Resource Complementarity and IT Economies of Scale: Mechanisms and Empirical Evidence

Abstract

In this study, we explore economies of scale for IT infrastructure and application services. An in-depth appreciation of economies of scale is imperative for an adequate understanding of the impact of IT investments. Our findings indicate that even low IT spending organizations can make a difference by devoting at least 60% of their total IT budget on IT infrastructure in order to foster economies of scale and extract strategic benefits.