Critical Issues to Consider when Evaluating Inter-Organizational Process Integration Configurations

1.1 Inter-Organizational Process Optimisation

To varying degrees, each company in a supply network or chain may exchange requirements, plans, data, suggestions, lessons to learn etcetera. The aim is to create seamless integration between and across supply chain participating companies’ activities.

Optimization schemes can benefit from focusing on inter-enterprise integration. Al-Naeem et al. (2005) defined inter-enterprise integration as ‘the integration of business processes and data with external trading partners’. Goethals (2008) evaluated data related aspects of this definition. He discussed ‘information sharing problems’ associated with setting up an inter-organizational system to exchange data. That article asserted eight problems have to be examined when evaluating inter-organizational data integration configurations.

This article complements the 2008 article by investigating process aspects of Naeem et al.’s definition: “problems that show up when partnering companies decide to set up inter-organizational processes”. Eight process integration problems are presented that typically arise when integrating inter-organizational processes and that enable evaluation of different inter-organizational process configurations.

Davenport & Short (1990) defined a business process as “a set of logically related tasks performed to achieve a defined business outcome”. From a reengineering perspective, Hammer and Champy (1993, p35) “define a business process as a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer.” Inter-organizational processes range from short-term or spot trading through long-term partnering. This article uses the term ‘Extended Enterprise’ to signify a long-term collaboration and ‘Market B2Bi’ to indicate short-term relationships (following Goethals et al., 2005). Irrespective of the long- or short-term nature of their corporate relationships, the term ‘partner’ refers to task executing parties.

1.2 Simple Example of an Inter-Organizational Business Process

The eight process issues identified in this paper will be contextualized in the frame of an order fulfillment system. Figure 1 shows a simplistic BPMN (Business Process Modeling Notation) process description. This description should not be regarded as an attempt to model a real-life process: it is merely a simplified process diagram that is used in this paper to contextualize the issues. In BPMN, solid arrows show sequence flows and dashed arrows are message flows.

Figure 1.

Example of a process

Process flows shown in Figure 1 represent direct and support activities that may be undertaken by various corporate parties, for example in the Personal Computer (PC) industry. In this simple process model shows four parties, with different roles, are involved when customers order products from a reseller:

• •

  A reseller delivers computers to end customers,

• •

  A manufacturer assembles and configures computers,

• •

  A shipper picks up consignments from manufacturer’s plant and transports them to the reseller, and

• •

  A factoring company advances a portion of the payment and ensures the customer makes the payment.