A cross industry comparison of inter-organisational systems implementation activities

Electron Commer Res (2011) 11: 215–243 DOI 10.1007/s10660-010-9074-9

A cross industry comparison of inter-organisational systems implementation activities Md Mahbubur Rahim · Graeme Shanks · Robert B. Johnston

Published online: 27 November 2010 © Springer Science+Business Media, LLC 2010

Abstract The Inter-organisational systems (IOS) Motivation Model (IMM) has recently been proposed as a theory that explains variations in IOS implementation processes initiated by organisations. The IMM classifies IOS adoption projects (regardless of the underlying technology used) into four generic motivation scenarios and explains different implementation processes for each motivation scenario. The theory was tested in the Australian pharmaceutical industry where it received broad support. In order to enhance its generality, in this study we explore the applicability of part of the IMM theory to a different industry context by addressing the research objective that organisations with the same motive for implementing an IOS initiate the same implementation activities regardless of differences in the industry contexts within which they operate. We have used a multiple case study approach and compared the implementation of a proprietary in-house built e-ordering system in a large Australian pharmaceutical manufacturing company with that of a web-based EDI system used by a large automotive manufacturing company using IMM as a theoretical lens. The empirical results indicate a striking similarity in the implementation processes of these two different IOS applications; this can largely be explained using the IMM theory. Furthermore, the differences in industry contexts do not appear to have a direct influence on the activities associated with implementing these systems. M.M. Rahim () Caulfield School of Information Technology, Monash University, Melbourne, VIC3145, Australia e-mail: [email protected] G. Shanks Department of Information Systems, The University of Melbourne, Melbourne, VIC 3010, Australia e-mail: [email protected] R.B. Johnston Centre for Innovation, Technology & Organisation, University College Dublin, Belfield, Dublin 4, Ireland e-mail: [email protected]

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Keywords Inter-organisational systems · Implementation process · Motivation · Adoption · Implementation · Case study · Australia

1 Introduction To survive in today’s dynamic and uncertain business environment, many businesses are introducing various forms of IT-enabled systems which establish electronic connectivity (using the Internet and/or proprietary communication networks) to link their key boundary spanning business processes with those of their supply chain partners. These systems are generally known as Inter-Organisational Systems (IOS) and form the foundation of Business-to-Business (B2B) e-commerce initiatives. With the rapid increase in global B2B transactions, IOS are becoming ever more valuable [18]. When successfully implemented, IOS can help supply chain partners improve their internal efficiencies, facilitate integration of business processes and information exchanges, allow them to compete more effectively with rival supply chains, and strengthen their existing relationships [9, 29, 49]. However, attaining these benefits to a large extent is influenced by how such systems are implemented. Due to the increased importance of B2B e-commerce in today’s economy, researchers have paid considerable attention to the adoption, usage and impact of IOS in various industry settings [41]. In contrast, relatively little has been discussed about the implementation activities associated with introducing these systems. According to some scholars [22, 26, 34], businesses differ in their IOS implementation activities. Intuitively, one may expect that such differences may be largely due to the fact that businesses operate in different industry settings, have different organisational contexts, and implement different types of IOS technologies. By contrast, we argue and assert in this paper that differences in IOS implementation activities can be traced to differences in the motivations organisations have for implementing IOS, and that differences in motivations are the main determinant of implementation activities that organisations initiate regardless of the industry in which they reside. We address this research assertion by comparing the implementation activities undertaken in two Australian manufacturing companies which demonstrated the same motive for introducing an IOS solution but which are in two different industries (pharmaceutical and automotive). The pharmaceutical manufacturing company implemented an in-house proprietary electronic ordering (e-ordering) system, and the automotive manufacturing company implemented a web-enabled Electronic Data Interchange (EDI) solution built by a third party vendor. These two selected companies operate in industry segments which have substantial differences in such characteristics as concentration of power along supply chains, the basic business problems faced by supply chains, and degree of virtual vertical integration already achieved. To analyse the empirical data from these cases, we use our IOS Motivation Model (IMM) [39] which explains the implementation processes (i.e. set of related IOS activities) involved in a given IOS project as a function of the organisation’s motivation for adopting that IOS. The model classifies IOS adoption into one of four generic motivation scenarios: techno-economic leader, socio-political leader, techno-economic

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follower, and socio-political follower. The IMM asserts that different implementation processes will be initiated within the different motivation scenarios and that similarities in IOS project implementation processes can be expected when businesses adopting these systems form identical motivations. In our previous research [37, 38], we have found that the observed differences in implementation activities between companies in the Australian pharmaceutical industry can be largely explained by the differences in their IOS adoption motivation, despite differences in the systems being implemented, and the position of the organisation in the supply chain. In order to enhance the generality of the IMM, it would be useful to test whether this is also true regardless of the industry contexts in which organisations operate. Hence, the broad purpose of this paper is to verify the applicability of the IMM in an industry segment other than the one (i.e. pharmaceutical) in which the model was initially applied. This research goal is evaluated by addressing the following specific research objective. Do organisations with the same motive for implementing an IOS initiate the same implementation activities regardless of differences in the industry contexts within which they operate? We compared the implementation processes used by these two case companies with the predictions derived from IMM, and despite the differences between the industry contexts of these companies, a close similarity was observed in their respective IOS implementation activities. The empirical findings indicate that: (a) the IOS implementation activities are not influenced by the industry contexts, and (b) the similarities in the IOS implementation activities can be largely explained by the corresponding similarity in their motives for IOS adoption. Consequently, we argue that the IMM can be used in other industries (at least automotive) thus enhancing the generality of the model. Our findings are useful to e-commerce researchers and practitioners alike. From the research perspective, a sound knowledge of how the IOS implementation process is affected by organisational motives for IOS adoption is useful to better understand the IOS implementation phenomenon in general and IOS project management in particular. Our findings provide additional empirical support for the notion that motivations determine implementation activities. Our findings also act as a partial test of the specific predictions of the IMM, since the activities were not only the same in the two industries but also were those predicted by the theory. It extends the range of validity of the IMM beyond the original industry in which it was tested. For practice, the findings corroborate the assertion that specific activities can be prescribed for IOS project implementation based on organisational adoption motivations alone despite differences in industry contexts. Our findings can help e-commerce managers recognise the central role that organisational motivation plays in determining IOS implementation processes. It is important that senior IT managers should develop a capability to predict exactly how they would initiate IOS implementation activities for reducing the uncertainties associated with IOS project planning. The rest of the paper is structured into five sections. The following section briefly reviews existing IOS adoption and implementation literature and positions our research objectives in relation to the literature. Next, the theoretical foundation of IMM is presented, and the development of IMM and associated propositions are presented. Then, the research approach is described and the profiles of the participating companies are summarised. The empirical findings are used to identify the motivations for

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IOS adoption and subsequent implementation activities of the companies for introducing their own IOS solutions. The findings are then analysed by comparing them with propositions drawn from IMM. The analysis also involves an examination of an alternative explanation in terms of differences in the industry settings. Finally, the contributions of the research project and the areas of further work are highlighted.

2 Literature on IOS adoption and implementation Existing IOS literature examines IOS introduction in organisations from three perspectives: factors affecting organisational IOS adoption decisions, factors influencing IOS use, and IOS implementation processes and their outcomes. Much early IOS adoption research focused on IOS adoption decisions in organisations. This literature treats adoption decision making as a discrete event and posits that the decision to adopt IOS can be predicted from the presence or absence or perhaps the level of a set of factors that affect an organisation’s decision to adopt IOS. Three broad categories of factors are identified: (a) characteristics of the business (e.g. organisational size, management support, and IT maturity), (b) properties of the IOS technology (e.g. complexity, cost and compatibility), and (c) features of the business environment (e.g. trust, uncertainty, dependency and external pressure). Typical examples representing this stream include the works of Kuan [25], Chwelos [11], Teo [51], Zhu [57], Soliman et al. [48], Sila [45], and Kurokawa [27]. The findings of this stream of studies are important because a deep understanding of the factors encouraging businesses to adopt IOS technologies is useful to IT and supply chain managers. The second stream of IOS adoption literature looks at the determinants of IOS usage between supply chain partners. Drawing on the Technology-OrganisationEnvironment (TOE) framework, and the notions of trust, power and perceived benefits, a range of factors have been identified that influence IOS usage. Typical studies representing this stream of literature include the works of Son et al. [49], Geri [17], Ibrahim [21] and Chang [9]. The findings of this stream of literature are also useful to IT and logistics managers because mere adoption of IOS in organisations does not guarantee its usage. Moreover, benefits cannot be generated when these systems are not satisfactorily used. The third stream views IOS adoption as an implementation process rather than a discrete event; it explains the benefits that arise as a result of IOS adoption. According to this stream, IOS benefits are not determined by a set of factors but rather are influenced by the IOS implementation processes that unfold over time. Furthermore, IOS implementation processes are also moderated by supply chain interactions. Much research of this stream of research took place in mid-late 1990s and early 2000. Typical examples representing this stream of research include the works of Webster [53], Damsgaard and Lyytinen [13] and Kurnia and Johnston [26]. Their studies involve examining implementation processes of EDI and ECR-enabled IOS technologies. They describe interactions between the supply chain partners and its influence on implementation activities and offer explanations on how certain IOS outcomes have emerged due to selection of implementation activities.

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The three streams of IOS literature discussed above however do not offer a clear explanation of the variations observed in implementing IOS technologies in different organisations. The first stream does not relate factors to IOS implementation processes at all. The second stream is concerned with how to increase IOS usage by identifying a set of facilitators, but it does not relate IOS usage with organisational motivations for IOS adoption. Finally, the third stream suggests that IOS implementation processes are moderated by supply chain partner interactions, but it does not explicitly establish what determines the variations in IOS implementation processes and why different implementation processes are initiated within different IOS projects. Thus, taken together these three streams of IOS literature have not recognised the importance of studying the role of organisational motivations for understanding IOS adoption/implementation. To address this gap, this paper uses the IMM as a theoretical framework to explain the relationship between organisational motivations for adopting a given IOS solution and variations in IOS implementation processes.

3 IOS adoption motivation model (IMM) 3.1 Theoretical foundation The IOS Motivation Model (IMM) recognises the importance of organisational motives for adopting an IOS solution. These motives help predict the activities initiated by organisations when introducing an IOS application [39]. The model uses a notion of motivation drawn from the social psychology literature and identifies six types of motives and two sources of motives. It extends this notion to IOS adoption in organisational settings, generates four distinct motivation scenarios based on the concepts of types of motives and locus of motives, and proposes a set of activities that organisations belonging to each motivation scenario are likely to perform in introducing a given IOS application. The social psychology literature regards motives as a specific need that guides the actions undertaken by an individual [31, 35, 52]. Six important types of motives reported in the psychology literature are considered to be relevant for understanding IOS adoption. These include: economic [33], imitation [1, 5], fear [12], power [54], status [54] and cultural norms [28]. The psychology literature also recognises two loci of motives: internal or external [33]. Internal needs are established by an individual for the interest and/or enjoyment inherent within that person to perform a given activity. However, in some situations, an individual may also be motivated by external stimuli in order to gain a reward (e.g. money and social status) [40]. This important aspect of motive is considered relevant in the development of IMM. In summary, the psychology literature suggests that motivation is described in terms of two specific dimensions, type and locus, and that motives guide actions undertaken by an individual. This general principle can also be extended to IOS projects undertaken in organisations. This is because for each IOS project, it is possible to identify an appropriate manager who would be the legitimate spokesperson for the project for articulating the motivation of the project based on the consensus view reached by the senior management of the organisation. Thus according to the IMM

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theory, this general principle when applied to IOS adoption can be expressed as the motivation to implement an IOS determines the types of implementation activities performed and how those activities are performed. 3.2 Key constructs in the IMM IMM classifies organisational motivation along two dimensions: ‘locus of motivation’ and ‘type of motivation’. In the context of IOS adoption, the ‘locus of motivation’ leads to two distinct categories of IOS adopters: IOS leaders and IOS followers. For organisations in which the locus of motivation is internal, the initiative to adopt IOS generally emerges from IOS champions. These organisations tend to become leaders of IOS adoption by setting the pace of IOS adoption in their industry. On the other hand, for organisations where the locus of motivation is external, the adoption of IOS is often initiated by customers, suppliers, government agencies, and industry bodies. They do not build an IOS, but introduce a standard IOS network as required by their trading partners. They are simply the users of IOS which others have developed and hence are known as IOS followers. In keeping with the psychology literature, IMM identifies six types of motives for organisations to introduce a given IOS solution. The economic motive refers to the desire of an organisation to introduce IOS in order achieve economic benefits by improving efficiency and effectiveness and can be explained in terms of resources efficiency theory [43] and competitive economic theory [36]. In contrast, the fear motive refers to the desire of an organisation to adopt IOS due to the perceived fear that non-compliance of IOS adoption is likely to upset the business partner. Fear motives in organisations can be interpreted in terms of resource dependence theory [34]. The institutionalised norms motive refers to the desire of an organisation to adopt IOS as a result of the influence arising from the cultural beliefs and norms of certain groups of professionals working within an organisation. According to Galaskiewicz and Wasserman [16], in organisations facing technology adoption decisions, managers may turn to the norms and standards held sacred in their business and professional communities, which eventually motivate them to introduce a new technology (e.g. EDI). On the other hand, the power motive refers to the desire of an organisation to adopt IOS in order to control the behaviour of other organisations (e.g. business partners) and can be explained in terms of market power theory [20]. The imitation motive refers to the desire of an organisation to adopt IOS as a result of the adoption of similar systems by other companies whom they consider to be successful in the industry. The existence of the imitation motive is supported by Simon [46] who suggested that decision makers facing uncertainty may look for direction from outside their organisational boundaries, and may model themselves on other similar organisations that they perceive to be more successful in their field. Finally, the status motive refers to the desire of an organisation to engage in activities to gain respect from others through IOS adoption. This view is consistent with other IT adoption scholars (e.g. Carrol and Delacroix [8], Bothner [7]) who suggested that organisations look for opportunities to advance their status, even if temporarily. There are two broad themes in the above-mentioned six motive types that are relevant to IOS. Hence, IMM groups these motives into two broad categories: socio-

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political (i.e. economic motive) and techno-economic (i.e. fear motive, imitation motive, power motive, status motive, and institutionalised norms motive). Classifying motives into these two major categories is useful as it implies that those organisations which introduce IOS prompted by techno-economic motives are likely to behave differently from those organisations that introduce IOS inspired by socio-political motives. 3.3 Description of the IMM The model comprises four distinct motivation scenarios (shown in the left hand side of Fig. 1), and associates a set of adoption processes with each motivation scenario. These scenarios are constructed in recognition of the existence of two broad categories of organisational motives (e.g. socio-political and techno-economic) and the source (e.g. internal or external) from which such motives originate. Cell I represents the “Techno-economic Leader” scenario that is characterized by an internal locus of motivation and a techno-economic type of motivation. This scenario occurs when organisations develop a direct economic motive internally and invest in an IOS project voluntarily, believing that the investment will improve organisational performance with regard to internal efficiency and competitiveness in the marketplace. Cell II represents the “Socio-political Leader” scenario that is characterised by an internal locus of motivation and a socio-political type of motivation. This scenario occurs when organisations invest in IOS voluntarily to realise their own socio-political motives. These organisations initiate an IOS project internally for reasons other than immediate efficiency gains, but nevertheless with a clear intention of perhaps portraying either a “progressive” or “customer caring” image in the industry, or with the realisation that there is no other way forward, given their trading partner’s IOS adoption strategies. Cell III represents the “Techno-economic Follower” scenario that is characterized by an external locus of motivation and a techno-economic type of motivation. This scenario occurs when an organisation is approached either by its business partners or by any other influential organisation about IOS adoption and, having evaluated the potential economic benefits of the IOS, invests in it voluntarily. Although the motivation to adopt IOS is generated from external sources, the decision is made based on an economic motive. Techno-economic followers generally do not build an IOS, but simply embrace a standard IOS developed either by the business partner that initiated IOS project or by a third party. However, even though techno-economic followers are not the initiators of IOS projects, they remain proactive users of IOS. Cell IV represents the “Socio-political Follower” scenario that is characterised by an external locus of motivation and a socio-political type of motivation. This scenario occurs when an organisation is approached by its trading partner or a third-party organisation to adopt an IOS, and a decision is made based on a socio-political motive. Socio-political followers generally do not develop an IOS, but embrace an existing IOS solution developed by partners or others parties. However, unlike techno-economic followers these organisations largely remain passive users of IOS and introduce IOS for reasons such as legitimacy, compliance, influence or social status. The fundamental premise of IMM is that organisational motivations determine IOS adoption processes. The model thus explains the activities that organisations

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Fig. 1 The Inter-organisational systems adoption motivation model (IMM)

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representing each motivation scenario are likely to undertake when introducing an IOS a solution. The associative relationship between motivational scenarios and the activities that are likely to be undertaken by organisations representing those four motivation scenarios is expressed as a set of eight propositions for each scenario (see Table 1) and is represented as a solid line in Fig. 1. A brief description of the derivation of these propositions is now provided. 3.4 Propositions generated from the IMM Techno-economic leaders seek an improvement in efficiency and competitiveness in the marketplace and therefore treat IOS as an efficiency strategy through transformation of key business processes. Their IOS projects therefore tend to be strategic with a much greater focus on integrating systems (P4) and improving the depth and quality of information available to business managers [47]. As improving the depth and quality of information with partners is considered to be a priority, the focus of technoeconomic leaders is on using data management capabilities of an IOS as the basis for transforming key processes by eliminating non-value adding activities (P5). Introducing changes to their business processes helps them to differentiate from their competitors. Hence, such business initiatives as Just-in-Time (JIT) and Vendor Managed Inventory (VMI), in which one company uses the IOS as a means to transfer responsibility for some operational inventory management functions to a business partner [6], are often initiated. These leaders tend to invest substantial resources in building an IOS, and hence are expected to prepare a careful implementation plan to secure support and funding from their senior management (P1). Such a plan enables management to monitor the progress of the IOS project. Techno-economic leaders are not expected to implement an IOS due to industry hype rather they make a judgement based on a financial analysis before proceeding with IOS adoption (P2). Techno-economic leaders generally recognise the need to introduce control mechanisms to help them achieve their goals and meet business objectives through IOS (Kirsch, 1996). Hence, techno-economic leaders are expected to initiate a post-implementation review of IOS (P3). These leaders also recognise training as an important facilitator to enable their IT staff to successfully complete an IOS project (P6). They are also expected to aggressively promote the notion of IOS to their partners as the lack of the participation of partners would seriously constrain the achievement of their expected economic goals (P8). The promotion of IOS is however based on its perceived economic advantage to entire supply chains. Hence, these leaders are unlikely to exert any coercive pressure on their partners (P7). Socio-political leaders are primarily concerned with goals relating to establishing organisational image and reputation and hence initiate a series of activities which help them in achieving those goals. This argument is consistent with impression management theory that can be used to explain how reputation considerations can influence IOS adoption behaviour [19]. For a socio-political leader that adopts an IOS to advance its socio-political aspirations, the primary aim is to minimize the perceived image gap between the organisation and its rivals. Being seen to adopt an IOS similar to those used by rivals is more important than economic considerations. Consequently, more strategic activities, such as integrating the IOS with other systems (P4) and

Likely to

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Likely to

Likely to

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Unlikely to

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P3

P4

P5

P6

P7

P8

Note: n/a means not applicable

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P2

Technoeconomic leaders

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Sociopolitical leaders

IOS motivation scenarios

P1

Propositions

n/a

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Technoeconomic followers

Table 1 Propositions relating IOS motivation to IOS implementation activities

n/a

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Sociopolitical followers

A8: Market IOS concept

A7: Apply pressure on partners

A6: Organise IOS training

A5: Introduce changes in the business practices

A4: Integrate IOS with back-end IT systems

A3: Perform a post-implementation review of IOS

A2: Initiate cost-benefit analysis of IOS

A1: Prepare an IOS implementation plan

IOS implementation activities

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undertaking business process transformations (P5) are unlikely to represent priority activities. Due to a lack of drive to use IOS for economic gains, these leaders are reluctant to disrupt their existing business practices. Hence, advanced supply chain techniques such as JIT and VMI are also unlikely to be introduced. Socio-political leaders however recognise that their aims cannot be fulfilled without a sound IOS implementation plan (P1). Such a plan also helps management in deciding whether the relevant factors are in place to ensure that IOS development is directed at advancing their image. The goals of socio-political leaders are intangible in nature and a traditional cost-benefit analysis is considered inappropriate. Furthermore, the IOS solutions are not introduced to address an organisational efficiency problem. Therefore, there is no expectation from these leaders to gain any economic benefits from IOS adoption. Hence, they are unlikely to perform a formal financial analysis prior to introducing an IOS project (P2). Socio-political leaders will not be willing to spend resources to determine whether an IOS application once implemented would contribute to achieving their socio-political goals. Hence, a formal IOS implementation review is unlikely to be initiated (P3). These leaders however acknowledge the value of training people for developing a successful IOS. Training is intended to build internal expertise in IOS which facilitates the attainment of socio-political objectives if the IOS project is completed on time (P6). Socio-political leaders are likely to apply pressure on their trading partners to join in their IOS networks, as lack of enthusiasm on the part of their partners may jeopardise their aim of attaining socio-political goals. Hence, these leaders will not hesitate to apply coercive influence to ensure IOS acceptance by their trading partners (P7). As socio-political leaders mandate IOS adoption by their partners, they are required to make a greater and more powerful marketing effort to promote IOS to their business partners (P8). Techno-economic followers are driven by resource efficiency motives [43], implementing an IOS to obtain transactional efficiency. Hence, adoption of IOS technology is justified based on financial grounds (P2) and a careful implementation plan is prepared (P1) due to the recognition of the importance of the IOS project to their company. The plan is also intended to assure management that appropriate control procedures would be followed to minimise the risk factors that may adversely affect the implementation of IOS in organisations. The plan will include benchmarks for performing a review of transaction efficiency due to the introduction of IOS (P3). The focus on transaction efficiency means that the IOS is unlikely to represent a strategic investment [14], and any changes to business processes will be directed towards automated transaction processing rather than business transformation (P5). This scenario is consistent with the examples cited by Chen and Williams [10] and Kheng and Al-Hawamdeh [24] where companies invest in IOS infrastructure being motivated by the potential to improve efficiency (i.e. fewer data entry errors and lower labor costs). In techno-economic followers, IOS is seen simply as a way to process transactions more efficiently, implementation efforts thus tend to be directed towards establishing an integrated automated system (P4). These followers are also likely to reduce the perceived fear of employees which may arise due to the introduction of IOS. Hence, they are likely to organise staff training in IOS operations (P6). As techno-economic followers are proactive users of IOS and are keen to improve transactional efficiency through integrated IOS applications, they are more likely to undertake initiatives to

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persuade their partner (which took the IOS initiative) to further expand the application of IOS in other functional areas. Therefore, these followers, if necessary, will not hesitate to exert pressure on the partner to encourage them improving the transactions frequency (P7). Proposition P8, which is about the promotion of the IOS solution is not relevant to techno-economic followers because they are not the initiators of IOS. Socio-political followers do not address a well-defined organisational efficiency problem; rather, they are prompted by socio-political goals. For socio-political followers, IOS is used as a defensive measure. Its primary aim is to minimize the social expectations gap between the corporation and its business partners. Being seen to adopt a system is more important than economic considerations. Hence, IOS technology is not justified based on a rigorous financial basis (P2). More strategic activity, such as integrating the IOS with other systems, is unlikely to represent a priority activity (P4). Such a scenario may lead to a less rigorous design process with the desire to be seen to be using the IOS regarded as more important than taking advantage of the system’s capabilities. Superficial adoption of the IOS technology may therefore result in process redesign (P5) and internal integration (P4) to be overlooked. Adopting IOS in this way is associated with a phenomenon which Fichman and Kemerer [15] refer to as the assimilation gap, a situation where a technology is acquired by many but only implemented fully by a few (with the remainder never implementing, not implementing fully, or abandoning shortly after implementation). In the sociopolitical follower scenario, IOS and its associated processes have some resemblance to the mandated processes described by Peter Keen [23] where IOS is implemented to satisfy external obligations (e.g. legal requirements), and is not seen to be a contributor to a firm’s economic value. Therefore, socio-political followers perceive that the disadvantages associated with the IOS technology outweigh any likely benefits, and so are not willing to expend resources on preparing a careful implementation plan (P1) and introducing controls through performing a post-implementation review (P3). These followers are expected to organise training to assist their staff in introducing IOS (P6). They do not regard IOS as a strategic application and hence are reluctant to exert any pressure on the business partners to further exploit the potential of IOS (P7). Proposition P8, which is about the promotion of the IOS solution is not relevant to socio-political followers because they are not the initiators of IOS.

4 Research design Justification of research approach and case organisations selection A multiple case study approach is used in this study. Case studies are appropriate when investigating contemporary phenomena within their real-world context where the researcher has little control [56]. Our research objective is to determine whether organisations with the same motive for implementing an IOS initiate the same implementation activities regardless of differences in the industry context within which they operate, we have chosen two case companies for comparison. They were deliberately selected in such a manner that they would operate in different industry segments and yet represent instances of a particular IOS motivation scenario (i.e. in this case techno-economic leader motivation scenario). One case ogranisation is a pharmaceutical manufacturing

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company and another is an automotive manufacturing company. These two companies operate in industry segments which are known to have considerable differences in terms of the basic business problems faced by supply chains, the degree of virtual vertical integration already achieved, and the distribution of power among supply chain members. Pharmaceutical products are research intensive items which are manufactured in mass volume and are sold with a high mark-up to the public but are subject to government regulation [55]. Therefore, we argue that IOS initiatives in this industry have tended to be driven by regulatory issues and to a lesser extent efficient distribution. In contrast, the automotive manufacturing industry consists of three car manufacturers and approximately 190 component, tooling, design and engineering firms [4]. The automotive manufacturing companies produce four types of vehicles (small, medium, large, and SUVs), each of which is assembled from approximately a hundred thousand different parts coming from several hundred different suppliers in a number of tiers [3]. The product is sold at low mark-up to a very selective customer base through a network of dealers. Therefore, IOS in that industry have historically been strongly targeted at supply chain efficiency and is driven by JIT replenishment [30]. As a result, the extent of overall adoption of electronic replenishment and virtual vertical integration is expected to be high compared with the pharmaceutical industry. On the matter of distribution of power along a supply chain, wholesaling companies which enjoy enormous purchasing power strongly dominate in the Australian pharmaceutical sector [32]. The hospitals and retail pharmacists predominately purchase pharmaceutical items from the wholesaling companies; they generally do not buy directly from the manufacturing companies due to their inability to provide logistical support. On the other hand, there are no dominant suppliers in the automotive market [44] and that the three motor vehicle assemblers (which are wholly owned subsidiaries of multinational companies), dominate and the automotive supply chains in Australia. Therefore, the concentration of power in these two industries occurs in different parts of the supply chain. Approach used in guiding data analysis First, the IOS adoption motives of the case companies were evaluated to ensure that they are the same and consistent with what was expected in their selection. Then, by consulting the IMM, related sets of propositions (see Table 1) were identified and were compared with the IOS implementation activity data from the case studies. Data collection approach Data was collected from multiple sources including faceto-face interviews, company websites, e-mail communications, and company documents relating to the company background, IT profile, IOS characteristics, and IOS implementation. Multiple interviews from key informants (which include both business executives and IT managers) were sought in each company. In-depth interviews were sought from two types of senior executives: (a) one key informant who would represent the official view of the organisation’s motivation to adopt a particular IOS project, and (b) the head of the IT function who could provide details about the IOS implementation process. This strategy has the advantage of tapping different perspectives on organisational motives and subsequent IOS implementation processes which greatly improves the reliability of the findings. Each interview lasted an hour, was

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tape-recorded and subsequently transcribed in full. A coding scheme was developed based on the interview protocol which was later used in identifying themes from the interview transcripts. This allowed the members of the research team to independently analyse the empirical data. Any differences were resolved through mutual discussion. Application of methodological rigour Established methodological guidelines provided by Yin [56] and Sarker and Lee [42] were applied to generate reliable and valid findings. Reliability was addressed by clearly conceptualising research variables, using a previously pilot-tested protocol and using multiple coders. The interview transcripts as well as a draft report on IOS implementation were prepared and were sent to the interviewees for review. Data collected from the company was analysed using pattern matching logic [56] which enabled the researchers to compare the pattern of outcomes of the dependent variable (i.e. IOS implementation activities) proposed by IMM with the pattern of outcomes deduced from the case data collected from the organisations. A summary of how the study satisfied the guidelines for reliability and validity is presented in Table 2.

5 Description of case companies Brief profiles of the participating case companies are summarised in Table 3. Case A is a pharmaceutical manufacturing company which was founded in the early 1960s. Its products provide blood, renal and intravenous therapies, which Australian medical researchers currently use to make new breakthroughs in patient treatment. As the bulk of these products are high volume fluid in nature, the company always supplies them direct to hospitals and medical clinics. The company currently employs about 600 staff and has annual sales revenue of about A$250 million. Information technology is widely used within the pharmaceutical company. It spends about A$3.5 million annually on IT operations. Its key IT systems include a pharmacy production system and an electronic catalogue system both of which run on an IBM AS/400 platform. Several years ago, the company introduced JdEdwards World ERP system which also runs on the IBM AS/400 platform. The company developed a web-based customer-oriented ordering system using Java script which is linked to its ERP system. Case B is a well-known automotive assembling company located in a large capital city in Australia. It designs, develops and builds a range of vehicles many of which are exported to Asian countries. The company has several thousand staff and has introduced a wide range of IT enabled applications in support of all major business processes. The company uses an ERP system which is well integrated with its materials planning and control system. The company had been using a traditional EDI system with its first tier suppliers for over a decade. However, the case study focuses on its recent introduction of a web-enabled EDI system in recent years at a cost of about A$50,000 in order to establish electronic relationships with small suppliers. The company currently sends about 270 weekly materials requirements schedules (MRS) to suppliers and in turn receives over 400 advanced shipping notices (ASN) on a daily basis from the suppliers as EDI messages.

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Table 2 Rigour applied in our study Criterion

Guidelines

How the guidelines were followed in this study

Internal Validity

Pattern matching

Propositions from the model were matched with patterns in the empirical data. Furthermore, because of the rich case data, it was possible to check that where patterns matched they did so according to the reasoning leading to the propositions.

Eliminating alternative explanations

The role of industry contexts in explaining variations in IOS implementation activities was ruled out

Using multiple sources of evidence

Case study data was collected from multiple sources including formal interviews, email communications, telephone conversations, IOS related documents, annual reports and company websites.

Having key informants review the case study report

The interview transcripts were sent to each interviewee and checked for transcription errors. A draft report on IOS adoption/use in each case organisation was prepared and was sent to the key informants.

Establishing a chain of evidence

A report was also prepared that described the sequence of the evidence pertaining to IOS adoption in each case organisation. This was done in order to enable an external observer to make an independent judgement concerning the appropriateness of the conclusions drawn from the case descriptions.

Creating/maintaining a case study database

Case study interview transcripts, copies of documents and analysis narrative were maintained as a database to ensure repeatability.

Developing a case study protocol

A standard set of questions was developed, based on the research model, and sent to interviewees one week prior to the interviews. The case study protocol was pilot tested at three sites.

Clearly Conceptualising research variables

The variables were carefully conceptualised and a summary provided to interviewees prior to the interviews.

Construct Validity

Reliability

Table 3 Major features of the participating case companies Case org

Nature of business

Annual sales

Total staff

IT staff

Back-end IT application

Type of IOS

A

Pharmaceutical manufacturing

A$250 millions

About 600

15

JDEdward’s World ERP system

Proprietary electronic ordering system

B

Automotive assembling

About A$1 >1000 billion

50

ERP system which is integrated with MRP system

Traditional EDI system and a web-based EDI system

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6 Case study findings 6.1 IOS adoption motives of case companies Case A (Pharmaceutical manufacturing company) The initiative to develop an e-ordering system to receive purchase orders electronically from hospitals was conceived internally within the manufacturing company. The initiative was initially driven by a senior IT manager who had read industry reports about the use of telecommunication-facilitated ordering systems by some American companies, which sparked his interest in electronic ordering system. Incidentally, the company also had a Canadian-based software system that had remote data entry option. Its presence also helped the IT manager to conceive the initial idea of developing an ordering system. The merchandise manager remarked: “The idea of developing our electronic ordering application originated in-house by our IT people. They read some industry reports that talked about the use of a telecommunication-based ordering system in some US companies. I also think that their idea was further influenced by a Canadian-based system called INTERACT, which we had in our company.” The senior business managers were convinced that the e-ordering system could be used to improve the efficiency of processing customer orders. They wanted to use the system for increasing organisational efficiency by bringing a reduction in man-power costs and data entry errors. According to the supply chain manager: “Instead of having so many people taking calls and physically transcribing orders and then keying in them into the our back-end system, e-ordering application would enable us to have a small order entry force. Another reason is to reduce the human error factor as orders would go straight from the e-ordering application into our back-end system.” In addition, the business managers also wanted to utilise the technological novelty of the ordering system to achieve an advantage over competitors. They believed that use of the ordering system would help their company in establishing a barrier for the rival wholesalers. This sentiment is reflected by the supply chain manager as follows: “This application was not developed purely for efficiency reason. Strategically, we expected to gain competitive advantage as none of the wholesalers were using similar type of systems at that time. So, this system created a barrier for our competitors to enter into the hospital market.” The empirical findings presented above thus confirm that the initiative of the pharmaceutical company to invest in the e-ordering system could be seen to have an ‘internal’ locus of motivation. We did not find any evidence that could otherwise suggest that the system was developed due to the request of its customers (i.e. hospitals/clinics) or any other external body (e.g. government agency, industry association). In other words, no evidence of an ‘external’ locus of motivation was observed. Similarly, the company demonstrated a motive which is techno-economic in nature. It invested in the ordering system to improve organisational efficiency. It also wanted to achieve

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competitive advantage. However, it did not demonstrate any form of socio-political motivation to introduce this system. Hence, according to the definitions given earlier, the type of motivation is techno-economic in nature. Considering the locus and type of motivation, the pharmaceutical company can therefore be regarded as an instance of techno-economic leader. Case B (Automotive assembler) Unlike the pharmaceutical company, the automotive assembly company has two different types of EDI system in place. It has been using a traditional EDI system with its large first-tier suppliers since the early 1990’s. However, in recent years the company introduced a web-based EDI system to transact electronically with small local suppliers. This paper is concerned with latter EDI initiative which originated from the materials planning department in mid-2003 when the company was making a serious attempt to maintain an industry quality standard called Q1 which necessitates an EDI capability requirement for all suppliers. The company identified that in the past its purchasing department had suppliers with no EDI capability whatsoever as these suppliers were delivering parts at a low cost. However, the non-compliance to EDI by these small suppliers had a detrimental effect on the company which was not identified before. The materials planning manager commented: “. . . our purchasing people have not always ensured this requirement (EDI compliance) as they’re driven by the prices of the components, and were less concerned with the EDI-capability of the suppliers. So, over the years, we ended up with a number of suppliers who were not EDI-capable which has had an (adverse) impact on the assembly plant.” The automotive company then conducted a survey of its local suppliers to find out more about their EDI capability. The survey results indicated that about 60 small suppliers were not EDI capable. These were low volume suppliers that had fewer than fifty monthly transactions. These small suppliers expressed complete reluctance to trade with the company through the existing traditional EDI network because the system was regarded as too expensive and cumbersome. According to the materials planning manager: “One of the things I wanted to do was have each and every supplier EDIcapable. We had noticed that some small suppliers were always pushing back and saying that they were not willing to invest in EDI systems. We have an EDI committee that met and discussed a possible web-based EDI offering.” Bringing these small non-EDI enabled suppliers onto an EDI network presented an opportunity to obtain considerable efficiency improvements in the assembly plant because materials planning and control system often showed negative inventory caused by a delay in receiving Advanced Shipping Notices (ASNs) from the small suppliers. According to the materials planning manager: “We really wanted our small non-EDI capable suppliers to migrate to the webenabled EDI solution. This is because the efficiency of our assembly plant was affected due to the delayed arrival of ASNs issued by the suppliers. Our materials planning and control system runs an over-night batch processing to calculate

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the usage of all the parts in the plant for that day in relation to the quantity of parts that arrived that day. If that data entry is not completed by the end of the day, the system shows negative inventory balance. The next day, the inventory analyst will look at the negative figures and panic straight away! In actual fact, there are parts available in the plant, but they have not been booked off. So, we can experience delays like this when suppliers are not EDI-capable.” Therefore, the intent of the automotive company to invest in the web-based EDI system was to realize efficiency gains by encouraging the small suppliers to adopt an electronic medium. In other words, 100% EDI compliance of suppliers was a major requirement for the company to attain greater efficiency in the assembly plant. The automotive company further recognised that most non-EDI-enabled small suppliers had limited financial resources and IT expertise. Taking this into consideration, the company decided to invest in a web-enabled EDI application and outsourced its development to a third party service provider. Using the web-based EDI system, the company could then send weekly Materials Requirements Schedule (MRS) to the third party provider via a proprietary network. Suppliers could then log-in and view the list of MRS using a standard web interface. The web application also allowed the suppliers to view a particular MRS and automatically convert it into an ASN, and send it off to the service provider which would then translate it into a traditional EDI format and forward the EDI message to the automotive company via the proprietary network. In summary, the opportunity of achieving efficiency gains in the assembly plant by allowing small non-EDI capable suppliers to join an internet-based EDI network inspired the automotive assembly company to embrace a fully integrated web-enabled EDI system. Hence, the type of motive is techno-economic in nature. Furthermore, the initiative did not arise either from the suppliers or the third party service provider. Rather, it came from a senior materials planning manager who was involved in introducing the Q1 standard within the company and observed how EDI non-compliance by the small suppliers was hurting the full efficiency of the assembly plant. Thus, the locus of motivation is internal in nature. In the light of these observations, the automotive company could be regarded to represent an instance of techno-economic leader. In this context, it is important to note that no empirical evidence has emerged in the interviews that support the notion that either organisational size or relative position of the company in the supply chain had influenced the formation of motives for EDI adoption. 6.2 IOS implementation activities initiated by case companies The activities initiated by the case companies in implementing IOS solutions are now compared and are summarised in Table 4. The case companies demonstrated a strong similarity in performing all eight activities. These are described in the following paragraphs. Activity 1: Preparing an IOS implementation plan Both case companies prepared a specific project plan in support of their respective IOS projects. In the pharmaceutical company, a project plan for the e-ordering system

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Table 4 A summary of IOS implementation activities initiated by the case companies IOS implementation activities

Prediction from IMM

Cases Pharmaceutical

Automotive

A1: Preparing an IOS implementation plan

Y

Y

Y

A2: Initiating a cost-benefit analysis of IOS

Y

Y

Y

A3: Performing a post-implementation review of IOS

Y

Y

Y

A4: Integrating IOS with back-end IT systems

Y

Y

Y

A5: Introducing changes in the business practices

Y

Y

Y

A6: Organising IOS training

Y

Y

Y

A7: Applying pressure on business partners

N

N

N

A8: Marketing IOS concept

Y

Y

Y

was prepared by a committee and was submitted to management for approval. It contained different phases of development, established clear milestones, and even indicated the software tools to be used for developing the ordering system. According to the IT manager: “This was a very important project for us and a committee was formed to look after the implementation of the e-ordering system. I was involved in that committee. We prepared a project plan which was submitted to the management for approval.” Similar to the pharmaceutical company, the automotive company also prepared an indepth implementation plan, but the plan was developed in close collaboration with the third party service provider. The plan specifically focused on two aspects of implementing the web-based solution. It was suggested that the third-party service provider should write a conversion program to translate the weekly MRS document which is prepared by the materials planning and control system of the company in a proprietary format. Another requirement also included in the plan was to design the EDI solution so that the suppliers could reuse the information given from the company. The materials manager commented: “The web-enabled EDI system for the supplier is to be designed in such a way that a MRS document can automatically be turned around as an ASN once the supplier enters the quantities dates, and presses the “submit” button. Thus, it eliminates a great deal of data entry errors for the suppliers.” Activity 2: Initiating a cost-benefit analysis of IOS On the matter of initiating a formal cost-benefit evaluation of their IOS projects, both case companies showed a remarkable similarity. In the pharmaceutical company, a cost-benefit analysis was performed to demonstrate the economic utility of the eordering system to its management. Expected benefits were identified and a cost estimate for developing the ordering system was established. The merchandise manager commented:

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“We certainly considered the investment required for building the system, identified the benefits that the system might generate, and performed a thorough cost-benefit analysis. Our management wanted to be convinced that the investment required in building the e-ordering system was worthwhile when compared to the operational benefits that the system might generate.” Likewise, the automotive company also conducted a cost-benefit analysis and decided to outsource the development of the EDI system in order to minimize development costs. According to the materials planning manager: “A business case highlighting the costs and benefits arising from the EDI solution was prepared. It was presented to the EDI committee. We liked the proposal and went along with the service provider to develop the solution because we saw the benefits.” Activity 3: Performing a post-implementation review of IOS The case companies did not differ with regard to performing a post-implementation review of their IOS projects. The pharmaceutical company conducted a postimplementation review of its e-ordering system with an intention of determining how the existing features of the ordering system were being used by its customers, and to ascertain if additional improvements were still required. This company however did not quantify the actual benefits arising from the introduction of the e-ordering system because the benefits were obvious to them. The merchandise manager commented: “This e-ordering system had lots of features. So, we wanted to know how those features were being used by our customers, and if additional features are needed. So, we went back to customers and asked them to indicate what features of our system they regularly use and consider of value to them.” In a similar manner, the automotive company also reviewed its internal operations after having undertaken the implementation of the web-based EDI system. According to a senior business analyst: “Once the system was up and running, we sought feedback from the suppliers which was useful in letting us know about the performance of the system. Based on the feedback, we then worked with the service provider to make further modifications.” During the review, the automotive company found out that manual work was reduced as non-EDI suppliers were now able to transmit documents electronically via the web. Like the pharmaceutical company, the automotive company too did not evaluate the post-implementation economic impact of the system as the management was convinced about its business utility. Activity 4: Integrating IOS with back-end IT systems On the matter of integrating IOS with back-end IT applications, both case companies were found to have initiated similar actions. For example, the pharmaceutical company integrated its electronic ordering systems with its own back-end information

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processing systems. Although IOS integration was not easy, the company established integration because it wanted to enable customers to view its inventory databases which are maintained in JdEdward’s OneWorld ERP system. Furthermore, integration was also intended to reduce data entry errors caused by manual order entry by the customer service staff. According to the IT manager: “We knew that integration was the key to the success of the system. We wanted our customers to access our inventory databases through the ordering system which was not possible without a seamless integration. We always believed that integration would enhance customer loyalty which means more orders for us.” Similar to the pharmaceutical company, the automotive assembly company also integrated the web-based EDI system with its back-end materials planning and control system. The integration was established in order to avoid manual intervention for sending weekly MRS documents and receiving daily ASN from the suppliers. According to the materials planning manager: “When parts arrive at the gate, if the ASN is coming to the materials handling system, all the data is pre-populated, when our inventory staff see that particular conveyance coming in, they can say “yes, I’ve got this conveyance. . . the screen’s already populated. . . we’ve received all those parts”. If they don’t have that, they’ll have to manually key in all the relevant data for those parts which is time-consuming.” Activity 5: Introducing changes in the business practices This activity was conducted by both companies. They introduced changes in their respective business practices in connection with the introduction of their IOS solutions. For instance, the pharmaceutical company changed its warehousing operations and introduced a Just-in-Time (JIT) kind of service to gain an edge over its competitors. It now looks after the day-to-day warehouse operations of a large public hospital and provides supplies direct to the hospital wards instead of the central hospital pharmacy warehouse. According to the manager: “I would say that the use of our electronic ordering system has enabled us to introduce a new service to a large hospital. We changed our warehousing operations to support this new service. Previously, that hospital used to have its own warehouse as part of the hospital, now the hospital relies on JIT service from us in order to supply to its ward levels. This means that we now basically look after its day-to-day warehousing operations. This change was achieved due to a combination of supply chain management techniques like JIT including the use of our ordering system. Thus, I would definitely say that this ordering system provided us with an opportunity to improve our internal operations.” Likewise, the automotive company improved its supplier delivery performance rating process as a result of the introduction of the web-based EDI system. According to the materials planning manager: “. . . by encouraging those small non-EDI capable suppliers to trade through us through the web-enabled EDI systems we are in a better position to analyse

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their delivery performance. We now receive ASN electronically and no longer receive incorrect data. This has a positive effect on the process that determines monthly performance ratings of suppliers.” Activity 6: Organising IOS training Both companies organised training for their staff to effectively use their IOS solutions. The pharmaceutical company organised training for its IT staff on JdEdward’s OneWorld ERP system, and that training helped them build a complex integration between the ordering system and its ERP system. In broad sense, training was intended to assist IT staff in completing the electronic ordering system project within the time-frame set in the plan. The IT manager commented: “We have however trained our IT people in ERP implementation, and that training facilitated them to establish a complex interface between the ordering system and our ERP software. There was no need to train customer services people as electronic ordering completely bypassed them.” Likewise, the automotive company trained its staff in the operations of the materials planning and control system and establishing electronic interfaces between this system and its traditional EDI hub. The training was sufficient for the IT staff to help introduce the web-enabled EDI system at the service provider’s side. The company also instructed the third party service provider to organise demonstration programs and on-line training programs for the small suppliers in order to train their staff in using the web-based EDI application. “As this was an important project for us, our IT people were given necessary training in Web object and Java. The cost of this training was included as a part of the development cost of the e-ordering system.” Activity 7: Applying pressure on business partners No differences were observed in the actions of the case companies with regard to applying pressure on business partners. The pharmaceutical company did not put strong pressure on its customers into accepting the electronic ordering system. It, rather, highlighted the merits of the system by emphasising the cost savings aspect of the ordering system to its customers. The merchandise manager remarked: “We did not coerce our customers into adopting our ordering system. We wanted to use the ordering system to make savings on our side by reducing our labour cost and data entry errors, and we also emphasised that similar benefits could be achieved by our customers.” Similar to the pharmaceutical company, the automotive company also did not exert any pressure on its small suppliers. It did not issue any explicit threats to non-EDI suppliers. This view is expressed by the materials planning manager as follows: “We made the web-based EDI system known to the suppliers that were not EDI-capable, but we did not impose it on them. The service provider also approached them. Most of them saw the benefits and decided to adopt the webbased system.”

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This view is also supported by the senior business analyst when he made the following remarks: “We have not imposed our EDI system onto them. I’ve seen large organisations do such a thing, and I reckon it’s a bad way of doing things with trading partners. The web-based system is an open architecture. . . . no impositions or restrictions are placed on them.” The automotive company paid a third party service provider to develop a web-based solution that was user-friendly, internet-based, and required low subscription fees from suppliers. Moreover, the company instructed the service provider to provide technical assistance and guidance whenever needed. In particular, as the translation of documents from the proprietary EDI network into a web-based format and vice-versa was done by the service provider small suppliers subscribing to the web services did not have to worry about EDI codes and formats. The web-based EDI system also eliminated the need for small suppliers to possess a high degree of technical proficiency and thus encouraged them to carry out transactions with the automotive company electronically. In the words of the senior analyst: “They looked at the change with dread (when the web-EDI was proposed) but were surprised by the support we provided them in going through the changes (getting to use the web to receive and send EDI messages).” Activity 8: Marketing IOS concept Both case companies were actively involved in marketing the notion of “Doing business electronically through IT-enabled IOS” to their business partners. For instance, the pharmaceutical company adopted several strategies to promote the acceptance of the ordering system by its customers. First sales brochures were mailed to customers highlighting the merits of the ordering system. Second, sales people were dispatched to customer sites (which are primarily hospital pharmacies) to explain to senior pharmacy people the possible benefits that hospitals could obtain from the system. Third, the functionalities of the e-ordering system were demonstrated to the key pharmacy staff of the hospital. Fourth, the system was offered free as development costs were not passed on to customers and the even co-operated with the software vendor of the hospital’s pharmacy system to build an interface with its e-ordering system. According to the manager: “We sent sales people to hospitals who explained to them of the potential benefits of using the ordering system. They said to the customers: ‘Here is a good way of actually ordering’, and when the customers agreed to have a go, we sent our IT people to demonstrate and install the system at hospitals’ own premises. These IT people also trained hospital staff on how to use the ordering system.” Similar to the pharmaceutical company, the web-based EDI system was also promoted by the automotive company following a cooperative approach. A senior business analyst visited a number of non-EDI capable small suppliers to develop an understanding of their operations and realised their concerns for manual data entry problems and receipt of confirmation for ASNs. Thus, the promotion strategy for

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the web-based EDI system was based on highlighting the merits of the system for the suppliers in terms of its ability to reduce data entry errors and provide prompt receipt of confirmation of ASNs. According to the senior business analyst: “It is hard to promote new technologies to suppliers because they claim not to see the advantages for them. So, it was a challenge for us to show them what the advantages actually are and in what form they come. I invited a number of those small suppliers and told them that the EDI system could fix their data entry problems for sending ASN. The system could also assure them of a prompt ASN confirmation from us. They do not need to wait for the ASN confirmation which normally takes several days to reach them.” 7 Discussion It was clearly established in the previous section that the motives for IOS adoption for both the pharmaceutical and automotive companies are the same (i.e. technoeconomic leader). Hence, according to the IMM, these two companies are expected to initiate the same activities for implementing their respective IOS solutions. The case study evidence is in agreement with this expectation. Additionally, the IOS implementation activities undertaken by the case companies are also consistent with the predictions (P1 to P8) associated with the techno-economic leader motivation scenario. This consistency is observed even though the companies reside in different industries contexts and despite other contextual differences between the cases described in earlier sections. Hence, we have obtained evidence that organisations having the same motive for IOS adoption tend to initiate the same implementation activities even when the industry context is different. In order to be able to make such a general conclusion, we need to establish that the cause of similarities in implementation activities of the two companies can in fact be traced back to the similarities in their motivation, despite contextual difference arising in the two industries in which they reside. In the following paragraphs, we will argue that although each industry difference (e.g. degree of virtual integration, basic industry business problem, and concentration of power along supply chains) between the two cases could be expected on general grounds to affect implementation activities, the explanation that the activities are in fact the same can be traced to similarities in motivation of the two companies, and thus that the similarity in motivation is the real cause of the similarity in observed implementation activities. For instance, virtual vertical integration could have an effect on companies wanting to undertake business process changes (A5) because individual IOS projects are likely to be more effective in a more virtually integrated industry. The degree of virtual integration is generally high in the automotive industry and low in the pharmaceutical industry. However, in these two cases, both companies process a large number of daily electronic transactions with their business partners through their respective IOS solutions. In other words, despite the disparity in virtual integration level at the industry level, the transaction frequency was similar in both case organisations. We suggest that the similar level of transaction frequency is the reason for these two company’s similar motives for IOS implementation, which in turn explains why they have initiated activities such as business changes and integration with back-end systems.

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Differences in the basic industry business problem could also manifest differences in implementation process, for instance willingness to undertake business process changes (A5). As mentioned earlier, supply chain efficiency and acceleration has been a strong focus of the automotive industry because of the complexity of the product and the competitiveness of the market. By contrast pharmaceutical products and supply chains are less complex but regulatory issues have tended to dominate as drivers for IOS. Despite such differences, both case companies demonstrated considerable maturity in leading electronic connectivity via IOS and pursued implementation activities that are not guided by the nature of business problem each industry faces. Another contextual difference between the two case companies is differences in concentration of power along supply chains. In the pharmaceutical industry, the wholesaling companies dominate. In contrast, in the automotive industry the automotive manufacturing companies dominate the supply chains. There are some suggestions in the IOS literature that power might influence such IOS implementation activities as actions of companies wanting to perform cost-benefit analysis (A2) and post-implementation review (A3) of IOS [2, 50]. However, in this research no influence of relative power of the case companies over their respective supply chains on these implementation activities was observed. Additionally, these two companies used different types of IOS technologies and established electronic relationships with business partners which occupy different positions of their respective supply chain echelons. However, we observe that the IOS technology and the nature of the business partner with whom these two case companies have established electronic relationships via their own IOS solutions, had no effect in deciding which implementation activities to execute. Both case companies engaged in similar activities which are more influenced by their motives for adopting their own IOS solution rather than technology characteristics.

8 Conclusion The IOS implementation experiences of two large Australian companies selected from two different industry segments (pharmaceutical and automotive) are presented. The motivations of these companies for introducing an IOS solution and their corresponding IOS implementation activities were examined using the IMM as a theoretical lens. The empirical findings indicate that regardless of the specific differences in industry characteristics from which the case companies were chosen, a strong similarity in their IOS implementation processes was observed between these companies. This observation lends evidence to the view that companies with the same IOS adoption motives will initiate the same IOS implementation activities. This is at least true for the tested techno-economic motivation scenario. Moreover, the differences in the industry setting of the case companies do not seem to influence the activities involved in their IOS implementation processes. Furthermore, neither the features of IOS technology nor the nature of business partners with whom these case companies have established electronic connectivity via their IOS solutions was found to affect their IOS implementation activities. Thus, it can be argued that given the evidence provided the IMM can be applied to an industry other than the one in which (pharmaceutical) it was initially developed. This helps enhance the generality of the model.

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The theoretical contribution of our study is that it provides extra support for the notion that motivations determine implementation activities. This in turn adds weight to the basic concept of the IMM. It is also a partial test of the specific predictions of the IMM (since the activities were not only the same for the two cases but the same as those predicted). It extends the range of validity of the IMM beyond the original industry in which it was tested. Our study also has practical significance. The findings support the idea that specific activities can be prescribed for an IOS implementation based on motivation alone, and despite differences in situation, particularly industry and type of IOS. In this study we have evaluated eight propositions for the techno-economic leader motivation scenario in the IMM, and traced the reasons for similarity for each activity. Therefore, our study is useful for analytical generalisation. However, as the IOS implementation experiences of the two case companies represent instances of the ‘techno-economic leader’ motivation scenario only, additional work is still necessary to include more cases that will serve as the instances of the remaining three generic motivation scenarios (shown in Fig. 1).

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Md Mahbubur Rahim B.Sc. (BUET), Dip.Ed. (Monash), M.S. (UPM), Ph.D. (Melbourne), is a Senior Lecturer at the Caulfield School of Information Technology, Faculty of IT, MONASH University, Australia. His research interests focus on electronic business, inter-organisational systems, and adoption and impact of IT-enabled systems in organisations. Rahim has over 70 refereed publications including in such leading journals as Information & Management, Behaviour and Information Technology, Journal of End User Computing, Journal of IT & People, Information and Software Technology, International Journal of Information Management, Journal of Internet Commerce, and Journal of Electronic Commerce in Organizations. Currently, Rahim is serving as the Chief Editor, IBIMA Journal of Innovations Management in SMEs. He is also an editorial board member for the Journal of Administration & Governance. Prior to becoming an academic, Rahim worked for a number of years as a software developer at several organisations in Bangladesh. Graeme Shanks B.Sc., Dip.Ed., M.App.Sci., Ph.D., is Australian Professorial Fellow in the Department of Information Systems at the University of Melbourne. His research interests focus on business analytics, the implementation and impact of information systems, data quality and conceptual modelling. Graeme has published in journals including MIS Quarterly, Journal of Information Technology, Information Systems Journal, Information & Management, Electronic Commerce Research, Journal of Strategic Information Systems, Information Systems, Behaviour and Information Technology, Communications of the AIS, Communications of the ACM, and Requirements Engineering. He is a member of the editorial boards of six journals and was recently a member of the Australian Research Council College of Experts. Prior to becoming an academic, Graeme worked for a number of years as programmer, programmer-analyst and project leader in several large organizations. Robert B. Johnston B.Sc., Dip.Ed., M.Sc., Ph.D. is Professor and John Sharkey Chair of Information Systems and Organisation at University College Dublin. His main research areas are electronic commerce, supply chain management, inter-organisational information systems and theoretical foundations of Information Systems. He has over 120 refereed publications, many in leading international journals, including

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Information Systems Research, Management Science, European Journal of Information Systems, Communications of the ACM, International Journal of Electronic Commerce, Journal of the Operational Research Society, International Journal of Production Economics, OMEGA International. Journal of Management Science, Journal of Strategic Information Systems, and Supply Chain Management. Prior to becoming an academic he spent 13 years as a freelance consulting analyst/project manager, designing and implementing about 25 large computer systems for inventory and production planning in a number of leading manufacturing companies in Australia.