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Ray et al.: Information technology and the performance of the customer service process: A resource-based analysis

12 important questions on Ray et al.: Information technology and the performance of the customer service process: A resource-based analysis

What does the study of Ray investigates?

It's an empirical study that examines the extent to which IT impacts customer service (the study investigates the differential effects of various IT resources and capabilities on the performance of the customer service process across firms that compete in N-American life and health industries).

The research of Ray draws on the RBV view. Explain the findings in line with the RBV.

-The findings suggest that valuable, rare, and costly to imitate IT capabilities, such as shared knowledge is the key capability that affects relative customer service process performance.
-Ray finds effects of explicit IT services (technical IT skills/generic IT etc.) are contingent on the level of shared knowledge. So they say that shared knowledge has both direct and moderating effects on customer services process performance.

Historically, RBV theory was developed to understand the conditions under which firms are able to gain/sustain competitive advantage. Whats Ray opinion about applying the RBV?

That in some cases the RBV should not bu used on firm level, but more on process level. Because there is more and more consensus in the strategy literature that business processes are the basic unit of competitive advantage.
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What is the purpose of the paper of Ray?

To apply this general theoretical framework to examine the relationship between IT resources/capabilities and the relative performance of the customer service process across a group of competing firms.

According to the research of Ray there are two categories of resources associated with the planning, conception, implementation and use of IT applications. These 2 categories consists out of 5 IT resources, name them:

1a Technical IT skills
1b Generic information technologies used in the customer service process
1c Raw IT spending
2 (capabilities that influences how the above resources are used)
2a Shared knowledge
2b IT infrastructure flexibility.

Explain the IT resource 1a 'technical IT skills' (Ray)?

F.e. programming. The skills can be valuable, but they are widely available and so not rare/costly to imitate.
>> This leads to hypothesis 1a: Technical IT skills, per se, will not explain the variance in the performance of the customer service process across firms in the N-American insurance industry. (=supported)

Explain the IT resource 1b 'generic information technologies' (Ray)?

Refers to the set of hard/software that can be purchased. These technologies are generic: they are available from multiple suppliers and are lacking in asset specificity. they are not specific for any particular firm, so they can be valuable but everybody as access to them,
>> This leads to hypothesis 1b Generic information technologies used to support the customer service process, per se, will not explain variance in the performance of the customer service process across firms in the N-American insurance industry. (=supported)

Explain the IT resource 1c 'IT spending' (Ray)?

The dollars spend on IT is an important resource for the customer service process. Failing to invest in IT, can put a firm at a competitive disadvantage in terms of the performance of its customers service process. Investment has become ALMOST a necessity.
>> This leads to hypothesis 1c: The level of IT spending, per se, will not explain variance in the performance of the customer service process across firms in the N-American insurance industry. (=supported)

Explain the IT resource 2a 'shared knowledge' (Ray)?

Shared knowledge is an important capability that enables the organization to conceive, effectively implement, and use IT applications to improve customer service process performance (f.e. knowledge about opportunities how to use IT to improve processes). RB-logic: shared knowledge can be a source of sustainable competitive advantage. IT developed over long periods of time (path dependent/social complex/valuable/heterogeneous). It can't be low cost imitated.
>> This leads to hypothesis 2a: The level of shared knowledge will explain variance in the performance of the customer service process across firm in the N-American insurance industry. (=supported)

Explain the IT resource 2b 'flexible IT infrastructure' (Ray)?

IT infrastructure is defined as a shared set of capital resources that provide the foundation on which specific IT applications are built. A flexible infrastructure facilitates rapid development and implementation of IT applications that enhance customer service process performance by enabling the organization to respond swiftly to take advantage of emerging opportunities or to neutralize competitive threats. It's valuable, complex, developed over time (path dependent nature).
>> This leads to hypothesis 2b: The flexibility of IT infrastructure will explain variance in the performance on the customer service process across firms in the N-American insurance industry. (=NOT supported)

What is the main conclusion of Ray?

Based on the result, he concludes that superior relative process performance from IT rests LESS on the level of IT spending/technical skills, and MORE on how these resources are deployed in a firm-specific manner in general, and on creating effective partnerships between IT and business managers in particular.

How does Ray explains the not supported hypothesis 2b (flexibility of the IT infrastructure)? (2)

1 A flexible IT infrastructure is a firm-wide resource. It may have no significant impact on the relative performance of the customer service process, it may have a positive impact on other processes withing the firm.
2 In an industry as mature as the N-American insurance industry, the options available with a flexible infrastructure are just not very valuable.

The question on the page originate from the summary of the following study material:

Advanced Service Management | A Alexiev

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