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The Adoption of Inter-Organizational Systems in Financial Services
By Christian M. Messerschmidt and Prof. Dr. Oliver Hinz
Over the last decade, a fundamental transformation has taken place as a networked economy has evolved in which multiple organizations collaborate and create supply chains or value networks (e.g., think of the dwpbank executing the securities settlement for a number of competing banks). Such networks constitute webs of relationships that generate both tangible and intangible value through complex dynamic exchanges between two or more organizations. Any agent engaged in these kinds of exchanges can be viewed as a value network in itself, whether in private industry, government or the public sector. This has given rise to important questions regarding the adoption of new technology in such a closely collaborating and networked economy. Most of the literature on the adoption of IT in organizations has focused exclusively on the characteristics of a single firm and the properties of the technology being adopted. We, however, observe that new technologies can also cross the boundaries of the firm, and thus the co-creation of IT value is an important topic for future research. Hence, it is necessary to understand how IT is also adopted among multiple partners in an inter-organizational relationship. The adoption of a new technology can begin with the commitment of all network partners, but more often a single firm starts to adopt the new technology and then the adoption is imitated by cooperating or competing firms. The adoption of the technology thus crosses the firm’s boundary and the diffusion process starts. The adoption should be seen as a process of social contagion where the adoption decision depends on the evaluation of other firms in the network. As outlined by Granovetter (1985), economic life is embedded in social relations. The focus on the atomic behavior of individual agents neglects the social interplay between different agents. It has been shown that social contagion occurs among prospective adopters in different contexts and that relationships significantly influence the adoption decisions of their peers. Thus, technology adoption models have to incorporate these social relations to be able to derive valid predictions. Based on institutional theory, adoption models were designed and tested that accounted for interorganizational influence factors by analyzing mimetic, normative and coercive pressures through which surrounding institutions may force organizations to adopt FEDI (Financial Electronic Data Interchange). Howe ver, many innovations can be beneficial for a single firm even when their peers do not adopt them. The adoption may start within a single firm, and its benefits may increase later when the adoption crosses the firm’s boundary, e.g., due to network effects.
Since little is known about the success factors in such a setting, which is an important precondition for a successful implementation, we examine the adoption of inter-organizational systems.
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Latest printed newsletter: | Third Issue, July 2010 |
