The role of external IT consultants in fostering IS competencies and organizational performance during digital transformation

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Journal Title

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Volume Title

School of Business | Master's thesis

Authors

Date

2023

Department

Tieto- ja palvelujohtamisen laitos

Major/Subject

Mcode

Degree programme

Information and Service Management (ISM)

Language

en

Pages

85 + 6

Series

Abstract

Today, the rapid pace of digitalization and the emergence of new technologies have not only reshaped the ways organizations operate but has also fundamentally altered competitive dynamics in the market. This, in turn, requires organizations to acquire totally new and technology-oriented competencies, that will help them to embrace digitally oriented processes and structures. To bridge these critical knowledge gaps swiftly, organizations increasingly rely on external IT consultants. This thesis explores the attributable causes behind the utilization of external consultants, as well as the consultants' contribution to the development of the organization's IS competencies. Furthermore, this study seeks to identify the factors through which consultants influence organizational effectiveness and performance during their engagements. The empirical part of this study was conducted as inductive qualitative research, employing a case study approach. As a part of this research, a total of nine semi-structured interviews were conducted among the consulting and client organizations. The data from the interviews underwent analysis and thematic categorization based on different subject areas relating to causes and utilization of consultants. Subsequently, the empirical findings were compared with previous research and literature on the field of digital transformation, IS competencies, and consulting. The findings of the study clearly indicate that the organization utilizes consultants, especially in situations when rapid changes occur in the market, technological, or regulatory environment. Notably, the roles undertaken by consultants varied depending on the phase of digital transformation and digital maturity of the client organization, suggesting that the organizations placed higher in digital maturity necessitate less external support. The direct and indirect effects stemming from consultant involvement were found to nurture an agile organizational culture, technological knowledge, and alignment of technology and business, promoting the maturation of organization IS competencies during digital transformation initiatives. Furthermore, the utilization of consultants was perceived as a means to scale specialized knowledge swiftly and cost-effectively while simultaneously freeing up an organization's internal resources for strategically more vital tasks, thereby ensuring business continuity during digital transformation projects.

Description

Thesis advisor

Hekkala, Riitta

Keywords

digital transformation, IT consulting, IS competencies, digital capabilities

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Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202310226575

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[gradu] Kauppakorkeakoulu / BIZ