A path for infrastructural ambidexterity: balancing reliability and flexibility in digital ecosystems



Recent developments of information technologies (IT) such as cloud-computing, big data and the internet of things are expected to play a key role in the near future due to their pervasiveness and the possibility they show to spur economic growth through process efficiencies, the enhancement of analytics capabilities, and the availability of a wide range of applications in downstream markets. However, in order to exploit such possibilities, firms need to define and adopt business models that are appropriately suited to their characteristics. Currently, two contrasting business models are preferred by large and small companies operating in the IT-based sector. On the one hand, large companies that manage large scale IT infrastructures (such as telecom operators) make huge investments for the development and organization of the whole system and gain profits by allowing the access to the latter to actors located downstream in the value chain. On the other hand, small (often start-up) companies are specialized in providing digitally enabled customized services to downstream users (including final consumers) and make use of available IT infrastructures. However, such firms often operate in niche markets and struggle in scaling up their customer base by providing higher value services. Furthermore, while large companies are characterized by reliability, given their size and the amount of resources and capabilities they possess, small start-ups are characterized by agility, given their ability to adapt general purpose technologies to widespread application domains. Thus, both types of companies possess strengths and weaknesses and face the challenge of finding a right balance in the trade-off between flexibility and reliability.

Theories on organizational learning and digital architectures provide useful frameworks to conceptualize this phenomenon. In particular we introduce the notion of “infrastructural ambidexterity” to refer to the capability of an organization to innovate while ensuring the reliability of digital services. Therefore infrastructural ambidexterity has the potential to both improve innovation management capabilities within large firms and to offer startups the possibility to scale up their services. In order to achieve these outcomes, the IT infrastructure and learning processes must co-evolve in a coherent way and a continuous effort is required for the re-design of the information system. In this presentation we will discuss a conceptual framework for exploring tensions and outcomes emerging from the interplay of different structures, knowledge regimes and cultures within large firms and startups. The design of a multiple case study will illustrate how this research will contributes to both theories, practice and policy making in the area of digital innovation.