Objective and main results

This article concerns the relationship between IT capability and organizational agility. IT capability refers to a firm’s ability to acquire, deploy, combine, and reconfigure IT resources in support and enhancement of business strategies and work processes. Organizational agility is a firm’s ability to cope with rapid, relentless, and uncertain changes and thrive in a competitive environment of continually and unpredictably changing opportunities.

Findings:

• There are significant positive relationships between IT capability and two types of agility; market capitalizing agility and operational adjustment agility. The former refers to a firm’s ability to quickly respond to/ capitalize on changes through continuously monitoring and quickly improving product/service to address customers’ needs. The latter refers to a firm’s ability in its internal business processes to physically and rapidly cope with market or demand changes. Both types of agility entail a continual readiness to change, with the former focusing on entrepreneurial mind set and the latter emphasizing speedy execution/ implementation.  
• There is a significant positive joint effect of IT capability and IT spending on operational adjustment agility.
• While more IT spending does not lead to greater agility, spending it in such a way as to enhance and foster IT capabilities does.

Summary of practical implications

Overall, managers need to develop their IT capability to successfully sense and seize market opportunities. The following competencies are significant:

• The ability to deploy shareable platforms. This concerns data management services and architectures, network communication services, and application portfolio and services. Firms can use this platform to build and enhance market intelligence to detect market opportunities and customer concerns.
• The ability to envision and exploit IT resources to support and enhance business objectives. This concerns development of a clear IT strategic vision, integration of business and IT strategic planning, and understanding of the value of IT investments. This helps the firm to target scarce IT resources to the right business initiatives.
• The ability to proactively search for ways to embrace IT innovations or exploit existing IT resources to create business opportunities. This concerns being current with IT innovations, experiment with new IT, seeking new ways to enhance its effectiveness of IT use, and fostering a climate that is supportive of trying out new ways of using IT.

Finally, the authors emphasize that firms should carefully direct their IT spending into nurturing and fostering essential IT capabilities, as IT spending that is not properly channelled into IT capability building may have negative effects on agility.

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