Information systems strategies in knowledge-based SMEs: the role of core competencies
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2001 Operational Research Society Ltd. All rights reserved 0960-085X/01 $15.00 www.palgrave.com/ejis
Information systems strategies in knowledge-based SMEs: the role of core competencies S Duhan1, M Levy2 and P Powell3 1
School of Business, Oxford Brookes University, Wheatley Campus, Oxford OX33 1HX, sduhan얀brookes.ac.uk; 2Warwick Business School, University of Warwick, Coventry CV4 7AL, orsml얀wbs.warwick.ac.uk; 3School of Management, University of Bath, Claverton Down, Bath BA2 7AY, UK, mnspp얀management.bath.ac.uk Research into the sources of competitive advantage identifies two competing views. The first concerns industry structure, and the role of information systems (IS) in enabling competitive advantage is to lower cost, build barriers to entry and tie in customers and suppliers. The second view is resource-based. This argues that competitive advantage arises from the ability to accumulate resources and capabilities that are rare, valuable, non-substitutable and difficult to imitate. This paper discusses the role of IS as firm resources and the role of such resources in small firms (SMEs). It uses as a vehicle, the identification and development of an information systems strategy (ISS) in a knowledge-based SME. The use of core competencies or capabilities, a key aspect of resources, as a basis for an ISS is contrasted with the use of a structural approach exemplified here by the value chain. Using participant observation research in a not-for-profit organisation that provides consultancy in social housing, this paper investigates these approaches. The paper concludes by identifying a number of areas for further research including the operationalisation of the core competence perspective in developing an ISS. European Journal of Information Systems (2001) 10, 25–40.
Introduction Research into the sources of competitive advantage identifies two views (Dyer & Singh, 1998). The first, exemplified by Porter (1980) concerns industry structure. The role of information systems (IS) in enabling competitive advantage in this type of world is about lower cost, building barriers to entry and tying in customers and suppliers. The second, more recent, view is resource-based. This argues that competitive advantage arises from the ability ‘to accumulate resources and capabilities that are rare, valuable, non-substitutable and difficult to imitate’ (Dyer & Singh, 1998, p 660). The resource-based view of the firm emphasises the resources firms need to develop to compete in the environment. Miller and Shamsie (1996) identify two forms of resources, property-based and knowledgebased. They argue that property-based resources contribute most in stable settings, while knowledge-based resources have the greatest utility in uncertain environments. Any resource of either type must be difficult to create, buy, substitute or imitate. Knowledge-based resources are difficult to imitate because they are subtle and hard to understand. Property-based resources are about control, while knowledge-based ones are enablers of adaptation. Each c
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