Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> Foreword by Adrian J. Slywotzky Introduction 1. The Premise and Promise of Sense-and-Respond 2. Unpredictability: The Only Sure Thing 3. Strategy: Past and Future 4. The Sense-and-Respond Alternative 5. Adaptiveness: Finding Meaning in Apparent Noise 6. The Role of Leadership in Sense-and-Respond Organizations 7. Building Organizational Context 8. Coordination: Keeping Track of Who Owes What to Whom 9. Managing by Wire 10. Managing the Transformation: A Case Study 11. Changing the Corporate DNA Appendix A: Creating the Modular Organization Appendix B: A Collaborative Decision-making Process for Adaptive Enterprises Appendix C: Putting the Commitment Management Protocol to Work Notes Acknowledgments Glossary Bibliography Index About the Author <s> BIB001 </s> Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> Agility is vital to the innovation and competitive performance of firms in contemporary business environments. Firms are increasingly relying on information technologies, including process, knowledge, and communication technologies, to enhance their agility. The purpose of this paper is to broaden understanding about the strategic role of IT by examining the nomological network of influences through which IT impacts firm performance. By drawing upon recent thinking in the strategy, entrepreneurship, and IT management literatures, this paper uses a multitheoretic lens to argue that information technology investments and capabilities influence firm performance through three significant organizational capabilities (agility, digital options, and entrepreneurial alertness) and strategic processes (capability-building, entrepreneurial action, and coevolutionary adaptation). We also propose that these dynamic capabilities and strategic processes impact the ability of firms to launch many and varied competitive actions and that, in turn, these competitive actions are a significant antecedent of firm performance. Through our theorizing, we draw attention to a significant and reframed role of IT as a digital options generator in contemporary firms. <s> BIB002 </s> Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> The role of information systems in the creation and appropriation of economic value has a long tradition of research, within which falls the literature on the sustainability of IT-dependent competitive advantage. In this article, we formally define the notion of IT-dependent strategic initiative and use it to frame a review of the literature on the sustain- ability of competitive advantage rooted in information systems use. We offer a framework that articulates both the dynamic approach to IT-dependent strategic advantage currently receiving attention in the literature and the underlying drivers of sustainability. This framework models how and why the characteristics of the IT-dependent strategic initiative enable sustained competitive advantage, and how the determinants of sustainability are developed and strengthened over time. Such explanation facilitates the pre-implementation analysis of planned initiatives by innovators, as well as the post-implementation evaluation of existing initiatives so as to identify the basis of their sustainability. ::: ::: In carrying out this study, we examined the interdisciplinary literature on strategic information systems. Using a structured methodology, we reviewed the titles and abstracts of 648 articles drawn from information systems, strategic management, and marketing literature. We then examined and individually coded a relevant subset of 117 articles. The literature has identified four barriers to erosion of competitive advantage for IT-dependent strategic initiatives and has surfaced the structural determinants of their magnitude. Previous work has also begun to theorize about the process by which these barriers to erosion evolve over time. Our review reveals that significant exploratory research and theoretical development have occurred in this area, but there is a paucity of research providing rigorous tests of theoretical propositions. ::: ::: Our work makes three principal contributions. First, it formalizes the definition of IT-dependent strategic initiative. Second, it organizes the extant interdisciplinary research around an integrative framework that should prove useful to both research and practice. This framework offers an explanation of how and why IT-dependent strategic initiatives contribute to sustained competitive advantage, and explains the process by which they evolve over time. Finally, our review and analysis of the literature offers the basis for future research directions. <s> BIB003 </s> Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> The concept of the agile enterprise emerged in the early 2990s from a Department of Defense/National Science Foundation-sponsored industry-collaborative study at Lehigh University. The intent was to forecast the competitive environment of 2005 and beyond. The accuracy of that work is evident in today’s emerging business strategies, practices, and technology-infrastructure support. In general, however, agility is creeping into the business environment with compelling spot applications, such as outsourcing and business process management initiatives. This paper examines new risk-management value-understandings, the nature of reality confronted by agile enterprise, and updates previously published agile-enterprise system-engineering concepts. The purpose of this paper is to illuminate requirements for those who would design and build the necessarily agile IT infrastructure support. <s> BIB004 </s> Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> In recent years, outsourcing has gained considerable management attention. However, the benefits of outsourcing are not without concessions. One major risk is losing the flexibility to change the extent, nature, or scope of the outsourced business services, and such flexibility is strategically imperative in today’s dynamic business environment. This paper seeks to clarify the multi-dimensional notion of flexibility in outsourcing by examining robustness, modifiability, new capability, and ease of exit. Adapting from Evans (1991), we also develop a framework to classify existing practices in managing outsourcing flexibility. We go beyond contractual provision to surface a portfolio of pre-emptive, protective, exploitive, and corrective maneuvers. These strategic maneuvers map well to traditional notions in coordination theory, both in advanced structuring through loose coupling and dependency diversification, and in dynamic adjustment through proactive sensing and reactive adapting. We put forward a set of propositions hypothesizing the relationships between the various strategic maneuvers and the different dimensions of outsourcing flexibility, and discuss the moderating impact of such maneuvers on outsourcing success. We hope the greater conceptual clarity will not only contribute to the effectiveness of outsourcing management but also spawn a new research agenda on outsourcing flexibility. <s> BIB005 </s> Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> In turbulent environments, enterprise agility, that is, the ability of firms to sense environmental change and respond readily, is an important determinant of firm success. We define and deconstruct enterprise agility, delineate enterprise agility from similar concepts in the business research literature, explore the underlying capabilities that support enterprise agility, explicate the enabling role of information technology (IT) and digital options, and propose a method for measuring enterprise agility. The concepts in this paper are offered as foundational building blocks for the overall research program on enterprise agility and the enabling role of IT. <s> BIB006 </s> Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> AbstractFirms are looking to leverage information technology (IT) to develop higher order capabilities that span the extended enterprise, such as demand-supply synchronization for agile response in volatile markets. In this study, we examine two global firms that are both driven to become orchestrators of their respective global business networks, where product design, distribution, and manufacturing are managed as one coordinated whole. However, each firm has pursued a different business strategy to develop demand-supply synchronization capabilities. The design of their business networks, digital enablement of business processes, and product characteristics are key attributes that differentiate these firms. By conducting a comparative case analysis of both firms, we assess differences and similarities, in an effort to understand how IT capabilities and business network structure can be aligned to leverage global resources, synchronize demand and supply, and develop business network agility on a global scale. <s> BIB007 </s> Enterprise Systems and Organizational Agility: A Review of the Literature and Conceptual Framework <s> ES-enabled Sensing and Responding Capability Alignment <s> Understanding how IT contributes to a firm's competitive advantage has long been of interest. While managers have made significant investments in IT, inflexible legacy systems hinder their ability to respond quickly to market opportunities. Our study examined how the flexibility of an organization's IT infrastructure enhanced information generation and dissemination and that this increased their ability to respond to rapidly changing environments. Our discussion of these information building and information leveraging effects was grounded in the resource-based view of the firm. We empirically tested our model using data collected from senior executives of 105 manufacturing and service firms. We found that IT infrastructure flexibility was positively related to information generation and dissemination. Moreover, information generation was significantly related to organizational responsiveness. Finally, organizational responsiveness was positively related to the firm's competitive advantage. These results showed the importance of developing a flexible IT infrastructure that can be quickly adapted and reconfigured to meet information processing demands in dynamic environments. <s> BIB008
Organizational agility places a strong emphasis on rapidity because, in order to operate in a dynamic environment, speed is an essential quality  . Time has two critical dimensions in OA. First, it refers to the speed in detecting and responding to threats or opportunities. This includes the time to sense the events, the time to interpret what is happening and to assess the consequences to the organization, the time to explore options and decide on which actions to take, and the time to implement appropriate responses BIB005 . Second, it refers to the time that organizations retain competitive advantage before those advantages are imitated by competitors  . However, there is no specific indication of how quickly the action should take place. The speed should be understood within the timeframe of available opportunities and competitors' actions BIB003 . Agile organizations need to be quick, both in detecting opportunities and in taking and implementing actions. Changes happen unexpectedly and continuously in the business environment; hence, organization agility indicates a continuous process of aligning to changing business requirements. Changes identified through the sensing process requires an appropriate response. The alignment between sensing capability and responding capability ensures that no changes are ignored or organizational resources are wasted, thus obtaining the optimal effect on organizational agility and, ultimately, organizational performance BIB001 BIB006 Teece, 2007] . The "strategic fit" between sensing and responding capabilities has been discussed in the literature under various constructs. BIB004 suggests value propositioning skills, along with knowledge management and responding capabilities, as the three cornerstones of the agility. Value propositioning refers to effective prioritization and choice making among competing response alternatives. Thus, value propositioning skills align the requirement for responding to the opportunities that an organization can sense and the actual responding capabilities of the organization. BIB002 postulate that entrepreneurial alertness, which consists of strategic foresight and systemic insight, is considered to be essential for converting digital options into agility. Entrepreneurial alertness refers to the mechanism that aligns the need for promoting agility (sensing capability) and digital options (responding capability). Both value propositioning skills and entrepreneurial alertness refers to the alignment of sensing and responding capabilities. The alignment between sensing and responding capabilities can be taken from three perspectives: moderating, matching, and mediating BIB008 . Based on the moderating perspective, the impact of responding capabilities on organizational agility varies according to different levels of sensing capabilities. By sensing more opportunities or threats (higher sensing capabilities), organizations will have a higher chance of taking more action in responding to these changes. However, the moderating view is valid only if organizations are proactively learning over a period of time. From the mediating perspective, organizational agility is dependent on the ability of the organization to respond to only the changes that it is able to capture. BIB007 , through cross-case analysis of IT strategies at two companies, Zara and Li & Fung, that are famous for being highly agile in volatile businesses such as the apparel industry, suggest that organizations need to design a decision rights architecture with the ability to respond and act on available information to achieve a high level of agility. From the matching view, development of sensing capabilities and responding capabilities is separate BIB006 . The match between sensing capabilities and responding capabilities would lead to various states of alignment of sensing and responding capabilities (i.e., high sensing/high responding, high sensing/low responding, low sensing/high responding and low sensing/low responding). The stronger the alignment between sensing and responding capabilities, the better the performance of organizational agility. However, if the alignment is low, a high Volume 31 Article 8 level of sensing capability would be wasted if the organization cannot respond, while high levels of responding will not improve organizational agility due to not being able to detect opportunities. Thus: Hypothesis 3: Better alignment of enterprise systems-enabled sensing capability and enterprise systemenabled responding capability is more likely to lead to higher organizational agility. Furthermore, the relationship among sensing capability, responding capability, and organizational agility can be viewed from a process-based view perspective. From a process-based view, organizational agility is "a set of processes that allows an organization to sense changes in the business environment, respond efficiently and effectively in a timely and cost-effective manner and learn from the experience to improve the competencies of the organization" [Seo and Paz, 2008, p. 136] . None of these steps can be omitted from the process. Teece [2007] also finds that organizations that more frequently engage in market sensing and more frequently seizing opportunities and reconfiguring the resource base will be more capable of dealing with market turbulence and be better prepared to align the resource base with the environment than organizations with less practice. Although the variation in sensing and responding capability can create different types of agility levels, high sensing capabilities can generally lead to high responding capabilities, allowing firms to rapidly retool existing products, change production volumes, and customize service offerings. Thus: Hypothesis 4: Higher enterprise systems-enabled sensing capability is more likely to lead to higher enterprise system-enabled responding capability.