Evaluating the use of information technology in inter-organizational relationships

In inter-organizational settings the use of information systems and networks is often not evaluated in a very formal way and decisions are made "by gut feeling" rather than based on rational evidence. Since benefits depend not only on internal contingencies but also on the decisions and the loyalty of business partners, issues of trust and the risk of becoming locked in with a disloyal partner become crucial. The Internet and Web-based technologies facilitate system development and the deployment of inter-organizational systems and may thus help change this picture. In times where IT use is becoming more and more important to stay competitive and efficient, system costs and benefits have to be balanced very carefully in order to build systems that are perceived as being beneficial even in cases where risk-aversion makes this a difficult task. In this paper the issue is addressed with a focus on applications which link a buying organization with its suppliers. The paper introduces a generic framework for the evaluation of IT systems and networks that might help mitigate the lack of success measures. The framework is applied to a procurement support system that was developed by Lawrence Livermore National Laboratory (LLNL) and that is used to link the Lab with its suppliers. The case also provides an example for a system that balances costs and benefits in a way that makes the system advantageous even in an inter-organizational setting.