Is more information technology better for new product development?

Purpose – Firms spend considerable amount of money on information technology (IT) to improve their processes, thereby reducing costs, enhancing quality and getting to market faster. Consequently, understanding the effective relationship between the IT department and new product development (NPD) teams can inform whether firms reap the expected benefits from their IT. The purpose of this paper is to provide an initial observation that helps in recognizing the unique relationship between the IT department and NPD teams. Design/methodology/approach – Mail surveys resulted in 21 dyads (IT department head and NPD team leader) from manufacturing firms in 14 different industries. These data are analyzed by correlations, Wilcoxon's paired signed‐rank tests and crosstabs. Findings – The results demonstrate that IT department and NPD team leaders share similar understanding regarding the role of IT in NPD. Moreover, the results provide evidence that more IT is better for NPD flexibility, but it also increases product development costs. Research limitations/implications – Future research would investigate why increased IT results in amplified costs. Among the potential reasons discussed in this paper is the assimilation of IT, that is, the degree of success achieved by a firm in making use of the capabilities of IT. Practical implications – It is useful for practitioners to know that IT department and NPD team leaders share similar understanding regarding the role of IT in NPD because shared understanding enhances innovativeness. Managers should also be cautious about relying too much on IT for coordinating NPD activities and must find a balance between the two. Originality/value – This paper examines the alignment of perceptions of the IT department and NPD teams while also revealing the effect of IT on several NPD outcomes.