EXAMINING DIFFERENT USES OF IT FOR ENHANCING SERVICE INNOVATION PERFORMANCE

ABSTRACT

Information technology (IT) is integral to service innovations, yet few efforts investigate how its different use might lead to different innovation outcomes, from a finer-grained perspective. Using the dynamic capabilities of the firm as a framework, we consider IT as an essential enabler of distinct service innovation activities and then use service-dominant logic to augment this high-level framework. The proposed model specifies how IT enables distinct innovation activities, through essential relationships that are associated with different innovation outcomes (radicalness and volume) and firm competitiveness. Our empirical test uses both survey data and accounting-based performance data from major Taiwanese service firms. According to the results, the strategic use of IT in planning activities is more relevant to innovation radicalness. To achieve innovation volume, strategically using IT for both planning and implementation is essential. Overall, customer cocreation strengthens these relationships and, more importantly, IT-enabled knowledge renewal in post-launch refinement activities has a significant, direct effect on firm competitiveness and positively moderates the relationship of innovation radicalness and firm competitiveness.

KEYWORDS:

• Service innovation
• information technology
• service-dominant logic
• firm competitiveness
• innovation radicalness
• innovation volume
• dynamic capabilities

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Both innovation radicalness and volume are essential, yet many firms struggle with their trade-off (Ordanini and Parasuraman 2011), a dilemma that is beyond the scope of this study.

² According to most executives and managers participating in the pilot test or pretest, the discussions, review meetings, and diagnostic activities internal to the firm typically incorporate customers’ feedback, frontline service employees’ observations and suggestions, and patterns and insights discovered through analyses.

³ Madhavaram and Hunt (2008) examine the S-D logic and resource hierarchies, and suggest that when lower-order resources interact and reinforce one another, interaction is a recommended operationalization to construct a higher-order capability. Accordingly, we used the interaction between knowledge renewal (KR) and IT resources (IT) to form IT-KR, then leveraged the three-way interaction of IT, KR, and innovation radicalness (or volume) for testing the hypotheses, in line with Saldanha, Mithas, and Krishnan (2017) and Johnson and Sohi (2003).

⁴ We gathered the accounting-based firm performance data from a database maintained by China Credit Information Service, the largest and most trusted business credit information provider in Taiwan.

⁵ Using the categorization published by the Ministry of Economic Affairs in Taiwan, we consider firms with 100 or more full-time employees as large and those with fewer than 50 full-time employees as small.

Additional information

Notes on contributors

Pei-Fang Hsu

Pei-Fang Hsu is Professor and Director at the Institute of Service Science, College of Technology Management, National Tsing Hua University, Taiwan. She received her Ph.D. in Information Systems from the Paul Merage School of Business at the University of California, Irvine. Her research focuses on the adoption and value of information systems, IT user behavior, and IT-enabled service innovations. She has published in Journal of Business Research, Journal of Management Information Systems, International Journal of Electronic Commerce, European Journal of Information Systems, Decision Support Systems, Decision Sciences, Information and Management, and other journals.

HsiuJu Rebecca Yen

Hsiu-Ju Rebecca Yen is Professor at the Institute of Service Science, College of Technology Management, National Tsing Hua University, Taiwan. She received her Ph.D. in psychology from Rutgers, the State University of New Jersey. Her research interests include information technology infusion in service management, service innovation, and service-oriented organizational citizenship behaviors. She has published research articles in Journal of Organizational Computing and Electronic Commerce, Journal of Management Information Systems, Journal of the Academy of Marketing Science, Research Policy, Decision Support Systems, Information and Management, International Journal of Electronic Commerce, IEEE Transactions on Engineering Management, and many other venues.

Paul Jen-Hwa Hu

Paul Jen-Hwa Hu is Professor and E.R. Dumke Jr. Presidential Endowed Chair in Business at the David Eccles School of Business, the University of Utah. He received his Ph.D. in management information systems from the University of Arizona. His current research interests include information technology for health care, data-driven analytics and business applications, electronic commerce, knowledge management, and technology-empowered learning. He has published research papers in Journal of Organizational Computing and Electronic Commerce, Management Information Systems Quarterly, Information Systems Research, Journal of Management Information Systems, Journal of the Association for Information Systems, Decision Sciences, Journal of Information Systems (AAA), Decision Support Systems, Journal of Medical Internet Research, Journal of the American Medical Informatics Association, and various IEEE and ACM journals and transactions, among other venues.