Information & Management 45 (2008) 297–303

Contents lists available at ScienceDirect

Information & Management

journal homepage: www.elsevier.com/locate/im

Organizational competence for harnessing IT: A case study

Gurpreet Dhillon *

Department of Information Systems, School of Business, Virginia Commonwealth University, 301 West Main Street, Snead Hall, Richmond, VA 23284, USA

A R T I C L E I N F O

Article history:

Received 7 November 2005

Received in revised form 1 November 2007

Accepted 14 January 2008

Available online 27 May 2008

Keywords:

Organizational competence

IT benefits management

Individual IT know-how

Heedful interactions

A B S T R A C T

In spite of decades of discussion and research into the benefits of the use of IT in the organization, it has

been difficult to prove a positive gain. Literature on IT management has reported more cases of failed

implementations than of success. We believed that developing organizational competencies both helped

in harnessing IT and also in gaining competitive advantage. Conceptual schema for developing this was

based on the theory of strategic competence, which formed the basis of our work. We undertook a case

study to prove this. Findings suggested that three broad categories of competence were necessary for

harnessing IT. A number of facilitating competencies were also found and are presented.

� 2008 Elsevier B.V. All rights reserved.

1. Introduction

Although many authors have argued that organizationalcompetence is needed for harnessing IT (e.g. [20]), little materialhas focused on defining these competencies except for on theknowledge and experience of IT managers (e.g. [7,30]). Webelieved that IT could only be exploited effectively if theorganization has developed a set of core competencies. And asthe role of IT changes so do the required competencies.

We decided to restrict our investigation to those competenciesthat related to deploying its resources to effectively harness IT. Thework is thus concerned with evaluating existing abilities againstfuture needs, which allows businesses to make informed decisionsabout the need to restructure, realign or reassess their approach.

2. The concept of organizational competence

In the strategy literature, two major paradigms are used toexplain organizational competence. The first draws upon theconcept of industrial organization economics. Traditionally thisemphasises barriers to competition, and takes the position thatindustry effects explain the greater part of persistent above-normal returns. Particular industries are attractive because theycontain ‘structural impediments to competitive forces’ and thusallow its firms to maintain competence (see [32]). The second saysthat firms are fundamentally idiosyncratic and develop unique

* Tel.: +1 804 828 3183; fax: +1 804 828 3199.

E-mail address: gdhillon@vcu.edu.

0378-7206/$ – see front matter � 2008 Elsevier B.V. All rights reserved.

doi:10.1016/j.im.2008.01.008

combinations of resources that allow them to ingrain distinctivecompetencies in themselves. As Clemons [12] points out, resourcesare long-lived productive ability that allows a firm to gain strategicadvantage because of its special competencies (see [28]).Organizational resources may be physical or intangible. A resourceis strategic when it results in a significant portion of theinvestment base of the firm and is not freely available in acompetitive resource market. However, as there are few ‘structuralimpediments’ for buying IT, it is generally considered to be a keyresource of the organization and organizational competence isneeded to exploit it.

Although much has been written about developing corecompetencies for competitive advantage, there is no conceptualframework to explain and measure organizational competence.The literature in this area falls into two major categories: first atthe level of individual skills [23,8,34,19] and second organizationwide [25,22,2,11]). Researchers who have restricted the conceptof competence to individual skills, define it as the underlyingcharacteristics of a person that result in effective and/or superiorperformance in a job. Boyatzis used Klemp’s conception to describethe ‘underlying characteristics’ in terms of motives, traits, skills,aspects of one’s self-image and roles, arguing that such traits had abearing on causal relationships that lead to effective performance.Boyatzis also highlighted the importance of understanding humanactions. He therefore emphasised the organizational context thatmay enhance or restrict individual effectiveness. Caldeira andWard [9] also suggested that organizational competence in IT wasderived from a combination of technical, managerial, and generalmanagement skills. They argued that such skills provided a basisfor organizational level competence (see also [10]).

Fig. 1. The process of competence development (based on Refs. [25,33]).

1 Along with Bechtel (USA) and Fluor Daniel (USA).

G. Dhillon / Information & Management 45 (2008) 297–303298

The main concern of those who considered competencies at anorganizational level was in developing core abilities in organiza-tions. Andreu and Ciborra postulated that it occurred through afundamental transformation process by using and combiningstandard resources available in open markets. When suchprocesses are integrated into an organization’s context and itsroutines, they become a source of competitive advantage. Hencethe managers must identify, develop, protect, and deploy resourcesand competence in a way that provides the firm with a sustainablecompetitive advantage and thereby, provide a superior return oncapital (see [1]).

From a strategic perspective, a major problem exists in themanagement and development of new sources of capability toreplace those no longer able to yield return. Furthermore, it isdifficult to keep improving an idea fast enough to be a major player.McGrath et al. raised two interesting issues: (1) organizationaladvantage can hardly evolve unless those responsible can developcompetence at what they are doing and (2) competence is acombination of firm-specific assets (resources) that allows it toaccomplish a given task. Among other factors that underlie successin developing competence, importance must be placed on the levelof competence of the organizational subunit and thus it is essentialto link competencies to desired outcomes that can be evaluated.

Weick and Roberts [33] stated that the process by whichelements of individual know-how and skill become linked wasimportant in achieving overall organizational competence. Theyargued that the process was crucial for achieving competence.

Following them, McGrath, MacMillan and Venkataraman alsonoted that an important antecedent to organizational competencewas purposeful heedful interactions. These are a group behaviorthat have been linked to activities in a business process. Howevermost researchers have overlooked these interactions, arguing thatit takes a long time to nurture them. Ray, Barney, and Muhanna[29] for instance termed them IT knowledge and argued that theyrelated to a firm’s customer service process. The notion ofpurposeful heedful interactions however reflects an in-depthunderstanding of business processes and suggest the ‘collectivemind’.

Fig. 1 shows our conceptual model. Based on this synthesizedperspective we argued that organizational competence forharnessing IT can be developed through two antecedent compo-nents: (a) improvement of individual know-how and skills and (b)institutionalization of purposeful heedful interactions. However,organizational competence can only be assessed via the strategicpositioning of the firm; i.e., the competitive advantage gained.

3. Empirical study

Our case study was carried out between late 1995 and 1999.However because of confidentiality agreements with the company(John Brown Engineering) and their ongoing merger and acquisi-

tion discussions, we were barred from publishing the results for aperiod of time. While the study was in progress (1996), thecompany was purchased by Kvaerner. It later was split, with itsassets being divided between Kvaerner and Yukosobtaining JohnBrown Hydrocarbons, and Davy Process Technology. John BrownHydrocarbons was sold to CB&I (Chicago Bridge and Iron Company)in 2003. As of 2007 CB&I was being traded on the New York StockExchange as CBI.

While the case may be considered dated, we believe that thereare some interesting lessons to be learned from it. At the time ofour study Mr. David Moorehouse was the Chief Executive of JohnBrown Engineering. Following the acquisition by Kvaerner, Mr.Moorehouse took over the position of Chief Executive Officer ofKvaerner Process plc. In 1999 he left the company to take over asChief Executive Officer of Lloyd’s Register of Shipping. Access forconducting interviews for this case was facilitated by Mr.Moorehouse. Given the large number of mergers and acquisitionsand name changes, for the purposes of this paper we shall refer tothe organization as John Brown Engineering. It offered a full rangeof engineering services for projects, or parts of projects, that wereworth from 10,000 to 2 billion British Pounds. Our analysis andfindings are based on in-depth interviews with key stakeholderswithin the organization and its customers. We intended tointerpret the strategic choices made by the organization in lightof the changing organizational context. Similar to the approachpresented in [15], the research method was interpretive in natureand focused on understanding the complex organizational aspects(cf. [24]).

3.1. The organizational context

John Brown Engineering was founded in the 1830s and by thetime the company was acquired by the diversified Trafalgar HouseGroup in 1986, it had built a global presence through a collection ofrelatively small offices around the world. It increased its presencewith the addition, in 1991, of Davy International, a similarly long-established engineering company with an ill-fated recent history.The Trafalgar Group added complementary expertise to itsEngineering Division and became the third largest1 Engineering& Construction (E&C) company in the world (measured onturnover).

The acquisition of Davy increased the number of TrafalgarHouse Engineering offices world-wide to 182 (in 30 countries);most were small relative to those of the competition who hadfewer sites but were larger. Employee numbers at the time totalledabout 25,000 and generally each office ran independently, offeringa local service to local customers.

Offices had their own areas of expertise. Resulting from theirhistoric roots, these different skills remained consistent within the

G. Dhillon / Information & Management 45 (2008) 297–303 299

old company structures. The management at the of the engineeringdivision recognized the strength of the cultural heritage andunique skills in these independent companies and wished topreserve them rather than homogenize them into larger masses.But, the size of many meant that they were restricted to bidding forsmall projects, or to taking-on contract staff to man larger projects.Typically, a large project might require up to 40% extra manpower,which was both expensive and inefficient. Also, small offices rarelyhad all the skills required for large projects, and finding these skillsfrom inside the organization would incur travel and time costs.

IT systems had played an important part in the engineering tasksince the late 1970s. John Brown was no different from thecompetition in having large mainframe computers with proprie-tary systems available to help projects. By the end of the 1980s, thecompany’s systems were operating on a legacy infrastructureconsisting of a dozen mainframes.

This structure became critical in the 1990s and cost issuesbecame important in the increasingly competitive and recession-dominant economic climate. A strategic initiative by the parentcompany at the beginning of the decade, required businessmanagers to list their future needs. High on the combined listwas: ways to meet customer demands for reduced engineeringman hours per project; means to reduce total installed costs ofplant for the customer; ways to maximize customer satisfactionand, ways to stop duplication of information. In addition themanagers wanted to be able to take advantage of new opportu-nities that might become available as large oil and pharmaceuticalcompanies outsourced ‘non-core’ activities.

Driving the competitive activities further was the advent ofnew, low cost, hi-tech competition from the East. For example,Hyundai and the Agip oil field project off the coast of Libya. JohnBrown had won the contract for design and project management,but construction went to Hyundai—based on the company’s hi-tech,low cost proposition.

Winning big projects from companies which were becomingmore global in their outlook, was seen by John Brown topmanagement as essential for the company’s future. These were themajor contracts that allowed predictability in earning streams andcash flows. They were also seeing a trend by customers who weretrying to find more cost effective ways of working with contractors.

Compared with competition, John Brown was in a poor positionfor winning big contracts. Fluor Daniels and Bechtel generatedsales close to double that of John Brown. These competitors, plusM. W. Kellogg, the Wood Group, ABB Global, and other majorplayers had better turnover-to-staff ratios. John Brown had thestaff but they were spread over many small offices aroundthe world. The local presence, however, provided John Brownwith good visibility, and knowledge of local requirements andpeculiarities.

The acquisitions of the late 1980s had transformed TrafalgarHouse’s engineering activities from local to global scale, but addingparts did not build a company for the future needs. Also, JohnBrown’s competitors were large and focused and were alreadyreducing costs of their operations. When the recession occurred,John Brown needed a survival strategy for itself and the TrafalgarGroup.

3.2. The emergent organizational competencies

The CEO proposed a strategic vision that involved developing aglobal capability to leverage expertise. This assumed that theglobal client was the target. The CEO considered that developingcompetencies based on a global office concept could create scalewithout mass. IT would be used to help building teams of peoplewith special skills from John Brown offices around the world

without their having to leave their desks. In the late 1980s thecompany had tried to take advantage of a low cost, English-speaking labour force in India by establishing an office in Mumbaito contribute resources to larger, distant projects. This had failed,because communicating with other offices proved cumbersome,especially when the majority of the project work travelled bycourier between offices. The experience gained from this, however,made John Brown top management determined that virtual teamscould only work with the right foundations. This was a purposefulheedful interaction. In fact it has been argued that correctconfiguration of teams, especially at an early stage of development,is important [18].

The CEO’s vision was to link all the disparate and far-flungoffices using open systems, creating a global network of engineers,and creating a company with high ability. Using such a system,engineers could access, update, or amend project data, CADdrawings, proposals, project management information, and teamsof specialists could work together without having to move desks,offices or cultural proclivities—at least immediately. Offices couldretain their specialist skills, whilst the IT systems became commonso that engineers, wherever they were, would be able to use thesame tools to complete the engineering cycle, seamlessly. Theorganization would become transparent to all who worked in it.This was an excellent vision, but difficult to achieve because ofground realities and the way in which it could be executed. Argyris[3] terms this problem as inconsistencies in espoused theories andtheories in-use. It is possible to overcome the contradictionbetween espoused and in-use theories through learning, whichoccurs when ‘‘diagnosis (insights, etc.) and the inventions areactually produced.’’ In the case of John Brown learning took placewhen they realized that simply opening up an office in Mumbaiwould not build competence. They had to proactively engage inestablishing interactions in addition to hiring skilled individuals.

Competence #1: A key competence in harnessing IT for strategic

advantage is to develop an ability to define heedful interactions in a

team along with establishing individual know-how in a highly

skilled environment.

3.2.1. Competence in establishing heedful interactions

In 1991 a single IT strategy document was published forTrafalgar House Engineering Division; this was the result of an 18-month review conducted across the division by the businesscommunity. It was not an IT review but dealt with the businessprocesses and then how IT would support then. Application aspectsof IT were defined later. This helped John Brown to identify gapswhere further development was needed.

Purchasing software packages was preferred whenever possi-ble. But in some cases, John Brown had to develop its own softwareto allow it to differentiate itself from its competitors and deliver itsstrategic vision. However all developments were undertakenwithin a clear framework of technical standards, etc. Develop-ments that John Brown undertook included JOIN (John BrownInternational Network), the global, high-speed network which wasto provide connectivity to the global office. It had to accommodateclient/server computing between about 8000 PCs, 700 CADworkstations and more than 170 corporate UNIX servers in 40locations. Whilst the technology was not particularly innovative,John Brown worked innovatively with 3Com, the US computernetworking company, to develop a form of advanced datacompression, enabling cheaper and quicker information transfer.The company boasted that JOIN responded anywhere within half asecond – any longer and users would not feel they were in the same

office – said a global office enthusiast. John Brown was innovativein the way in which they combined packages to deliver overall

G. Dhillon / Information & Management 45 (2008) 297–303300

functionality to the business (e.g. ENGINES for data, SCOPE forproject management and NAVIGATOR for document retrieval).

McGrath, Macmillan and Venkataraman considered that suchactions led to behaviors that were advantageous to the firm. Theysaid: ‘‘a group can be very undeveloped . . . yet possess a well-developed collective mind’’. Miller [26] however noted that oncesuch competencies are developed, it is difficult to sustain them,because they ‘‘further channel cognitions and values and makedouble-loop learning very difficult’’. While definition of cleararchitectures may be very important so is the development andsustaining of social interactions between organizational groups.This was a primary challenge for John Brown Engineering.

Competence #2: Key competencies in establishing purposeful

heedful interactions are to develop an ability to:

(a) D

efine and redefine the technical architecture.

(b) E

ncourage an understanding of interactions within the group or

the subunit.

(c) D

evelop appreciation for the potential of IT.

3.2.2. Competence in developing know-how and skills

After a conventional start the development team learned todeliver faster and cheaper. John Brown generated a network of‘functional champions’ – people working in each discipline – tobecome the system’s users who had to define the needs of eachsoftware system. Some years ago the ‘estimating functionalchampion’ identified a shortlist of 12 potential estimatingpackages, all fitting the company’s requirements for Unix-basedmulti-user systems. This was whittled down to four that under-went rigorous demonstrations for potential users. The construc-tion division IT manager explained the process as

We try to involve as many people as possible, the people whoare going to be using it. We have a lot of requirements to satisfyfrom major projects. We are sceptical about the softwareindustry, we do not believe what people tell us, so we know wewould have to do lots of pilots to take the product into thebusinesses and try them out for real. There is no better wayof testing a programme than running a few tenders throughit. You soon learn how easy it is to use and how good thefunctionality is.

The IT managers statement is an attempt to limit discordbetween espoused theory and theory in-use (per Argyris). Theactions at John Brown can also be seen as a sort of internal strategicalliance. In general these help maximize a firm’s ability to offersuperior products and services, increase efficiency, and reducecost. John Bown’s development of individual know-how via astrategic network of internal alliances was a means to sustainknowledge. Barringer and Harrison [6] however cautioned thatsuccess in such cases could only be achieved if a firm had carefullyconsidered that:

(a) i

nternal strategic alliances should create monopoly-likeinfluences;

(b) r

elationships should increase political power and thus be ableto influence governing bodies;

(c) r

elationships should increase the efficiency of operations; and (d) r elationships should provide a product or service differentia-

tion.

Finally, the users in the demonstration phase chose one packagefor full-scale piloting. It was installed in two regional offices andtested on major projects. A primary objective of this piloting phasewas to test the quality of support for the system, as a manager said:

We expected exemplary support during the pilot phase, but wealso wanted to know how easy it was to modify. No package hasever met all our requirements on the nail, so we wanted to findout how good the supplier is at enhancing it.

The piloting helped John Brown to develop and sustain a level ofskills that was essential for further refinement and sustainability.Such actions also helped in overcoming rejection, while testing forany problems and increasing user self-efficacy. As Bandura [4]noted, ‘‘self-perceived inefficacy can . . . nullify the motivatingpotential of alluring outcome expectations.’’ Furthermore. expec-tations of performance are a function of self-beliefs of ability.Hence, if the notion of individual know-how is embedded in anorganization, it helps to increase self-belief of efficacy. John Brownwas clearly able to do so, as evidenced by their superiorperformance and steady improvement, thus making it an attractivetarget for a takeover bid.

Competence #3: Key competencies to establishing individual

know-how and skills for harnessing IT are to:

(a) E

stablish vehicles for organizational learning, particularly by

reducing discordance between espoused theories and theories in-

use.

(b) C

reate internal strategic alliances in order to define individual

know-how.

(c) E

stablish programs to increase self-belief of efficacy.

3.2.3. Competence for orchestrating adeptness with respect to IT

The top managers at John Brown were committed to thestrategy document, believing that company survival depended onits successful implementation. They also recognized that all staffhad to be involved and committed to the new way of working forfull benefits to be realized. Consequently all available tools andtechniques were subservient to the success of any technologicalsolution.

John Brown managers started looking at the processes duringthe initial strategic review and realized that it would be difficult tobring about change in some offices. So the development andimplementation of technology was decreed, giving the employeesno option but to adopt innovations and new processes. In reactingto the changes, some people were hostile but started to diffusetheir hostility when others started to use the tools. The projectapproach helped the organization to convince employees about thebenefits. Indeed it was not extremely difficult to ‘win over’individuals after they recognized the technical excellence of thesystems. The IT team also made a firm decision to stop spendingany resources on maintaining or supporting old, legacy, applica-tions.

The resources saved from maintenance and running main-frames was redirected to new system development; this amountedto £10 M per year over a 5-year period. By this time, the companyhad gained considerable external recognition as a leader in the useof IT. New systems were introduced as new projects were started.Thus implementation was phased across the company andinformation did not have to be transferred from one system toanother.

Operating as a virtual team required a change in companyorganizational structure. The role of the local offices had to changefrom self-managed to one where they provided resource andexpertise to ‘corporate’ projects. John Brown was able toorchestrate changes, define new processes and implement newtechnology through adeptness. By incorporation of the changes,John Brown managed to bridge the gap between the know-howand know-that (see [35]).

G. Dhillon / Information & Management 45 (2008) 297–303 301

Competence #4: Key competencies in orchestrating adeptness with

respect to IT are to:

(a) E

nsure that the know-how and know-that gap does not exist and

hence good change management principles need to adopted and

followed.

(b) E

Fig. 2. Three categories of competence for harnessing IT.

ngage in change management that goes beyond structure and

process issues. Behavioral enrichment and getting people to

change and/or adapt to new ways of work is critical.

3.2.4. Competence for realizing the benefits—improved organizational

capability

John Brown’s ability to cut lead times of projects won contractsfor the company. As an example, a pharmacy company withrecently granted approval to sell a new-to-market drug estimatedthat they could loose $1 M every day waiting for the manufacturingplant to be built. Two competitors bid and the winner was thecompany with the most convincing time scale. John Brownpromised delivery in a year, a 4-month improvement over thebest that competition could offer. The time was saved by sharingwork between the New Jersey office, USA and the Portsmouthoffice, UK and achieving an 18 h working day by transferringdrawings between offices at the close of work each day. Theinterface between John Brown offices was not apparent to thecustomer and the relatively scarce supply of CAD skills available toJohn Brown were used to the maximum.

The general consensus in the industry is that John Brown movedclearly in front of the competition in terms of integrated ITsystems. The others, however, could have had similar IT withinabout 18 months.

As Dhillon [16] noted, ‘‘for success, there must be a cleardependency linkage from IT features which enable sets of changesin working practices to occur.’’ Inability to do this risks failure,where firms fall short of important business objectives. In the caseof John Brown, there seemed to be a clear linkage between processlevel changes and changes in the behavior of people. It isimpossible to get benefits from IT investments if there is adeficient change management program with clear responsibilitiesfor the delivery of benefits.

Competence #5: Key competencies are required to ensure

realization of IT benefits, which include:

(a) A

bility to define investment objectives and linking these to the

benefit drivers.

(b) A

bility to identify and make people responsible for benefits

delivery.

(c) A

bility to institute organizational change in light of the benefits

identified.

4. Discussion

John Brown Engineering presented a situation in which thecompany engaged in a reorientation of strategy through radicalchange. While they did not call organizational competence, in ourinterviews, Mr. Moorehouse mentioned on several occasions thathe was trying to do was ‘‘build a competent organization.’’ JohnBrown did what mattered and linked know-how with know-that,establishing a learning organization and ensuring that benefitswere properly delivered. Competencies that an organization builtenable identification and exploitation of opportunities resultingfrom its industry and organizational characteristics. Awareness inthe organization of its external and internal environmentalconditions and exploitation of opportunities under those condi-tions can generate continuous advantage. John Brown Engineer-ing’s IT usage helped by removing the misconception that critical

opportunities were determined by the business rather than theirtechnical excellence.

Based on our assertions and interpretations, we proposed thatorganizational competence for harnessing IT resided at threelevels: strategic, exploitation and supply. A constant interplaybetween the three ensures sustained competence (see Fig. 2).

4.1. Strategy competence

The importance of customer needs and management vision andsupport were confirmed as important factors in the strategic use ofIT. An innovating organization’s understanding of technologicaland business aspects increases the probability that it will introducecompetitively significant enhancements and sustain their advan-tage despite copying by rivals. Competence to exploit anopportunity is influenced by the prevailing management culture,experience, and employee satisfaction. There must be anorganizational infrastructure capable of developing and movinginnovations to market quickly. In the case of John BrownEngineering, the element of management outlook and attitudeplayed an important part in deploying IT as a tool for continuedperformance.

IT applications have the potential to lower costs or createdifferentiation across a wide array of activities in a firm’s valuechain. When applications create an advantage, they affect thestructural characteristics of the industry and become importantto successful strategy and organizational performance [21].The presence of first-mover benefits provides the basis for thesustainability of advantage. In addition, innovators may achieveadvantages that continue even after technology is widelydiffused.

Strategic competence therefore is the ability of the organizationto understand and appreciate the strategic use of IT and to considerfuture options affecting the way an organisation works.

4.2. Exploitation

The use and exploitation of IT showed that a unique combinationof the firm’s resources provided a way to maintain high performancelevels. The strategic importance of a resource will depend on theextent to which it is competitively available. If the resource isunique, not easily duplicated, or highly specialised, it is likely thatresource owners will be able to appropriate some of the benefitsfrom the innovation (see [13]). Thus organizations can sustaincompetitive advantage only if their resources cannot be expanded

G. Dhillon / Information & Management 45 (2008) 297–303302

freely or imitated by other firms. As long as assets are imperfectlymobile, inimitable, and non-substitutable, firms will not be able tomimic a successful advantage [5].

Moreover, the quest for strategic IT use must be based onintangible and even opaque areas, such as organizational culture(see[27]). The investigation and enhancement of unique sources ofpractice, know-how and culture at the firm and industry level canthen be the source of sustained advantage. Firms can develop newcompetencies—new ways of combining resources that are difficultfor competitors to appropriate. In the John Brown case, the earlyadoption of a global infrastructure and the competence to recognizepatterns among a range of initiatives lead to excellence in adaptingtheir IT system, provided a significant advantage (see [17]).

4.3. Supply

Competitive advantage depended on the interaction betweenindustry conditions and ability to identify and exploit oppor-tunities. An examination of cases of IT-based competitiveadvantage showed that sustained superior performance requiredthe interplay of the environmental conditions and internalcompetencies. Under no circumstances can IT alone be regardedas the firm’s motivation in producing strategic applications. Theimpetus to develop IT applications does not come through mereexistence of a firm’s technological strengths. Organizations needskills that can react effectively to changes in the businessenvironment. An understanding of the potential strategic impactof IT and integration with business processes may lead tosustainability of competitive advantage. In essence, a largenumber of factors can jointly shape an organizations propensityto utilise IT in its quest for sustainable competitive advantage(see [14]).

5. Conclusion

Our study showed that IT was an ingredient of superiorperformance of the firm. However a challenge lay ahead—toharness IT to use the competencies of the organizations,creating new information and knowledge. If firms can buildsimilar platforms and access the same data, the advantagerelated to IT can only stem from the cognitive and organizationalcapability in converting such data into practical knowledge foraction.

It is imperative to adjust and renew the available resources andrelationships as time, competition, and change erode their value[31]. Thus using IT will not alone ensure success: creativeapplication and ingenious use must become the source ofsustainable competitive advantage.

Acknowledgements

Sincere thanks to Dr. Julie Verity for her help in collectingdata for the case study and Robert Lambert for engaging ininitial discussions on organizational competence and IT. Thanksare also due to colleagues at University of Minho, Portugalwhere early versions of this paper were presented at variousworkshops. Willingness of key managers within John BrownEngineering, BP, and Shell to participate in the study is alsogreatly appreciated.

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G. Dhillon / Information & Management 45 (2008) 297–303 303

Dr. Gurpreet Dhillon is a Professor of Information

Systems in the School of Business, Virginia Common-

wealth University, Richmond, USA. He holds a Ph.D.

from the London School of Economics and Political

Science, UK. His research interests include management

of information security, ethical and legal implications of

information technology. His research has been pub-

lished in several journals including Information Systems

Research, Information & Management, Communications of the ACM, Computers &

Security, European Journal of Information Systems, Information Systems Journal, and

International Journal of Information Management among others. Gurpreet has

authored six books including Principles of Information Systems Security: Text and

Cases (John Wiley, 2007). He is also the Editor-in-Chief of the Journal of Information

System Security. Gurpreet consults regularly with industry and government and has

completed assignments for various organizations internationally.