Caninformation Technology Be a Competitive Source

ECONOMIC AND BUSINESS REVIEW | VOL. 14 | No. 3 | 2012 | 251–269

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CAN INFORMATION TECHNOLOgY BE A SOURCE OF COMPETITIVE ADVANTAgE?

LIdIja BreznIK1

aBSTraCT: It is still difficult to judge the effect of IT on business performance and competitiveness. Many scholars has sought to contribute by showing the impact of IT on firm performance, and emphasized its potential in creating a sustainable competitive advantage. A brief overview of the literature indicates that many perspectives have emerged, mainly due to different understandings and uses of approaches, methodologies and terminologies. This paper attempts to ascertain if IT can be a source of competitive advantage. We argue that IT can be a source of competitive advantage just like any other resource/capability can be. We suggest that the first step in further research is to clarify the terminology since it represents the foundation for building a coherent framework and the second is to look from the practitioner’s point of view to ensure greater understanding and usefulness for practitioners. Keywords: information technology, competitive advantage, firm performance, resource-based theory jeL classification: M15, M10, L20

1 InTroduCTIon Let us begin with the question Can information technology (IT) be a source of competitive advantage (CA)? Evidently, the answer depends on the perspective we are taking. The possibility that IT can contribute to firm performance and help to gain a sustainable competitive advantage (SCA) has received a great deal of attention in recent years. Some scholars claim IT can be a source of competitive advantage and its impact can be either direct or indirect (e.g. Duh et al., 2006, Neirotti and Paolucci, 2007), others suggest IT cannot be a source of competitive advantage since it does not fulfill the requirements of the competitive advantage concept (e.g. Carr, 2005), finally, some even argue that IT has a negative impact on firm performance and thus on the created...