Organizing IT to promote agility

Abstract

Agility at the individual business unit and organizational levels presents a challenge for many information system (IS) departments. Business unit agility demands the ability to sense and respond to changes in local competitive environments, whereas organizational agility demands the ability to sense broader market opportunities and respond with changes that are organization-wide. The former requires experimentation and customization of system designs, while the latter demands uniformity and standardization. Although flexible and customizable software might assist organizations in adapting systems to meet these challenges simultaneously, coordination across multiple business units also demands effective organization and governance of system design and development. This paper presents a longitudinal case study of an insurance company that was effective at sensing and responding to changes in the environment at the business unit level, but less effective at sensing and responding at the organizational level. Using the platform logic as a theoretical lens, we analyze this case and offer insights into how multi-unit organizations can manage system design at the organizational and business unit levels, thereby supporting agility through the development of effective organizing and governance mechanisms. Our analysis outlines relational and integration mechanisms and explains how these arrangements helped the organization to attain greater enterprise agility and support its overall strategy.