The complex contribution of information technology capability to business performance

Businesses spend billions of dollars annually on information technology (IT) capability, or computer hardware, software, and related devices. Increasingly, however, managers are asking what contribution IT capability makes to business performance. Past research has provided mixed evidence of a simple direct contribution. We thus propose a more complex relationship in which IT capability indirectly (via customer orientation) and interactively (with intra-organizational trust and information systems services quality) improves business performance. We ground this model in the Socio-Technical View, and test it through a survey of 189 executives in a wide range of firms and industries. Our findings largely support the model, indicating that IT capability has both indirect and contingent effects. From these results, we draw managerial and research implications.