Choosing the Right B2b Information System: Managing a Portfolio of Choices

In this paper we propose that firm choices related to b2b systems are determined by two fundamental sets of decisions that firms need to make when committing to a b2b system. The first of these choices relate to the level of control and influence a firm needs to exercise over a b2b system – including financial ownership of the system, deciding who can access and use the system, and how the transactions are to be carried out using the system. We refer to this set of choices as the governance choices related to the b2b system. The second set of choices relate to the extent of use that the b2b system will be subjected to – including the extent to which the system will be integrated with internal processes, as well as the scope or diversity of transactions the b2b system can handle. We refer to this set of choices as the intensity of use of b2b systems. Based on data collected from large US manufacturers, and using governance and use intensity as the principal dimensions, we develop a matrix identifying four distinct modes of b2b system participation. We also identify a number of contextual factors that can influence b2b system participation modes. Finally, we identify a set of outcomes that each of the b2b system participation modes can provide. Our framework can help the practitioners answer two key questions. First, given a specific transaction context, which b2b system participation mode best suits the context? Second, having chosen a specific b2b system participation mode what outcomes can the firms expect?