The Antecedents of Information Systems Development Capability in Firms: A Knowledge Integration Perspective

The linkages between IS and business units are recognized as being critical to information systems development processes and outcomes. Previous research has found that they are associated with better performing ISD teams, stronger alignment between firms’ IT investments and business objectives, and comparatively superior exploitation of information technologies for business ends. What remains lacking in this stream is a coherent theoretical explanation for why and how the linkages between the IS unit and business units in a firm influence ISD processes and outcomes. This study draws on strength-of-ties theory to develop and test a project-level model that links both structural and cognitive IS-business linkages to ISD outcomes and processes. The key premise of this model is that IS-business linkages influence ISD primarily by facilitating integration of business and technical knowledge dispersed across internal business functions and outside the formal boundaries of the firm during the ISD process. Such integration of internal and external knowledge in turn influences ISD processes and outcomes. We tested the model using data on 133 projects collected from CIOs and client-side managers in 133 firms. Our results provide strong support for the hypothesized model