Inter-Organizational Information Systems in the Supply Chain

Inter-Organizational Information Systems in the Supply Chain

Maria Madlberger (Webster Vienna Private University, Austria)
Copyright: © 2015 |Pages: 10
DOI: 10.4018/978-1-4666-5888-2.ch503
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Information technologies are important enablers of coordination and collaboration in supply chains (Chong, Ooi, & Sohal, 2009). In particular, inter-organizational information systems (also referred to as inter-organizational systems or IOS) enable collaborative business practices between organizations with remarkable productivity gains. IOS can serve many purposes, e.g., support virtual teams or project management. One important application area of IOS is the supply chain in which sellers and buyers constantly interact to ensure a flow of goods from sources to final consumers.

Due to their boundary-spanning nature and comprehensive support of business processes IOS in supply chains are a highly interdisciplinary and complex research field. Since the development of the first systems in the 1960s IOS have undergone dramatic changes, particularly due to the Internet. Thus research on IS and other disciplines (supply chain management, marketing, operations research etc.) accumulated a large body of knowledge on IOS technologies, usage, and consequences. Many findings are highly consistent, but some are contradicting and thus highlight the need for future research in this field (Robey, Im, & Wareham, 2008).

The goal of this chapter is a systematic discussion of insights into relevant IOS issues from an IS research perspective. It addresses the academic debate on drivers, types, and impacts of IOS in the supply chain and seeks to contribute to a clear understanding of the business and technical implications of IOS. For this purpose, we draw on the technology-organization-environment framework (T-O-E) by Tornatzky & Fleischer (1990) and the theory of diffusion of innovations (Rogers, 1995). The T-O-E framework discusses the technological, organizational, and environmental context of innovations or IS. We extend this framework by accounting for two dimensions in the organizational view that originate from the diffusion of innovations theory. That theory distinguishes between leaders’ attitudes as well as organizational conditions of innovations. Thus we apply two dimensions of the organizational view: organizational behavior (that is, managers’ decisions) and organizational conditions that cannot be changed in the short run. We further add the economic outcome of IOS usage and consider its benefits and costs including strategic and operational consequences on business processes. Based on this extended framework we discuss IOS from five perspectives:

  • The Technological View: IOS technologies and IOS standards.

  • The Organizational Behavior View: Purpose, levels, and drivers of IOS usage.

  • The Organizational Conditions View: Organizational factors that influence IOS usage.

  • The Environmental View: Inter-organizational and further external factors that influence IOS usage.

  • The Economic View: Strategic and operational benefits and costs of IOS usage.

The chapter first discusses the conceptual background and practical relevance of IOS usage. Then it elaborates the above-mentioned five views and presents key findings of seminal, primarily IS research. The chapter concludes with an outlook on future research directions on IOS in the supply chain.



IOS are information systems that electronically link organizations with other organizations to facilitate information exchange between them (Riggins & Mukhopadhyay, 1994). IOS can function as enablers of many modified business processes as well as intensified inter-organizational relationships. The key to these IOS-induced changes is the possibility to exchange information to an extent that would not be feasible without IOS (Madlberger, 2009). Examples are competitive advantages and benefits obtained by IOS (Riggins and Mukhopadhyay 1994; Mukhopadhyay, Kekre and Kalathur 1995), impacts on inter-organizational business processes (Lee, Clark, & Tam, 1999), and IOS-based alliances and relationships (Gurbaxani &Whang 1991; Kumar & van Dissel, 1996). IOS thus imply “a level of cooperation and coordination well beyond that of the traditional arms-length relationship that exists between organizations acting as free-agents in a market” (Kumar & van Dissel, 1996 p. 279).

Key Terms in this Chapter

Inter-Organizational Information Systems (IOS): Information systems that electronically link organizations with trading partners by enabling the movement of information across organizational boundaries.

Supply Chain: Two or more organizations that are involved in the upstream and downstream flows of products, services, information, and money from sources to final consumers.

Supply Chain Collaboration: A form of interfirm partnerships which are established in order to obtain advantages, such as cost sharing, pooling or spreading risks, specialization or the access to complementary resources within supply chains.

Supply Chain Management: A collaborative managerial approach of strategic coordination of business functions within a company and across companies within the supply chain with the goal of improving the long-term performance of the individual companies as well as the entire supply chain.

Internet-Based IOS: Standards-based electronic exchange of structured information between trading partners via the Internet.

Electronic Data Interchange (EDI): A proprietary standards-based IOS that allows trading partners to exchange structured information electronically from application to application.

IOS Standards: Facilitate interorganizational exchange of data and coordination by defining data structure, data transfer, and/or business processes.

Information sharing: The regular exchange of business data between organizations in a supply chain that goes beyond the transmittal of data necessary in any inter-organizational trading.

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