Development of Measures to Assess the Extent to Which an Information Technology Application Provides Competitive Advantage

TLDR

The study operationalizes the construct CAPITA to measure how IT applications provide competitive advantage and proposes extensions to refine the measure and validate it on new data. The authors conducted a field survey of 185 top IS executives on IT applications designed for competitive advantage and performed confirmatory analysis to develop the CAPITA construct. Confirmatory analysis identified nine dimensions of CAPITA that meet measurement criteria and form a preliminary multidimensional index useful for assessing and evaluating competitive advantage.

Abstract

In order to measures the extent to which information technology provides competitive advantages, the construct “Competitive Advantage Provided by an Information Application” (CAPITA) was operationalized. A field survey gathered data from 185 top information systems executives regarding information technology applications which had been developed to gain competitive advantage. A confirmatory analysis revealed that CAPITA may be conceptualized in terms of nine dimensions which satisfy key measurement criteria including unidimensionality and convergent validity, discriminant validity, predictive validity, and reliability. The nine dimensions from the basis of a preliminary multidimensional measure or index of competitive advantage which has practical uses for competitive assessment. These include justifying and evaluating applications and acting as dependent variables in empirical competitive advantage research. Extensions entail formulating alternative measures of CAPITA to clarify the theoretical foundations of the construct, validating the latent-structure model on another data set, use of multiple informants for data collection, and exploring complex factor structures for the construct.