THE MODELING OF IT TRANSFORMATION: THE ROLE OF IT RESOURCES IN SUPPORTING THE DYNAMIC CAPABILITY, ORGANIZATIONAL AGILITY, AND ORGANIZATION PERFORMANCE

• Main Author: Akbar, Rizal
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53800
• Institution: Institut Teknologi Bandung

This research objective is to propose a model of IT transformation focusing on role of IT resources (IT infrastructure flexibility, absorptive capacity, and partnership quality) in supporting the dynamic capability, organizational agility, and organizatin performance. The research objects are Indonesian State Owned Enterprises (SOEs). This research approach is sequence of events describing the IT transformation initialized by the conversion of IT resources impacting dynamic capability then further impacting organizational agility and ultimately impacting firm performance. This research also considers the moderating effects of strategic orientation and environmental dynamism during the transformation progress and the control variables of organization size and industry IT intensity. This research conducted by structural equation modeling (SEM) using partial leased squares (PLS) technique. The research model is tested using empirical data of 74 SOEs. This research concluded that the sequence of IT transformation events in the SOEs research objects confirmed the following findings: a. IT resources (IT infrastructure flexibility, absorptive capacity, and partnership quality) simultaneously have significant effect to dynamic capability. b. Dynamic capability has significant effect to organizational agility. c. Organizational agility has significant effect to firm operational performance. d. Strategic orientation and environmental dynamism both did not found affecting the moderation effect of dynamic capability and organizational agility, respectively. e. Environmental dynamism has significant and direct effect to firm operational performance. f. Firm performance is significantly affected by industry IT intensity, but did not affected by firm size. Multi-group analysis of this research confirmed that significant differences existed in specific paths of this research model in Indonesian SOEs based on industry sectors, ownership (public/private), and competitiveness (monopolistic/competitive), such as: a. Path coefficient of absorptive capacity to dynamic capability in SOEs of financial industry group is higher than the manufacture industry group. b. Path coefficient of dynamic capability to firm performance in SOEs of manufacture industry group is higher than the transportation industry group. c. Path coefficient of control variable industry IT intensity to firm performance in SOEs of financial industry is lower than the transportation industry group. d. Public company SOEs has higher path coefficient of absorptive capacity to dynamic capability than the fully government owned SOEs. iv e. Monopolistic business operation SOEs has higher path coefficient of absorptive capacity to dynamic capability than competitive SOEs. The results of this research could be used as reference by SOEs to enhance the activities that directly improve the quality and capability of IT resources consist of IT infrastructure flexibility, absorptive capacity, and partnership quality that impacting better dynamic capability. The enhanced dynamic capability will later on has higher significant positive impact to organizational agility that ultimately expected to improve the SOEs operational performance. The subsequent research opportunity in this IT business value research area is to use the publicly listed companies in Indonesia Stock Exchange as research objects, that expected to found better understanding of the impact of IT resources to dynamic capability, organizational agility, and firm performance covering nationwide industry sectors. Other research opportunity is to focus on direct correlation of IT investment to firm performance using mathematical model or longitudinal researchs.