Background

2. Background • The modern business environment is characterised by competing supply chains rather than competing organisations (Christopher, 1992) • The boundary between organizations and their supply-chain partners are becoming less distinct, and interdependencies between them are increasingly more important (Hagel, 1996) • Organisations should plan for the future by creating a domain into which new business processes, methods and models can be introduced (Heidegger, 1977)

3. Flexibility • Upton (1994) defines flexibility as “the ability to change or react with little penalty in time, effort, cost or performance”. • Confusing and ambiguous term (Upton, 1995) • Flexibility is an important factor for organisations to succeed in dynamic and uncertain environments (Koste and Malhotra, 1999; Dreyer and Grønhaug, 2003; Garavelli, 2003; Zhang et al., 2003) • Flexibility is often achieved at a cost to efficiency as there are “set-up costs” that come through changing the organisational response to challenges in the environment.(Phillips and Tuladhar, 2000) • While IT can promote organisational flexibility, the technology used to promote flexibility becomes harder to maintain over time and paradoxically may lead to decreased flexibility in the long run (Lucas and Olsen, 1994) • Inflexible IS have acted as inhibitors of organisational flexibility (Allen and Boynton, 1991) • Web services offer an organisation the possibility of low-cost connectivity across many technology platforms allowing businesses more flexibility. (Hagel and Seely-Brown, 2002)

4. Dimensions of Flexibility (Golden and Powell, 1997) • Focus – the area in which flexibility is created (Internal/External) • Temporal – length of time taken to respond to changes in the environment • Range – the degree to which a firm can adapt to foreseeable and unforeseeable changes • Intention – the degree to which a firm is proactive or reactive in the face of environmental changes

5. Web Services • Application-to-application transactions conducted via an Internet-based communication link (Aberdeen Group, 2002) • A piece of code is made available over the internet to a remote machine, providing access to its functionality without having to download or install the actual code (Fletcher and Waterhouse, 2002) • Web services perform functions, which can be anything from simple requests to complicated business processes (IBM Web Services Tutorial) • Improvements in…the speed of developing solutions, interoperability with existing systems, deploying mobile systems, security (Microsoft, 2002)

6. Web Services • By deploying a Web services platform, companies can • better manage the information they share internally and externally • make employees, customers, suppliers, and business partners more productive. • be able to quickly create new business opportunities, • establish effective partnerships, • speed application integration • forge tight connections with their customers. • Unlike other ebusiness technologies, Web services provide complete platform independence, easing integration between systems as well as promoting interoperability. (IDC Report, 2002) • Web Services have been a victim of the “hype hurricane” (Manes, 2003)

7. Web Services Architecture ServiceRegistry In a typical scenario, a provider hosts the implementation for a service. Providers define service descriptions for services and publish them to a registry. A requestor then uses a registry to find service descriptions for services they are interested in using. With the service description in hand, the requestor binds to a service (Power and Acton, 2002) Publish Find WSDL UDDI ServiceRequestor ServiceProvider SOAP / XML Bind (to protocol)

8. Value Configurations • Value Chain may be obsolete in the post-industrial economy (Van der Heijden, 1993) • Value Chain framework proposed by Porter (1985) is best suited to describing the activities of a traditional manufacturing firm but is less appropriate when analyzing the activities of other types of organisations (Stabell and Fjeldstad, 1998) • IT has been a facilitator of the emergence of these new organisational forms (Tapscott, 2000; Child and McGrath, 2001) • Value Chain is just one of a possible three value configurations based on the work of Thompson’s (1967) interdependence view of the firm

9. Value Configurations Value Network Value Shop Value Chain

10. Chains, Shops and Networks

11. Comparing Proprietary IOS and IOS based on Open Standards (Hagel, 2002; Estrem, 2003)

12. Previous Studies • Found that IOS can both enable and constrain flexibility (Golden and Powell, 1997) • Focused on proprietary technologies (EDI) • Basing electronic networks on proprietary standards limits their reach to an exclusive set of organisations (Evans and Wurster, 2000) • Focused on traditional industries • Sequential relationships (Dyadic IOS) • Value Chain Configuration (Manufacturing Orgs)

13. Research Gap (What’s new?) • New Technologies (Open Standards, WS) • Other Value Configurations (Shop, Network) • Other business interdependencies (pooled + reciprocal)

14. Research Objective + Questions • Objective • To explore how web services affect the ability of an interorganisational network to respond to changes in the business environment • Questions • How do web services affect the flexibility of a node to respond to changes in the interorganisational network and external environment • How do web services affect the flexibility of Interorganisational networks of supply chain partners to respond to changes in the environment?

15. Unit of Analysis • A single firm is not a valid unit of analysis for IOIS research studies because the environment the firm operates in will also be affected by IOIS implementation (Kurnia and Johnston; 2000, 2002) • Reimers et al. (2004) propose the Industry Segment Value System (ISVS) as the unit of analysis for IOIS studies • While an industry is defined in terms of products, industry segment is defined in terms of interactions among firms (Reimers et al., 2004)

16. ISVS (Reimers et al., 2004)

17. Choice of Cases • Focal Organisation with Horizontal and Vertical partners • Diversity of Value Configurations in the ISVS (chain, shop, network) • Diversity of Supply Chain Interdependencies in the ISVS (sequential, pooled, reciprocal) • Dynamic business environment • 3 Industry Segment Value Systems (ISVS) • Travel • Financial Services • Mobile Value-Web

18. Research Strategy • Case Studies of 3 ISVS’s • 15-20 organisations in total • Semi-structured Interviews • Case Study Protocol • Assess Web Service Issues (internal + external) • Assess Flexibility Issues (internal + supply chain)

19. Case Study Instrument • Preliminary Focal Orgs in each ISVS • Traventec (Travel) • O2 (Mobile Services) • Fexco (Financial Services) • Identify players (Horizontal and Vertical) in each ISVS • Identify and classify connections (type of interdependencies) • Applied at the level of the environmental change • Classify types of environmental changes • customer, competitor, supplier, government regulation etc. • Classify Importance of env change, impact of change + response time • Difference in flexibility before + after use of Web Service applications • 3 ISVS – identify the players – identify and classify connections

20. Case Study Instrument • Identify + Bound ION • Identify environmental changes to which network has to respond • Identify elements of network affected by the response • Intra node • Categorised by activities • Categorised by interdependencies • Inter node • Categorised by interorganisational activities • Categorised by interorganisational interdependencies • Classify responses by flexibility dimensions (time, range, intention + focus) • Relate to inter + intra node changes

21. Potential Outcomes • Identify new WS-based IOS • Classification of WS • Measures of intra- and interorganisational flexibility • Reality-checking/hype-busting