Measuring the Extent of EDI Usage in Complex Organizations: Strategies and Illustrative Examples

As interest into the nature and value of Electronic Data Interchange (EDI) within organizations continues to grow, it becomes increasingly desirable to establish a tactical linkage between the strategic value of EDI and observed operational benefits. This article provides such a tactical linkage by presenting an approach to EDI measurement consisting of four facets: volume, diversity, breadth, and depth of a firm’s EDI initiatives. Each of these facets is defined and then described through its application within the contexts of seven case sites, where each case site represents a * Brake Ires was the accepting senior editor for this paper. Introduction Electronic Data Interchange (EDI), or the computer-to-computer exchange of standard business documents, generally refers to a class of interorganizational information systems that provides a number of potential operational and strategic benefits (Dix and Naze, 1993; Emmelhainz, 1990; Konsynski, 1993; Nygaard-Andersen and Bj~rn-Andersen, 1994). In order to better understand these benefits, as well as any associated challenges, prior research efforts have explored exemplary EDI implementations from both operational (Banerjee and Golhar, 1992; Emmelhainz, 1987; Metzgen, 1990) and strategic (Bakos, 1991; Benjamin, et al., 1990; Clarke, 1992; Malone, et al., 1987) perspectives. Operationally, EDI has been found to reduce both cycle times and costs by improving the quality, speed, and business value of standard document exchanges (Mackay, 1993; Metzgen, 1990; Monczka and Carter, 1987; Mukhopadhyay, et al., 1995; Zorfass and Michel, 1992). Strategically, EDI has enabled some organizations to fundamentally change the way their business is conducted (Cash, 1985; Malone, et al., 1987; Sokol, 1989). More specifically, EDI provides a direct means to enhance an organization’s competitive presence by affecting performance and costs associated with time, resource consumption, and security and control (Wrigley, et al., 1994). Furthermore, EDI has more recently been cast as a pivotal technology for business process MIS Quarterly/September 1996 331