The Impact of I.T. on the Degree of Outsourcing, the Number of Suppliers, and the Duration of Contracts

It has long been accepted within theinformation technology (IT) researchcommunity that IT should have a profoundimpact on industrial organization. However,there has been as yet on the changes to be expected in the design of firms or industries; rather, there is an apparently inconsistent collection of conjectures and analyses. We are now able to offer an integrative framework for describing the impacts of IT on an industrial organization. Our analyses generally support the "move to the middle" hypothesis that states that the impact of IT on the organization of economic activity is to lead to a greater degree of outsourcing where this increased outsourcing is done from fewer suppliers with whom the buyer has long-term relationships.

The Determinants of Network Default and Consolidation

Many industries whose products and services are based on information technology are being swept by asset buyouts, mergers and consolidations, a trend that promises to bring increased competition and cooperation, and lower prices for consumers. We have seen this happen in the world of packaged software products, including database management products, CASE tools, LAN software and software suites. The recent news of the merger of IBM and Lotus, and Microsoft\u27s attempted purchase of Intuit are cases in point. In a similar vein, the cellular communications industryalready has experienced a number of consolidations, with the result that the big players have gotten dramatically bigger. The market for services delivered by retail electronic payment networks also has experienced a deal of change in the last decade. Electronic banking networks have been merging with and acquiring one another in their fight for market share. The result is that the average network has increased in size, and although automated teller machine (ATM) usage has expanded even more dramatically,today fewer and fewer electronic banking networks exist (O\u27Keefe, 1994). Each of these industry scenarios shares an important feature: installed base appears to give rise to network externalities that create value for users who adopt common solutions and buy into shared technological standards. This, in turn, creates value for the acquirers or for the owners of the merged network. Why do some network technologies consolidate with competing technologies or networks to remain competitive, while others evolve to become dominant? How can these outcomes be explained? Although much has been written on the adoption of technologies and networks in the presence of beneficial externalities by economists (e.g., Farrell and Saloner, 1985; Katz and Shapiro, 1985; Oren and Smith, 1981) and IS researchers (e.g., Bakos, 1991; Chismar and Meier, 1992; Clemons and Kleindorfer, 1992; Gurbaxani and Whang, 1991; Seidmann and Wang, 1994), little is known about why network mergers occur under these circumstances. This research examines the determinants ofnetwork default(when a network goes out of business by its own choice) and network consolidationin electronic banking networks, and suggests a general evaluative framework that applies more broadly, to a spectrum of informationtechnologies and competitive interorganization information systems that offer network externalities

Dotcoms vs. Notcoms: The Impact of Internet Commerce on Traditional Firms

The confluence of several factors over the last few years has transformed the Internet from an experimenting ground for technophiles and hobbyists into an important and sophisticated forum for commerce. The Web promises to be not only an effective channel for information dissemination, but also for customer acquisition and retention, relationship management, oneon- one interaction, differentiation, cost reduction, competitive positioning and other such activities that are revolutionizing commerce. Unlike traditional distribution channels, the Web possesses several unique features that not only enable the seamless unbundling of the various functions that distribution channels perform, but also helps to realign these functions and increase efficiency by altering the existing economies of scale and scope. Further, the Web provides a whole new opportunity to rethink the way businesses are conducted and holds the potential for radical changes in the way of new products and services. Despite the growing importance of online commerce, most of what is known about the Web as a channel for commerce is based on anecdotes and exploratory studies. There is no formal understanding of how it would affect the structure and performance of markets, and the rapid pace of technological change makes it difficult to predict any long-term effects. Besides, it is not clear if the Web promises to be an efficient channel for commerce for all categories of products, firms and industries and if it should be used differently from other direct sales and distribution channels. My thesis seeks to address some of these issues

Developing a theoretical framework for joint service provision (JSP)

Joint Service Provision (JSP) offers the potential to improve organisational effectiveness through the provision of services jointly to groups of organisations rather than individually. Drawing upon, and extending, existing research in outsourcing this paper seeks to develop a framework to guide the development of JSP. As an initial empirical test of the framework an exploratory case study of a franchise system, which prima facie would appear to be an ideal context for JSP, is presented

IOS ASSIMILATION STRATEGIES: AN EMPIRICAL APPRAISAL

Interorganizational information systems (IOS) are increasingly relied on to facilitate the electronic exchange of data among organizations. Though substantive progress by the research community toward understanding IOS technology has been made, one unattended issue is understanding more fully the efficacy of alternative management strategies for assimilating IOS into organizational processes. Referred to here as IOS assimilation strategies, these strategies may offer to management useful alternatives for planning for and proceeding with IOS implementation. Conceptually based on Keen's (1991) notions of "reach" and "range" regarding organizations' computing infrastructure, two IOS Assimilation Strategies are tested for their comparative effects on three efficiency and six effectiveness measures. The empirical results, based on data from forty-eight organizations of the Group Insurance industry and the nonparametric Friedman test for significance testing, indicate that a significantly different ranking on the efficiency measures occurs across groups inhering varying strengths of IOS use pursuant to the alternative IOS Assimilation Strategies. The results suggest that greater efficiency gains may obtain by pursuing a strategy to extend IOS range over IOS reach. Consequently, management is advised to weigh carefully which IOS benefits, in terms of efficiency and effectiveness, are more important for substantiating IOS investments, and to make decisions regarding IOS implementation accordingly.Information Systems Working Papers Serie

The Determinants of Network Growth: The Case of Commercial Online Information Networks

With the advent of modern telecommunications capabilities, networks are rapidly becoming a competitive necessity in a wide variety of industries. The literature on networks suggests that networks have characteristics (e.g., network externalities) not shared by many other products or services, and thus traditional explanations of product growth or diffusion may not apply. Because there have been few empirical studies on networks, little is known about how networks grow and compete in the marketplace and the impact of network externalities. Using commercial online information networks as a context, this research examines the determinants of network growth. We find that make effect, usability, and compatibility with the dominant technological architecture are important variables influencing network growth. The results are also weakly supportive of the network externalities hypothesis, i.e., the online services industry exhibits some extent of network externalities

Discontinuous Technological Change and Relaxations of Regulatory Restrictions to Achieve Societal Objectives for the Environment, with Focus on IP Protections

We address cases where improvements in information technology for measurement and monitoring should result in regulatory relaxation, in contrast with much recent research, which focuses on situations where these improvements should result in increased regulatory restrictions on the actions permitted by large platform operators. We focus specifically on the problem of reducing environmental degradation, and we explore how regulatory restrictions associated with intellectual property (IP) rights should be relaxed in the presence of demonstrable reductions in environmental impact that result from improvements made by parties other than the owners of the IP. We explore how Environmental Impact Merit should be used to compel the owner of the IP to adopt improvements and to compel compensation to the improver. Future research will develop additional examples where regulatory relaxation is appropriate

Network Effects and Switching Costs In the Market for Routers and Switches

This research examines the impact of switching costs on vendor choice in the market for routers and switches. We show that despite the use of open standards which attempt to enhance interoperabilities for equipments from different vendors, vendors in this market are able to maintain high switching costs. Because routers and switches are networked goods, switching costs may arise from prior investments made at the same establishment and/or at other establishments within the same firm. We study how the introduction of switches into the LAN market affected vendor choice in routers. In particular, we provide evidence of significant cross-product switching costs and sizeable shopping costs when buyers purchase routers and switches simultaneously. However, we also show that the introduction of switches may have temporarily reduced switching costs for router buyers investing in switches