Assessing the Value of Interorganizational Systems to Support Business Transactions

Judith Gebauer and Peter Buxmann
International Journal of Electronic Commerce,
Volume 4, Number 4, Summer 2000, pp. 61.

Abstract: In interorganizational settings, the use of information systems (IS) and networks is often not formally evaluated, and decisions are made by “gut feeling” rather than based on rational evidence. Since benefits depend not only on internal contingencies but also on the decisions and loyalty of business partners, issues of trust and the risk of becoming locked in with a disloyal partner become crucial. The Internet and Web-based technologies, by facilitating system development and the deployment of interorganizational systems (IOS), may help change this picture. In times when IT use is becoming more and more important for firms to remain competitive and efficient, system costs and benefits have to be carefully balanced in order to build systems that are perceived as beneficial even in cases where risk aversion makes this difficult. This paper examines applications that support interfirm business transactions, in particular those that involve buying processes. A conceptual model for the evaluation of investments is introduced that takes into account the perspectives of the initiator and the prospective participants. The model is applied to a system developed by the Lawrence Livermore National Laboratory (LLNL) to link it with suppliers and support purchasing processes.

Key Words and Phrases
: Business value, case study, information technology value, interorganizational systems, procurement.