Traditional and Internet EDI Adoption Barriers

Abstract

Electronic data interchange (EDI) is a conduit to innovative ways of conducting e-business processes, as well as facilitating e-business applications and services. EDI is the electronic exchange of business documents using standardized document formats (Blackstone & Cox, 2004). Traditional EDI, based on proprietary value added networks (VANs), went through the early adoption stages in the 1990s (Clinkunbroomer, 1991; Premkumar, Ramamurthy, & Crum, 1997). Many factors caused the slow diffusion of the technology, including, but not limited to, high investment costs (Wilde, 1997), proprietary standards, poor integration capability with existing corporate systems, rigidity, poor scalability (Peters, 2000), poor performance in auditing trails, document certification needs, and the perceived need for hardcopies of the documents (Banerjee & Golhar, 1994). Despite these adoption obstacles, many large and small organizations have been leveraging the open architecture of the Internet to improve their agility and competitiveness. Unlike traditional EDI, Internet EDI adopts an open standard (extensive markup language or XML) and entails higher business agility by integrating the information systems of the business partners. Internet EDI is becoming an alternative to traditional EDI. Their natural differences pose an interesting, timely, relevant, and applicable research question: What would it take to accelerate the adoption of traditional and Internet EDI to support electronic business? This article proposes a theoretical framework based on Rogers’ (1983; 2004) innovation diffusion model and interorganizational theories. Major technological and managerial obstacles confronting widespread adoption of traditional EDI and Internet EDI are addressed. Future trends of these technologies are discussed as a conclusion.