19 th Australasian Conference on Information Systems The extent of IT-enabled organizational flexibility 3-5 Dec 2008, Christchurch Paschke, et al. 730 The Extent of IT-Enabled Organizational Flexibility: An Exploratory Study among Australian Organizations Joerg Paschke Alemayehu Molla Bill Martin School of Business IT RMIT Melbourne, Australia Email: Joerg.Paschke@rmit.edu.au ; Alemayehu.Molla@rmit.edu.au ; Bill.Martin@rmit.edu.au Abstract The intensity of market competition, the ever increasing demand for shortening time to market and the pressure of first mover advantage are forcing businesses to develop non-imitable sources of value creation. Information technology (IT) plays a key role as a necessary, but not sufficient, source of value. For IT to generate business value, IT has to adapt itself to a firm’s continuously changing competitive environment. The strategic value of IT can be defined as an enabler of organizational flexibility. Hence, IT-enabled organizational flexibility is of strategic importance to organizations and has been found to affect competitive advantage. This study uses an enhanced concept of IT-enabled flexibility to investigate IT-enabled organizational flexibility among Australian organizations. The findings show that, even though Australian companies exhibit IT enabled organizational flexibility, company and IT department size are influencing the flexibility of IT. The paper provides an indication of the extent to which Australian organizations are poised to exploit the value generating potential of IT. Practitioners can use the result to benchmark where they stand in regards to the flexibility of their IT. Keywords IT infrastructure flexibility, flexible IS, IT personnel flexibility, IT-enabled organizational flexibility INTRODUCTION Since the mid 1990s, researchers have been investigating the strategic value of IT-enabled organizational flexibility as a source of competitiveness (Byrd & Turner 2001b; Duncan 1995a; Sambamurthy, Bharadwaj & Grover 2003). IT-enabled organizational flexibility refers to the ability of a firm’s IT to respond to both internal business requirement and external market demands. Previous researchers used a variety of approaches and variables to investigate the complex, and still not totally understood factors that determine IT’s ability to cope with change. Even though, these findings have given insights into what constitutes IT-enabled organisational flexibility and added to the knowledge of these variables and their contribution to the competitiveness of a firm, we identified some research gaps that motivated our enquiry. Firstly, previous study used a limited set of variables to operationalize IT-enabled organizational flexibility. Indeed, many researchers used IT infrastructure flexibility and IT personnel flexibility as variables in their studies. We note that there is a difference between information systems (IS) and information technology (IT). IT processes, transmits and stores information, where as IS represents a set of integrated software that uses IT to support individual, group and business goals. Therefore, the flexibility of IS should be considered as an essential element of IT-enabled organisational flexibility. So far there is no study known to the authors that investigated the flexibility of IS in this context. Considering the contribution of IS to sustainable and competitive business, this is a serious shortcoming. IS flexibility refers to the ability of firm’s IS to adapt quickly and efficiently to changes in its competitive environment (e.g. market, integration and network related changes) and has been identified as a strategic value to organizations (Gebauer & Schober 2006). Secondly, most studies of IT–enabled organizational flexibility, have been conducted in the North American context, and there is less known about the experience of IT-enabled organizational flexibility in Australia. Even though the characteristics of IT are similar all over the world, competitive environments and demographic variables (e.g. average company and IT department size) differ. As technology is socially constructed and technological developments and deployments are sensitive to contextual differences, studying the status of IT- enabled organisational flexibility in Australia provides not only additional data, but also an opportunity to cross validate if and which North American findings apply in the Australian context. It also enables to identify new insights. This research therefore intends to address the above gaps. The specific research questions the paper answers include (1), what is the extent of IT-enabled organizational flexibility, including IS flexibility, in