Do Organizational Competencies Influence How Enterprise Systems Foster Organizational Agility?

Recent research indicates that higher ERP assimilation in organizations has positive influence on organizational agility, and that the dynamic capability of systems agility moderates the effects of ERP assimilation on agility. In this paper, we extend this research, to investigate the knowledge conditions under which enterprise systems influence organizational agility. We propose a theoretical framework incorporating two organizational competencies – IT Competence in Business(ITCB) and Business Competence in IT(BCIT) – and theorize that both ITCB and BCIT have mediating and moderating effects on organizational agility. To empirically validate the theoretical framework, we conducted a quantitative cross-sectional survey across 215 organizations. The results validate our key theorizing on the dual effects of ITCB and BCIT on organizational agility. In addition, when organizations have high levels of ITCB and high ERP assimilation, we see surprising results in the negative moderating effects of ITCB on the influence of ERP assimilation on organizational agility