Information technology and perceived competitive advantage: an empirical study of engineering consulting firms in Taiwan

Abstract

Using the 13 leading engineering consulting firms in Taiwan as samples, this empirical research adapts Bakos and Treacy's (1986) model to study the impact and linkage of information technology (IT) and competitive advantage. The five sources of competitive advantage are; competence in design and trade-off analysis, unique capability and services, switching costs, internal efficiency and interorganizational efficiency. Twenty-five ITs are identified and classified into five categories; administration and decision support, engineering analysis, organizational communication, design and project management, and advanced computer technology. For the firms surveyed, the design and project management system and the administration and decision support system have offered very good implementation results. Different ITs are shown to impact on the sources of competitive advantage differently. The diverse relative weights attached to the different sources of competitive advantage from the individual firm match the general theory that the characteristics of the firm influences competitive strategy. The relationship between the perceived IT impact and the assessed realized competitive advantage is demonstrated. The linkage between business performance and the assessed competitive advantage is inconclusive. This research is an empirical study of IT from the perspective of competitive advantage rather than from the more usual operational perspective. The validity of some of the initial findings could be verified by further study using multiple year performance data with larger sample size or through extensive case analysis.

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