 Those that develop a sustainable competitive advantage in IT and align it with their business model continue to invest in IT. Those without an advantage, do not!  Well written and interesting, but is it a surprise?  To move us forward and make it an incremental contribution: › How did they get there? How do they keep competitors from imitating? › Explain the whole range of IT Investors – not just the extreme IT investors › Does it always make financial sense to be a persistent IT innovator? Is this strategy always aligned with the company’s business model?

 This study shows that if a business can sustain a competitive advantage in IT and align it with their business model, it will. › Wal-mart, Fedex, Schneider National, etc.

Yes Yes No Q2: Appropriate resources available? Q1: Value creating strategy? Yes Yes No No No Selected strategy will not provide a sustained competitive advantage. Q4: Prohibitive to copy? Q3: Different from the competition? Selected strategy has a good chance of providing a sustained competitive advantage. Selected strategy may provide a temporary competitive advantage. It is in this 4 th step that people believe an IT strategy fails, due to the ease of acquiring IT software and hardware.

 Another way to look at it: IT infrastructure, technical IT skills, and managerial IT skills.  Carr (2003) suggests that IT infrastructure and technical IT skills can be replicated, but managerial IT skills are likely the hardest to imitate (Bharadwaj, 2000).  Resource-Based Theory of the Firm would suggest how they got there? › Path Dependency (explored in this paper) › Role of History › Time Compression Diseconomies › Causal Ambiguity › Socially Complex Links – company culture, relationships with other companies

 This paper helps establish that there are four possible classes: › Persistent Innovator, or can sustain competitive advantage in IT › Copycat adopter – Firm can buy same software and hardware, but can it effectively change organization? › Late Adopter – let someone else bear the costs (e.g. Home Depot) › Only if I have to Adopter - Simply don’t invest in IT unless required to. (e.g., Wal-mart RFID example)

 "Today, we are announcing the launch of a new computer initiative that will help position our company for the future," said Bob Nardelli, chairman, president and CEO, The Home Depot. "We have tremendous amounts of data on sales, products, services, store performance, and customer buying patterns. "This new data-warehousing capability will significantly improve our ability to rapidly analyze the elements of success in all parts of our business and do a much more effective job of forecasting and planning. This is the kind of technology Home Depot needs to help make decisions that will keep us in the forefront of our industry." Home Depot CIO Bob DeRodes said the company has the opportunity to "leapfrog the industry with the technology and tools that are available to us today." "We are very excited to take this step at this time," said DeRodes. "Home Depot is positioned to maximize the advantage this technology can bring to our business. As we begin this initiative, we know more about how to do this than anyone who previously built an enterprise-wide data warehouse, and we can do it much faster. "Today, we can leverage newer technologies that were not proven when other retailers began building their data-warehousing capabilities. We are going to have better information than ever, and we will be able to get to it much faster and in much more useable fashion. This is a big opportunity for our company."

Return on Investment (ROA) in IT above/beyond Environmental Expectation Group 1&2 - Only if I have to; Group 3-5 – Late Adopter; Group 6-7 Copycat Adopter Groups 8-10 – Persistent IT Innovator Source: Kobelsky, Richardson, Smith and Zmud (2007)

Source: Henderson, Kobelsky, Richardson and Smith (2007)

› How and why are they persistent IT innovators? › Can we explain the whole range of IT Investors › Does it always make financial sense to be a persistent IT innovator? Is this strategy always aligned with the company’s business model?