Complexity and Context: Emerging Forms of Collaborative Inter-Organizational Systems

ABSTRACT The paper analyses the collaborative development of emergent IOS in three data intensive industry sectors (telecommunications, news media, and financial services). The findings reveal that environmental complexities (the complexity of data consumption patterns and increased interdependence within value webs) require context-sensitive value exchanges operationalised within co-operatively developed commodity-like IT infrastructures. The paper concludes by examining the implications of the study findings for developing IOS to support pooled, sequential, and reciprocal inter-organisational interdependencies. INTRODUCTION The potential of inter-organisational co-operation has been advocated since the 1960s by researchers such as Kaufman (1966). From the 1970s to the early 1990s, researchers (e.g. Van de Ven, 1976; Provan, 1982; Borman, 1994) argued that an organisation should link with others in order to cope with its environment and reduce environmental uncertainty, and that inter-organisational systems (IOS) were essential in this regard. Traditionally, IOS operationalised sequential inter-organisational relationships and supported limited internal processes such as inbound logistics and outbound logistics. Such IOS configurations can be classified as 'value chain' to 'value chain' models involving bilateral relations between two firms (Howard, Vidgen and Powell, 2003). Normann and Ramirez (1993) argue that traditional notions about value creation are based on outdated assumptions with an upstream supplier providing inputs to a value chain, an organisation adding value to the inputs and subsequently passing outputs to the customer or next participant in the supply chain. Subsequently, Internet focused research such as Timmers (1999), Kaplan and Sawhney (2000), and Hayes and Finnegan (2005) focused attention on the development and exploitation of new IT-enabled business-to-business models. While the focus was on e-business, the operationalisation of such linkages is characterised as IOS. Timmers (1999) sees new business models emerging from linkages between elements of the value chains of different organisations. Consequently, the boundary between organizations and their supply-chain partners is becoming even less distinct with interdependencies between them being more important (Hughes, Powell, Panteli and Golden 2004; Gulati and Kletter, 2005; Premkumar, Ramamurthy and Saunders 2005). Further, El Sawy, Malhotra, Gosain and Young (1999) argue that organisations that survive in this type of dynamic environment will need to be innovative in order to create new approaches to delivering value and will, as a result, have to employ altered enterprise structures and IT infrastructures. Thus, while increasing environmental complexity and technological innovation have led some organisational networks to explore more dynamic IOS models (Baron, Shaw and Bailey 2000; Howard, Vidgen and Powell 2003), empirical research on such systems is sparse and our conceptualisations of IOS need to be updated to include them (Hong, 2002). This paper reports on a study that explores the regulatory, economic, socio-cultural, technological and other inter-organisational environments that facilitated the development of IOS in three data intensive industry sectors (telecommunications, news media, and financial services). We firstly discuss the theoretical foundations for the study by examining the need to revisit IOS theory due to changing business requirements and enabling technology. Next, we explain the methodological approach used for the study. The findings illustrate that emerging IOS can help overcome the complexities of data consumption and value webs by facilitating standardisation and customisation for participants utilising context-sensitive value exchanges. This requires the development of a commoditised IOS infrastructure and higher co-operation levels amongst participants. We conclude by proposing an update to our conceptualisation of IOS by outlining an extension to an IOS framework developed by Kumar and Van Dissel (1996). …