Firms have increasingly standardized their enterprise systems (ES) to streamline operations, reduce costs, and improve coordination across business units. However, how ES standardization, defined as implementing the same enterprise system modules across business units, affects firm performance remains unexplored. To advance our understanding of the value implications of ES standardization, we draw upon organizational information processing theory (OIPT). Using a sample of 1728 firm-year observations from the United States, we find that ES standardization has a negative influence on firm performance. However, this effect can be attenuated when firms make greater IT investments, leading to superior performance in the presence of both greater ES standardization and increased IT investment—two key moderators in our model. Furthermore, our analyses reveal that environmental uncertainty—specifically, industry dynamism and complexity—amplifies the moderating role of IT investment in the relationship between ES standardization and firm performance. Our theoretical framework and empirical findings underscore the importance of considering ES standardization as a critical factor in assessing the business value of IT.

Information Systems research provides significant insight into how information technologies affect the strategic agility of firms. Most research to date has studied the responding element of agility at the expense of sensing. Further, extant research has mainly focused on how the sensing of formal and strong signals might influence agility. With the highly turbulent and fast-changing competitive landscape of the digital age, we argue for the need to expand the focus of this research to include examining how managers identify and make sense of weak signals, and how the sensing of weak signals influences digital-enabled strategic agility. Drawing on social network theory, this paper presents two streams of research and several research avenues that can stimulate and potentially guide research efforts on this topic.