The Effect of Transformative IT Capability on Sustainable Competitive Advantage

This research recalls the resource base view of the firm theory that argues that return above the average is not only determined by the external factors but it is also determined by the internal factors. Instead of of talking at lower order of IT Capability, this study pays attention at corporate level strategy that. At this level of analysis, IT is not considered as operational tools only, further, IT is positioned as an strategic internal capability that is enable to drive organization transformation process in responses to the changes of the organization actual context. It is supposed to be an alternative argument in describing the relationship between IT capability and sustainable competitive advantage, instead of the controversy opinions which are often found in literature. Some authors argue that the IT capability impacts on competitive advantage, but some others argue that IT capability has no effect on the competitive advantage.. With triple-loop learning approach, IT capabilities are then analyzed and classified into tree levels of capabilities to find a capability which has close relation to sustainable competitive advantage. The empirical evidences provide an important foundation to develop a comprehensive theory for formulating the role of IT capability on organizational innovativeness leads to sustainable competitive advantage. Management should develop capability to provide infrastructure for information exchange, to operationalize new conception, and to reconfigure IT resources. This new dynamic and contextual IT capability, then called as Transformative IT Capability. This basic research applies a causality model to explain the relationship between IT Capability and organizational innovativeness impacts on competitive advantage. All of those latent variables are revealed through a set of indicator variables that can be measured through a survey. Sample are collected from 210 Telkom's managers who are responsible in achieving business targets, and analyzed using SEM Lisrel 8.80 software.