Internet-Based Interorganizational Systems Research Paper

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Internet-based interorganizational systems (IIOS) are Internet-based information systems (ISs) shared by two or more organizations such as extranets, virtual corporations, Internet-based electronic data interchanges (EDIs), and business-to-business electronic commerce (B2B e-commerce; Grossman, 2004). In today’s business environment, most organizations face developing an e-business strategy, and the IIOS planning issues are those that appear to have the greatest weight (Finnegan, Galliers, & Powell, 2003; Rodgers, Yen, & Chou, 2002; Salmela & Spil, 2002).

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IIOS planning was consistently identified as one of the most critical issues facing IS executives and academic researchers. According to surveys of information systems management issues in the recent decade, improving information systems strategic planning remains among the top ten issues facing IS executives and corporate general managers. The strategic value of Internet-based ISs and the impact of technology innovation on the competitive advantages of businesses have increased the need for effective IIOS planning. Furthermore, as electronic business (ebusiness) strategies have received growing attention from entrepreneurs, executives, investors, and industry, the IS strategic planning is now considered critical in developing a successful electronic strategy (e-strategy). IIOS planning differs from planning for internal ISs and deals with different organizational structure, diverse business strategies, differing information system/information technology (IS/IT) infrastructures, and cooperative issues (Finnegan, Galliers, & Powell, 1999). The importance of planning for IIOS is widely recognized. It provides a business direction for Internet-based IS applications, coordinates the efforts of trading partners, and solves technical and nontechnical issues. IIOS planning describes the procedure of identifying a portfolio of IIOS applications that integrate organizational and interorganizational processes and provide organizations with capabilities to enhance linkages between trading partners along the supply chain.

IIOS involve substantial internal operations and efforts for IS development and have significant impact on the organization. Numerous researchers indicated that technological factors (such as IT infrastructure and IT expertise) and organizational factors (such as management involvement and commitment) expect to influence the planning guidelines for EDI and B2B e-commerce (Galliers, Swatman, & Swatman, 1995; Marshall & Mckay, 2002, Finnegan et al., 2003). Moreover, most research in the IS field focused on examining the planning of IIOS to support interorganizational activity, and several frameworks were proposed to identify the systems planning in e-commerce environments (Finnegan et al., 1999; Pant & Ravichandran, 2001; Marshall & Mckay, 2002). IIOS involve that all participating members coordinate their efforts and cooperate with each other. These participants may have complex business relationships between the firms and trading partners, resulting in a number of social and political factors that influence IIOS planning (Hong, 2002; Finnegan et al., 2003). Since the planning of IIOS, unlike the conventionally adopted ISs, requires the cooperation of the firm’s trading partners, various aspects of uncertain business environments and interorganizational relationships have a significant influence on the planning process.

This study discusses why IIOS planning is an important exercise, a conclusion based on evidence from an ongoing program of empirical research on IIOS planning and management (Lee, Lin, & Pai, 2005; Lin, 2006). It also explores the influence of technological factors (IIOS maturity and technology competence), organizational factors (top management support and CEO/CIO relationship), and environmental factors (environmental uncertainty, competitive pressure, and trading partner readiness) on IIOS planning effectiveness (planning alignment, improvement in planning capability, and fulfillment of planning objectives). It proposes an integrative conceptual framework that included these key factors that were expected to influence IIOS planning effectiveness.

Internet-Based Interorganizational Systems

Internet-based interorganizational systems (IIOS) offer various functionalities that allow firms to achieve these diverse objectives and performance outcomes within the context of different types of trading partner relationships. Zhu, Kraemer, Gurbaxani, and Xu (2006) define IIOS as “the kind of interorganizational system that uses open standards (e.g., TCP/IP as the communication protocol and XML as data standards), and is built upon the open Internet for information exchange and business-to-business transactions such as sales, procurement, and customer services.” They argued that IIOS generally have a broader trading partner base. For example, developing IIOS require joint efforts across firm boundaries, and the benefits of adopting IIOS are thus contingent on the status of network adoption by other firms in the trading community. Moreover, the existing IS/IT management literature suggests that IIOS can be used to enhance the organizational benefits of IS. For example, Dewett and Jones (2001) have identified five benefits of IIOS that enabled organizational performance: (a) improved ability to link and enable employees, (b) improved ability to codify the organization’s knowledge base, (c) improved boundary-spanning capabilities, (d) improved information processing that leads to increased efficiency, and (e) improved collaboration and coordination that promote innovation.

On the other hand, firms are increasingly deploying IIOS to facilitate collaboration with their suppliers and trading partners. Researchers and practitioners (Cash & Konsynski, 1985; Davenport, Hammer, & Metsisto, 1989; Ives & Learmonth, 1984; Johnston & Vitale, 1988; R. Johnston & Lawrence, 1988; Porter & Millar, 1985) argued that the IS/IT revolution was transforming the nature of products, processes, companies, industries, and even competition itself. One of the most intriguing of these transformations is the electronic linkage, facilitated by IIOS (Bakos, 1998). IIOS can enable firms to establish one-to-many linkages and enhance sourcing leverage through electronic connections (Zhu, Kraemer, & Xu, 2003; Zhu, 2004). IIOS affect competition in the following six vital ways (Siau, 2003):

  1. It changes the structure of the industry and alters the rules of competition.
  2. It enables firms to conduct electronic transactions with any business partners along the value chain.
  3. It creates opportunities for companies to establish interactive relationships with business partners (such as suppliers, logistics providers, wholesalers, distributors, service providers, and end customers).
  4. It improves customer service and strengthens back-office integration.
  5. It creates competitive advantages by giving companies new ways to cooperate and compete with their competitors.
  6. It spawns whole new businesses, often from within a company’s existing business processes.

Internet-Based Interorganizational Systems Planning

Internet-based interorganizational systems (IIOS) planning has been described as a managerial and interactive learning process for integrating IS considerations into the corporate planning process, aligning the application of ISs to business goals, developing detailed IS plans, and determining information requirements to achieve business objectives (Cunningham, 2001; Earl, 1989; Galliers, 1991; Teo & King, 1997). The IIOS planning process involves a longrange planning horizon for funds, human services, technical expertise, and hardware and software capabilities needed to take advantage of any opportunities that may arise (Baker, 1995). Organizations, however, may fail to realize the anticipated benefits of their IS/IT investments if they do not engage in appropriate information system planning (Clemons & Weber, 1990; Lederer & Sethi, 1996; Salmela, Lederer, & Repoen, 2000). According to Lee and Pai (2003) and Marshall and Mckay (2002), an inappropriate IIOS planning frequently leads to incomplete system projects, resulting in incompatible, redundant, and inflexible information systems. IIOS planning is a long-term process that organizations use to construct their IS infrastructure.

Besides effectively managing Internet-based IS investment, IIOS planning can also optimize resource allocation. In the context of Internet-based ISs, incentives for businesses to engage in IIOS planning are summarized as follows (Lee & Pai, 2003):

  1. Increasing strategic role of IIOS. IIOS applications have been widely developed and used in enterprises such as e-business, e-commerce, knowledge management, virtual organizations, business process reengineering, customer relationship management, Internet marketing, and supply chain management. Such applications allow organizations to improve their performance and enhance their competitiveness.
  2. Accelerated evolution in information technology. Organizations must reevaluate available IIOS to maintain their competitive advantage in light of accelerated change in IT including Web-based technology, multimedia technology, client-server architecture, gigabit networking, object-oriented databases, groupware, and wireless communication.
  3. Resource constraints. Organizations must allocate information resources efficiently given resource constraints including cost, human resources, material resources, software, and hardware.
  4. Integration of existing and new Internet-based IS applications. The increasing uses of IIOS and growing information requirements necessitate the eradication of incompatible systems. Consequently, businesses must develop new Internet-based IS applications and integrate existing and new systems.

Both practitioners and researchers have considered IIOS planning very important because IIOS contribution to organizational performance depends on its successful execution (Bauer & Colgan, 2001; Kao & Decou, 2003). The advent of new technologies such as Internet-based systems for interorganizational activity possibly makes the challenge of aligning IS with business more significant and difficult than ever before (Salmela & Spil, 2002). Additionally, involvement in IIOS planning has many benefits; for example, IIOS planning can help an organization use IIOS to implement existing business objectives (Chang, Jackson, & Grover, 2003), assess the influence of corporate IIOS investments on existing business activity, and define new business strategies, technological policies, and approaches (Jarvenpaa & Tiller, 1999). Some problems exist in developing IIOS planning, however, including inadequate knowledge of IIOS planning that leads to inadequate decision making, difficulty in convincing top management to approve the process, difficulty in securing top management commitment for implementing plans, failure to assess the current IIOS application portfolio, and failure to adjust IIOS plans to reflect environmental changes (Marshall & Mckay, 2002; Teo & Ang, 2001).

Planning Effectively For Internet-Based Interorganizational Systems

Planning for IIOS extends internal systems planning by adding Internet-based technology, diverse business strategies, and cooperative arrangements on planning requirements. Based on the research framework of Segars and Grover (1998), this study modeled IIOS planning effectiveness as a three-dimensional construct, involving planning alignment, improvement in planning capability, and fulfillment of planning objectives. First, planning alignment applied in this study identifies the close linkage of the IIOS strategy and business strategy. This linkage or alignment facilitates acquisition and deployment of Internet-based systems that are congruent with the interorganizational competitive needs. Segars and Grover (1998) argued that IIOS alignment planning focused on transformation of the business strategy set to the IIOS strategy and a linkage of IIOS objectives with business objectives. Secondly, planning must be improved to assess the planning process adapted over time to ensure its effectiveness, including adapting unexpected environmental and organizational changes. Improvement in IIOS planning capability is defined as the ability of the IIOS planning to continuously improve support of organizational functions. Finally, fulfillment of IIOS planning objectives is a multifaceted concept that depends on the organizational objectives (King, 1988) including increased competitiveness and operational performance, enhanced trading partner relations, and improved information management for strategic planning (DeLone & McLean, 2003).

Alignment between business and IS objectives makes the firm more adaptive (Lee & Pai, 2003). Segars and Grover (1998) also felt that alignment between IS and corporate strategies influenced organizational planning ability. Indeed, increased alignment between business and IS planning reduces IS planning problems and increases the contribution of ISs to organizational performance (Kearns & Lederer, 2004; Teo & King, 1997).

This study conceptualizes the IIOS planning capability in terms of its ability to plan interorganizational systems to analyze IIOS and its associated technologies and enhance business operations and management performance (Lederer, Mirchandani, & Sims, 1996; Segars & Grover, 1999). Moreover, previous studies found a positive relationship between planning capability and IS contribution to business objectives (Wang & Tai, 2003). Similarly, Lin (2006) also argued that effective IIOS planning would provide the organization with a greater IIOS contribution to organizational performance.

Factors Influencing IIOS Planning Effectiveness

IIOS planning enables organizations to focus on setting business directions and organizational redesign. The strategy-based framework also has been expanded to include technological, organizational, and environmental contexts (Evans, 2001; Wang, 2001). For example, since IIOS planning is performed in an organizational and interorganizational process, technological resources (such as IT infrastructure, Internet skills, IIOS know-how) and organizational characteristics (such as perceived benefits, organizational compatibility, financial resources, and firm size) may significantly influence its success (Lederer, Mirchandani, & Sims, 2001; Shi, 2002). Moreover, the competitive dynamics of an industry and the way that a firm competes significantly affect the firm’s IS implementation success (Bradford & Florin, 2003). Numerous studies have examined the influence of competitive pressure on the use of Internet-based systems for competitive advantage (Ramamurthy, Premkumar, & Crum, 1999; Ranganathan, Dhaliwal, & Teo, 2004; S. Wang & Cheung, 2004). Chi et al. (2005) also argued that firms evaluate their external business opportunities and threats by assessing their achievement of strategic IS planning objectives. Additionally, much of the research on the influence of trading partners on technology adoption has focused on the implementation of EDI (Chwelos, Benbasat, & Dexter, 2001; S. Lee & Lim, 2003) and the Internet-based electronic marketplaces (Fairchild, Ribbers, & Nooteboom, 2004; Pavlou, 2002). For similar reasons, competitive necessity and interorganizational relationships may contribute to successful IIOS planning and implementation. Hence, this study proposes that technological, organizational, and environmental contexts were major influencing factors in the success of IIOS planning. The following sections detail each of the influencing factors.

Technological Factors

A case study by Cerpa and Verner (1998) demonstrated that alignment of IS planning with business objectives is necessary for IS function maturity. Moreover, as Internet-based IS functions have matured and an IIOS planning framework has been adopted by IS planners, the IIOS planning has also matured (Detlor, 2001). Organizations with greater IIOS maturity perceive IIOS applications as important, and understanding of organizational resource requirements and the aligning of IIOS strategy with business strategy will improve over time.

The technical competence of a firm is a strong enabler of IS planning success (Brown & Magill, 1998; Nieder-man & Brancheu, 1991). Consistent with previous studies (Bharadwaj, 2000; Mata, Fuerst, & Barney, 1995), this study defined technology competence as consisting of IT infrastructure and IT human resources, where IT infrastructure referred to technologies that enable IIOS-related businesses and where IT human resources referred to employees with the knowledge and skills needed to implement IIOS-related applications. IT infrastructure provides a platform for building IIOS, and technical know-how provides the Internet-based skills for developing IIOS applications (Lin & Lee, 2005). Therefore, firms with sufficient technological competence have stronger incentives than firms that lack technology competence to achieve IIOS planning alignment and pursue planning capabilities.

Organizational Factors

Top management support is important, of course (Ragu-Nathan, Apigian, Ragu-Nathan, & Tu, 2004). Numerous studies have found it essential in creating a supportive climate and providing sufficient resources (Chatterjee, Grewal, & Sambamurthy, 2002). Moreover, Kearns and Lederer (2004) proposed that top management participation encourages other functional managers to join in the process and, thus, elicit their knowledge of business processes. Consequently, top management support might help and lead to effective IIOS planning.

The relationship between the organizational and IS leaderships (i.e., CEO/CIO relationship) has been identified as a critical factor affecting the IS planning and IS performance in an organization. For example, from a recent survey conducted by Khandelwal (2001), what CEOs perceive as key IT management issues sometimes differ from the view of IS executives. Khandelwal (2001) further indicated that this difference may cause inappropriate alignment between business and ISs. Therefore, to improve the CEO/CIO relationship, CEOs must understand the capabilities of ISs and be willing to exploit IS opportunities and threats (Jones, Taylor, & Spencer, 1995). Based on three case studies from diverse industries, Ranganathan and Kannabiran (2004) concluded that a good CEO/CIO relationship is necessary for effective management of IS function.

Environmental Factors

In the IS area, numerous studies have found a positive relationship among environmental uncertainty, IS management, and organizational performance (Sabherwal & Vijayasarathy, 1994; Bergeron, Raymond, & Rivard, 2001). Moreover, diversity in product lines and changes in competitors’ strategies are positively associated with higher dependence on IT and IS planning practices (Kearns & Lederer, 2004). Choe (2003) also empirically showed a positive relationship between perceived environmental uncertainties and IS alignment. Furthermore, corporate ecommerce initiatives and plans may be broadly considered a competitive weapon for coping with uncertain environments (Patterson, Grimm, & Crosi, 2003). Firms facing environmental uncertainty thus have a greater incentive to enhance the alignment of IIOS and business strategies and improve their organizational planning capabilities.

Competitive pressure is defined here as the pressure that results from a threat of losing competitive advantage, forcing firms to plan for new business and IS strategies (Abraham-son & Bartner, 1990). Corporate e-commerce initiatives and plans may be considered to provide a competitive weapon for coping with competitive environments (Patterson et al., 2003). Firms that are first in deploying IIOS have tended to derive greater advantage. Thus, the firm has a greater incentive to align IIOS and business strategies and improve their organizational planning capability.

Some IS studies have recognized the significance of trading partner readiness in successfully implementing IIOS. For example, Marshall and Mckay (2002) showed that the benefits perceived by trading partners, and the anticipated advantage that IIOS can provide trading partners, significantly influence IIOS planning. Simatupang, Wright, and Sridharan (2002) argued that greater trading partner expertise would provide firms with an external reason for implementing and using IIOS linkages. Additionally, Segars and Grover (1998) indicated that partnerships among functional managers and business partners were crucial to the alignment and success of strategic IS planning.

An Integrative Conceptual Framework

Based on the interorganizational relationship perspectives, organizational theory, and IS planning literatures (Doherty, Marples, & Suhaimi, 1999; Hong, 2002; Ranganathan & Kannabiran, 2004; Segars & Grover, 1998), this study proposes an integrative conceptual framework (see Figure 1) to discuss a set of seven antecedent factors (two technological factors, two organizational factors, and three environmental factors) that were expected to influence IIOS planning effectiveness. The emphasis on the influence of technological factors (IIOS maturity and technology competence), organizational factors (top management support and CEO/CIO relationship), and environmental factors (environmental uncertainty, competitive pressure, and trading partner readiness) on IIOS planning effectiveness (planning alignment, improvement in planning capability, and fulfillment of planning objectives) is clear.

We do not contend that these are the only factors that need consideration when deciding on ways to effectively manage the IIOS planning. They are, however, important elements that may influence whether an organization can accomplish effective IIOS planning.

In summary, this study has presented some key factors that an organization needs to consider in order to develop effective IIOS planning. These factors are as follows:

  1. IIOS maturity. The maturity of IIOS positively correlates with IIOS planning alignment and improvement in IIOS planning capability. As the IS personnel gains experiences with developing important IT/IS, and as the CEO and users recognize the strategic potential of IT, a shift may be expected from an internal orientation toward applications that enhance business competitiveness (King & Sabherwal, 1992). Similarly, Chang et al. (2003) argued that as IIOS have matured, Internet-based technologies have been applied to a wide range of activities up and down the value-added chain, both within and outside organizations. Consequently, the utilization of IIOS is an important determinant of successful IIOS planning.

Figure 1 An Intergrative Framework: Factors Influencing IIOS Planning Effectiveness

Internet-Based Interorganizational Systems Research Paper Figure 1

  1. Technology competence. Technology competence is conceptualized as an overall trait of technological advantage. This factor breaks down into three dimensions: (a) IT infrastructure, (b) Internet skill, and (c) technical expertise. The three dimensions of technology competence should not be considered in isolation from each other, but should be treated in a collective and mutually reinforcing manner. Technology competence positively correlates with IIOS planning alignment and improvement in IIOS planning capability. This proposition is consistent with the expectation that more technologically competent firms are more likely to align IIOS with business needs, identify new business opportunities, and achieve organizational objectives. Consequently, providing sufficient technology resources is critical for firms to pursue effective IIOS planning.
  2. Top management support. Top management support will have to play an important role in establishing some of the key conditions required to facilitate IIOS planning and implementation. Top management support is significantly related to IIOS planning alignment and improvement in IIOS planning capability. Lack of top management support and understanding has even caused major IS planning failure (Lee & Lim, 2003). It is also consistent with the fact that top management’s direct participation in IIOS planning study signals the importance of IIOS to the other executives in the organization and ensures their cooperation and support, contributing to the overall success of IIOS planning.
  3. CEO/CIO relationship. This study suggests that the CEO/CIO relationship is significantly related to the IIOS planning alignment and improvement in IIOS planning capability. That is, the relationship between CEO and CIO is a good predictor of IIOS planning alignment and planning capability. Previous studies have emphasized that the alignment of IS planning with business objectives requires the CEO and CIO to assume joint responsibility for achieving benefits through IS investments (Jones et al., 1995; Kearns & Lederer, 2000). Consequently, this study suggests that increasing the amount of time the CIO spends communicating with the CEO regarding IIOS planning study and educating the CEO about IIOS opportunities and threats improves the CEO/CIO relationship.
  4. Environmental uncertainty. Environmental uncertainty refers to the external threat posed by changes in customers’ preferences, competitors’ strategies and prices, and diversity in product lines. Kearns and Lederer (1999) argued that the role of CEO in strategic IS planning and the CIO in business planning may become more important under environmental uncertainty, especially for firms highly dependent on IS/IT. Environmental uncertainty is recognized as an important contextual factor that can explain the role of IIOS planning within an organization. For example, greater diversity creates structural challenges that can be met by the integrative and communicative abilities of IIOS that support strategic decision making. Moreover, under increased threat from the external environment (such as environmental hostility and environmental heterogeneity), it becomes even more necessary that IIOS investments support business objectiveness and, thus, have a greater incentive to enhance the alignment of IIOS and business strategies and improve IIOS planning capability.
  5. Competitive pressure. Competitive pressure, as previously defined, is the degree of pressure exerted by competitors on the IIOS implementation decision. The emergence of competitive pressure is a key influence on both IIOS planning alignment and planning capability. Competitive intensity, or competitive pressure, has been cited as an important environmental factor for achieving effective IIOS planning. This variable is consistent with expectations that a firm’s concerns about competitive advantage and performance drove IIOS implementation plan development.
  6. Trading partner readiness. Partner relationships in the IIOS are important issues for both practitioners and academicians (Futla, Bodorik, & Dhaliwal, 2002; Marshall & Mckay, 2002). Even if partner relationships have been traditionally associated with successful buyer-seller relationships, partnerships have been recently regarded as the foundation of IIOS (Leidner, 1999; Ratnasingam & Pavlou, 2003). In this study, trading partner readiness can be viewed as the potential partner willingness and ability to use IIOS. Trading partner readiness has emerged as a key influence on IIOS planning alignment and improvement in IIOS planning capability. In situations where greater mutual dependence between firms and their trading partners is expected, firms are likely to gain an improved understanding of the needs of trading partners and of external opportunities and threats. This understanding will, in turn, significantly help the firm to achieve its IIOS planning effectiveness. Consequently, inducing trading partner participation in the alignment between IIOS and business objectives can enhance and increase organizational planning capability.

Additionally, a discussion of the relationships among subdimensions of IIOS planning effectiveness follows.

First, IIOS planning alignment positively influences improvement in planning capability. This implies that IIOS planning alignment is a prerequisite for improvement in planning capability. Second, IIOS planning alignment and planning capability were positively correlated with fulfillment of planning objectives. As C. S. Lee (2001), as well as Kearns and Lederer (2004), noted, effective IIOS planning not only can let firms establish electronic links with trading partners, but also can enhance organizational performance. Finally, IIOS planning effectiveness has to facilitate a firm’s competitive advantage and long-term, organizational-level benefits. Marshall and Mckay (2002) also identified that effective IIOS planning helps organizations cope with the competitive environment and enhances organizational performance.

Implications For Practitioners

IIOS implementation has become increasingly complex, costly, and risky owing to changing business processes, strong competitive pressure, and rapid and radical technological changes. Hence, effective IIOS planning plays an important role in many situations and certainly in IIOS implementation and management. It also needs to consider the effects of environmental and organizational factors on the success of interorganizational systems planning within the specific context of Internet-based systems. This study has the following managerial implications for practitioners initiating or currently conducting IIOS planning exercises:

  1. IIOS maturity emerges as a key variable, indicating that the greater the importance of IIOS, the greater the degree of acceptance of IIOS planning. IIOS maturity is no longer a competitive tool but a strategic necessity. Top management and IS executives are assured that the firm’s extensive use of IIOS can facilitate the systems planning to support the implementation of IIOS.
  2. Technology competence has emerged as another key variable, indicating that the degree of acceptance of IIOS planning increases with the importance of IIOS. Firms must pay great attention to their technical capability to achieve IIOS planning effectiveness and must keep in mind that technology competence includes both tangible IT infrastructure and intangible IT human resources. As IIOS becomes a necessity, the significance of technical and managerial knowledge for IIOS planning becomes increasingly significant.
  3. Because top management support was an important factor for IIOS planning effectiveness, top management should establish closer relationships and long-term commitment with business partners such as empowered cross-functional and interorganizational teams. In a similar vein, top management must also recognize that exploiting the full potential of IIOS will require more than a financial investment to initiate IIOS planning and, then, to reap the organizational-level outcomes.
  4. CEO/CIO relationships were important facilitators for planning success of IIOS and for the firm’s executive performance. IS executives should be proactive in their efforts to identify opportunities from emerging Internet-based technologies and educate senior management. Specifically, top management should establish closer relationships and long-term commitment with business partners such as empowered cross-functional and interorganizational teams. Consequently, top management and IS executives benefit by recognizing the importance of organizational support and commitment and carefully shaping IIOS planning practices to reap the organizational-level outcomes.
  5. This study argued that competitive pressure predicated achievement of IIOS planning effectiveness. It implies that practitioners may rapidly respond to changes in the competitive environment and may want to consider increasing their involvement in future IIOS planning. Simultaneously, the emergence of trading partner readiness as a key variable emphasizes the need to plan Internet-based transaction processing systems between organizations. The firm must build mutual trust and a cooperative relationship with trading partners to facilitate IIOS planning effectiveness. Consequently, this study suggests that inducing trading partner participation in the alignment between IIOS and business objectives can enhance and increase organizational planning capability.
  6. IIOS planning is an organizational and interorganizational process. Introducing IIOS involves not only technical conditions, but also considerable environmental and organizational changes including changes in trading partnerships, beliefs and attitudes of senior executives, managerial styles, and shared values. Consequently, appropriately considering technological, organizational, and environmental contexts is necessary for effective IIOS planning.

Implications For Researchers

Although both consulting companies and academic institutions have extensive ely studied IIOS planning, numerous problems remain unresolved (Min, Suh, & Kim, 1999). Conventional IS planning approaches emphasize the rational and formal aspects of organizational life and ignore the complexities and messiness inherent in actual organizational situations, which are fraught with power relations and human behavior (Huysman, Fischer, & Heng, 1994). An investigation of IS planning demonstrated that only 24% of planned IS applications were actually developed (Flynn & Arce, 1995), confirming that IS planning processes require improvement.

Rapid advances in Internet and Web technology have led to the development of IIOS frameworks that consider e-commerce and e-business (Pant & Ravichandran, 2001; Raghunathan & Madey, 1999). For example, Raghunathan and Madey (1999) suggested an IS planning framework which focuses on the development of e-business applications, providing a three-dimensional coordinate axis to classify business models and establish an IS architecture for a particular model. Pant and Ravichandran (2001) presented an IS planning framework for developing e-business information systems designed to produce an information architecture based on the IT infrastructure of Internet and Web technology. These frameworks, however, do not explore the key factors (such as technological, organizational, and environmental contexts) that can influence IIOS planning effectiveness.

These frameworks may help strategic business planners to understand how to rapidly plan Internet and Web-based information systems. These frameworks, however, appear somewhat normative in that they do not consider technological, organizational, and environmental problems involving how IIOS planning should be done and how to best exploit current contexts. Furthermore, while focusing on developing particular IIOS applications, these frameworks have neglected the importance of incorporating organizational considerations into IIOS planning objectives. This may cause problems in the IIOS planning process, such as an inability to satisfy trading partners, the creation of IIOS plans that are unable to achieve internal organizational consistency, an inability to achieve organizational goals in change management, and an inability to meet planning objectives.

To achieve planning objectives for IIOS as well as e-business and e-commerce in the network era, this study suggests that organizations must consider organizational factors while conducting IIOS planning. Future researchers could develop IIOS planning frameworks (or models) that integrate managerial mechanisms related to organizational environment to enhance the IIOS planning effectiveness, such as innovation characteristics, knowledge sharing behaviors, and organizational learning factors. These mechanisms also can provide practitioners with a set of considerations that may merit special attention. In particular, change management mechanism could be viewed as a core of IIOS planning in the digital era since the introduction of e-strategies (such as enterprise resource planning, customer relationship management and supply chain management) may impact the organizational and IS/IT infrastructures. As King (2000) contended, the best IS planning involves using a methodology that “fits” the organization’s culture, style, sophistication, and IS capabilities. Organizations could apply both trading partner relationships and technology competence to fit the organizational context and promote the formulation of an organizational learning environment during IIOS planning. Moreover, future studies could seek an enhanced understanding of the effects on IIOS planning of the technological, organizational, and environmental factors discussed in the integrative framework through structured interviews and case studies of IS executives dealing with ongoing or recently completed IIOS planning projects.


IIOS planning is based on a portfolio of Internet-based systems that integrate organizational and interorganizational processes and assist a firm in realizing its organizational objectives. The contribution of this study is to elaborate and integrate technological, organizational, and environmental factors that can influence the effectiveness of IIOS planning. Previous writing on this topic has dealt with this issue only in a fragmented way.

This study presents an integrative framework, focusing on key factors that can influence IIOS planning effectiveness. It explores the influence of technological factors (IIOS maturity and technology competence), organizational factors (top management support and CEO/CIO relationship), and environmental factors (environmental uncertainty, competitive pressure, and trading partner readiness) on IIOS planning effectiveness (planning alignment, improvement in planning capability, and fulfillment of planning objectives). This integrative framework suggests that technological capabilities, internal organizational resources, and external competitive pressures could affect successful IIOS planning. This framework also provides some direction for e-business managers and IIOS planners, as well as researchers interested in IIOS planning and management.


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