Developing IT-Enabled Dynamic Capabilities: A Service Science Approach

Abstract

AbstractThe transition from a relatively stable goods-based economy to an intangible and highly turbulent service-based economy has necessitated the development of an appropriate theoretical perspective to explain value creation and sustained competitive advantage. Service science has been put forth in order to address this changing view and requires firms to fundamentally reconsider the means by which value is derived. Firms that foster the service logic are increasingly dependent upon Information Technology (IT) to enact their operations and deliver value propositions. Despite significant investments in service-oriented technologies, the prevailing research view regarding management of IT has not been in adherence with the principles of service science or the dynamism of the environment. The view on IT still follows a resource-based logic, in which a competitive advantage is seen as being a result of owning a unique bundle of resources. Literature to date has placed little attention on the IT-enabled capabilities that firms must develop in order to remain competitive in conditions of high environmental turbulence. Building upon this need of conceptually reframing the management of service-oriented technologies which is reinforced by recent calls of the IT management literature, we use service science principles to propose an alternative perspective of IT-enabled capabilities. We ground our developments on the Dynamic Capabilities (DCs) theory since it provides a theoretical basis for explaining resource renewal and competitive survival in highly turbulent environments. Hence, we propose four IT-enabled dynamic capabilities: IT-enabled sensing, IT-enabled coordination/reconfiguration, IT-enabled learning, and IT-enabled integration. We argue that these IT capabilities constitute the prime source of sustained competitive advantage for service-oriented enterprises operating in conditions of moderate to high environmental uncertainty.KeywordsService ScienceDynamic CapabilitiesServices ComputingITEnabled Dynamic CapabilitiesEnvironmental TurbulenceService-Oriented Architectures