Skip to main content
SpringerLink
Log in

System sourcing and information processing capability in supply chains: a study of small suppliers

  • Published:
Information Technology and Management Aims and scope Submit manuscript

Abstract

Although the adoption of inter-organizational systems (IOS) has been studied extensively in the existing literature, relatively little research attention has been paid to how small firms in supply chains are influenced by their larger partners in making their system sourcing decisions. In this study, we examine how small suppliers may choose their system sourcing approaches to better serve and collaborate with their large customers in supply chains. Our empirical findings suggest that information processing requirements and collaboration needs drive small suppliers to adopt more commercial off-the-shelf software package (i.e., external sourcing) to build their IOSs. Moreover, we find that small suppliers take such external sourcing as a way to achieve system effectiveness and enhance their information processing capabilities. The findings of this study generate important theoretical and managerial implications for IOS adoption and organizational information processing.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

References

  1. Anandarajan M, Arinze B (1998) Matching client/server processing architectures with information processing requirements: a contingency study. Inf Manag 34(5):265–274

    Article  Google Scholar 

  2. Angerhofer BJ, Angelides MC (2006) A model and a performance measurement system for collaborative supply chains. Decis Support Syst 42:283–301

    Article  Google Scholar 

  3. Bagozzi RP, Yi Y (1988) On the evaluation of structural equation models. J Acad Mark Sci 16(1):74–94

    Article  Google Scholar 

  4. Ballintine J, Levy M, Powell P (1998) Evaluating information systems in small and medium-sized enterprises: issues and evidence. Eur J Inf Syst 7(4):241–251

    Article  Google Scholar 

  5. Barrett S, Konsynski B (1982) Inter-organization information sharing systems. MIS Q 6(5):93–105

    Article  Google Scholar 

  6. Benlian A, Hess T (2007) A contingency model for the allocation of media content in publishing companies. Inf Manag 44(5):492–502

    Article  Google Scholar 

  7. Bollen KA (1989) Structural equations with latent variables. Wiley, New York

    Book  Google Scholar 

  8. Cao M, Vonderembse MA, Zhang Q, Ragu-Nathan TS (2010) Supply chain collaboration: conceptualisation and instrument development. Int J Prod Res 48(22):6613–6635

    Article  Google Scholar 

  9. Chou T-C, Chang P-L, Cheng Y-P, Tsai C-T (2007) A path model linking organizational knowledge attributes, information processing capabilities, and perceived usability. Inf Manag 44(4):408–417

    Article  Google Scholar 

  10. Chwelos P, Benbasat I, Dexter AS (2001) Research report: empirical test of an EDI adoption model. Inf Syst Res 12(3):304–321

    Article  Google Scholar 

  11. Clemons EK, Reddi SP, Row MC (1993) The impact of information technology on the organization of economic activity: the “move to the middle” hypothesis. J Manag Inf Syst 10(2):9–35

    Article  Google Scholar 

  12. Daft RL, Lengel RH (1986) Organizational information requirements, media richness and structural design. Manag Sci 32(5):554–571

    Article  Google Scholar 

  13. Dedrick J, Kraemer KL (2010) Impacts of internal and interorganizational information systems on the outsourcing of manufacturing. J Strateg Inf Syst 19:78–95

    Article  Google Scholar 

  14. Dewettinck K, van Dijk H (2012) Linking Belgian employee performance management system characteristics with performance management system effectiveness: exploring the mediating role of fairness. Int J Hum Resour Manag 24(4):806–825

    Article  Google Scholar 

  15. Egeihoff WG (1982) Strategy and structure in multinational corporations: an information-processing approach. Adm Sci Q 27(3):435–458

    Article  Google Scholar 

  16. Fairbank JF, Labianca GJ, Steensma HK, Metters R (2006) Information processing design choices, strategy, and risk management performance. J Manag Inf Syst 23(1):293–319

    Article  Google Scholar 

  17. Grover V, Jeong S, Segars AH (1996) Information systems effectiveness: the construct space and patters of application. Inf Manag 31(4):177–191

    Article  Google Scholar 

  18. Hamilton S, Chervany NL (1981) Evaluating information system effectiveness—Part I: comparing evaluation approaches. MIS Q 5(3):55–69

    Article  Google Scholar 

  19. Hu LT, Bentler PM (1999) Cutoff criteria for fit indexes in covariance structure analysis: conventional criteria versus new alternatives. Struct Equ Model Multidiscip J 6(1):1–55

    Article  Google Scholar 

  20. King WR, Malhotra Y (2000) Developing a framework for analyzing IS sourcing. Inf Manag 37:323–334

    Article  Google Scholar 

  21. Krause DR, Handfield RB, Tyler BB (2007) The relationships between supplier development, commitment, social capital accumulation and performance improvement. J Oper Manag 25(2):528–545

    Article  Google Scholar 

  22. Kumar K, van Dissel HG (1996) Sustainable collaboration: managing conflict and cooperation in interorganizational systems. MIS Q 20(3):279–300

    Article  Google Scholar 

  23. Lacity MC, Khan SA, Willcocks LP (2009) A review of the IT outsourcing literature: insights for practice. J Strateg Inf Syst 18(3):130–146

    Article  Google Scholar 

  24. Lee H, Kim MS, Kim KK (2014) Interorganizational information systems visibility and supply chain performance. Int J Inf Manag 34(2):285–295

    Article  Google Scholar 

  25. Leyland FP, Watson RT, Kavan CB (1995) Service quality: a measure of information systems effectiveness. MIS Q 19(2):173–187

    Article  Google Scholar 

  26. Lusch RF, Brown JR (1996) Interdependency, contracting, and relational behavior in marketing Channels. J Mark 60(4):19–38

    Article  Google Scholar 

  27. Malhotra A, Gosain S, Sawy OAE (2005) Absorptive capacity configurations in supply chains: gearing for partner-enabled market knowledge creation. MIS Q 29(1):145–187

    Google Scholar 

  28. Mentzer JT, Foggin JH, Golicic SL (2000) Collaboration: the enablers, impediments, and benefits. Supply Chain Manag Rev 4(4):52–58

    Google Scholar 

  29. Palanisamy R, Verville J, Bernadas C, Taskin N (2010) An empirical study on the influences on the acquisition of enterprise software decisions. J Enterp Inf Manag 23(5):610–639

    Article  Google Scholar 

  30. Park J-Y, Kim JS (2005) The impact of is sourcing type on service quality and maintenance efforts. Inf Manag 42(2):261–274

    Article  Google Scholar 

  31. Premkumar G, Ramamurthy K, Saunders CS (2005) Information processing view of organizations: an exploratory examination of fit in the context of interorganizational relationships. J Manag Inf Syst 22(1):257–294

    Google Scholar 

  32. Rai A, Patnayakuni R, Seth N (2006) Firm performance impacts of digitally enabled supply chain integration capabilities. MIS Q 30(2):225–246

    Google Scholar 

  33. Rai A, Xinlin T (2010) Leveraging IT capabilities and competitive process capabilities for the management of interorganizational relationship portfolios. Inf Syst Res 21(3):516–542

    Article  Google Scholar 

  34. Ravichandran T, Rai A (2000) Quality management in systems development: an organizational system perspective. MIS Q 24(3):381–415

    Article  Google Scholar 

  35. Roberti M (2010) Wal-Mart relaunches EPC RFID effort, starting with men’s jeans and basics. http://www.rfidjournal.com/articles/view?7753/. Accessed 23 July 2010

  36. Sanders NR (2007) An empirical study of the impact of e-business technologies on organizational collaboration and performance. J Oper Manag 25(6):1332–1347

    Article  Google Scholar 

  37. Sheu C, Yen H, Chae D (2006) Determinants of supplier-retailer collaboration: evidence from an international study. Int J Oper Prod Manag 26(1):24–49

    Article  Google Scholar 

  38. Soh CPP, Yap CS, Raman KS (1992) Impact of consultants on computerization success in small businesses. Inf Manag 22(5):309–319

    Article  Google Scholar 

  39. Srinivasan A (1985) Alternative measures of system effectiveness: associations and implications. MIS Q 9(3):243–253

    Article  Google Scholar 

  40. Subramaniam C, Shaw MJ (2002) A study of the value and impact of B2B e-commerce: the case of web-based procurement. Int J Electron Commer 6(4):19

    Google Scholar 

  41. Teo HH, Wei KK, Benbasat I (2003) Predicting intention to adopt interorganizational linkages: an institutional perspective. MIS Q 27(1):19–49

    Google Scholar 

  42. Thong JYL, Yap CS (1995) CEO characteristics, organizational characteristics and information technology adoption in small businesses. Omega 23(4):429–442

    Article  Google Scholar 

  43. Tushman ML, Nadler DA (1978) Information processing as an integrating concept in organizational design. Acad Manag Rev 3(3):613–624

    Google Scholar 

  44. Venkatraman N, Camillus JC (1984) Exploring the concept of “fit” in strategic management. Acad Manag Rev 9(3):513–525

    Google Scholar 

  45. Viswanath V, Hillol B (2012) Adoption and impacts of interorganizational business process standards: role of partnering synergy. Inf Syst Res 23(4):1131–1157

    Article  Google Scholar 

  46. Wailgum T (2009) Wal-Mart orders suppliers to go green, and some see red. http://www.cio.com/article/497559/Wal_Mart_Orders_Suppliers_to_Go_Green_and_Some_See_Red?page=2&taxonomyId=3000. Accessed 20 July 2009

  47. Wang T, Chen H (2006) Effects of internal support and consultant quality on the consulting process and erp system quality. Decis Support Syst 42(2):1029–1041

    Article  Google Scholar 

  48. Watjatrakul B (2005) Determinants of IS sourcing decisions: a comparative study of transaction cost theory versus the resource-based view. J Strateg Inf Syst 14:389–415

    Article  Google Scholar 

  49. Xue L, Zhang C, Ling H, Zhao X (2013) Risk mitigation in supply chain digitization: system modularity and information technology governance. J Manag Inf Syst 30(1):325

    Article  Google Scholar 

  50. Zhou H, Benton WC Jr (2007) Supply chain practice and information sharing. J Oper Manag 25(6):1348–1365

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Management Information System, Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China

    Liwen Hou

  2. Department of Computer Information Systems, Georgia State University, Atlanta, GA, 30302, USA

    Ling Xue

  3. Department of Management Information Systems, Fogelman College of Business and Economics, University of Memphis, Memphis, TN, 38152, USA

    Son Ngoc Bui & William Kettinger

Authors
  1. Liwen Hou
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Ling Xue
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Son Ngoc Bui
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. William Kettinger
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Liwen Hou.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Hou, L., Xue, L., Bui, S.N. et al. System sourcing and information processing capability in supply chains: a study of small suppliers. Inf Technol Manag 17, 379–391 (2016). https://doi.org/10.1007/s10799-016-0255-7

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10799-016-0255-7

Keywords

Search

Navigation