The main aim of this interdisciplinary project was to present a comprehensive analysis of the determinants and effects of the use of IT consulting. The project, which was split into three modules based on three subsequent methodical approaches, examined sociological, organisational and economic aspects of IT consulting processes.
By comparatively analysing the content of media products and expert interviews it was studied how innovative plans to use IT come into being, how they change during the course of time and what role consultants play in the complex knowledge interaction process. This knowledge-sociological part of the project combines discourse analysis and network analysis. It is intended to determine the cognitive and normative context of consulting services and managerial decisions.
The organisational part of the project examined to what extent IT and organisational consulting contributes to enhancing the innovative capabilities of firms and if there are other latent functions related to the use of consultants. This part of the project is mainly based on case studies and partially structured interviews with persons or firms involved in IT consulting processes.
Based on a representative survey of approximately 4,400 firms in Germany, a quantitative-economic approach first analysed the determinants of the use of IT consulting. Further, the relation between IT consulting and the firm's performance was analysed. The performance was measured by looking at both labour productivity and different measures of innovation activity. The use of relevant econometric methods allowed for identifying causal effects of IT consulting. A variety of influencing factors, such as firm size, human capital, IT intensity and industry affiliation was considered.
Due to the use of different explanatory approaches and different empirical methods new insights were gained on the qualitative and quantitative importance of IT services with regard to the innovation system and the transformation towards an information- and knowledge-based economy and society.
Some of the findings, which were partly surprising, were supported by the results from all three project modules. It was shown, for example, that IT consultants are mainly used because of their technical know-how and that their importance regarding the firm's innovation process is finally lower than was expected at the beginning of the project. Moreover, it was shown that software manufacturers themselves launch new trends, rather than IT consultants.
The quantitative economic module, carried out by the ZEW, led to further results:
On the determinants of the demand for IT consulting
As shown by an econometric analysis of the determinants of the demand for IT consulting, the role of the consultant as knowledge broker is of primary importance. The main raisons for the use of IT consulting are the firm's IT intensity, its use of complex software and past IT-based and consultation-intensive events. This result indicates that consultants contribute to generating demand for consultation services. As for stock companies, the legitimation function is important.
Another decisive factor is firm size. The larger a firm the more it uses IT consulting. One main reason for this larger demand is that the business processes and the IT applications related to them are more complex. Besides that, larger firms are more likely to have more funds available to spend on consulting.
On the effects of IT consulting on the productivity and innovative capability of firms
The results show that IT consulting positively affects labour productivity. One likely reason is that IT consulting allows for a more efficient organisation of (IT-based) business processes. However, no positive effect could be determined with regard to the probability of innovation, the number of product and process innovations introduced to the market and the amount of R&D spending. The negative effect of IT consulting on the value of the introduced innovation seems surprising at first.
There are different approaches to explain these results. First of all, the findings confirm the descriptive result found before, which states that firms use IT consulting above all to gain technological know-how or to implement IT applications, and that they use it much less to enhance their organisational structures and workflows or to launch new or significantly new products and services. This is consistent with the results from the case studies in module B, which state that firms forgo radical, comprehensive solutions to avoid putting too much strain on the organisation. Thus, risk-related innovations are rare.
Further estimates show that this negative effect of IT consulting on the innovation's value can mainly be observed for firms, which are small and have a relatively low productivity.
Articles in Refereed Journals
Bertschek, Irene (2011), Wissensvermittlung versus Legitimationsfunktion - Warum engagieren Unternehmen IT-Berater?, Zeitschrift für Betriebswirtschaft Volume 81, Number 12, 1379 - 1399. Download
Discussion and Working Papers
Bertschek, Irene (2008), Wissensvermittlung versus Legitimationsfunktion - Warum engagieren Unternehmen IT-Berater?, ZEW Discussion Paper No. 08-083, Mannheim. Download
VolkswagenStiftungVolkswagenStiftung, Hannover, DE
01.01.2006 - 30.06.2008