THE ADOPTION AND DIFFUSION OF INTERORGANIZATIONALSYSTEM STANDARDS AND PROCESS INNOVATIONS

Matthew L Nelson, University of Illinois, Department of Business Admin, and Michael J Shaw, University of Illinois, Department of Business Admin

1/01/2005
(Original Publish Date: 2003)

Interorganizational system standards are reaching a new era in industry. When asked about interorganizational systems, invariably most people think of electronic data interchange (EDI) standards (ANSI X12). Albeit EDI still remains the preeminent type of interorganizational system, IOS solutions have been overhauled since the mid-1990s. IOS solutions are now collaboratively developed, structured around discretely defined cross-company business process standards and able to be distributed via the web. Compared with EDI technology from the past, the notions of open standards, modularity, scalability, and interorganizational business process reengineering have become embedded in modern-day IOS development. This paper is intended to examine assimilation levels of interorganizational system standards and process innovations (IOS SPI) among members of an industrial group where an IOS standards development organization (SDO) exists. A Conceptual IOS SPI Adoption and Innovation Diffusion Model is developed, defined and nine hypotheses are proposed and empirically tested based on firm-level cross-sectional surveys of 102 firms from 10 different industrial groups (encompassing 15 different SDOs). Using the organizational - technological - environmental framework (with the addition of the SDO construct), the significant determinants of IOS SPI adoption were found to be; top management support, feasibility, technology conversion, competitive pressure, SDO participation level, and SDO Architecture. Using the same framework, the significant determinants of IOS SPI deployment were found to be; feasibility, competitive pressure, SDO participation level, compatibility, shared business process attributes, SDO Architecture and SDO Governance. A rich discussion is then provided regarding findings in the areas of industrial coordination of IOS standards, consequences of IOS standards diffusion, and SDO measures of success (including governance and management practices). Numerous recommendations are provided to practitioners and researchers for future consideration in this critically important and emerging research frontier.