Global Transfer of Edi Technology: a Multi-level Approach

Electronic Data Interchange (EDI) is a technology which has shown significant impact not only at the individual organisation level, but at industry-sector and even at the country-level. As the issues to be addressed at these levels are different, a systemic study of EDI technology transfer incorporating multiple levels is necessary for developing a holistic understanding of the transfer process. This chapter provides such a framework of global EDI technology transfer which can be used for analysing and planning EDI implementation within a country, an industry-sector, or an organisation. The chapter explores EDI implementation across two dimensions: breadth and depth. The breadth dimension focuses on the scope of EDI technology transfer — a country, an industry-sector, or an organisation. The depth dimension focuses on the maturity of EDI usage, which is differentiated into three levels roughly corresponding to "learner", "practitioner and "expert levels. The chapter then identifies critical success factors across these two dimensions. These factors are grouped into "critical success areas" which are used to define a conceptual framework of EDI technology transfer, and to apply this framework to some countries and industry-sectors as example. Finally, the chapter uses the framework for proposing an approach for planning the EDI technology transfer process. INTRODUCTION, Technology could be defined as knowlegement can be studied, codified, and taught to others (Weick, 1990). Technology transfer basically refers to the application of such knowledge and can cover the entire spectrum of events from conceptualisation of a new technology to its industry-wide use. An important component of the transfer process, technology implementation refers to tlie process of large scale institutionalisation of the new technology in organisations. Often the technologies of interest deal with physical products or processes whose scope is limited to only a few organisations or at the most an entire industry-sector. However, some technologies have much wider impact as they deal with inter-organisational information flows affecting business performance and relationships of organisations across multiple industry-sectors in several countries. The transfer of such technologies, therefore, needs to be studied globally in order to improve our understanding of the issues related to their successful implementation. Electronic data interchange (EDI) is such a technology, which can be defined as the inter-organisational, computer-to-computer exchange of business documents in a standard, mctchine-proce&sablc format (Limmclhnin/., 1993). Sonic key features of liDI are: (a) the use of an electronic transmission medium; (b) the use of structured, formatted messages based upon agreed standards; (c) relatively fast delivery from sender to receiver; and (d) direct processing by computer application software, generally resulting in a response to the sending organisation (Wrigley et al, 1994). EDI technology gives organisations an opportunity to exchange electronic messages instead of paper business documents, and leads to a new way of doing business electronic commerce. Because of the need for a sliuclurctl form and agreed standards, the introduction of EDI requires considerably more planning and co-ordination than while introducing other forms of electronic communication. Direct benefits of EDI include labour-savings in the areas of data transcription, controls, and error investigation and correction, and fewer delays in data-handling. As a consequence, EDI (Emmelhainz, 1993): (a) improves internal operations of a firm from a reduction in process-cycle time, (b) improves responsiveness to customers, (c) helps improve trading partner relationships, and (d) increases ability to compete, both domestically and internationally. These indirect benefits of EDI may prove to be even more significant strategically than the direct ones, but can only be obtained from closer integration among related functions within different organisations. Many industrialised and newly industrialised countries, such as the U.S.A., Canada, Japan, Australia, and Singapore have been successful in exploiting the strategic potential of EDI, especially in international trading (Farhoomand, 1992; Clarke, 1994; Masson, 1992; McCubbrey et al, 1994; Neo, 1994). EDI is also very attractive to many developing countries, who intend to strategically compete in the international market by reducing the length of procurement/ delivery cycle through EDI. As a consequence, many developing countries are actively considering EDI technology even though the technology infrastructure required for EDI in these countries is not very adequate (Doukidis 1993). HQwever, there are also many countries such as Hong Kong (Damsgaard et al, 1994), who have not been very successful in adopting EDI technology to their own environments. The major barriers to the successful transfer of EDI technology as often found are: (a) limited EDI awareness, (b) lack of government support, (c) weak technological infrastructure such as value-added networks and other services, (d) high percentage of small and medium-size enterprises, having small volume of transactions insufficient to justify EDI investment, (e) bureaucratic "paper-oriented" business culture and public administration, (f) primitive "batch-oriented" business information technology environments, and (g) cheap human labour in case of developing countries. Thus an interesting question relates to factors which contribute towards successful transfer of EDI technology into a country. Furthermore, as EDI adoption varies between different industry-sectors (even within a country), another question posed is that for a given industry-sector, what factors contribute towards the successful implementation of EDI technology within the organisations in that sector. There have been many studies of EDI implementation (as for example Banerjee et al, 1994; Bouchard, 1993; Cox et al, 1995; Holland et al, 1992; Krcmar et al, 1994; Mackay, 1993; Pfeiffer, 1992; Reekers, 1994; Reekers et al, 1993; Reekers et al, 1994; Saunders et al, 1992; Scala et al, 1993; Thissen et al, 1992). Unfortunately most of them have focused mainly at the organisational-level characteristics and not on cither country-level or industry level characteristics. Whereas successful transfer of any technology depends on some key factors, EDI technology is different from many other technologies in the sense that these factors are not merely technological or organisational in nature. They are also environmental, needing intervention of governments and international organisations. For instance, successful EDI technology transfer needs large scale availability of low-cost value added telecommunication services. But it also needs willingness of trading partners to enter into formalised business relationships, and even more important, legal acceptance of electronic documents and regulatory structure for global electronic commerce. Because issues in EDI technology transfer are complex and dynamic, a structure is needed to analyse the issues. A framework provides that structure as it identifies and organises context variables for research and practice (DeSanctis, 1993). Frameworks do not lend good insight into cause/effect relationships, rather the power of frameworks is that they provide a short-hand language for describing the relation. They highlight important dimensions as well as suggest which dimensions may be unimportant (Neumann, 1994). Frameworks are not theories; they are only a classification language. Therefore a framework could be applied for analysing the issues in the EDI technology transfer. Furthermore, in order to make the analysis more meaningful, the issues should also be related to the stakeholders in the transfer process. This chapter provides a conceptual framework of global EDI technology transfer which can be applied universally, i.e. in industrialised, newly industrialised as well as developing countries. It explores EDI implementation across two dimensions of its breadth and depth. The breadth dimension includes three levels in descending order of scope: country, industry-sector, and individual organisation (Fig.l). This multi-level approach is deemed necessary because each level has its unique characteristics, nature of EDI impact, success factors, and resource requirements. The depth dimension of EDI technology transfer captures three maturity-levels of organisational use of EDI. These levels refer to discovery, operational use, and strategic use of EDI. They roughly correspond to using EDI as a "learner, "practitioner", and "expert". Again, the need for multiple levels arises from our finding that each one differs in its impact, success factors, and resource requirements. EDI implementation at the organisation-level has been studied extensively. Therefore, this chapter will discuss critical success factors of EDI implementation at the country and industry-sector levels, spanning across the entire depth dimension within each level. The chapter is organised as follows. The next two sections describe the levels of EDI technology transfer scope and the EDI usage maturity respectively. The subsequent three sections define the CSFs of EDI technology transfer and describe those CSFs at the countryand industry-sector levels. The two subsequent sections describe a framework for global EDI technology transfer and identifiy stakeholders in the countrylevel EDI technology transfer. The section following it applies the framework to some selected countries. Finally, an approach for planning EDI technology transfer is given, followed by the conclusion and recommendation for further research. EDI TECHNOLOGY TRANSFER SCOPE (BREADTH) LEVELS This dimension defines various "units of analysis" for understanding the EDI technology transfer process, which are: (a) the country, (b) the industry-sector/community, and (c) the individual organisation. These three units are chosen for analysis because: (a) they provide a continuum of a broad to a narrow analytical focus (Fig.l), (b) each unit can be identified as a distinct behavioural entity having its unique set of characteristics, and most important (c) the three units together facilitate a systemic study of global EDI technology transfer.