Deriving Value from Information Technology: Role of Concordance Investments

The role of complementary investments in successful implementation of information technology is now widely accepted. However, for information technology implemented in collaborative arrangements such as supply chain partners, complementary investments may lead to successful implementation yet prove insufficient in creating the expected value. Our research in the implementation of Collaborative Planning, Forecasting and Replenishment (CPFR) systems finds a second set of investments, called concordance investments, is needed to derive the expected value of reduced forecast errors. Our preliminary results of two case studies provide evidence that without concordance investments, the benefits of IT investments to the partners are limited.