Abstract

This project, funded by the National Science Foundation, involves a comparative empirical analysis of the development, adoption, implementation, and diffusion of vertical (or industry-wide) information system standards in three industries (automotive parts supply, retailing (RFID applications in the footwear and apparel), and the home mortgage finance industries). The study aims to contribute to knowledge about IT-enabled interorganizational collaboration and its consequences for national productivity improvement.

This work is motivated by the opportunity enabled by the potential for Internet-based XML standards, which promises to lower the costs of interorganizational collaboration significantly. Achieving these gains, however, will depend on 1) the successful development of higher-level Internet-based interorganizational coordination standards, 2) widespread adoption of these standards by both large and small organizations in specific vertical industries, and 3) appropriate technical choices by these industry participants during implementation of the standards. Unfortunately, standards development, adoption, and implementation are problematic and challenging processes. Standards development is a collective (industry-level) activity. Because an interorganizational interconnection standard must harmonize the activities of many different organizations, no one organization can develop a successful standard for all others: Representatives of all interdependent organizational segments must join in. The extent to which a vertical information system standard diffuses in an industry is also a collective phenomenon, because individual organizations base their adoption choices on what other organizations do. But the actual adoption and implementation of standards are organization-level activities, leading to complex interactions between individual organizational decisions and collective processes and outcomes. For example, certain technical choices during standards development can make it easier to gain consensus and successful development of an industry-wide standard. This, however, would make simultaneously organization-level adoption and effective implementation of the standard less likely to occur, such as by failing to account for the incentives of commercial software developers. Our aim is to better understand how these processes interact in shaping vertical information system standards creation and use.

The study involves in-depth case studies of three industries, including analysis of the efforts of the relevant industry consortia developing vertical information system (VIS) standards. These industry-level case studies are complemented by detailed interviews with a sample of 60 companies in each industry in order to allow comparisons of relative success across industries in terms of adoption and use of VIS standards, and the consequences of the standard.