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  Banking on Ambidexterity: An IT Transformation Case Study 

Gregory, Robert Wayne; Keil, Mark; Muntermann, Jan; Mähring, Magnus
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Ambidexterity in management refers to the ability to pursue two disparate things at the same time. A prime example is the ability to simultaneously exploit the present and explore with an eye to future development.

Ambidexterity has a particularly important role to play in information technology (IT) transformation programs. IT transformation programs enable businesses -- from banks to clothing retailers -- to compete more effectively in the digital age. As anyone who has lived through IT transformation knows, the programs tend to be highly complex, encompassing interrelated projects with disparate goals. Ambidexterity, or the ability to juggle, is required.

In their article published in Information Systems Research, IESE's Robert Wayne Gregory and three co-authors analyze an ambitious, multiyear IT transformation program at a major commercial bank in order to theorize about its management's needs. Gregory visited this bank regularly for more than two years in order to formulate six paradoxes to be tackled by managers of the program.

Identifying six areas in which disparate, seemingly paradoxical aims must be reconciled, the co-authors then share practical insights for managers. They recommend that managers forge partnerships that blend business and IT interests. They also recommend that managers balance their "local" needs at the IT project level and "global" needs at the IT program level to fulfill their goals. Addressing program drift and using the power of persuasion toward these goals are required.

Managing Complexity -- Over Nine Years
Via 90 interviews, frequent visits and a previous case study, the co-authors track a complex IT transformation program at a large commercial bank over nine years. Initially, the bank aims to increase its IT-enabled competitiveness by transforming the firm's IT architecture and associated processes. In the fourth year of this ambitious program, the bank announces it is merging with a national competitor. Integrating platforms and enabling a unified digital future become even more challenging.

The scope of the program allows the authors to come to grips with contrasting demands that emerged. Gregory and co-authors begin their research with a broad topic: "why IT transformation programs are challenging and how they are executed." It is during the course of the research that the co-authors formulate their theory of ambidexterity in IT transformation programs, inspired by their reading of theories of ambidexterity in management which seem closely related to what they observe in their case study.

See also "Leadership Tips for Today to Stay in the Game Tomorrow: The Ambidextrous Leader"Premium

Paradoxes in IT Programs
The following six pairs of paradoxes are identified via interviews and observations of C-level executives down to operational personnel at the bank:
  1. In portfolio decisions: IT efficiency vs. IT innovation
  2. In platform design: IT standardization vs. IT differentiation
  3. In architecture change: IT integration (of existing components) vs. IT replacement (for renewal)
  4. In program planning: IT program agility vs. IT project stability
  5. In program governance: IT program control vs. IT project autonomy
  6. In program delivery: IT program coordination vs. IT project isolation
"What weaves these six areas together is the combined need for IT managers to employ ambidextrous resolution strategies to ensure short-term IT contributions and continuous progress of IT projects... for IT-enabled business transformation," the co-authors write.

The co-authors subdivide their six pairs of tensions into two groups. The first three paradoxes -- efficiency vs. innovation, standardization vs. differentiation and integration vs. replacement -- are defined as strategy issues. The next three -- program agility vs. project stability, program control vs. project autonomy and program coordination vs. project isolation -- are defined as execution issues.

To resolve these strategic and execution issues, the co-authors recommend blending and balancing solutions, respectively. Blending is working to convince an organization that two sets of demands are not in fact paradoxical but harmoniously combinable. Balancing seeks to forge compromises between demands through coordination mechanisms and roles.

As the co-authors formulate it, the bank's IT transformation program has a tendency to drift toward exploiting IT now for shorter term efficiency gains. To fight this drift, successful managers must "excel at coming up with persuasive, integrative, and even blended solutions that convince the business organization that a combination of [business and IT interests] can be achieved at the same time," they write.

Meanwhile, another undercurrent at work is the tendency to focus on the execution of individual stand-alone IT projects at the risk of the program-level interests. The co-authors observe that a delicate balancing act is required to redirect this drift. They recommend shifting temporarily toward the overarching program from time to time to ensure that its demands are met along with the individual project goals.

With deft blending and balancing by management, IT transformation programs can achieve their goals, the co-authors contend. Their case study is banking on it.
This article is based on:  Paradoxes and the Nature of Ambidexterity in IT Transformation Programs
Publisher:  Informs
Year:  2015
Language:  English