Prior research regarding IT business value has largely focused on the role of IT in generating tangible outcomes for firms, such as enhanced output productivity, reduced labor costs and increased financial or market performance (e.g., [8]). More recently, practitioners have considered IT to play an important role in corporations’ innovation (e.g., [73]). According to a recent Gartner CIO Agenda survey4, creating new products and services (innova-tion) has been ranked No. 4 among CIOs’ top business priorities, which has significantly risen from its No. 10 ranking five years earlier5. With the emergence of new IT, such as mobile technologies, cloud computing and data, analytics and their various applications in business, CIOs and IS leaders increasingly concentrate on the role of IT as a critical enabler of firm innovation. However, the relationship between IT and organizational innova-tion, especially the role of IT in product innovation, is not well understood. The current study was motivated by the desire to shed light on this hitherto elusive role. The key findings from this study contribute to the IT business value literature by explaining how IT