Ambidextrous governance of IT-enabled services: A pragmatic approach

https://doi.org/10.1016/j.infoandorg.2020.100325Get rights and content

Highlights

  • · Highlight challenges in managing competing innovation and operational tensions in delivering IT-enabled services in dynamic environments

  • The competing concerns cannot simply be “balanced” without taking contextual and trade-off issues into account

  • Examine how a health delivery organization addressed the competing concerns through sequential, structural, and contextual ambidexterity

  • Demonstrate how organizations can pragmatically combine multiple ambidexterity approaches in highly dynamic contexts

Abstract

Organizations must continuously allocate and reallocate limited resources, including IT resources, to competing innovation and operational concerns. While the ambidexterity literature provides some guidance regarding resource allocation approaches, studies typically assume that such tensions can be balanced without taking contextual and trade-off issues into account. Further, many studies examine ambidexterity approaches individually without considering how different approaches may be combined. To address these shortcomings, we pragmatically examine how a U.S. health delivery organization responded to technological, regulatory, and demand changes over a 15-year period and the effects of its actions. To manage the consequential tensions between innovation and operation of its IT-enabled services, we retrospectively observe that the organization applied a portfolio of sequential, structural, and contextual ambidexterity approaches. As a contribution to the IT governance and health IT literatures, the study offers theoretical and practical knowledge on how organizations can pragmatically apply ambidexterity in highly dynamic contexts to mindfully orchestrate and coordinate between innovation and operation of their IT-enabled services.

Introduction

In response to contextual dynamics, organizations must continuously invest in various ITs to innovate their service portfolio and delivery (Barrett, Davidson, Prabhu, & Vargo, 2015; Constantinides, 2013). At the same time, they must manage the day-to-day operations of their services to avoid disruptions for customers (Aanestad & Jensen, 2016; Barrett, Oborn, Orlikowski, & Yates, 2012). As a result, managers face many IT governance concerns as they seek to allocate the organization's limited resources and attention between future-focused innovation pursuits and present-focused operational pursuits (Gregory, Keil, Muntermann, & Mähring, 2015). Contemplating whether to invest in a specific IT-enabled service innovation at a particular cost and functionality level, managers may ask: Should we invest now, or should we wait until more mature and more broadly applicable IT solutions become available? How should we implement and assimilate this innovation while minimizing disruptions to existing services? Inability to effectively manage such competing concerns can contribute to failures and adversely affect organizational performance (Napier, Mathiassen, & Robey, 2011; O'Reilly & Tushman, 2011; Svahn, Mathiassen, & Lindgren, 2017). While such IT governance concerns are relevant in any organization (Peter Weill & Ross, 2004), they become particularly critical in healthcare organizations that must harness IT to deliver health services to patients (Jones, 2014).

The current literature suggests that governance of resources in response to competing concerns requires organizations to adopt ambidextrous approaches. Ambidextrous approaches can be applied toward continuous sensing of environmental threats, seizing available opportunities, and dynamically reconfiguring resources into new competencies while sustaining current ones (Benner & Tushman, 2015; O'Reilly and Tushman, 2004, O'Reilly and Tushman, 2013; Tushman & O'Reilly, 1996). As Lavie, Stettner, and Tushman (2010) have noted, the ambidexterity literature typically assumes that organizations can manage competing concerns by balancing resources and attention (March, 1991; W. K. Smith & Tushman, 2005). For example, Gibson and Birkinshaw (2004) discussed the importance of enabling simultaneous capacities for alignment and adaptability. Rivkin and Siggelkow (2003) argued that successful organizations must balance the opposing needs for broad search of real options and stable decision making. Moreover, organizations facing competing concerns are expected to engage in “sufficient exploitation to ensure its current viability and, at the same time, devote sufficient attention to exploration in order to ensure the organization's future viability” (Levinthal & March, 1993, p105).

However, a pragmatic perspective on the ambidexterity “balance assumption” reveals several shortcomings. Balancing does not explicitly consider how trade-offs between exploration and exploitation activities (Lavie et al., 2010, pg. 127) affect the outcomes of organizational responses to innovation-operations tensions over time. Further, the literature does not explain what level of balance (such as between exploration and exploitation) would be considered sufficient, how to achieve that balance, and whether such a balance would bring performance benefits to the firm (Raisch & Birkinshaw, 2008). As such, a balance assumption provides limited guidance to how organizations can effectively manage competing concerns. Managing resources and attention related to innovation and operational pursuits is, in fact, non-trivial and subject to considerable organizational and industry contingencies (Lavie et al., 2010). As such, a balance assumption “may be harmful to firms under certain conditions,” such as those related to firm size, strategy, resource availability, and environmental uncertainty (Lin, Yang, & Demirkan, 2007, p1656; Yamakawa, Yang, & Lin, 2011).

The literature also suggests that organizations can apply different ambidexterity approaches, including sequential, structural, and contextual ambidexterity (Benner & Tushman, 2015; Birkinshaw & Gibson, 2004; March, 1991; O'Reilly and Tushman, 2008, O'Reilly and Tushman, 2013). However, with the exception of a few studies, such as Chandrasekaran, Linderman, and Schroeder (2012) and Andriopoulos and Lewis (2009), the literature has examined these approaches individually without considering how they may be combined to address competing resource allocation strategies. Further, research has yet to examine how organizations that operate in highly dynamic environments can manage IT governance tensions between innovation and operation. This issue is particularly important in healthcare organizations that need to make timely and appropriate IT investments into health service innovations while managing day-to-day operations in an environment characterized by unprecedented technological advancements, frequent regulatory changes, increasing market competition, and demand fluctuations (Berry & Bendapudi, 2007; Danaher & Gallan, 2016).

Against this backdrop, we ask: How can organizations pragmatically manage competing concerns between innovation and operation of IT-enabled services? Our investigation draws on a retrospective case study of THA (pseudonym), a home health organization in the U.S. that provides health services to patients discharged from a hospital after a major surgery to continue recovery in their home. In response to a changing technological, policy, and demand environment between 2000 and 2015, THA invested in remote patient monitoring (RPM) and other IT-enabled services while also managing its day-to-day operations. Drawing on ambidexterity theory (Benner & Tushman, 2015; Birkinshaw & Gibson, 2004; March, 1991; O'Reilly and Tushman, 2008, O'Reilly and Tushman, 2013) to understand the relationship between the actions this organization took and the associated effects, we reveal how THA managed the resulting innovation-operation tensions by mindfully orchestrating and coordinating a portfolio of structural, contextual, and sequential ambidexterity approaches. In doing so, we adopt a pragmatic approach to build knowledge about social and institutional phenomena (Aakhus, 2007; Agerfalk, 2010) related to governance of IT-enabled services.

Section snippets

Governance of IT-enabled services

Several developments—including transformational advances in IT (e.g., mobile applications, cloud computing, and internet-of-things), rapid expansion of digital infrastructures (e.g., standards, platforms, and broadband internet), widespread deployment of IT applications (e.g., video conferencing, email, and instant messaging), and growth in analytical capabilities—have provided unprecedented opportunities for organizations to offer innovative IT-enabled services to their customers (Barrett et

Remote patient monitoring (RPM)

Consider an 80-year old patient, discharged from a hospital after a major surgery and continuing recovery at home where a trained nurse from a home health agency provides care and care coordination. Such health services have become an important part of the U.S. healthcare system, in part due to policies that emphasize minimizing in-hospital stays and reducing emergency room (ER) visits (Kocher & Adashi, 2011). Traditionally, a home health nurse would visit a patient based on a fixed schedule

Research design

To examine our research question, we adopted a case study design, which is useful in examining a contemporary phenomenon in its context (Yin, 2003). Moreover, case studies have been successfully applied in previous examinations of ambidexterity (Andriopoulos & Lewis, 2009; Raisch & Tushman, 2016). We focus on within-case analysis (Eisenhardt, 1989) of the tensions between innovation and operations at THA in which we examine embedded units of analysis (Yin, 2003), with multiple initiatives,

Findings

Over the 15-year period during which THA enacted various ambidexterity approaches, the organization improved the performance of its RPM-enabled home health services. Notably, THA reduced the number of home health nursing visits per 60-day patient episode from an average of 8.5 in 2001 to an average of 4.0 in 2013. The increased productivity allowed THA to reduce related travel costs (since the nurses had to travel less often to visit a patient). THA also improved the quality of its healthcare

Discussion

Drawing from research on IT governance (Gregory et al., 2018; Tiwana & Kim, 2015; Weill & Ross, 2004), IT-enabled services (Barrett et al., 2015; Holmström, 2018; Svahn et al., 2017), and ambidexterity theory (Benner & Tushman, 2015; Birkinshaw & Gibson, 2004; March, 1991; O'Reilly & Tushman, 2013), and by relying on a pragmatic approach (Goldkuhl, 2012; James, 1975; Yvonne Feilzer, 2010), we analyzed how THA managed innovation-operation related governance tensions in its RPM-enabled health

Conclusion

In this study, we explain how organizations facing a dynamic technological, regulatory, and demand environment may sustainably focus on both IT-enabled innovation and day-to-day operations. We demonstrate how organizations can reduce risk in integrating IT-enabled innovative services into day-to-day operations through short sprints that emphasize innovation followed by longer periods of operation focused on how to effectively and pragmatically leverage the new technologies. Our in-depth

Declaration of Competing Interest

None.

Rajendra Singh ([email protected]) is an Associate Professor in the MIS Division at University of Oklahoma's Price College of Business. His research interests include health information technology, healthcare operations, digital innovation, business process transformation, and strategic use of technology. He has published in journals such as MIS Quarterly, Journal of Management Information Systems, European Journal of Information Systems, Journal of the Association for Information Systems,

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  • Cited by (1)

    Rajendra Singh ([email protected]) is an Associate Professor in the MIS Division at University of Oklahoma's Price College of Business. His research interests include health information technology, healthcare operations, digital innovation, business process transformation, and strategic use of technology. He has published in journals such as MIS Quarterly, Journal of Management Information Systems, European Journal of Information Systems, Journal of the Association for Information Systems, Information and Organization, and Health Services Research. He received his doctoral degree in computer information systems from Georgia State University. Before joining academia, he worked for more than 14 years as a production engineer, business process analyst, software quality consultant, and project manager.

    Aaron Baird ([email protected]) is an Associate Professor in the Robinson College of Business at Georgia State University with a primary appointment to the Institute of Health Administration and a secondary appointment to the Department of CIS. His research primarily focuses on health information technology adoption, assimilation, use, and related outcomes. He has served on the Arizona and Georgia health-related Chapter Boards, has collaborated with a variety of industry partners including the Mayo Clinic, and has published in Journal of Management Information Systems, Information Systems Research, European Journal of Information Systems, Information and Organization, and others.

    Lars Mathiassen ([email protected]) is Georgia Research Alliance Eminent Scholar, Professor at the Computer Information Systems Department, and co-Founder of The Center for Process Innovation at Georgia State University. His research focuses on development of software and information services, on IT-enabled innovation of business processes, and on management and facilitation of organizational change processes. He has published extensively in major information systems and software engineering journals and has co-authored several books on the subject, such as Professional Systems Development, Computers in Context: The Philosophy and Practice of Systems Design, Object Oriented Analysis & Design, and Improving Software Organizations: From Principles to Practice. He has served as senior editor for MISQ, and he currently serves as senior editor for Information & Organization and for the Journal of Information Technology.

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