The effects of innovation capabilities on the business value of software

Williamson, Rael
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Purpose: The purpose of this research report is to investigate how innovation capabilities in software development affect the business value of software. This was achieved by drawing on the resource-based view of the firm to develop and test a research model to understand the relationships between innovation capabilities, the business value of the associated software, and its subsequent contributions to firm performance outcomes. The three selected innovation capabilities investigated in this study were agility, collaboration, and creativity. Design / Methodology / Approach: The research study applied a relational cross-sectional survey research design and strategy. Through the lens of a positivist researcher, the study proceeded to deductively measure the effects of Innovation Capabilities on the Business Value of Software using new empirical data collected via a structured questionnaire instrument from a sample of 54 senior software professionals across several countries. The statistical relationship between the constructs was analyzed using correlation and multiple regression techniques. The findings show that Innovation Capabilities have a positive effect on Business Value of Software. Collaboration expressed the strongest relationship to the overall construct of Business Value of Software and strongly correlated with the individual dimensions of value and rarity. Agility is strongly related with both rarity and non-substitutability / immobility, with results also indicating a relationship with overall Business Value of Software. Creativity did not show a positive relationship to the overall Business Value of Software. Furthermore, the results show that Business Value of Software is important for Strategic and Customer Benefits. Originality / Value: The study makes a novel contribution by applying the resource-based view of the firm to link innovation capabilities in software development with performance outcomes. The results provide researchers and organisations a better understanding of which innovation capabilities are most important and the mechanisms through which they improve software’s business value. Practical implications: There has been an increase in the popularity of ‘hackathons’, ‘incubators’, ‘accelerators’, and ‘innovation labs’ as a means for organisations to improve innovation. By identifying innovation capabilities and their relationship with the development of valuable software, this research helps practitioners better understand which innovation capabilities are most important and therefore better focus their energy on implementing interventions to develop these capabilities.
A research report submitted in partial fulfilment of the requirements for the degree of Master of Commerce in the field of Information Systems to the Faculty of Commerce, Law and Management, School of Business Sciences, University of the Witwatersrand, Johannesburg, 2022