Demand chain collaboration and operational performance: role of IT analytic capability and environmental uncertainty

Purpose – The purpose of this research is to enhance the extant understanding of the IT‐collaboration relationship. The study aims to test the robustness of the relationships among the concepts of IT analytic capability, demand chain collaboration and operational performance besides investigating the interaction effects of environmental uncertainty variables on the IT‐collaboration relationship. Design/methodology/approach – Data for testing the hypothesized relationships in the conceptual model were collected through a survey of managers in manufacturing firms from the Council of Supply Chain Management Professionals (CSCMP) membership directory. The survey sample included 152 responses accounting for a response rate of 28 percent. Findings – Findings suggest that while IT analytic capability associates positively with collaboration, the technological turbulence dimension of uncertainty enhances the above relationship. Market turbulence, however, was not found to have a significant moderating impact on the IT analytic capability‐collaboration relationship. The findings further support the link between collaboration and better operational performance. Research limitations/implications – While the study focused on a specific IT capability – IT analytic capability – firms utilize other IT resources such as database systems and e‐commerce. These IT capabilities need to be investigated as well since they could bring different functionalities and influences. Besides, a richer understanding of the interacting variables could be obtained by incorporating a broadened set of contextual variables. Practical implications – Deploying advanced IT analytic capabilities in firms facilitates collaborative endeavors among supply chain partners and ultimately results in operational improvements. However, managers should also understand that the IT capability‐collaboration link is contingent upon technological turbulence: firms operating in highly uncertain technological environments can best leverage IT analytic capabilities to improve collaboration and enhance performance. Originality/value – Much of the evidence on the performance impact of specific IT capabilities in supply chains is still anecdotal and extant empirical research is insufficient to suggest an unambiguous performance linkage. A critical shortcoming in extant IT and SCM literature is research on the interaction effects of environmental uncertainty variables on the IT‐collaboration relationship. The study addresses these issues.