Americas Conference on Information Systems ( AMCIS ) December 2002 CO-ADOPTION OF XML-BASED INTERORGANIZATIONAL SYSTEMS

The factors that influence an organizations decision to begin using a certain type of technology have come under much study. Several theoretical models, referred to as technology diffusion models, have been developed to better understand the role of these factors in the adoption, diffusion and infusion of certain types of technology. This paper provides background and positioning regarding a recent technological development in B2B e-commerce known as XML-based interorganizational systems (IOS). A Co-Adoption Model of XMLBased IOS is introduced and defined. The theoretical model is developed to empirically evaluate the influential factors leading toward adoption and internal diffusion (volume, diversity, and breadth) of the target technology. The factors under study include compatibility, relative advantage, environmental and three control variables (seller versus buyer, technology conversion type, and location in supply chain). A field study covering twelve implementations of the target technology is conducted with the RosettaNet consortium. An empirical analysis of the field study results to the theoretical model is completed and nine hypotheses are tested. From the compatibility construct, the XML-based IOS solution earned greater compatibility levels in four of the five common task needs as compared to the EDI solution. Findings also indicate substantial improvements in all direct financial and operational measures (ROI, transaction cost, payback, cycle time and throughput). In fact, transaction cost savings ranged from 16% to 87%. The indirect benefit findings are the most significant. The most common indirect benefits include reduced negotiation time of technical standards and improved resource allocation time. While the most important indirect benefits include compliance with business partner mandates and product cost advantages. Significant indirect benefits were also derived from a supply-chain focused interorganizational architecture standards setting consortium (such as RosettaNet) that are over and above direct transaction cost savings. Examples of the benefits from such a consortium include designing (and promoting) modularity in IOS architecture, enabling a blanket PO process, and reduced tensions between business partners. From the environmental construct, partner power was heavily in favor towards buyer organizations. The expectations of market trend variable provided valuable insight as well. Respondents placed a higher expectation of market trends on the RosettaNet consortium (overall) as compared to the specific RosettaNet IOS technology they utilized. Thus supply chain partners felt greater confidence with the existence of the consortium, than they did with the technological standards output from that consortium. Based on preliminary findings, environmental factors and indirect benefits jointly resulted in the participating organizations decision to adopt RosettaNet-based solutions. However, the relative advantage direct measurement variables (transaction cost savings, ROI, operational improvements) is the key construct in sustaining interest in the target technology and likely leading towards greater levels of internal diffusion. Several recommendations for future research and managerial implications are provided.