IT agility is all about reconfiguring or replacing your information technology systems when new marketplace realities change the way you have to do business. While most studies generically interpret IT agility as the ability to respond to changes in the external environment through appropriate internal adjustments, they implicitly refer to one (or more) of two evaluation criteria to gauge whether a firm possesses this ability. They consider either the extent to which an organization can respond to changes in the external environment – its range of agility – or to the time required to execute this response. Let’s take each type in turn.
Range-agility This represents an organization’s ability to broaden (or shrink) specific aspects of its capabilities. They include increasing or decreasing the repertoire of products and/or services offered to the market, or expanding or shrinking internal capabilities in manufacturing, services or processes. Adjustments in range can be accomplished by exercising options available internally (for example, better integration in processes or strategic business units), and externally (for example, via alliances and partnerships).
Time-agility The speed of response, that is, the time it takes to
retool one’s IT capabilities, is also important to think about. For example,
some assert that IT infrastructures are considered to be critical in
facilitating quick dissemination of new information and practices, especially
in high velocity environments. However, such infrastructures themselves are
often rigid and suffer from low time-agility; in particular, some researchers
have wisely noted that legacy constraints (all the technology your company already
has and uses) make it difficult for many organizations to make quick changes to
their IT infrastructures.
Read full article by Sengupta and Massini (Business Strategy Review)
Service organizations have to deal with highly uncertain events, both in the internal and external environment. In the academic literature and in practice there is not much knowledge about how to deal with this uncertainty. This piece of work investigates the role and impact of information technologies (IT) on business agility in service organizations. Business agility is a relatively new term defined as the capability of organizations to swiftly change businesses and business processes beyond the normal level of flexibility to effectively manage highly uncertain and unexpected, but potentially consequential internal and external events. Empirical research was carried out via surveys and interviews among managers from 35 organizations in four industries and in three governmental sectors. Four in-depth case studies were carried out within one service organization.
The book has six key findings:
- In many large service organizations business agility is hampered by a lack of IT agility.
- Organization and alignment of processes and information systems via the cycle of sensing, responding and learning along with the alignment of business and IT are important conditions for improving business agility performance of service organizations.
- Standardization of IT capabilities and higher levels of data quality support higher levels of business agility of service organizations.
- Two knowledge management strategies – codification and personalization -- are identified that can be used to respond to events with different degrees of uncertainty. A codification knowledge management strategy supports the response to events with low levels of uncertainty by exploiting explicit knowledge from organizational memory. A personalization knowledge management strategy drives the response to events with high levels of uncertainty by exploitation of tacit knowledge and social capital.
- Social capital is an important moderating variable in the relation between IT capabilities and business agility. Social capital can mitigate the lack of IT agility that exists in many service organizations by overcoming information system boundaries and rigidities via human relationships.
- The combination of sensing, responding and learning capabilities is required to increase all dimensions of business agility performance.
Overall, in this book I introduce a new approach to analyze and measure business agility. This work takes the first steps to develop theoretical knowledge on the conditions under which IT supports higher levels of business agility and business agility performance.
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