Information technology outsourcing and architecture dynamic capabilities as enablers of organizational agility

Abstract

Grounded in the dynamic capabilities perspective, our study addresses the question of how information technology outsourcing capabilities can interact with other IT strategic capabilities to enable organizational agility through the ongoing reconfiguration of IT solutions. To answer our question, we built on the notion of microfoundations that undergird the high-level dynamic capabilities of sensing, seizing, and reconfiguring. Adopting a theory elaboration approach, we studied the case of a firm evolving in a turbulent environment, which had outsourced the quasi-totality of its IT services and had a mature IT architecture. From the case data, we specify two types of microfoundations: repeatability-related microfoundations (i.e. processes) and ability-related microfoundations (i.e. IT department structure, skills, simple rules, and communications) that undergird either information technology outsourcing dynamic capabilities or IT architecture dynamic capabilities. We propose a model that outlines how the interaction between repeatability-related microfoundations, supported by ability-related microfoundations, enables the reconfiguration of IT solutions. Our study also elucidates how a firm can follow a logic of opportunity enabled by their IT outsourcing and IT architecture dynamic capabilities.