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Objective and main results

The results of the study show that a firm’s IT competence and innovation capacity are significant enablers for organizational agility, which again is positively related with firm performance.

A firm’s IT competence is conceptualized as its capability to create digital platforms by investing in IT and utilize IS capabilities. That is, digital platform capabilities are created through a firm’s IS capabilities and its IT investment orientation. Together these relationships constitute a firm’s IT competence. 

The analyses show that:

• firm performance is positively related with organizational agility.
• Organizational agility is positively related with digital platform capabilities and innovation capacity.
• Digital platform capabilities are positively related with IS capabilities and IT investment orientation. 

Summary of practical implications

The study stresses the importance of investing in development of IT competence as this could enable agility and improve firm performance.

A cost-focused approach to IS investments might be dysfunctional as strong IS functional capabilities and an aggressive investment orientation are value yielding.  

Senior executives who understand the strategic value of IT platforms must proactively educate other executives in the organization and seek the necessary funding to renew and improve IT competencies.

Development of IT competencies is time-consuming, and a sustained effort towards competence development is more likely to be beneficial than the boom and bust cycles that seem to characterize IT investing.

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Tags

Customer responsiveness Operational flexibility Strategic flexibility