Date of Award
Doctor of Philosophy
Organizational subunits such as marketing, sales, human resources, and customer service invest in software as a service (SaaS) as a means to reduce information technology costs, speed time to market, gain access to new technologies, and improve application support and maintenance. For these reasons, SaaS has been characterized as a form of outsourcing, and one in which the internal IT function is losing relevancy because contracts are being executed between external application service providers and the affected subunits directly without IT oversight. Here we argue that SaaS is not outsourcing as it has been traditionally envisioned and enacted, and that through the generation of four types of functional slack it has demonstrated the ability to result in higher levels of IT innovation in support of a digital business strategy. A redistribution of IT resources from efficiency to innovation as a result of SaaS adoption was found that prescribed movement toward an equilibrium of ambidexterity between exploitative and exploratory activities. This research has established a number of firsts: 1) explored the production and combination of multidimensional slack, concentrated at a functional level; 2) demonstrated a previously disconfirmed positive relationship between IT outsourcing and innovation; 3) confirmed the feasibility of a theorized positive relationship between outsourcing and ambidexterity, and 4) discovered a new pathway within the realm of digital business strategy between a key external trend and an internal organizational shift of roles, responsibilities, and knowledge patterns. Further, our findings suggest that IT ambidexterity may be a better construct for investigating the impact of IT on firm performance than traditional measures of IT performance.
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