How Do Shared IT Applications Influence Agility? Theory and Evidence of a Convex Relationship

ABSTRACT

Organizations increasingly depend on information technology (IT) applications (apps) for competitive positioning. Governance of IT apps presents a unique set of challenges, particularly as organizations turn to shared IT apps across business units (IT apps relatedness). Shared IT apps can foment IT misalignment within business units, while also creating opportunities for learning-related synergies. This study develops the idea that an organization’s efforts to increase IT apps relatedness influence business unit agility and that this relationship is U-shaped. Analysis of data from 120 organizations provides support for a convex, U‐shaped, relationship. Furthermore, the U-shaped curve flattens under conditions of increased market uncertainty. This relationship highlights the need for IT governance to balance tension between business unit interests that seek autonomy over certain IT app choices and corporate interests that push for synergies based on shared IT apps. Failure to create this balance could impede business unit agility and hurt the broader organization.

KEYWORDS:

• IT applications
• IT governance
• synergy
• organizational alignment
• business unit
• organization agility
• market uncertainty

Acknowledgments

We thank the Editor-in-Chief of JMIS and the anonymous reviewers for their many helpful and insightful comments and suggestions. We also thank Viswanath Venkatesh for comments on an earlier draft of this manuscript.

Supplementary information

Supplemental data for this article can be accessed online at https://doi.org/10.1080/07421222.2022.2127452

Disclosure Statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

^1. Gartner press release from October 2021: https://www.gartner.com/en/newsroom/press-releases/2021-10-20-gartner-forecasts-worldwide-it-spending-to-exceed-4-trillion-in-2022

^2. Arguments by Pacific Life business units in favor of autonomy around IT apps were complicated by the need for risk management at an enterprise level alongside systemic, enterprise-wide issues around data security, business continuity planning, document management, and compliance [48].

^3. Given a U-shaped relationship dependent on moderator Z, a flattening of the curve occurs in the presence of a negative moderation [17, p. 1187].

^4. The case of Saturn and GM as explained by Pfeffer and Sutton [42] is particularly illustrative of how learning-related synergies due to knowledge transfer are difficult to achieve in practice. Despite its attractiveness, the reality is that learning from others often means admitting to failure. Divisions inside GM developed distinct social identities to where they resented being told what to do to improve their operations. They were reluctant to ask for help and were equally reluctant to act upon that advice when it was presented to them, even when it was obviously in their best interests to embrace that advice.

^5. Figure adapted from Haans et al.’s [17] illustration of theoretical mechanisms resulting in an inverted U-shaped curve. For an example of a study that adapts Haans et al.’s illustration for a U-shaped relationship, see Chirico et al. [11].

^6. Figure adapted from Haans et al.’s [17] illustration of the moderation of curvilinear effects.

Additional information

Notes on contributors

Magno Queiroz

Magno Queiroz ([email protected]; corresponding author) is Assistant Professor of Information Systems and Dean’s Outstanding Junior Faculty Fellow in the College of Business at Florida Atlantic University. He received his Ph.D. from University of Wollongong, Australia. His research interests include the influence of IT on competitive dynamics, the governance of IT applications, strategic agility, and the business value of AI investments. Dr. Queiroz’s research has been published in leading journals such as Journal of Management Information Systems, Journal of the Association for Information Systems, European Journal of Information Systems, Journal of Strategic Information Systems, and Journal of Information Technology.

Paul P. Tallon

Paul P. Tallon ([email protected]) is Professor of Information Systems and Chair of Information Systems, Law, and Operations at the Sellinger School of Business, Loyola University Maryland. He also serves as Director of the David D. Lattanze Center for Information Value. Dr. Tallon previously worked as an IT auditor and accountant with PricewaterhouseCoopers. His research interests cover the business value of IT, strategic alignment, real options, IT portfolio analysis, and the economics of information management. He has published in top-tier journals such as MIS Quarterly, Journal of Management Information Systems, European Journal of Information Systems, Journal of Strategic Information Systems, Journal of Information Technology, Journal of the AIS, and Communications of the ACM. His research work has received several awards. In 2013, he was a Visiting Scholar at the MIT Center for Information Systems Research.

Tim Coltman

Tim Coltman ([email protected]) is Emeritus Professor, University of Waikato, New Zealand, and holds an honorary appointment at the University of Wollongong, Australia. He holds a Ph.D. in Strategic Management from the Australian Graduate School of Management (jointly awarded by University of NSW and University of Sydney). Dr. Coltman specializes in the areas of innovation management, digital transformation, and strategy. He has provided consulting assistance to numerous organizations and has been awarded over $3.2 million in research funding by the Australian Research Council, DHL, Ports Australia and BlueScope Steel. He has published in such journals as Research Policy, Journal of Operations Management, California Management Review, Journal of Business Research, MISQ Executive, Journal of the AIS, and many others.