FACTORS AFFECTING EFFECTIVE USE OF ELECTRONIC DATA INTERCHANGE IN ORGANIZATIONS : AN EMPIRICAL STUDY OF TRADENET

Abstract

A thorough review of existing interorganizational systems (IOS) literature was conducted to identify and define the research problem. Among other findings, the review indicates that factors relating to successful use of IOS by participants are the least studied. Hence, this study investigates the impact of five contextual and three organizational action factors on the successful adoption and use of EDIS (Electronic Data Interchange systems), a specific class of IOS by participants. The five contextual variables used in this study are: (1) organizational size; (2) organizational maturity; (3) organizational proactiveness; (4) CEO support; and (5) champion support. The three action variables studied include: (1) timing of adoption; (2) process restructuring; and (3) system integration. EDIS success was measured in terms of communications efficiency, decision quality, and competitiveness. Towards this end, a research model to investigate these impacts was developed and a survey on Tradenet participants was performed. 210 useful responses were collected from this study. Results show that Tradenet participants which performed extensive process restructuring and integrated their internal application systems with Tradenet benefited more in terms of enhanced communications efficiency, improved decision quality, and increased competitiveness. Additionally, organizations with a proactive stance attained greater benefits in terms of improved decision quality and increased competitiveness. Further analysis reveals that organizational action factors play a more critical role than contextual factors in influencing EDIS success. Multiple regression analyses results indicate that action variables account for a greater variance in all three dependent variables. Process restructuring, and system integration were found to be significant predictors of communications efficiency. For decision quality, organizational proactiveness, and process restructuring were found to be significant predictors. Organizational proactiveness, timing of adoption, and system integration were found to be significant predictors of competitiveness. Finally, we found that organizational actions are more successful for organizations with certain characteristics. Early adoption results in greater EDIS benefits for large, mature organizations, and organizations without champion support. Extensive process restructuring reaps greater benefits for young organizations.