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Digital Capability: Investigating Coevolution of IT and Business Strategies
Umeå University, Faculty of Social Sciences, Department of Informatics. (Swedish Center for Digital Innovation)ORCID iD: 0000-0003-0602-5404
2014 (English)Doctoral thesis, comprehensive summary (Other academic)Alternative title
Digital abilitet : En undersökning av samevolution mellan IT- och affärsstrategier (Swedish)
Abstract [en]

This dissertation investigates the role of information technology (IT) in organizational strategy. Specifically, it examines how organizations can persist in turbulent competitive landscapes characterized by IT innovations. Underlying premises for this dissertation are that: (1) ubiquitous IT implies constant disruptions from digital innovation, (2) IT and practice are becoming fused, and (3) organizational strategies are dynamically linked with practice, i.e. they are reciprocally related through what organizations do rather than have. To investigate such IT strategizing processes, I outline a conceptual framework for analyzing how organizations can generate digital capability, i.e. a collection of routines for strategizing by leveraging digital assets to create differential value. Digital assets here refer to the complement of available resources and competencies for IT design and implementation. Based on the notion of dynamic capability and evolutionary theory, this framework emphasizes the importance of sensing, seizing and transforming abilities for generating digital capability.

As organizational practices are becoming fused with IT scholars have argued that attempting to disentangle them analytically is futile. In a similar vein, organizational strategy is increasingly reliant on available IT resources for both formulation and execution. In the IS field it is widely acknowledged that IT has both enabling and inhibiting consequences for organizations. Drawing on the resource-based view of the firm and theory on organizational capabilities, the notion of IT capability has been widely used as a conceptual tool for analyzing these dual strategic effects of IT. Considering the explosive advances in computing, network and interaction that have resulted in IT being ubiquitous and deeply embedded in contemporary practices, recent research argues for the need to move beyond the functional view of technology implicit in the IT capability notion. A key aspect to address for such broadening of the perspective is the coevolution of IT and business practices, i.e. who (or what) leads, who or what follows, and whether such a causal distinction is meaningful.

Grounded in the outlined conceptual framework, this dissertation examines how organizations can build digital capability to both enable large variation and complexity of feasible competitive actions, and reduce inhibiting effects of IT. The empirical investigation is situated in three distinct domains: boundary spanning IT innovation, transformation of existing IT resources, and hybridization of technology through digitalization of production equipment. These investigations are presented in five research papers.

The dissertation contribute to knowledge of IT strategy by: (1) explicating the construct of digital capability, (2) providing a framework for coevolutionary strategizing processes, (3) presenting an empirical illustration of the coevolution of IT and business strategies, and (4) offer specific insights on design and orchestration of processes for digital capability generation.

Place, publisher, year, edition, pages
Umeå: Umeå universitet , 2014. , 98 p.
Series
Research reports in informatics, ISSN 1401-4572 ; RR-14.01
Series
Dissertations from the Swedish Research School of Management and Information Technology, 64
Keyword [en]
Digital capability, IT strategy, coevolution, IT innovation, digital innovation, organizational evolution, practice research, strategy-as-practice, evolutionary theory
National Category
Information Systems, Social aspects
Identifiers
URN: urn:nbn:se:umu:diva-88722ISBN: 978-91-7601-065-5 (print)OAI: oai:DiVA.org:umu-88722DiVA: diva2:717029
Public defence
2014-06-05, MA 121, Umeå Universitet, MIT-huset, Umeå, 10:00 (English)
Opponent
Supervisors
Available from: 2014-05-15 Created: 2014-05-13 Last updated: 2014-05-15Bibliographically approved
List of papers
1. A platform for open IT innovation: Knowledge brokering in academiaindustry collaboration
Open this publication in new window or tab >>A platform for open IT innovation: Knowledge brokering in academiaindustry collaboration
(English)Manuscript (preprint) (Other academic)
Abstract [en]

While extant research on open innovation and knowledge brokering has shown that boundary-spanning innovation hold great promise, less attention has been paid to how such efforts are established and managed in the context of academia-industry collaboration for IT innovation. The paper thus aims to provide insights into design and orchestration of boundary-spanning IT innovation efforts involving academia and industry. We report experiences from a longitudinal case study of the design and orchestration of a platform for collaboration in a large-scale regional IT innovation program – ProcessIT Innovations – with particular emphasis on the management challenges involved in facilitating interactions between IT providers, IT user organizations and IT researchers. Combining insights from the case study and innovation theory, we contribute to the literature on boundary spanning IT innovation by pointing to the influence of knowledge brokering capabilities in generating innovation dynamics, identifying configurations options in terms of innovation modes, and, providing an empirical illustration of the role of network diversity and size in implementing such configurations.

Keyword
IT innovation, Open innovation, Knowledge transfer, Collaboration, Capacity building, Practice, Innovation theory
National Category
Information Systems
Identifiers
urn:nbn:se:umu:diva-88704 (URN)
Available from: 2014-05-13 Created: 2014-05-13 Last updated: 2014-05-15Bibliographically approved
2. Balancing diversity in innovation networks: Trading zones in university-industry R&D collaboration
Open this publication in new window or tab >>Balancing diversity in innovation networks: Trading zones in university-industry R&D collaboration
2015 (English)In: European Journal of Innovation Management, ISSN 1460-1060, E-ISSN 1758-7115, Vol. 18, no 1, 44-69 p.Article in journal (Refereed) Published
Abstract [en]

Purpose

– Although the potential of innovation networks that involve both university and industry actors is great variances in cultures, goals and knowledge poses significant challenges. To better understand management of such innovation networks, the authors investigate different strategies for balancing diversity. The paper aims to discuss these issues.

Design/methodology/approach– In this multiple case study, the authors draw on network and trading zone theory to examine the strategies of four research centers that govern university-industry innovation networks.

Findings

– The authors provide empirically grounded descriptions of strategies for balancing diversity in innovation processes, extend previous theorizations by suggesting two types of trading zones (transformative and performative), and identify four strategy configuration dimensions (means of knowledge trade, tie configuration, knowledge mobility mechanisms and types of trust).

Research limitations/implications

– Further research is needed on transferability of results when, e.g. cultural collaboration and communication patterns change, and performance implications of different configurations. The research provides conceptual tools for future research on the impact of different diversity strategies.

Practical implications

– The findings point to the importance of identifying desired types of innovation outcomes and designing the appropriate level of diversity. To implement the selected strategy, managers need to configure communication channels and strength of relationships, establish associated capacity for knowledge transfer and build appropriate levels of trust.

Originality/value

– While extant research has provided a solid understanding of benefits from diversity in boundary spanning innovation processes, this paper outlines strategies for managing associated challenges.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2015
Keyword
Diversity, Open innovation, Innovation management, Innovation networks, The medici effect, Trading zone
National Category
Information Systems
Identifiers
urn:nbn:se:umu:diva-88705 (URN)10.1108/EJIM-09-2013-0088 (DOI)
Available from: 2014-05-13 Created: 2014-05-13 Last updated: 2017-12-05Bibliographically approved
3. Coping with complexity: Exploring modularity and flexibility in IT infrastructure adaptation
Open this publication in new window or tab >>Coping with complexity: Exploring modularity and flexibility in IT infrastructure adaptation
2010 (English)In: Industrial informatics design, use and innovation: Perspectives and services / [ed] Holmström, Jonny, Wiberg, Mikael & Lund, Andreas, Hershey: IGI Global , 2010, 85-101 p.Chapter in book (Other academic)
Abstract [en]

This chapter explores issues associated with the implementation of Enterprise Resource Planning (ERP) in process industries and the inherent tension between control and flexibility in IT infrastructures. A qualitative case study of the alignment between organizational elements and the ERP system was conducted. The study illustrates the complexities involved with IT infrastructure adaptation and the extensive organizational consequences accompanying process and data standardization. The main contribution to the body of knowledge on IT infrastructure is a suggestion that fit between the inherent standardization an ERP system conveys and processes in the host organization are key aspects, hence implementation is more likely to contribute with desired effects in relation to stable and universal processes. A prerequisite for accomplishing limitation of the scope of ERP systems to these processes is a truly modular system.

Place, publisher, year, edition, pages
Hershey: IGI Global, 2010
Keyword
ERP, infrastructure, standard, platform, modularity
National Category
Information Science
Identifiers
urn:nbn:se:umu:diva-35299 (URN)10.4018/978-1-61520-692-6 (DOI)9781615206926 (ISBN)1615206922 (ISBN)
Available from: 2010-10-07 Created: 2010-08-11 Last updated: 2014-05-15Bibliographically approved
4. Digital Options Theory for IT Capability Investment
Open this publication in new window or tab >>Digital Options Theory for IT Capability Investment
2014 (English)In: Journal of the Association for Information Systems, ISSN 1536-9323, Vol. 15, no 7, 422-453 p.Article in journal (Refereed) Published
Abstract [en]

While research has shown that investments in IT capability may translate into improved firm performance, how and why they do is still a source of debate. Drawing on financial options thinking, recent research suggests that managers can support appropriate investment decisions by examining digital options. However, current research has not effectively translated the financial options construct into the IT domain, making it difficult to rigorously examine digital options. To address this void, we revisit general options theory and review current notions of digital options. To support understanding, we extend current theorizing by offering a rigorous conceptual foundation that defines the digital option life cycle and relationships to neighboring constructs. To support practice, we present principles for examining digital options for a specific business process. To illustrate the detailed workings of the theory, we examine a production planning process within the dairy industry to arrive at a set of desirable and feasible IT capability investments. The proposed theory supports managerial practice by offering a rigorous and actionable foundation for digital options thinking. It also sets an agenda for academic research by articulating theory-based constructs and principles that are subject to further empirical and theoretical investigation.

Keyword
Digital Options, IT Capability Investments, Information Requirements, Process Innovation
National Category
Information Systems
Identifiers
urn:nbn:se:umu:diva-88702 (URN)000339386400003 ()
Available from: 2014-05-13 Created: 2014-05-13 Last updated: 2015-05-07Bibliographically approved
5. Platform Change: Theorizing the Evolution of Hybrid Product Platforms in Process Automation
Open this publication in new window or tab >>Platform Change: Theorizing the Evolution of Hybrid Product Platforms in Process Automation
(English)Manuscript (preprint) (Other academic)
National Category
Information Systems
Research subject
Computer and Information Science
Identifiers
urn:nbn:se:umu:diva-88701 (URN)
Available from: 2014-05-13 Created: 2014-05-13 Last updated: 2014-05-15Bibliographically approved

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