Coordination of Multi-Organizational Information Systems Development Projects – Evidence From Two Cases

Abstract In this paper we study coordination of multi-organizational system development projects. In these kinds of projects a common information system is developed to several client organizations by several vendor organizations. We studied two large-scale projects in the public sector and analyzed the evolution of coordination mechanisms and the mode of coordination. Case 1 is a joint development project between thirteen universities and Case 2 is a joint system development project among public and private pension fund companies in Finland. Different coordination mechanisms and mode of coordination were used in the studied cases. In the first case the mode of coordination was mostly informal during the studied phases of system development lifecycle. The second case started with a formal mode of coordination and maintained that mode. In both cases the mode of coordination remained the same, but the coordination mechanisms used varied in different phases of the project. In Case 1 the informal mode of coordination led to difficulties with the schedule and the quality of the first version of the system. In Case 2 more formal approaches helped keep to the schedule, but the functionality of the system was reduced. We conclude that given the size and complexity of these multi-organizational system development projects, it is difficult to change the ways of working in a short period of time. Keywords: Coordination theories, coordination mechanisms, mode of coordination, systems development INTRODUCTION Organizations spend increasing amounts of money on information systems services. The comparative disadvantages of in-house development of customized IS have in many cases led to outsourcing of IT functions and distinct ISD organizations in many areas of business. Recently, joint development of IS has proliferated, as organizations aim at procuring information systems for their needs more cost-efficiently, rapidly, and with fewer resources. Very often these joint efforts take place in sectors where no commercial software is available. This is the case in many emerging industries and small market niches. This activity incorporates interesting examples of private-public partnerships, e.g., in the areas of health care, education, and social security. We see that joint ISD efforts will become even more common in the future. However, management of such multi-organizational or complex (multi-client and multi-vendor) (Gallivan and Oh 1999) information systems (IS) development embodies many challenges that have not received sufficient attention in academic research. These include not only the management and coordination of development work, but also reconciliation of divergent objectives and goals, communication between different stakeholders, risks, and the various economic aspects of ISD throughout the lifecycle of the information system. Coordination is one of the key processes of successful systems development efforts (Kraut and Streeter 1995). Previous research has acknowledged coordination as relevant to system development, and there is a wide body of literature around coordination and coordination theories (Malone and Crowston 1994). What is missing from the current research is the understanding of coordination in multi-organizational system development projects, where number of stakeholders adds complexity and diverse goals. Hence, our research questions are: * What are the key coordination mechanisms used and mode of coordination in multi-organizational system development projects in different phases of the project? * What are the implications of the chosen mode of coordination in multi-organizational system development project? We wanted to capture the coordination mechanisms used and the mode of coordination. In addition, as we analyzed coordination in different phases of the system development, we had the opportunity to approach the evolution of coordination. We studied two cases in detail and adopted the exploratory case study method. …