Information technology push/pull reactions

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Abstract

Innovation has not only become the domain of a few progressive enterprises but the key to success of many others. Innovative changes in management practices can assist in ensuring survival in an increasingly competitive world.

Management information systems are critical to exploiting technological, process, and product innovations. Improvements in information technology continue to have a major impact on information systems. The relationships between different sources of new information technology and reactions of organizations are critical to adopting and exploiting innovations. These relationships are empirically tested using a growing and important systems innovation, Electronic Data Interchange.

Two principal types of impetus are explored, technological-push and demand-pull forces. They are found to produce different external, internal, and cost/benefits. Further, the impetus for the usage of the system affects evaluations of systems, information, and management of systems. Technological-push requires user accessibility and support. The benefits are more clearly identifiable with demand-pull. Internal demand-pull results in the highest levels of benefits but is infrequently the major source of impetus. Comparisons of organization reactions to technological-push and demand-pull indicate that different management strategies and practices are required. Industries are affected differently depending on the impetus for change. Recommendations are made for managing the changing pattern of information technology innovation.

Introduction

The application of marketing principles to the transfer and commercialization of technology is a vital policy issue in the internationally competitive marketplace. Innovation researchers have frequently debated whether innovation is driven by market demand or by technological shifts. The market demand school of thought suggests that organizations innovate based on market needs, whereas the technology proponents claim that change in technology is the primary driver of innovation. Collectively, empirical research on technological innovation is inconclusive regarding this technology-push, demand-pull debate (Chidamber and Kon, 1994).

Innovations have been classified in many different ways such as technological, administrative, product, or process (Wolfe, 1994). Another important class of innovations is Information Technology (IT) which includes hardware, software, and systems. Some writers feel that IT innovations are a distinct class even though they may have administrative and technological properties (Swanson, 1994; Gopalakrishnan, 1994).

The IT industry has had many successful and unsuccessful innovations (Lucas, 1994). Research investigations have sought to increase the probability of success and reduce the risks of failure. For example, Brancheau and Wetherbe (1990examined the adoption of spreadsheet software, Moore and Benbasat (1991)personal workstations, Zmud and Apple (1992)electronic scanners, and Rai (1995)CASE tools. Prior research on IT adoption has centered on the attributes of organizations. For example, Zmud (1982)and Hannan and McDowell (1984)investigated organizational size and industry. Other studies, have examined different attributes of IT innovations, such as compatibility (Ramiller, 1992). However, the critical part of the decision process is in the beginning when information about the proposed system is attained and the impetus to pursue the innovation is addressed. This study differs from past research by focusing on different initial driving forces for IT change and the reactions to these impetuses.

The purpose of this empirical investigation is to assess the organizational reactions to technological-push and demand-pull for IT. This study focuses on a growing and important IT innovation, Electronic Data Interchange systems (EDI). EDI is the movement of business documents electronically between or within firms in a structured, machine retrievable data format, to be transferred from one location to another location (Hansen and Hill, 1989). Keen (1990)argues that the economics of EDI are so compelling that no firm can ignore the competitive opportunity. However, the growth of EDI usage since its inception has been limited in the industrial world. Only a small percentage of business transactions use EDI and further, a sizable percentage of organizations have no plans to adopt EDI (Banerjee, 1994). Understanding what motivates change by organizations in adopting IT innovations is a critical element to linking organizations nationally, and internationally.

The next section discusses the major types of impetuses and their effects. The focus is on the technological-push and demand-pull forces. These have been applied in the marketing literature and extended to the IT context. Data from 152 organizations were collected to test differing impacts of these forces. Section 3describes the sample selection and instrument development procedures. This is followed by the data analyses that test the relationships between the benefits and the internal effects on systems, users, and management. The final section contains the conclusions and recommendations for future practice and research.

Section snippets

Impetuses for information technology adoption

Push and pull strategies are promotional techniques used to advance a product through the channel of distribution. In a push strategy, the product is promoted directly in the channel toward the consumer. A push strategy suggests that the producer/innovator drives or generates the market demand. In contrast the pull strategy begins with the consumer or primary buyer creating demand pressure from the buyer back to the producer along the same channel. The subtle difference is that the buyer is

Analysis

Data were collected by mailed questionnaire. The inventory of items included in the questionnaire was evaluated for relevancy, completeness, and clarity by 25 information systems and EDI managers. Sampling was performed in three waves. In the pre-survey letter, organizations were informed of the impending survey and were asked if they would be interested in participating in the project. In total, 27.4% of the companies expressed interest in participating in the survey.

In the second stage of the

Conclusion

Technological-push and demand-pull are fundamentally different models of development and diffusion of technological innovations. Whereas technological-push requires the adopter to fit the technology to the organization, demand-pull requires the technology fit the adopter. Recent writers have advocated the importance of both, rather than as alternatives to each other. The results of that study support this view. Electronic Data Interchange systems have been adopted by different organizations

Don H. Drury is Professor of Accounting and Information Systems at McGill University in Montreal, Canada. His Ph.D. is from Northwestern University. He has published papers in MIS Quarterly, Communications of the ACM, Management Science, Information & Management and numerous other journals in management information systems. He has written four monographs on planning, costing, and control issues in information technology and is consultant to government and business organizations. He can be

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    Don H. Drury is Professor of Accounting and Information Systems at McGill University in Montreal, Canada. His Ph.D. is from Northwestern University. He has published papers in MIS Quarterly, Communications of the ACM, Management Science, Information & Management and numerous other journals in management information systems. He has written four monographs on planning, costing, and control issues in information technology and is consultant to government and business organizations. He can be reached via [email protected].

    Ali F. Farhoomand is Associate Professor of Information Systems at The University of Hong Kong. His publications have appeared or will be appearing in journals such as MIS Quarterly, IEEE Trans. on Engineering Management, Datamation, Organizational Computing and Electronic Commerce, Information & Management, and Data Base. His research activities focus on IS assessment and international electronic commerce. He can be reached via [email protected].

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