Exploratory Study on Value of Information Systems to Electrical Construction Companies: Resource-Based View

Abstract

Many practitioners and researchers believe that the application of information systems in the construction industry lags behind that of other industries such as the manufacturing industry, because the construction industry is mainly composed of small to medium size companies. Besides, to many people, the value of information systems to their business is vague and elusive. Existing studies on the value of information systems are not specifically focused on small to medium size specialty contractors such as electrical contractors. In addition, with an intention to demonstrate the value of information systems to the improvement of operations or business of all relevant companies, those studies typically do not look into the impact of information systems on the competitive advantage of individual companies. This paper argues that such a generalization of the value of information systems, although valuable to both practitioners and researchers, may have overlooked the fact that the value of information systems needs to be reflected through improved competitive advantage of a company and the competitive advantage is company specific. Thus, the examination of different effects of information systems on individual companies can generate useful insight into the value of information systems because such a strategy leads to a better understanding of the relationships between information systems and the competitive advantage of individual companies. With such a perspective, this study applies a case study strategy to study five small to medium size electrical construction companies based on the resource-based view theory. The case studies show that the observed electrical construction companies are well equipped in terms of physical information infrastructure in relation to their business objectives regardless of company size. However, their capabilities of strategically integrating information systems with their business plans and with their external business partners are general lacking, compared with their physical information system infrastructure. This is partly because many electrical contractors do not fully understand that there are many different forms of information systems that have different impacts on gaining and sustaining competitive advantage. This paper then conjectures that the existing imbalanced application of information systems may not lead to the improved competitive advantage of electrical construction companies, which in turn prevent many contractors from clearly seeing the value of the information systems. Thus, the paper further points out that a plan for the systematical implementation of information systems in a company is very important. However, the successful development of such a plan depends on a better understanding of electrical contactors on the concepts of information system capabilities, competitive advantage, and their relationships.