positive and significant relationship between IT capabilities and competitive advantage, which led to conclusions and recommendations.

Contributions to theory, practice, and policy: The review was able to highlight the importance of investment and deployment of IT resources such as infrastructure, human resources, and knowledge management to gain a competitive advantage, and established the role of RBV in strategic management research. Recommendations were made on theory, practice, and policy