This study addresses the theoretically neglected interplay between organizational information technology (IT) architecture and IT governance structure in shaping IT alignment. We theoretically develop the idea that IT architecture modularity helps sustain IT alignment by increasing IT agility, and that decentralization of IT governance strengthens this relationship. IT architecture therefore complements IT governance structure. Tests of the proposed mediated-moderation model using data from 223 organizations support these ideas. Implications for theory and practice are also discussed.
We review and reframe three main quests of research on information systems (IS) strategy: (1) the strategic alignment quest, (2) the integration quest, and (3) the sustained competitive advantage quest. The assumptions and logic of these quests have become less relevant in increasingly complex adaptive business systems (CABS), where the competitive performance landscapes of products and services are highly dynamic and co-evolve. We revise the strategic alignment quest to propose a co-evolution quest that addresses not only competitive strategy questions of a firm but also corporate strategy questions. The co-evolution quest seeks to increase a firm's agility and dynamism in repositioning itself, identifying profitable product-market positions as the evolving competitive landscape erodes the profitability of the firm's existing positions. To support the co-evolution quest, we revise the integration quest and propose a reconfiguration quest that encompasses not only business processes but also products and services, as well as the contracts, resources, and transactions associated with them. As the firm makes repositioning moves to co-evolve with the competitive landscape, the reconfiguration quest seeks to increase the firm's agility in disintegrating its existing nexus of contracts, resources, and transactions that support the old positions and in reconfiguring new ones that support the new positions. Finally, we revise the sustained competitive advantage quest to propose a renewal quest that recognizes the temporary nature of competitive advantage in CABS. The renewal quest seeks to destabilize the firm's old sources of competitive advantage when competitive dynamics erode their utility, rapidly create new sources of competitive advantage, and concatenate a series of temporary advantages over time. The three reframed quests provide the foundation for a research agenda on IS strategy in CABS.
Multisourcing, the practice of stitching together best-of-breed IT services from multiple, geographically dispersed service providers, represents the leading edge of modern organizational forms. While major strides have been achieved in the last decade in the information systems (IS) and strategic management literature in improving our understanding of outsourcing, the focus has been on a dyadic relationship between a client and a vendor. We demonstrate that a straightforward extrapolation of such a dyadic relationship falls short of addressing the nuanced incentive-effort-output linkages that arise when multiple vendors, who are competitors, have to cooperate and coordinate to achieve the client's business objectives. We suggest that when multiple vendors have to work together to deliver end-to-end services to a client, the choice of formal incentives and relational governance mechanisms depends on the degree of interdependence between the various tasks as well as the observability and verifiability of output. With respect to cooperation, we find that a vendor must not only put effort in a “primary” task it is responsible for but also cooperate through “helping” effort in enabling other vendors perform their primary tasks. In the context of coordination, we find that task redesign for modularity, OLAs, and governance structures such as the guardian vendor model represent important avenues for further research. Based on the analysis of actual multisourcing contract details over the last decade, interviews with leading practitioners, and a review of the single-sourcing literature, we lay a foundation for normative theories of multisourcing and present a research agenda in this domain.
In this essay, we argue that pervasive digitization gives birth to a new type of product architecture: the layered modular architecture. The layered modular architecture extends the modular architecture of physical products by incorporating four loosely coupled layers of devices, networks, services, and contents created by digital technology. We posit that this new architecture instigates profound changes in the ways that firms organize for innovation in the future. We develop (1) a conceptual framework to describe the emerging organizing logic of digital innovation and (2) an information systems research agenda for digital strategy and the creation and management of corporate information technology infrastructures.
The process by which organizations incorporate technological innovations into existing routines and use them on a regular basis persists as a central concern in the literature. Although we now have a fairly robust understanding of the drivers of innovation adoption, the use of innovations is less understood. In this paper, we draw on two streams of literature, managerial and organizational sensemaking, and organizational capabilities that have hitherto been used independently, to investigate organizational use of information technology (IT)-based innovations. Building on and extending prior work, we posit that organizational capabilities serve as complements to managers' technological frames related to an innovation. We focus on the use of an important technological innovation—business-to-business (B2B) electronic markets for procurement. We examine interactions between three technological frames—benefits frame, threat frame, and adjustment frame, and two organizational capabilities—technological opportunism and technological sophistication, and their relationship with the use of B2B electronic markets in firms. We test our research model using survey data collected from 292 firms. Results largely support the proposed conceptualization and shed new light on the key factors associated with firms' use of B2B electronic markets. Theoretical and practical implications of the findings are discussed.
The emergence of software-based platforms is shifting competition toward platform-centric ecosystems, although this phenomenon has not received much attention in information systems research. Our premise is that the coevolution of the design, governance, and environmental dynamics of such ecosystems influences how they evolve. We present a framework for understanding platform-based ecosystems and discuss five broad research questions that present significant research opportunities for contributing homegrown theory about their evolutionary dynamics to the information systems discipline and distinctive information technology-artifact-centric contributions to the strategy, economics, and software engineering reference disciplines.
Enterprise systems software (ESS) is a multibillion dollar industry that produces systems components to support a variety of business functions for a widerange of vertical industry segments. Even if it forms the core of an organization's information systems (IS) infrastructure, there is little prior IS research on the competitive dynamics in this industry. Whereas economic modeling has generally provided the methodological framework for studying standards-driven industries, our research employs social network methods to empirically examine ESS firm competition. Although component compatibility is critical to organizational end users, there is an absence of industry-wide ESS standards and compatibility is ensured through interfirm alliances. First, our research observes that this alliance network does not conform to the equilibrium structures predicted by economics of network evolution supporting the view that it is difficult to identify dominant standards and leaders in this industry. This state of flux combined with the multifirm multicomponent nature of the industry limits the direct applicability of extant analytical models. Instead, we propose that the relative structural position acquired by a firm in its alliance network is a reasonable proxy for its standards dominance and is an indicator of its performance. In lieu of structural measures developed mainly for interpersonal networks, we develop a measure of relative firm prominence specifically for the business software network where benefits of alliances may accrue through indirect connections even if attenuated. Panel data analyses of ESS firms that account for over 95% of the industry revenues, show that our measure provides a superior model fit to extant social network measures. Two interesting counterintuitive findings emerge from our research. First, unlike other software industries compatibility considerations can trump rivalry concerns. We employ quadratic assignment procedure to show that firms freely form alliances even with their rivals. Second, we find that smaller firms enjoy a greater value from acquiring a higher structural position as compared to larger firms.
Since the inauguration of information systems research (ISR) two decades ago, the information systems (IS) field's attention has moved beyond administrative systems and individual tools. Millions of users log onto Facebook, download iPhone applications, and use mobile services to create decentralized work organizations. Understanding these new dynamics will necessitate the field paying attention to digital infrastructures as a category of IT artifacts. A state-of-the-art review of the literature reveals a growing interest in digital infrastructures but also confirms that the field has yet to put infrastructure at the centre of its research endeavor. To assist this shift we propose three new directions for IS research: (1) theories of the nature of digital infrastructure as a separate type of IT artifact, sui generis; (2) digital infrastructures as relational constructs shaping all traditional IS research areas; (3) paradoxes of change and control as salient IS phenomena. We conclude with suggestions for how to study longitudinal, large-scale sociotechnical phenomena while striving to remain attentive to the limitations of the traditional categories that have guided IS research.
Organizations are increasingly engaged in competitive dynamics that are enabled or induced by information technology (IT). A key competitive dynamics question for many organizations is how to build a competitive advantage in turbulence with digital IT systems. The literature has focused mostly on developing and exercising dynamic capabilities for planned reconfiguration of existing operational capabilities in fairly stable environments with patterned “waves,” but this may not always be possible, or even appropriate, in highly turbulent environments with unexpected “storms.” We introduce improvisational capabilities as an alternative means for managing highly turbulent environments; we define this as the ability to spontaneously reconfigure existing resources to build new operational capabilities to address urgent, unpredictable, and novel environmental situations. In contrast to the planned role of dynamic and operational capabilities and the ambidexterity that they jointly offer, improvisational capabilities are proposed to operate distinctly as a “third hand” that facilitates reconfiguration and change in highly turbulent environments. First, the paper develops the notion of improvisational capabilities and articulates the key differences between the two “reconfiguration”—improvisational and dynamic—capabilities. Second, the paper compares the relative effects of improvisational and dynamic capabilities in the context of new product development in different levels of environmental turbulence. Third, the paper shows how IT-leveraging capability in new product development is decomposed into its three digital IT systems: project and resource management systems, organizational memory systems (OMS), and cooperative work systems—and how each of these IT systems enhances improvisational capabilities, an effect that is accentuated in highly turbulent environments. The results show that although dynamic capabilities are the primary predictor of competitive advantage in moderately turbulent environments, improvisational capabilities fully dominate in highly turbulent environments. Besides discriminant validity, the distinction between improvisational and dynamic capabilities is evidenced by the differential effects of IT-leveraging capability on improvisational and dynamic capabilities. The results show that the more the IT-leveraging capability is catered toward managing resources (through project and resource management systems) and team collaboration (through cooperative work systems) rather than relying on past knowledge and procedures (through organizational memory systems), the more it is positively associated with improvisational capabilities, particularly in more turbulent environments. The paper draws implications for how different IT systems can influence improvisational capabilities and competitive advantage in turbulent environments, thereby enhancing our understanding of the role of IT systems on reconfiguration capabilities. The paper discusses the theoretical and practical implications of building and exercising the “third hand” of improvisational capabilities for IT-enabled competitive dynamics in turbulence.
As the United States expends extraordinary efforts toward the digitization of its health-care system, and as policy makers across the globe look to information technology (IT) as a means of making health-care systems safer, more affordable, and more accessible, a rare and remarkable opportunity has emerged for the information systems research community to leverage its in-depth knowledge to both advance theory and influence practice and policy. Although health IT (HIT) has tremendous potential to improve quality and reduce costs in healthcare, significant challenges need to be overcome to fully realize this potential. In this commentary, we survey the landscape of existing studies on HIT to provide an overview of the current status of HIT research. We then identify three major areas that warrant further research: (1) HIT design, implementation, and meaningful use; (2) measurement and quantification of HIT payoff and impact; and (3) extending the traditional realm of HIT. We discuss specific research questions in each domain and suggest appropriate methods to approach them. We encourage information systems scholars to become active participants in the global discourse on health-care transformation through IT.