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Abstract

We focus on the digital solution supplier’s perspective to analyse which information systems (IS) capabilities are essential for business-to-business (B2B) value co-creation. To gain a deeper understanding of the issue, a qualitative multi-case study was used. The results show that the focus of digital solutions in business has changed and shifted from the technical functions of solutions to the need for supplier and customer to work towards a common goal. The study proposes that, in advanced digital solutions, all parts of the solution development process require co-creation, either direct or indirect. In particular, forming IS–business partnerships, one of the spanning capabilities which integrates with internal organizational processes shows great potential in value co-creation. Originality builds on the understanding of which IS capabilities are essential when advanced digital solution suppliers offer services to their customers in the B2B context. This outcome contributes to the IS capabilities literature by showing the shift in focus from technically oriented capabilities to relationship-oriented capabilities in value co-creation.

Keywords

IS capabilities digital solution digital solution production B2B value creation co-creation

Introduction

Information systems (IS) capabilities, such as external relationship management, technical skills and planning, have been considered as vital for the implementation and use of IS and digital solutions (Bharadwaj, 2000; Tan et al., 2015; Wade & Hulland, 2004). IS capabilities refer to the deployment of information technology-based resources with other organizational resources and capabilities (Bharadwaj, 2000) in a way that strives to enhance value creation, such as overall efficiency, effectiveness and flexibility, among other business needs (Karimi et al., 2007). IS capabilities have been found to play a significant role in value co-creation in developing digital solutions (Grover & Kohli, 2012; Haki et al., 2019; Saunila et al., 2019; Winkler & Wulf, 2019). Recent research has called for studies into the essential capabilities of producing digital solutions (Lenka et al., 2017). As a result, O’Cass and Ngo (2012) argued that the suppliers of digital solutions should ‘give significant attention to interpreting and responding to what value it perceives customers are looking for’ (p. 126). The importance of customer perspectives emphasizes the distinct roles of suppliers and customers, meaning that value is co-created (e.g., Grönroos, 2011; Grönroos & Voima, 2013; Vargo & Lusch, 2008). Value co-creation can be defined as ‘the processes and activities that underlie resource integration and incorporate different actor roles in the service ecosystem’ (Lusch & Nambisan, 2015, p. 162). This study is based on the dual nature of the value co-creation process, denoting that both the supplier and customer may engage in each other’s processes as value co-creators (Grönroos & Ravald, 2011).

It has been shown that value co-creation in a business-to-business (B2B) context differs from a business-to-consumer (B2C) context in terms of, for example, complexity and multidimensionality (Roser et al., 2013; Saunila et al., 2019). As most of the capability-related studies around digital solutions have been conducted in the B2C context, little is known about their use in the B2B context (Lenka et al., 2017). Yet what remains to be discovered is what digital solution suppliers consider to be the essential IS capabilities in digital solution production when they co-create value with their business customers. This is important to study as, first, business customers generally represent a considerably larger value to the provider than a single consumer. Second, the purchasing duration typically takes longer, as in the customary B2C case (Oliveira & Roth, 2012). This is because of the amount of interaction needed for making complex buying decisions, which typically involve several different practices on both the provider and customer sides, for instance, related to technological and financial issues (Grönroos & Helle, 2010; Oliveira & Roth, 2012). Moreover, firms that operate in the B2B context typically need to have a broader view of the entire supply chain than those operating in the B2C context (Oliveira & Roth, 2012). Therefore, this study aims to contribute to this gap in the research by answering the following research question: Which IS capabilities are essential for B2B value co-creation? This study presents suppliers’ perspectives on the essential IS capabilities using a qualitative multi-case study approach. A multi-case study was used due to its potential to provide higher external validity compared with single cases. Utilized cases include situations where digital solution suppliers co-create digital solutions with their business customers. Thus, a digital solution supplier and its relationships with its customers formed the unit of analysis.

IS Capabilities

Many studies that try to understand the impact of IS on firm performance rely on the resource-based view (RBV; Tan et al., 2015; Wade & Hulland, 2004). RBV builds on the assumption that firms possess unique resources that will allow them to gain sustainable competitive advantage (Barney, 1991). There are legions of definitions and classifications of the resource concept in the literature (Wade & Hulland, 2004). In this article, we divide resources into assets and capabilities (Wade & Hulland, 2004) and define assets as available tangibles or intangibles a firm can use in its operations to achieve its goals and capabilities as intangible, repeatable patterns of actions deploying assets to reach the desired outcomes (Karimi et al., 2007; Wade & Hulland, 2004). Capabilities in the context of IS refer to the ‘ability to mobilize and deploy IT-based resources in combination or copresent with other resources and capabilities’ (Bharadwaj, 2000, p. 171) to achieve desired outcomes such as improving efficiency, effectiveness, and/or flexibility (Karimi et al., 2007; Tan et al., 2015).

Various typological categorizations comprise a variety of IS-related organizational capabilities that are considered to create business value. After reviewing numerous typologies (see Appendix 1), we concluded to adopt Wade and Hulland’s (2004) typology. It has been found to be one of the most consistent and comprehensive typologies (Doherty & Terry, 2009; Felipe et al., 2020), and, in addition to the internally targeted IS capabilities, it addresses the externally oriented capabilities relevant to our study. Furthermore, the IS capabilities in the typology are ‘all mid-level constructs that are reasonably specific while also permitting an acceptable level of generalizability across studies’ (Wade & Hulland, 2004, p. 129), thus building a perfect framework for our study (see Table 1). IS infrastructure is excluded in this study, as it is an asset rather than a capability.

Table 1.

Capabilities Definitions Based on Wade and Hulland’s (2004) IS Resources.

Dimension
IS Capability	Definition
Outside-In	Externally oriented capabilities with an emphasis on anticipating market demands, building sustainable customer relationships, and understanding competitors (Day, 1994; Wade and Hulland, 2004).
External relationship management	Firm's ability to manage linkages between the IS function and stakeholders outside the firm (Tan et al., 2015; Wade and Hulland, 2004).
Market responsiveness	Firm’s ability to sense and respond to changes in the external environment (Overby et al. 2006; Tan et al. 2015; Wade and Hulland, 2004).
Inside-Out	Internally focused resources (assets and capabilities) that are deployed from inside the firm in response to market demands and opportunities (Day, 1994; Wade and Hulland, 2004).
IS technical skills	Relevant and updated technology skills related to IT infrastructure, that are held by the IT employees of a firm (Bharadwaj, 2000; Doherty and Terry, 2009; Felipe et al., 2020; Ross et al., 1996; Wade and Hulland, 2004).
IS development	A future oriented capability to develop or experiment with new technologies (Bharadwaj, 2000; Wade and Hulland, 2004).
Cost effective IS operations	Firm's ability to provide efficient and cost-effective IS operations on an ongoing basis (Tan et al., 2015; Wade and Hulland, 2004).
Spanning	Capabilities that integrate a firm’s internal and external capabilities by considering both internal and external analysis (Day, 1994; Wade and Hulland, 2004).
IS-business partnerships	The ability to integrate and align the IS functions and other functional areas or departments within the firm (Wade and Hulland, 2004).
IS planning and change management	Firm’s ability to plan, manage, and use appropriate technology architectures and standards (Bharadwaj, 2000; Doherty and Terry, 2009; Feeny and Willcocks, 1998; Felipe et al., 2020; Ross et al., 1996; Wade and Hulland, 2004).

Source: The authors.

IS and Value Co-creation in the B2B Context

IS research has shown a growth in studies considering service-dominant logic and value co-creation (Grover & Kohli, 2012; Haki et al., 2019; Saunila et al., 2019; Winkler & Wulf, 2019). Value co-creation can be considered as the supplier’s willingness to participate in its customer’s value creation processes or allowing the customer the opportunity to participate in the supplier’s value creation processes as a co-creator (Grönroos, 2011; Grönroos & Voima, 2013). This means that the supplier can ask the customer to co-produce the solution, or the customer can extend active participation into the supplier sphere (Grönroos & Voima, 2013). Both of these widen the interconnection beyond direct interaction and make co-creation possible (Grönroos & Voima, 2013; Lenka et al., 2017). Co-creation will then provide value for both the supplier and the customer. While IS service research has mainly focused on value co-creation in B2C relationships, some scholars have adopted value co-creation to study B2B relationships (Blaschke et al., 2018; Roser et al., 2013). However, the B2B context differs from B2C regarding value co-creation (D’Andrea et al., 2019; Roser et al., 2013). B2B co-creation is a way of promoting ideas through shared knowledge and experience, while B2C co-creation is usually aimed at engaging customers in innovation-related tasks (Roser et al., 2013).

Due to the rise of service-dominant logic and the need for value co-creation, it is necessary to examine whether extant IS approaches can adequately capture these novel business requirements (Haki et al., 2019). Recently, IS research has promoted value co-creation as a theoretical lens to study various IS phenomena, such as digital service systems or digital business ecosystems (Blaschke et al., 2018; Tan et al., 2020), IS strategy (Winkler & Wulf, 2019) and associated human factors (Grover & Kohli, 2012; Saunila et al., 2019). IT facilitation necessitates governance that concentrates on novel value co-creation in which informal social controls have the potential to drive the co-creation of value (Grover & Kohli, 2012) Similarly, Saunila et al. (2019) found that behavioural factors (such as attitude or motivation) together with skills and a customer-oriented mindset played a key role in value co-creation. These are supported by digital solutions aiming to co-create value through effective interaction, information exchange and collaboration. Successful collaboration, however, requires an understanding of the capabilities that lead to value creation (Blaschke et al., 2018; Tan et al., 2020).

While the value co-creation perspective provides new possibilities for analysing IS (Haki et al., 2019), we argue that capabilities are essential in leveraging the fulfilment of value co-creation, especially when the interaction between the supplier and the customer is indirect and part of the co-creation of value. Therefore, what still needs to be discovered is what digital solution suppliers consider the essential IS capabilities for co-creating value with their business customers. Thus, the purpose of this study is to examine what IS capabilities are essential for B2B value co-creation from the digital solution supplier’s perspective.

Methodology

Research Strategy

As this study aims to gain a deeper insight into the IS capabilities of digital solution production for co-creating value with business customers, a qualitative approach was employed. Qualitative case studies are used to gain an understanding of phenomena that have complex and multiple variables and processes (Yin, 2003). According to Yin (2003), one rationale for using cases is the researcher’s access to a previously inaccessible situation, which makes the descriptive information alone revelatory. This is the premise of this study in providing insights from two digital solution suppliers. A digital solution supplier and its relationships with its customers formed the unit of analysis. This study analysed the phenomenon from the digital solution suppliers’ perspectives and focused on the suppliers’ understanding of the essential IS capabilities in digital solution production.

Research Design, Case Selection and Case Descriptions

A multiple case study design was used, and two cases were selected through theoretical sampling (Eisenhardt & Graebner, 2007) with the purpose of contributing to the theory (Yin, 2003). Four criteria were used to determine the appropriate cases. First, the selected firms were advanced in terms of provided digital solutions. Second, these firms had concrete initiatives towards the co-creation of IS capabilities and, as such, were considered more likely to have a greater understanding of the value co-creation process and, hence, were successful in building customer value. Third, one case should be small and the other large to reduce the effect of contextual factors. Finally, a case should provide access to a sufficient amount of relevant information.

Both cases met the criteria and were digital solution suppliers comprising different types of functions that co-create value through advanced digital solutions. Case 1 (referred to hereafter as Supplier 1) is an IT firm that employs 20 people. As a fast-growing firm, it offers a wide range of digital solutions, including customer relationship management (CRM) and enterprise resource planning (ERP) software, application development, e-commerce solutions, design services and data centre services. The digital solutions offered by this firm are strongly based on customization and versatility because it aims to build long-term customer relationships instead of one-time deliveries. Thus, the firm builds its operations on customer understanding and flexibility in meeting customer needs by continually tailoring and shaping products and services. Case 2 (referred to hereafter as Supplier 2) is a large international firm that produces a broad range of digital solutions, such as system deliveries (e.g., ERP), software solutions and data centre services. Its solutions are not heavily customized according to customer preferences, but the value is in providing comprehensive solutions so that the customer receives all services in the same place.

Data Collection and Analysis

The data collection method utilized was semi-structured interviews. Although the interview questions were determined in advance, the discussions were informal and were facilitated with supporting questions and comments made by the researchers. The aim of the interviews was to achieve an overall view of which IS capabilities are essential when suppliers offer digital solutions to their customers in the B2B context. The key themes developed from these interviews were digitalization, digital operating environment, value creation, value co-creation and customer participation. To acquire a comprehensive view of patterns and behaviour at each level, employees from different hierarchical levels and job descriptions were included in the research process. The unit of analysis was the organization and its relationships with its customers, and the interviews were aimed at understanding value creation and co-creation through capabilities at the organizational level. All the interviews were recorded and transcribed to enable in-depth analysis. The key information from the interviews is presented in Table 2.

Table 2.

Data Gathering and Sources.

	Case 1	Case 2
No. of employees	20	1,000
No. of informants	5	5
Digital services provided	CRM and ERP software, application development, e-commerce solutions, design services and data centre services	System deliveries (e.g., ERP), software solutions and data centre services
Themes of the interviews	Digitalization, digital operating environment, value creation,	Digitalization, digital operating environment, value creation, value co-creation, customer participation
Interview participants	Managing director, software specialist, provider of electronic	Head of services, head of CRM, business executive, senior developer, user experience executive
Duration	A minimum of 25 min to a maximum of 1 h	A minimum of 45 min to a maximum of 1.3 h
Type of data	Recorded and transcribed interview data	Recorded and transcribed interview data

Source: The authors.

The data analysis was conducted using the content analysis method (e.g., Carley, 1990) based on findings from the previous literature (e.g., Doherty & Terry, 2009; Felipe et al., 2020; Wade & Hulland, 2004). Three researchers analysed the data and discussed any differing interpretations. As the goal of the study was not to achieve scientific generalization, theoretical concepts of prevailing understanding were used for themes in the analysis (Yin, 2003). Thus, the data analysis was guided by the conceptualization of IS capabilities in the digital solution context. The principal themes centred on capabilities relating to the outside-in, spanning and inside-out perspectives. First, a preliminary division of categories was imposed, but themes were also allowed to emerge from an exploratory base. The final categories were found through a cyclic analytical process, including the following stages: (a) reading the transcriptions, interpreting the contents and writing notes; (b) coding and classifying the data into themes; and (c) combining themes into initial and new categories. These iterative processes resulted in a stage in which no new information was found in the data, after which a comprehensive interpretation was developed. Thus, the research validity was strengthened through replication, with the case findings compared against the theoretical framework.

Findings

Value Co-creation via Outside-In Capabilities

Managing the external relationship from the co-creation perspective, the supplier and the customer must work closely together. The best value is achieved when the customer lets the supplier be their partner and shares their business information.

We need to be able to understand the needs of our customers very accurately, the needs of our customers’ end-users or our own customers, so that we can create value for them. That is to say that our own customers should let us be their partners. (S2 expert 1)

In order to share business information, besides trusting the supplier in terms of secrecy, ‘a customer should be confident about getting real added value from our services’ (S2 manager 2). Suppliers stressed that in addition to being able to create the best value for the customer by working as partners, they have the opportunity to benefit from such customer relationships themselves. Thus, the best value for both actors in a supplier–customer relationship is created through a partnership.

The suppliers found that their customers are a great source of information for gaining market intelligence because they help suppliers understand both the current and future customer requirements which are needed to respond to changes in market conditions. Supplier 2 had a systematic way of collecting feedback from customers, while Supplier 1 did not. However, S1 manager 1 emphasized the importance of customer feedback: ‘By actively providing feedback, they [the customer] develop our business and enable us to bring new business models to them.’ In addition to gathering feedback in the conventional way, Supplier 2 facilitated several industry-specific customer events for information sharing. While getting ‘a huge amount of knowledge capital for ourselves’ (S2 manager 2), the events were found to create value for all the participants. Therefore, gaining market intelligence from customers by letting them disseminate it among others can lead to value co-creation for both the supplier and the customer.

Value Co-creation via Inside-Out Capabilities

The suppliers considered the current IS technical skills of IT employees to include the ability to take usability and user experience into account when building technical solutions. For example, according to S2 manager 2, an online store needs to be able to be built such that an end user ‘should feel like visiting a village shop: he’s known in advance, and the range of services is controlled by this’. To succeed here, the supplier needs ‘“input feed” [from the customer] throughout the development process [of a technical solution]’ (S1 expert 3). In order to gain in-depth information to be able to produce an appropriate digital solution for a customer, Supplier 2 had created a ‘Day in Your Life’ operating model alongside various feedback channels.

We spend a day with the customer and watch what they are doing, what it is that irritates them. In this way, we get the end user’s point of view, which differs from the point of view of management representatives. (S2 manager 2)

Supplier 2 emphasized that they are clearly doing better with the customers with whom they have this operating model in use. ‘The fact that we are in the office and the customer is there in their own office does not produce the best result at all’ (S2 manager 2). Hence, the ability to create in-depth knowledge of customer needs in collaboration with customers leads to the best value for the customer.

Both suppliers felt that they needed to be familiar with emerging technologies, and they emphasized the relentless acquisition of new specific expertise from outside the house. In addition, Supplier 2 highlighted that they also set goals for customer projects in this regard.

We also have internal ambitions for those [customer projects]. We may take a cut in profitability if only we are able to learn a new thing with a customer. (S2 expert 2)

This is to say that besides learning a new technology, the supplier is able to apply and test it in a real situation for the benefit of the customer, and by doing so, both the customer and the supplier gain value.

Supplier 1 underlined that the ability to develop and manage IS operations should be cost-effective for each customer individually, while Supplier 2 considered that overall cost-effectiveness is adequate. However, both suppliers emphasized that in order to create value for the customer, digital solutions must be of high quality. As the value is ‘partly created due to how well the service stays alive’ (S1 expert 1), the contracts of Supplier 2 are based on the time span; the value depends on a service’s resilience. Technical system failures are solved independently by the suppliers, but ‘if it’s a problem which requires a little thinking, we usually explore interactively how to improve the situation’ (S1 expert 4). Thus, for ‘efficient, high-quality digital solutions’, the best value for the customer is created when they are managed together with the supplier and the customer.

Value Co-creation via Spanning Capabilities

Both suppliers saw a change in the role of IT houses in the market. S2 expert 1 expressed, ‘We’re not only dealing with IT departments but also with business.’ Both suppliers emphasized that this is the right direction, as from the perspective of value co-creation, the most important thing is that the customer opens their own business to the supplier. In addition to being able to create the most value for the customer, opening the business also increases the supplier’s business expertise, and so the supplier is able to develop more relevant technical solutions.

With this [knowing the customer’s business], we strive to build a lasting customer relationship, and we are able to create more and better for each customer. (S1 expert 2)

Moreover, S1 manager 1 is confident that they can benefit the customer: ‘We are able to process it [customer data] into our customer’s most profitable business areas.’ Accordingly, IT suppliers’ ability to collaborate with the customer’s business co-creates value for both the supplier and the customer.

In addition to experimenting with new technologies per se, both suppliers seek to figure out how to leverage them for the benefit of the customer. This is also what the suppliers felt the customers expected from them, as customers are often unaware of the potential of information technology.

The customers expect from us the intelligence to overcome their everyday challenges as well as the competence to predict future challenges and opportunities. (S2 manager 3)

In order to be able to support the customer in developing the business, both suppliers strived to monitor the consequences of their operations on the customer. Both also highlighted that, in addition to monitoring various business indicators, they aim to be part of the customer’s business development. S1 expert 3 noted, ‘We might even try to advise the customers how they should handle the business, so that, for example, they could be able to improve their own internal processes,’ while S2 expert 2 agreed, ‘The aim is to hold such regular development meetings where it is really looked ahead what development issues there are.’ The suppliers also felt that they have a good ability to meet the diverse development needs of customers as, in addition to business know-how, both stated that they have a wide range of expertise in the IT industry. Consequently, co-developing the customer’s business with digital solutions creates the best value for the customer.

Summary

A summary of the main findings is presented in Table 3. The dimension of each IS capability is noted in the first column, accompanied by information about the co-creation perspective presented in the third column. The best value is achieved in every IS capability with co-creation. However, the amount of co-creation varies in different capabilities. The prerequisites for co-creation are the independent capabilities of the digital solution supplier. These include several inside-out capabilities in which the role of co-creation is smaller than in the other two capabilities. Thus, co-creation requires partnerships, especially external relationship management capabilities. These outside-in capabilities deal with strategic-level capabilities being the responsibility of the management. The spanning capabilities, other types of capabilities which are highlighted in the co-creation, are operational-level capabilities. In particular, in IS–business partnerships, capability is a key to co-creation, as in addition to mere technical expertise, there is a need for business expertise.

Table 3.

The Essential IS Capabilities in Value Co-creation.

Dimension	IS Capability	Appearance of Value Co-creation	Beneficiary of Value
Outside-in	External relationship management	Ability to work with customers as partners	Supplier and customer
Outside-in	Market responsiveness	Ability to gain and disseminate market information among customers	Supplier and customer
Inside-out	IS technical skills	Ability to co-create in-depth knowledge of customer needs	Customer
	IS development	Ability to experiment with emerging technologies with customers	Supplier and customer
	Cost-effective IS operations	Ability to jointly manage efficient and high-quality IS solutions with customers	Customer
Spanning	IS–business partnerships	Ability to collaborate with the customer’s business	Supplier and customer
	IS planning and change management	Ability to co-develop the customer’s business with IS solutions	Customer

Source: The authors.

To sum up, cost-effective IS operations do not bring a competitive advantage as such, although few inside-out capabilities were highlighted in the findings. Thus, the key for co-creation to happen is the supplier and the customer working towards a common goal. As a result, the role of digital solutions has changed, now underlining the need to consider the solution platform more broadly than for co-creation in bilateral relations. This is evident due to the rise in the importance of external relationship management and market responsiveness-related capabilities. The study proposes that in ‘advanced digital solutions’, all parts of the solution development process require co-creation, either direct or indirect.

Discussion and Conclusions

Theoretical Implications

The purpose of this article was to analyse which IS capabilities are essential for B2B value co-creation from the digital solution suppliers’ perspective. The findings indicated that spanning and outside-in capabilities are of great importance in value co-creation between digital solution suppliers and their customers. This study sees the outside-in capabilities as externally focused, with an emphasis on anticipating market demands, understanding competitors and building long-lasting relationships with customers (Felipe et al., 2020; Tan et al., 2015; Wade & Hulland, 2004) that facilitate the co-creation of digital solutions. Especially forming IS–business partnerships, one of the spanning capabilities that integrate outside-in with internal organizational processes, shows great importance in value co-creation. This result supports prior studies which have called for further understanding of the capabilities that lead to value creation (Blaschke et al., 2018; Tan et al., 2020). Co-creating value through effective interaction, information exchange and collaboration is considered an essential capability in digital solution development and is needed to achieve B2B value co-creation. These outcomes contribute to the IS capabilities literature (Doherty & Terry, 2009; Felipe et al., 2020; Wade & Hulland, 2004) in the value co-creation context (e.g., Grover & Kohli, 2012; Haki et al., 2019; Saunila et al., 2019; Winkler & Wulf, 2019) by showing the shift in focus from technically oriented capabilities to relationship-oriented capabilities in value co-creation.

This article supports the long-acknowledged understanding that digital technologies alone do not contribute to value co-creation, and that human and business resources in direct and indirect interaction are needed to complement digital technologies (Grover & Kohli, 2012; Saunila et al., 2019). This is to say that the added value for the customer is created through capabilities other than those related to the technical solution. There has been a noticeable shift in the role of digital solution suppliers from being merely technical professionals to becoming wide-ranging experts in digitalization services. This is in line with Saunila et al. (2019), who found that behavioural factors (such as attitude or motivation) together with skills and a customer-oriented mindset played a key role in value co-creation.

Managerial Implications

The practical importance of this study was to provide a deeper insight for digital solution suppliers and to recognize the essential IS capabilities in value co-creation with their customers. Managers need to be aware that inside-out capabilities do not bring a competitive advantage as such. Presently, customers of digital solution suppliers are seeking wider expertise than only for technical solutions. Customers take for granted that the supplier has the IS technical skills, IS development abilities and ability to deliver and run cost-effective IS operations.

Digital solution suppliers should focus on developing outside-in and spanning capabilities, since the value for the customer in advanced digital solutions requires co-creation through the digital solution development process. Added value is co-created when suppliers become more proficient with other capabilities than those related to inside-out capabilities. Based on these findings, organizations that provide digital solutions should actively seek ways to improve their service processes and relationship capabilities. Managers must also recognize that value for the customer may be other than purely monetary. The study further revealed that the co-creation process may act as an important possibility for digital solution suppliers to develop their own expertise.

Limitations and Directions for Future Research

The study has several limitations which can be addressed in future research. The findings are based on data from only two digital solution suppliers which have their own culture and existing structures in relation to value co-creation. Thus, further research is needed to ensure the generalizability of the findings. This study could be treated as a preliminary study, which should be confirmed in a study with a significantly larger sample. Moreover, the study explored value co-creation from the supplier firms’ perspective. It would also be highly valuable to analyse value co-creation through capabilities from customers’ perspectives. Further, the influence of customers’ viewpoints on value co-creation in the B2B context also offers an interesting avenue for future research.

Appendix 1:

Selected Studies Linking IS Capabilities with Business Value

Source	Construct	Dimensions	Topic of Interest
Ross et al. (1996)	IT capability	IT human resources assetTechnology assetRelationship asset	Competitive advantagethrough IT assets
Powell & Dent-Micallef (1997)	Human, business and technology resources	Human resources (open organization, open communications, consensus, CEO commitment, flexibility, IT/strategy integration)Business resources (supplier relationships, supplier-driven IT, IT training, process redesign, teams, benchmarking, IT planning)Technology resources (ITs)	IT and firm performance
Feeny & Willcocks (1998)	IS capability	IS/IT leadershipBusiness systems thinkingRelationship buildingArchitecture planningMaking technology workInformed buyingContract facilitationContract monitoringVendor development	Core IS capabilities for IT exploitation
Bharadwaj et al. (1999)	IT capability	IT business partnershipsExternal IT linkagesBusiness IT strategic thinkingIT business process integrationIT managementIT infrastructure	IT capability construct
Bharadwaj (2000)	IT capability	IT infrastructureHuman IT resources (technical IT skills, managerial IT skills)IT-enabled intangibles (customer orientation, knowledge assets, synergy)	IT capability and firm performance
Zhu & Kraemer (2002)	E-commerce capabilities	Information (product information online, search capability, product review, product update)Transaction (buy capability, online order tracking, account management, return, security)Interaction (configuration capability, customer registration, online recommendation, content personalization, real-time support)Supplier connection (online procurement, EDI links, integration to backend IS, fulfilment, inventory data sharing)	E-commerce capability construct and firm performance
Sambamurthy et al. (2003)	IT competence	Level of IT investmentsQuality of the IT infrastructure (global connectivity and reliability)IT human capital (technical and business skills)Nature of IS/business partnerships	IT competence and financial performance through agility, digital options, entrepreneurial alertness and competitive actions
Tippins & Sohi (2003)	IT competency	IT knowledgeIT operationsIT objects (computer-based hardware, software, support personnel)	IT competency, organizational learning and firm performance
Melville et al. (2004)	IT resources	Technological IT resource (IT infrastructure, business applications)Human IT resource (technical expertise, managerial skills)	IT and organizational performance
Peppard & Ward (2004)	IS capability	Fusion of business knowledge with IS knowledgeFlexible and reusable IT platformEffective use process	IS capability construct and organizational performance
Wade & Hulland (2004)	IS resources	Outside-in (external relationship management, market responsiveness)Spanning (IS–business partnerships, IS planning and change management)Inside-out (IS infrastructure, IS technical skills, IS development, cost-effective IS operations)	IS resources typology and firm performance
Bhatt & Grover (2005)	IT capabilities	IT infrastructure qualityIT business expertiseRelationship infrastructure	Intensity of organizational learning, IT capabilities and competitive advantage
Piccoli & Ives (2005)	IT capabilities	Technical skillsManagement skillsRelationship asset	IT-dependent strategic initiative and sustained competitive advantage
Ravichandran & Lertwongsatien (2005)	IS resources and capabilities	IS human capital (IS personnel skill, IS human resource specificity)IT infrastructure flexibility (network and platform sophistication, data and applications sophistication)IS partnership quality (internal partnership quality, external partnership quality)IS capabilities (IS planning sophistication, systems development capability, IS support maturity, IS operations capability)	IS resources and firm performance through IS capabilities and IT support for core competences
Pavlou & El Sawy (2006)	IT leveraging competence in new product development	Acquisition of IT resourcesDeployment of IT resourcesLeveraging of IT resources	IT leveraging competence and competitive advantage in new product development through dynamic capabilities and functional competencies
Rivard et al. (2006)	IT support for firm strategy and assets	IT support for firm strategy (innovative differentiation, marketing differentiation, low-cost strategy)IT support for firm assets (organizational competencies, marketing competencies, technological competencies)	IT and firm performance
Aral & Weill (2007)	IT resources	IT assets (IT infrastructure, transactional investments, informational investments, strategic investments)Human resource competence (technical and business skills of IT staff, IT skills of business users, the relative ability of firms to satisfy their demand for highly skilled IT labour)Management competence (degree of senior management commitment to IT projects, business unit involvement in IT decisions)IT use intensity for communication (internal IT communication intensity, supplier facing IT communication intensity)Digital transaction intensity (degree of digitization in purchasing, electronic purchase orders/total purchase orders, degree of digitization in sales to customers)Internet architecture (degree to which firms use Internet architectures in salesforce management, in employee performance measurement, in training, in post-sales customer support)	IT resources and firm performance
Karimi et al. (2007)	IS resources	Knowledge resources (business process knowledge, project management knowledge)Relationship resources (user involvement, top management involvement)IT infrastructure resources	IS resources, ERP capabilities and business process outcomes
Zhang et al. (2008)	IT capability	IT business partnershipsExternal IT linkagesBusiness IT strategic thinkingIT business process integrationIT managementIT infrastructure	IT capability and firm’s international performance
Doherty & Terry (2009)	IS capabilities	Outside-in (external relationship management, market responsiveness)Spanning (IS–business partnerships, IS management/planning)Inside-out (infrastructure provision, IS technical skills, IS development, cost-effective IS operations)	IS capabilities and organization’s competitive positioning
Stoel & Mulhanna (2009)	IT capability	Internally focused IT capabilitiesExternally focused IT capabilities	IT capabilities and firm performance
Liang et al. (2010)	Organizational resources and capabilities	Technology resource (IT investment, IT infrastructure, IT assets, software, system application)Organization resource (knowledge resource, human resource, financial resource)Internal capabilities (managing internal relationship, IS planning and changingmanagement)External capabilities (external relationship, market responsiveness)	IT, organizationalresources and capabilities and firm performance
Pavlou & El Sawy (2010)	IT-leveraging capability	Effective use of project and resource management systems (resource allocation, task assignment and scheduling)Effective use of organizational memory systems (knowledge coding, directories and retrieval IT functionalities; support the acquisition, assimilation, transformation and exploitation of knowledge practices)Effective use of cooperative work systems (conveyance, presentation and convergence systems; support real-time communication and group collaboration)	IS-leveraging capability and competitive advantage through improvisational capabilities
Kim et al. (2011)	IT capabilities	IT personnel expertise (technical, technology management, business functional, relational [interpersonal])IT infrastructure flexibility (connectivity, compatibility, modularity)IT management capabilities (IT planning, IT investment decision-making, IT coordination, IT control)	IT capabilities and firm financial performance through process-oriented dynamic capabilities
Lu & Ramamurthy (2011)	IT capability	IT infrastructure capability (technological foundation)IT business spanning capability (business–IT strategic thinking and partnership)IT proactive stance (opportunity orientation)	IT capability and organizational agility
Fink (2011)	IT capability	IT infrastructure capabilities (physical, managerial)IT human capabilities (technical, behavioural, business)	IT capabilities and strategic value
Masli et al. (2011)	IT capability	IT investment (IT personnel, IT spending)IT-related knowledge	IT and business value
Mclaren et al. (2011)	IS capabilities	Operational efficiencyOperational flexibilityPlanningInternal analysisExternal analysis	IS capabilities and firm’s competitive strategies
Mithas et al. (2011)	IT-enabled information management capability	The ability to provide data and information to users with the appropriate levels of accuracy, timeliness, reliability, security and confidentialityThe ability to provide universal connectivity and access with adequate reach and rangeThe ability to tailor the infrastructure to emerging business needs and directions	IT-enabled information management capability and firm performance through organizational capabilities
Nevo & Wade (2011)	IT-enabledresources	IT assets (fungible, widely available, commodity-like, technology-based products)Organizational resources	IT-enabled resources and firm performance through strategic potential
Chen (2012)	IT-enabled resources	Technological IT resource (psychical IT assets, information repositories)Human IT resource (technical and managerial IT skills)Complementary organizational resource (non-IT resources that interact with IT dependent resources to generate synergy)	IT-enabled resources and firm performance through organizational capabilities
Pérez-López & Alegre (2012)	IT competency	IT knowledgeIT operationsIT infrastructure	IT competency and firm performance through knowledge management processes
Wang et al. (2012)	IT resources and IT capabilities	IT resources (IT infrastructure, technical IT resource, managerial IT resource, relational IT resource)IT capabilities (IT strategic planning capability, IT development capability, IT use capability, IT management capability)	IT resources, IT capabilities and firm performance through IT support for competitive strategies and IT support for core competencies
Gu & Jung (2013)	IS resources, IS capabilities and IS qualities	IS resources (business expertise, internal relationships, external relationships, technical skills, infrastructure)IS capabilities (IS planning, business process change, acquisition, development, operation, support)IS qualities (system quality, information quality, service quality, reliability, responsiveness, assurance, empathy)	IS resources, complementary organizational resources, IS capabilities, IS qualities and organizational performance through business process performance
Chae et al. (2014)	IT capability	IT infrastructureHuman IT resources (technical and managerial IT skills)IT-enabled intangibles (knowledge assets, customer orientation, synergy)	IT capability and firm performance
Chen et al. (2014)	IT capability	IT infrastructureIT business partnershipsBusiness IT strategic thinkingIT business process integrationIT managementExternal IT linkage	IT capability and organizational performance through business process agility
Ashrafi & Mueller (2015)	IT capabilities	IT resources (IT human resources, IT knowledge resources, IT relationship resources)IT capabilities (IT strategic planning, tactical deployment of IT projects)	IT resources, IT capabilities and firm’s financial performance through IT competitive advantage
Chen et al. (2015)	IT capabilities	IT infrastructure flexibilityIT integrationIT business alignmentIT management	IT capabilities and product innovation performance through corporate entrepreneurship and competitive intensity
Tan et al. (2015)	IS capabilities	Outside-in (external relationship management, market responsiveness)Inside-out (IS infrastructure, IS technical skills, IS development, cost-effective IS operations)Spanning (IS–strategy alignment, IS planning)Outside-out IS capabilities (platform IS leadership)	IS capabilities and development of multi-sided platforms
Wang et al. (2015)	IT resources	IT assets (e.g., hardware, software, applications, network infrastructure)IT management (e.g., IT planning, IT project management, allocation of IT assets)	IT assets, IT management, environmental dynamism and firm performance
Nwankpa & Roumani (2016)	IT capability	IT infrastructureIT business spanningIT proactive stance	IT capability and firm performance through digital transformation and innovation
Peng et al. (2016)	IT capability	Basic IT applicationsStrategic positioning of IS in the organizationKnowledge managementDecision supportMan–machine synergy	IT capability and firm performance through internal business process and supply chain management capabilities
Baloch et al. (2018)	IT capabilities	Inside-out (deployment of infrastructure within the organization to meet market demand)Outside-in (external environment focused, market responsiveness)Spanning (IS planning and management to integrate capabilities above)	IT capabilities and organizational agility through operational dynamic capability
Benitez et al. (2018a)	IT infrastructure capability	Technological resources (servers, computers, laptops, operating systems, software, electronic communication networks (email, Intranet, Extranet, wireless devices) and shared customer databases)Managerial resources (IT managers’ [IT and business] skills in identifying and supporting IT-enabled business activities, approving IT innovation projects, deploying a portfolio of resources, searching for new business opportunities and working effectively with business managers to execute the firm’s business strategies)	IT infrastructure capability and firm performance through businessexperimentation, business flexibility and operational competence
		Technical IT resources (IT personnel’s (IT and business) skills in designing databases, developing new IT applications, improving the efficiency of IT services and using different programming languages)
Benitez et al. (2018b)	IT infrastructure flexibility	IT compatibilityIT connectivityModularityIT personnel skills flexibility	IT infrastructure flexibility and post-merger and acquisition performance through business flexibility and post-merger and acquisition IT integration capability
Chae et al. (2018)	IT capability	IT infrastructureHuman IT resources (technical and managerial IT skills)IT-enabled intangibles (knowledge assets, customer orientation, synergy)	IT capability, industry and firm performance
Levallet & Chan (2018)	Digital capabilities	Flexible IT infrastructure (software, hardware, network)Information management capability	Digital capabilities and managerial improvisation
Lo & Leitner (2018)	IS strategies, IS dynamic capabilities	IS strategies (IS innovator, IS conservative, IS undefined)IS dynamic capabilities (IS absorptive capacity, IS agility)	IS strategy and IS performance through IS dynamic capabilities
Ravichandran (2018)	IT competence	IS capabilities (IS planning sophistication, systems delivery capability, IS operations capability, IS support maturity)IT investment orientationDigital platform capabilities (IT infrastructure flexibility, application platform scope)	IT competence, innovation capacity and firm performance through organizational agility
Aydiner et al. (2019)	IS capabilities	Infrastructure capabilityHuman resource capabilityAdministrative capability	IS capabilities and firm performance through decision-making performance and business process performance
Erkmen et al. (2020)	IT capability	Managerial capabilityTechnical capabilityHuman capital support	IT capability and firm performance through innovative climate
Felipe et al. (2020)	IS capabilities	Inside-out (IS infrastructure, IS technical skills, IS development, cost-effective IS operations)Outside-in (external relationship management, market responsiveness)Spanning (IS–business partnerships, IS management, IS planning and change management)	IS capabilities and firm performance through organizational agility
Suoniemi et al. (2021)	Firm-level IT capability	IT infrastructureIS planning sophisticationIS personnel skillInternal partnership qualityExternal partnership quality	Firm-level IT capability and organizational productivity through project-level IT capability and system quality

Source: The authors.

Footnotes

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

ORCID iDs

Sariseelia Sore

Minna Saunila

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Business-to-Business Value Co-creation: Suppliers’ Perspective of Essential Information Systems Capabilities

Abstract

Keywords

Introduction

IS Capabilities

Capabilities Definitions Based on Wade and Hulland’s (2004) IS Resources.

IS and Value Co-creation in the B2B Context

Methodology

Research Strategy

Research Design, Case Selection and Case Descriptions

Data Collection and Analysis

Data Gathering and Sources.

Findings

Value Co-creation via Outside-In Capabilities

Value Co-creation via Inside-Out Capabilities

Value Co-creation via Spanning Capabilities

Summary

The Essential IS Capabilities in Value Co-creation.

Discussion and Conclusions

Theoretical Implications

Managerial Implications

Limitations and Directions for Future Research

Selected Studies Linking IS Capabilities with Business Value

Footnotes

Declaration of Conflicting Interests

Funding

ORCID iDs

References