IN TODAY’S COMPETITIVE WORLD, the effective use of information technology (IT) as an element of a competitive strategy is critical. In the literature there are numerous examples of how organizations have used information technology to build and sustain new relationships with suppliers or customers and, as a result, have achieved a significant competitive advantage.1 A common theme in these examples is the use of information technology to improve coordination of the activities across organizations that are critical to delivering goods and services to a market.
However, it is often noted that these organizations did not gain their advantage by virtue of the information technology alone. Foremost McKesson radically changed both its internal operations and its relationships with customers in an effort to gain a competitive advantage over large, integrated pharmaceutical companies.2 Rockart and Short argue that effective internal integration across value-added functions is a key to interorganizational information systems (IS) implementation.3 Others have noted that the use of information technology linkages between organizations may only “speed up the mess” if a fundamental restructuring of the nature of work in organizations is not achieved.4,5
To the extent that these observations are correct, senior managers must now learn to integrate information technology into every aspect of their organizations.6 One approach to achieving this level of integration has been to decentralize the information systems organization, placing the responsibility for management of the IS function directly under the general manager of strategic business units. Yet this decentralization in itself does not remove the need for effective coordination across the information systems community. In fact, such decentralization may increase the cost of coordination for critical infrastructure components such as telecommunications or data resource management.7
Further, while there are many examples of how investments in technology yielded significant competitive advantage, there are also many examples where such investments resulted in no measurable impact.8 In many cases, this failure appears to stem not from an inappropriate vision but from the inability of the organization to integrate the use and the management of the technology infrastructure into the mainstream of the firm. One key element of a solution to this management challenge is to build a partnership between IS organizations and line managers.