Business Impacts of Frontier Information Technologies: The Cases of Cloud Computing and Usage Based Insurance


Student thesis: Doctoral Thesis

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Award date25 Jan 2018


The presence of information technology (IT) drives business into a new stage. IT creates critical changes in the way business is organized and operated. These changes draw researchers to study business impacts of information technology and expand their scope and move in more novel directions in order to keep up with the times. The business impacts of information technology contain many perspectives. The key objective of prior IT valuation studies is to exam these IT business impacts and the main determinants for implementing the IT business values. Scholars and practitioners are have strong desire to understand how and to what extent the application of IT within firms leads to a improved organizational performance. With the continual emerging of information technology and its tremendous contributions to business in past the several decades, researchers have attempted to develop a more multi-layered view of information technology and devoted themselves to study the frontier information technologies in the business context. The transformation from IT to IT business value is a complex process that organizational adopters would not always perceive all the features and benefits of the new technology or system. How to capture the beneficial characters of new IT and incorporate these features with the organizational needs is essential. Thus, the first research question raised in this thesis is how to make a rational information technology switching decision for organizations in a new IT development era. In this era, massive amounts of data occurred at a spectacular scale. Many new IT based business implications can be obtained from the highly detailed commercially viable data. The massive data needs to be harnessed in order to create or enhance its business value. Therefore, the second research question in this dissertation is how to utilize the information technologies to satisfy organizational commercial needs by generating business value from the massive data.

This study chooses cloud computing technology and On-Board Diagnostic based usage based insurance (UBI) as two representatives of the frontier information technologies to investigate their organizational impacts in business. To address the first research question, study one explores the cloud computing technology and its organizational transformation process by investigating IT switching behavior from the perspectives of both incumbent structure discontinuance and new technology acceptance intention. A theatrical IT transfer model is developed based on the Rational Choice Theory. The proposed model discusses the reasons of why organizational users would like to switch to new technology, and why switching patterns and deploy results may vary across different organizations. The statistic results indicate that the value/ cost of incumbent IT and new IT would affect the organizational technology switching process integrally. The final deployment decision behavior is dually affected by the intention of incumbent discontinuance intention and new technology acceptance intention of organizational adopters.

Study two tries to answer the second question by investigating UBI models and its business implications. A supervised machine-learning approach is utilized to train the risk-level classification model on the extracted IT-based in-car sensor features and extend the existing usage-based insurance research scope by designing a differential behavior-centric pricing mechanism based on real behavior data. Moreover, a down-to-earth demonstration namely VPC prototype is created for insurance agents to calculate vehicle premium. The results show the behavior-centric classification approach improves the accuracy and reliability of prior methods and BVIP Model performs well in assisting insurance business. The second study also indicates that organization needs more detailed and various data of customers for IT-driven business innovation.