Journal article
How finance shared services affect profitability: an IT business value perspective
Information technology and management, pp 1-16
16 Feb 2023
PMID: 36811062
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Shared services have become an important IT-enabled organizational form for providing support business functions to internal users. The information systems that implement and deliver shared services are part of the organizational IT infrastructure that has a twofold effect on firm financial performance. On the one hand, with the shared services model, the IT infrastructure consolidates so that the costs are lowered for providing the common functions firm-wide. On the other hand, the systems delivering the shared services embody the workflow and business functions so that the value of shared services can be gained from improvements in the function performance at the process level. We perceive finance shared services as IT-enabled services for corporate finance and accounting functions, and propose that finance shared services improve firm profitability via cost savings at firm level and via increased working capital efficiency at the process level. We test our hypotheses with data on Chinese public firms from 2008 to 2019. Data analysis results show both direct effect of finance shared services on profitability and mediating effect of working capital efficiency. This study expands our understandings about impacts of shared services, and contributes to empirical research in IT business value.
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Details
- Title
- How finance shared services affect profitability: an IT business value perspective
- Creators
- Xin Chen - Shanghai Jiao Tong UniversityQizhi Dai - Drexel UniversityChaohong Na - Yunnan University of Finance And Economics
- Publication Details
- Information technology and management, pp 1-16
- Publisher
- Springer Nature
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Decision Sciences (and Management Information Systems)
- Web of Science ID
- WOS:000939161300001
- Scopus ID
- 2-s2.0-85148229705
- Other Identifier
- 991020537628004721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Information Science & Library Science
- Management