An investigation of the alignment between technological innovation effectiveness and operational effectiveness

Organisations are increasingly investing significant resources, time and money, in complex technological innovations such as enterprise information systems, with the aim of improving the operations of the organisation, and in this way improving the operational performance and gain competitive advantage. The implementation of technological innovations such as enterprise information systems, however, tends to have an excessive focus on either technological innovation effectiveness (also known as system effectiveness), or the resulting operational effectiveness. Focusing on either one of them is detrimental to the long-term enterprise benefits through failure to achieve the real value of technological innovations, as there is evidence that many of these technological innovations fail to deliver the expected outcomes and often fail completely. The purpose of this research is to explore the alignment between technological innovation effectiveness (system effectiveness) and operational effectiveness. Accordingly, there is a need to understand the role of organisational factors such as strategies and human resources, among others, which influence the alignment between technological innovation effectiveness and operational effectiveness, because such an understanding could be expected to lead to adopting technological innovations such as enterprise information systems that maximise benefit to the enterprise. The literature, however, has not addressed the stated alignment in a comprehensive way.

Given the exploratory nature of this research, a combination of qualitative and quantitative, three-stage, methodological approach has been used. The first stage was unstructured interviews to identify preliminary issues and variables that were then investigated in more detail, using semi-structured interviews, in two large service organisations in Australia. To provide triangulation, companies' documentation related to the information strategy, implementation and post implementation reports were analysed. In the second stage, quantitative data was gathered through a self administered questionnaire in organisations belonging to the electricity distribution and retail and higher education service sector. Data has been analysed and tested using principal components analysis, multiple regression analysis and path analysis techniques. The final stage was a confirmatory stage, using structured interviews with managers, engineers and general staff from the organisations involved in the research. The main aim was to confirm the findings in the two previous stages. Thus this research involves both theory building and theory testing.

The findings of this research suggest that factors such as quality of information and quality of the service stemming from technological innovation effectiveness, and quality and speed stemming from operational effectiveness are important and significantly well correlated factors that promote the alignment between technological innovation effectiveness and operational effectiveness and also have a predictive power on the improvement of the operational performance. In addition, organisational factors such as politics, culture, structure, strategies and human resources have been found to have an influence on the alignment between technological innovation effectiveness and operational effectiveness, however, this research has only investigated the organisational factors: strategies and cross-functional teams (from human resources).

This study has several limitations. The first is the fact that, as only two organisations were studied in the first stage, the results do not allow for comparisons between organisations of different sizes, cultures or industries. This may also have an impact on the implementation of technological innovations such as enterprise information systems. The cross-sectional data provided a snapshot at one point in time not a collection of data over time, which is a limitation as the two companies studied in the qualitative stages were in the implementation process. A third limitation of this study is the small sample in the quantitative stage.