IT And Collaboration In Service Innovation: A Dynamic Capability Perspective

In today’s networked service economy, it becomes essential for service firms to continuously innovate their service offering to remain competitive in constantly changing market conditions. Many successful firms collaborate with external partners and utilize contemporary information technology (IT) support to integrate dispersed service innovation capacity and knowledge. In this paper, we develop and test a theoretical framework that explains how IT and collaboration can contribute to developing service innovation capability. Drawing on dynamic capability theory, we differentiate between sensing, seizing, and transformation abilities in service innovation. With our theoretical model, we can explain as much as 65% of the variance in service innovation success (R2=.647) and provide evidence of the multi-facetted and significant effects of IT and collaboration. Especially in the phase of turning first ideas into operational service innovation concepts, IT and collaboration are of great importance for service innovation success.