Organizations are using information technology in order to shift the competitive dynamics that they face.  In this course, we learn how organizations can create and respond to new competitive dynamics by using information technology. We will particularly focus on the ways in which organizations innovate with various forms of information technology.  We learn analytical frameworks that can be used to sensitize the situations and formulate appropriate strategic actions and responses using information technology.  We will use case studies, case research, field research and guest speakers in order to achieve our learning goals.

Broadly speaking, we will cover three big themes. First, information technology has radically reduced the communication cost for remote collaboration and coordination, which has led to the emergence of new organizing structures that transcend the traditional organizational boundaries and space limitations. Open innovation, for example, allows organizations to tap into a much broader source of new ideas by democratizing the innovation process and taking advantage of reduced communication cost and access to shared digital resources. By overcoming constraints on communication and coordination, the use of digital technology has enabled organizations to radically decentralize the way they manage innovation across networks of increasingly heterogeneous actors.  Examples of such networked, distributed innovation abound: from software engineering companies that work with the global hacker community to improve their software, to manufacturing companies sourcing innovation from customers and suppliers, to mass media companies drawing on digital content created by users. We will explore and discuss strategic implications of this type of information technology applications.

Second, change in the innovation process is also taking place due to digital convergence. The integration and embedding of digital technologies into non-digital artifacts is opening up vast new avenues for radical innovation. Integration of digital technologies, often in the form of computing, memory and transmission capability, not only allows the products and services to become “smarter”, but also potentially transform the way the products are consumed and experienced.  The embedding of global position systems (GPS) chips and Radio Frequency Identification (RFID) tags into ordinary products, for example, enable the production of streams of digital data that can be combined with other forms of digital information – such as digital map on Google Earth or social networks on MySpace.com. Therefore, the notion of digital convergence that is often used to describe the bundling of phone, internet, mobile and TV services need to be expanded to all forms of artifact design, process change and experience creation in order to theorize about these kinds of “radical” digital innovations. Radical digital convergence blurs the boundaries across industries and commerce, as exemplified by the collaboration between Apple and Nike when they introduced Nike shoes that interact with iPod. Here, organizations are confronted with heterogeneous knowledge resources that are often embedded in different pockets of the organizational hierarchy. We will explore strategic implications of digitization of products and services, discuss how firms can re-align its value network in order to maximize the disruptive potential of this type of strategic innovations. Students who have taken or will take Designing Innovations in an iPod World where they learn micro-level perspective on how to come up with new innovation ideas with digital convergence, will learn a complimentary, macro-level, perspective.

Third, the advances in information technologies and software platforms now allow organizations to “digitize” multiple aspects of work processes that were previously supported by analogue tools. Digitized work practices can be modularized, integrated, and reconfigured. In the construction industry, for example, Building Information Management (BIM) systems have started to leverage new kinds of digital information infrastructures that integrate activities related to design, budgeting, scheduling, material management and human resources. Again, we see the challenge of managing heterogeneity across organizational borders as a result of digital innovation. We will discuss how information technology can allow firms to re-design the organization in order to gain sustainable competitive advantage.