Rai et al.2012 – Yiran

This paper examine the relationship between interfirm IT capability, interfirm communications and relational value.   Interfirm communications is defined as the exchange of knowledge, ideas, and opinions driven by goals among senior executives in the interfirm relationships. In this study, the interfirm communications for business development and IT development are measured by total number of visits and phone calls in past year between the supplier’s account executives with the buyers on each aspect. Building on the marketing literature, relational value is operationalized as share of wallet and loyalty.

To conduct the empirical study, they use the active relationships between a Fortune 100 logistics supplier and its buyers in the United States.  The findings reveal that IT functionalities, when implemented and used in combination with other resources in the interfirm logistics process (e.g., physical goods, information, and finances across locations), increase relational value. Moreover, higher sophistication of interfirm IT capability profiles would leads to higher relational value. The study also finds interfirm communications for business development can only create relational value with the facilitation of IT capability profiles, whereas interfirm communication for IT development is not found to be contingent on IT capability profiles. As a result, interfirm IT capability profiles have a more substantial role in relational value when relying on interfirm communications for business development.

The contributions of this study include that it theorizes interfirm IT capability profiles as the implementation and use of a set of IT functionalities that combine with other resources to execute interfirm business processes and as a major means for cocreating relational value.  Second, this study stresses the importance of the level of sophistication in implicating the IT capability profiles. The sophisticated IT capability profiles accompanied by interfirm communications for business development can significantly enhance the relationship value.