Scalable growth in IT-enabled service provisioning: a sensemaking perspective

Vendors of IT-enabled services must address equivocal and changing requirements from diverse customers while simultaneously making a profit. However, our knowledge of how these organizations can achieve the necessary scalability is limited. Against this backdrop, we leverage organizational sensemaking to investigate how a large vendor attempted to create a scalable service infrastructure through three sequential strategies. This in-depth case study reveals key factors that challenged the efficacy of each strategy. First, addressing equivocality through structural separation exacerbated the organization’s challenges because of misaligned collective identities between business units. Second, reducing equivocality through market segmentation proved to be inadequate because individual-level cognitive constraints shaped pre-packaged solutions that lacked functionality. Third, responding to equivocality through service modularization was challenged due to lack of social interaction about standardization of component interfaces, system and process redundancies, and inflexible process architectures. We offer a detailed analysis of these strategies and discuss implications in relation to theory and practice.