Value Chain Analysis

Published on 15 May 2010 by in Strategy

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According to Boynton and Zmud (1987), researchers Porter and Millars are responsible for the initial application of value chain analysis to information technology (IT) (Boynton and Zmud, 1987). The early definition of value chain analysis, as given by Boynton and Zmud, states

The value chain views an organization as a series of input, transformation and output stages, where at each stage it may be possible to enhance an organization’s competitive position. By identifying “information intensive” locations on the value-chain, firms can enhance their competitive position through the use of IT. (Boynton and Zmud, 1987, p. 66)

Over the last 25 years, value chain analysis has evolved and matured from an analytical technique first introduced in the mid-eighties into an engineering and management methodology, known as value engineering, that enables more efficient and effective business and IT alignment.

A search of the Business Source Complete database provided by EBSCOHost for scholarly, full text articles containing the words, “value chain analysis,” returns 501 results. Narrowing the Business Source Complete search to “value chain analysis AND information technology” reduces the set of results to 176 records. Using these search criteria, the earliest result in the Business Source Complete database is the Boynton and Zmud article from 1987, which defines value chain analysis as above and attributes the first IT application to Porter and Millars. The most recent result in the Business Source Complete database is Dembinski (2009) discussing very large enterprises and global value chain analysis (Dembinski, 2009).

Porter and Millars introduced value chain analysis as a means of improving business strategy by applying information technology to the best places on the value chain (Boynton and Zmud, 1987). Throughout the eighties and nineties, value chain analysis appears in scholarly research literature as a technique for improving the outcomes of strategic information systems planning and business process reengineering efforts. In the 21st century, the scholarly discussion changes from value chain analysis as a technique for business process reengineering and strategic alignment to value chain analysis as a methodology for measuring total cost of ownership, IT’s capacity to create value, and the impact of globalization on business. The most recent research addresses governance of value chains and IT’s value as an enabler of peace, anti-poverty, and environmentally green initiatives (for example, Gibbon and Ponte’s article, “Trading Down: Africa, Value Chains, and the Global Economy,” published in Volume 38, Issue 2 of the journal Development & Change, in March of 2007).

Since the concept was first introduced in the mid-eighties, value chain analysis has developed into a critical technique for strategic information systems management and business alignment. Value chain analysis has morphed into value engineering and continues to be an area of scholarly research and a best practice for enterprises seeking to maximize the efficient and effective deployment of technology.

References

Boynton, A. C., & Zmud, R. W. (1987). Information technology planning in the 1990′s: Directions for practice and research. MIS Quarterly, 11(1), 59-71. Retrieved from http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com.library.capella.edu/login.aspx?direct=true&db=bth&AN=4678871&site=ehost-live&scope=site

Dembinski, P. H. (2009). Very large enterprises, focal firms and global value chains. Revista De Economía Mundial, (23), 107-129. Retrieved from http://ezproxy.library.capella.edu/login?url=http://search.ebscohost.com.library.capella.edu/login.aspx?direct=true&db=bth&AN=48874132&site=ehost-live&scope=site

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