The View of IT-Consuming Firms on the Key Digital Service Capabilities of IT-Producing Firms

Aim/Purpose: This study focuses on the connection between IT-producing firms’ digital service capabilities and the digital service performance of IT-consuming firms, especially online shop operators. Background: The acquisition and integration of knowledge regarding digital service capabilities and performance can increase the level at which employees assimilate information, organize with IT-consuming firms, and cooperate with them to develop the delivery of services and customize services to fill their needs. Exploring capabilities that may enable this process is a prerequisite for all businesses offering digital services and, thus, an engrossing and ongoing interest of practitioners and scholars. However, there is a lack of research on the relationship between IT-producing firms’ digital service capabilities and the digital service performance of IT-consuming firms in the business-to-business (B2B) context. Methodology: The study builds on a survey conducted among small firms that have an online shop in use and are located in Finland. Contribution: The study offers empirical evidence for the capabilities valued by IT-consuming firms, providing a model for IT-producing firms to use when deciding on a future focus. The study was executed in a B2B setting from the viewpoint of online shop operators, presenting a novel understanding of influential digital service capabilities. Findings: Adaptability, determined by capabilities related to utilizing information gained via the integration of a digital product into other digital tools (e.g., marketing, personalization, and analytics), statistically significantly affects all three aspects of an IT-consuming firm’s digital service performance (financial, operational, and sales). Another product capability, availability, which includes aspects such as security, different aspects of functioning, and mobile adaptation, affects one aspect of digital performance, namely operational. The results also suggest that the role of service process-related capabilities in determining service comprehensiveness significantly influences two aspects of IT-consuming firms’ digital service performance: financial (negative effect) and operational (positive effect). The results show that the capabilities associated with the relationship between the producing firm and the consuming firm do not affect IT-consuming firms’ performance to the same extent. Recommendations for Practitioners: The study results suggest that IT-producing firms should concentrate on leveraging service comprehensiveness, as there has been a shift in the B2B context from merely selling a digital product and associated services. It seems that usability-related issues are now taken for granted, and the emphasis is on features that support the use of information to create value. Recommendation for Researchers: The results contribute to the capabilities literature by showing that the shift in focus from technical product-related capabilities to relationship-related capabilities is not yet evident among small online store operators. Impact on Society: In addition to offering tools with different integration possibilities, supporting IT-consuming firms in making the most of the possibilities would be very helpful. Future Research: The comprehension of the relationship between digital service capabilities and digital service performance would benefit from future research that takes into account additional control variables. The theoretical model of this study can be further studied by using other performance measures, such as market performance, as dependent variables.