Empowering IT Organizations Through a Confluence of Knowledge for Value Integration into the IT Services Firm’s Business Model

Abstract

Challenges in operationalizing business innovation based on information technology (i.e. advancing new technology from the lab to the business operations) affect the ability of IT organizations to implement and effectively exploit these technologies. In IT services firms, these challenges are often linked to conflicting priorities, integration issues, inadequate infrastructure capabilities and the availability of the required knowledge/skills. Sometimes insurmountable these challenges leave the firm incapable to incorporate emerging information technologies into their business model. At the intersection of knowledge-based theory of the firm and the theory of dynamic capabilities, the study draws insight from the two cases in IT services companies. We seek to understand mechanism required to manage the flow knowledge assets for successful integration of innovation, while assimilating the tacit knowledge of the customer as a major component in the value integration. The study has far‐reaching implications for practice and produces interesting opportunities for further research.