Interorganisational Standards

Introduction

Interorganisational Standard is the standard that enable the firms, organisatons, government organisation and others to collaborate and to form "plug & play economy". The collaboration of firms, organisation and government organisation can be completed without using standard but the time and expense to form the value chain will be high and take longer period.

Goals of Interorganisational Standards

• Allowing data to flow automatically between firms for the communication.
• Lower the expense of the organisation/firms in the long run. The firms don't need to altering the system continually with the errors and requirement.
• Reduce the conflict of business system within the firms. This is the opportunity for the firms to sorted out their business system and requirement for value adding.
• Give efficiency and flexible information systems: Reduce error which cause by human, an error will converging to none. Increasing speed converging to real-time.
• Providing the Standard for the supply chain and e-commerce. The standard will provide the consistency of data format to allow the firm to transferring the data, so that the firms don't have to convert data to certain format before transferring and after receiving.

Challenge of Interorganisational Standards

• High Cost to initiate the standards to the system because:
  1. Outdated data formats: The firms need to spend money to reform the data format, make it up to dated
  2. Software constraint: The exist system can only be run on the specific software, which the firms need to purchase new software
  3. Transport via proprietary communication infrastructures: It is expensive for firms to exchange high volume of data over a long terms. It's depends on the agreement of proprietary communication infrastructure.

• Numerous of Standards available:

There are many field for the Interorganisational Standards like logistic, ecommerce.

1. 1. Standards Development Organisation (SDOs) - form to describe and develop the semantic for different fields of information exchange. Each standards below offer different Interorganisation Standard
   2. EbXML
   3. OASIS
   4. RosettaNet
   5. UCC
   6. UN/CEFACT

The firms are often confuse which standard that are suitable for their requirement. The Firm's value will be lower if the firm adopting the very different standards and has to make the major adaptations.

An important goal is to agree on one set of interorganisational standards at least in sectors in which firms often cooperate such as specific industries. For example, is limited to the electronics industry and logistic.

• Complex relationships:
  • because IOS has to cover many aspect, therefore IO relationship are often complex.
  • while Electronic Data Interchange standard (EDI) – define semantic of electronic document, define Interorganisational Standard, discovery the mechanism and describing the processes. Is the backbone's of electronic business
  • For example, Collaborative Planning Forecasting and Replenishment standards (CPFR) is a standard to describe processes to conduct the collaborative forecasting between firms in supply chain network (predict the relationship between firms)
  • Service Oriented Architecture – is the service that enable the Interorganisation Standard support more complex relationships. It is a new architecture that has been emerging in recent years. It would make the Interorganisational relationship between firm more flexible and better. wow professions wow gold reviews GoDaddy Promo Code SEO Elite Review wow engineering guide wow first aid guide wow enchanting guide wow cooking guide wow blacksmithing guide wow inscription guide wow alchemy guide wow leatherworking guide wow jewelcrafting guide wow tailoring guide wow farming spots buying wow gold safe The implementation of the technologies above has affect more on aspect of the business rather than conventional EDI systems, such as choice of business partner to collaborate with.

• Diverse Interest:
  • Interorganisation standards are often assume from external organisations. But In reality, the development of standard has involve many different actors. Actors in this case refer to user firms, software vendor and government organisation. Each actor may have interest in different things. For example; user firms want to shape and to control the standards according to their business requirements, whereas software vendors need the standards to sell their software systems. The diverse and conflict occurs which influence on the quality of system and long term expectation of Interorganisational standard.

quality - can't communicate, don't operate properly long term expectation of Interorganisation - the expectation and prediction of outcome in the future

It is difficult to achieve an agreements of actors/participants to involve one standard for their requirements.

Interorganisational Relationship

Interorganisational Relationships is the relation that establish and maintain by many organisations/firms in order to offer complex goods and services. The effective and efficient management of such interorganisational (IO) relationships is a critical task for today's firms. Evan (1965) has describe the theory on IO relationships as "Describing and measuring networks of inter-organisation relations presents a substantial methodological challenge."

There is no single theory can explain IO relationships. The resulted are in a long list of theories the following : noted this is only some of the result.

1. Actor-network-theory
2. Behavioural theories,
3. Contract theory,
4. Exchange theory,
5. Game theory,
6. Institutional theory,
7. Learning theory,
8. Political economy theory,
9. Principal agent theory,
10. Property rights theory,
11. Resource dependence theory,
12. Social exchange theory,
13. Stakeholder theory,
14. Strategic choice theory,
15. Systems theory,
16. Transaction cost theory

The further development was done by Williamson (1975) and the result turned out that the firms are an alternative to markets for the organisation of input resources to select. It doesn't matter on where the tasks are organises (via market or within the firms) but it does matter on where the costs of organisation are lower.

The divisions boundaries of where a firms ends and market begins are implicitly assume. In reality, it's often difficult to determine where the organisational boundaries of firms are. And more often, an organisational arrangements are in hybrid form as they are neither strict hierarchies nor pure markets. Still, this is very broad as many kind of hybrid arrangements can observed. The most frequently discussed are as following:

1. buyer-supplier relationship
2. consortia,
3. firm networks,
4. joint ventures,
5. licensing,
6. shared capital,
7. strategic alliances,
8. supply chain network and trade associations.

Figure 2: The characteristic of IO Relationships

Supply Chain Networks (SCNs)

The study had focuses on the role of interorganisation standards in Supply Chain Networks(SCNs). Christopher (1998) gives a practical definition of SCNs:
"The supply chain is the network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer." However this mechanisms often revel the technical limits of the existing EDI standards. For example, the very limited support of real-time processes.

Supply Chain Management (SCM) is the concepts for managing SCNs. The main goal of SCM is to gain higher efficiency through intense collaboration of resources and primary activities between vertical partner, mainly secured through neo-classical contracts. The exchanged goods and services can be low or high specificity. The time horizon can be unlimited or limited. Coupling can be loss or tight, often depending on the specificity. Finally, SCNs typically have a high degree of Formalisation (refer to Figure 2: characteristic of IO Relationship).

One stand out research result of SCM is the discovery of the "Bullwhip effect". The effect occurs when a small demand changes at one location in the supply chain, it can lead to high demand changes at another location. Therefore the reason that cause the high demand at another location is because of a slow and limited exchange of information between firms, due to the isolated planning (didn't consider the side effect that would occur to others) and safety stocks.

Bullwhip effect has very high relevance to the practical as:

• demand changes are getting stronger because of faster innovation rates

and consumer behaviour that is harder to forecast, and

• an increasing number of firms participate in SCNs.

The researcher assumed that Interorganisational information systems (IOS) lower the transaction cost of market-like coordination forms. From this has causing a shift from hierarchical to more hybrid organisational arrangements and leading to smaller firms. A more differentiated view reveals the tendency of firms to shrink vertically and grow horizontally, which is the specialisation of firms mentioned above.

The firms do not have to develop all the parts of a product themselves, but can focus their competencies on certain modules. The modular product architectures lead to increasingly modular SCNs, which can offer very complex products. For example, the structure of the computer industry, which changes from few vertically integrates firms to horizontally specialised industry (refer to the diagram above). As the result, there are more firms involved in the creation of product. These have to manage an increasing number of interorganisational relationships. It is often unlimited to straight buyer-supplier relationships. But if complex scenarios such as joint product development, collaborative forecasting or contract manufacturing has been comprise, the conflict and interruptions in complex interorganisational relationships can significantly affect the overall efficiency of SCNs, which leading to the Bullwhip effect.

At the core of this model are business process, which are embedded in the organisational structure executed by people. And supported by information technology, while strategy sets the long term goals. The model includes three layers of interorganisational relationships. First, decisions of establishing and ending interorganisational relationships are made on the strategic level. Second, interpersonal relationships link organisations through direct contact between employees. Third, interorganisational information systems (IOS) couple business processes across boundaries via information technology.

The information exchanged in SCNs often has high volumes and requires accuracy and speed,which making it difficult to process manually. Thus the IOS make the management of SCNs possible. For instance, car makers connect their production lines to suppliers via IOS to enable the just-in-time delivery of parts.

Information Systems

Interorganisational information systems are a specific form of general information systems. Davis(1999) gives a definition of IS as following: "The information system or management information system of an organisation consists of the information technology infrastructure, application systems, and personnel that employ information technology to deliver information and communications services for transaction processing, operations, administration, and management of an organisation. The system utilizes computer and communications hardware and software, manual procedures, and internal and external repositories of data. The systems apply a combination of automation, human actions, and user-machine interaction.”

The automation of information processing is a fundamental aspect of IS. There are three fields of decision-making in the firms which describe by Simon (1965). Each fields has different levels of potential automation.

1. In the top management, unprogrammed decision-making prevails, which has almost no automation potential.
2. Programmed decision-making dominates middle management and has medium automation potential.
3. The highest automation potential is offered by clerical work with repeated work processes.

This can be explained in terms of the potential formalisation of knowledge in the three fields. If the environmental conditions are stable, as for clerical work, formal rules for the execution of tasks can be explicated. A constantly changing environment, however, requires a lot of expertise to make successful decisions. Formalisation of such expertise is possible only to a very limited extent. Even if formalisation succeeds, the permanent semantic change requires frequent ‘repairs’ of the formal system to be consistent with the underlying real world.

formal systems based on artificial intelligence will match the capabilities of the human mind within the next few decades. Humans have advantages in accomplishing tasks requiring problem-solving activities or perceptual-motor activities. Computers are better suited for tasks that are predictable, repetitive sequences of activities, or potentially complex and well-structured calculations.

Simon (1965) already predicted that the use of computers would lead to large savings through inventory reductions and the smoothing of production operations across organisational boundaries.

Johnston/Vitale (1988) add: “An IOS is built around information technology, i.e., around computer and communication technology, that facilitates the creation, storage, transformation and transmission of information. An IOS differs from an internal distributed information system by allowing information to be sent across organisational boundaries. Access to stored data and applications programs is shared, sometimes to varying degrees, by the participants in an IOS.”

Therefore the boundaries of organisational can often can not be clearly drawn. For instance, a linking subsidiaries of Information Systems in a large multinational company has many properties of IOS, and it also crosses organisational boundaries.

The rapid improvement of computer hardware and software in the following decades led to a wide use of very diverse types of Information System used in IO relationships:

1. computer-supported cooperative work (CSCW) systems,
2. customer-relationship management (CRM) systems,
3. electronic data interchange (EDI),
4. electronic mail,
5. electronic markets,
6. instant messaging,
7. supply chain management (SCM) systems,
8. Web Services,
9. and Web sites.

The study focuses on IOS for SCM, which support vertical role linkage on an operational and strategic level, frequently execute structured tasks, use standard specifications, are based on asynchronous or synchronous machine-to-machine communication, enable at least application-to application coupling, and automate communication up to a pragmatic level. This excludes CSCW systems (unstructured content, human-to-human, and syntactic layer), CRM (human-to-machine, mostly syntactic layer), electronic mail (unstructured content, human-to-human, and syntactic layer), instant messaging (unstructured content, human-to-human, and syntactic layer), and Web sites (mostly singular, human-to-machine, and syntactic layer).

Typical SCM mechanisms are: – Available-to-Promise: Offering precise information to customers about price and availability of products. – Collaborative Forecasting: Customer and supplier jointly forecast the demand for supplied parts. – Efficient Consumer Response: Suppliers replenish products at the point of sale as soon as a certain amount is sold.156 – Mass Customisation: A product is produced only after a customer has configured and ordered it.

Especially for large companies with many suppliers it is almost impossible to use such mechanisms based on manual work alone. They have to rely on highly automated IOS, which are still in most cases electronic data interchange (EDI) systems.

Electronic Data Interchange Systems

Four features classify an IOS as an EDI system:

1. It must have at least two organisations in a business relationship as users;
2. Data processing tasks pertaining to a transaction at both (all) organisations must be supported by independent application systems; (This property is unique to EDI; other IOSs are based on a single application system that is used by multiple users.)
3. The integrity of the data exchange between application systems of trading partners must be guaranteed by agreements concerning data coding and formatting rules; and
4. Data exchange between the application systems must be accomplished via telecommunication links.

Agreements on data coding and formatting play a crucial role, as they determine the compatibility and implementation time of an IOS. If these agreements are not specific to one particular EDI implementation, but are developed and maintained by a standards development organisation (SDO) and have a broad adoption, one usually speaks of EDI standards. The most important EDI standard is the Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT) standard, coordinated by the United Nations Economic Commission for Europe (UNECE). This is an international standard focusing on transactional documents independent of any industry. ‘Subsets’ are adaptations of EDIFACT for certain industries, such as EDIFICE for the electronics industry and ODETTE for the car industry.

illustrates above how EDI enables the complete electronic processing of an order between a buyer and a supplier, a logistics provider and two banks. As a result, no manual tasks or physical document exchange are needed, except for the actual transport of the ordered products.

The EDI was born in 1960s. As the US transportation industry suffered from vast amounts of unstructured paper documents, it developed the first solutions for transferring documents electronically. Later in 1975, the Transportation Data Coordination Committee (TDCC) published the first EDI standard. Although many different EDI standards emerged, ANSI and the Data Interchange Standards Association (DISA) managed to establish ASC X12 as the preferred, industry-independent EDI standard in the US. In Europe, EDIFACT and several industry-specific subsets dominate. While ANSI and UNECE jointly aimed to push through EDIFACT as the only global EDI standard, many different EDI specifications are still in use.

Besides the fragmentation of EDI standards, the cautious adoption of them by small and medium-sized enterprise (SMEs) is also an unresolved drawback of EDI. For example, in a survey of German firms, 36% of the respondents had no knowledge of EDI, of which 88% were SMEs, even though SMEs only represented 60% of all companies responding. A more recent study reveals that the three main obstacles to SMEs using EDI are high personnel costs (few experts available), high operations costs (use of ‘value added networks’ (VANs) often required), and high setup costs (specific software and converters needed). Several initiatives have tried to counter these problems, such as the Open-edi specification of the International Organisation for Standardisation (ISO). Moreover, the broad adoption of Internet and Web technologies promises to foster EDI adoption by SMEs. Indeed, approaches such as AS2, ebXML, RosettaNet and Web Services aim at the migration of the concept of EDI to the Internet. Experts expect these Web-based successors to EDI to drive out the ‘classic’ EDI based on EDIFACT and similar standards within the next decade. Nevertheless, EDI has a large installed base, which is still growing in traditional standards and VANs too. For example, even Amazon, an enterprise ‘born’ on the Web, relies on EDIFACT to exchange business data with partners. Thus, EDI can still be seen as the backbone of today’s interorganisational electronic business. Kanakamedala et al. (2003) assessed the volume of EDI-based business transactions to be more than two trillion US$ for the year 2001. Moreover, case studies show the economic significance of EDI. For instance, Teo et al. (1997) analyse the huge impacts of EDI use on Singapore’s TradeNet^? platform. Some also stress the important role EDI has played in the strong economic growth of Singapore in the recent decades. As this work is focused on interorganisational standards used in interorganisational relationships, it cannot ignore the importance of EDI. Therefore, the next section first reviews the results of existing EDI research, followed by recent research on the currently emerging Web based IOS.

Management Research on IOS

Research Gaps

All the recent works on the development of IO standards underpin the importance of this topic, but also stress that the research is still at an early stage. While considerable progress has been made with these contributions, they also leave several research gaps:

• ebXML and RosettaNet are recognised as the most important initiatives in developing IO standards, but none of the works offers a comprehensive description and analysis of their activities.
• Most works stress the importance of standards development organisations (SDOs) and their functions, while none gives a consistent picture of how these SDOs coordinate the contributions of their different participants.
• Thus, they derive only a few dispersed recommendations as to how different actors should ideally participate in IO standards development.
• Finally, several works cite actor-network theory (ANT) as a fruitful approach to analysing standardisation processes without giving a concise overview of this theory.

This study is a major attempt to fill these gaps. After a thorough discussion of ANT, two comprehensive case studies on ebXML and RosettaNet are conducted. Both are analysed using ANT in order to derive a general model of IO standards development, which results in recommendations for different actors on how to participate in such initiatives.

The Nature of Standards

• Standard can be traced back to German words as 'Standan' which mean to stand and the word 'ord', which mean point.
• International Organisation for Standardisation is the worlds largest organisation which concerned with Standards, has giving one of the most general definition:

A standard is a “document, established by consensus and approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context."

• Almost any kind of standard is somehow codified in a document to facilitate its adoption and lower its ambiguity.
• Not Every standards need consensus for their establishment or established by a "recognised body", but rather broaden the adoption by the target group of users. For example: Microsoft products and formats, which are clearly standards, but not established by consensus and recognised standards body.
• Standards should be common and can be use repeatedly, as standard only makes sense if it describe something that is of interest for many actors.
• Standard provides "rules, guidelines or characteristic for activities or their result".
• The stipulate of standard is to describe what certain activities and results should be like.

Types of Standards

• De jure standards are defined and sometimes also enforced by Governmental organisations
• De facto standards emerge through voluntary development and adoption

Dimension of Coercion

• refer to "Standards object"
• The categorisation of standards cannot be without overlaps each other.
  • For instance, standardise semantic are required in product, process and performance standards.
  • The line between product and process standards is not always clear.
    • First product of one firm can involve a process for another firm.
    • EDI standards, for example, are product standards for software vendors, while they are a kind of process standard for EDI software users.
    • Second, in the case of services, the product sold is mainly a process and not a physical product. For instance, an electronic service offered via Web Services standards would fit into both categories.

• consists of :
  • product standard - defines the properties and functions of physical or digital products.
    • The standards play a crucial role in System products where product are built out of bit and pieces, and can be enhanced by adding or exchanging modules.
    • Enable the connection of products, which result in product networks.
    • For example; The European GSM standards, which specifies mobile phones and associated infrastructure networks and is the most successful standard for mobile phone networks today.
    • Understanding such product networks is critical for business strategies in what are known as network industries.

• • Semantic standard - describes the definite meaning of terms.
    • This is a necessary for the cooperation of different actors, which would otherwise be misrepresent by frequent misunderstandings.
    • For example; EDIFACT precisely defined all the terms and data fields used. While human actors can cope with making assumptions about meaning (although this can cause a lot of friction), unambiguous definitions are required for machine-to-machine communication.

• • Process Standard - propose of how to coordinate and execute certain tasks.
    • It describe:
      • the steps needed,
      • their order of execution,
      • and the respective result.
    • This standard is especially importance when different actors, departments or firms have to work together.
    • For example; ISO 9000 is the best known for such an organisation standards. *ISO call it a 'generic management system standard', it provides a generic model to follow in setting up a quality management system.
      • It helps organisations to run their processes more reliably and serve their customers better.

• • Performance Standard - define the outcome level of a product or process.
    • It contains a set of quantitative criteria to measure the outcome against a certain standard outcome.
    • For example; Supply Chain Cousil's SCOR model, which defines many performance of different supply chain.
      • it provides benchmarks to compare the performances of different supply chains.
    • 'Standard performance' - indicates a performance that is average, neither poor nor excellent.

Dimension of Openness

• refer as "Standards Coordinator"
• represent the classification of standards
• gained special importance through the broad adoption of the open Internet and open source
• Open standards is available at no or very low cost and is free to use.
• Proprietary standard is controlled by firm, which aims to make a profit with the standard and charges fees for the use of it.
• Classification of Standards used by David/Greenstein (1990):
  • Market,
  • Community,
  • Consortium,
  • Government
    
  • The distinction between a free market and a dominating firm can be misleading. If there is no Government or Consortium involved in the standardisation process, then there is usually a free market at the begnning, in which firms with their specifications compete with one another. When the specification of one firm drives out the others, this firm gains market share and becomes the dominating firm.

adding open communities as another way of coordicating standardisation.

• • Community case
    • no organisation explicitly leads the development and diffusion of a standard.
    • Some actors voluntarily contribute to the development, and even more actors adopt the open standard without any external coercion.
    • The success of the open source development approach offers many examples to show that the community mechanism can lead to excellent standard semantics and products, such as Wikipedia and Linux.

• • Market case
    • firms compete int he development and adoption of standards.
    • Depending on their position, they rely on the voluntary cooperation of other firms or can force them to contribute to one standard in certain ways.
    • The most prominent example is Microsoft, whose products Windows and Office are obvious de facto and proprietary standards in the software market. These give the firm a strong position from which it can dominate related technologies, such as the development of media technologies.

• • Consortium case
    • a separate organisation is formed to develop standards.
    • Different individuals and firms contribute to the development, while the consortium mainly coordinates these efforts and decides on the final specifications. Compared to the dominant firm case, consortium standards are usually open standards, as most consortia are non-profit organisations and provide their standard free of charge. One example is the World Wide Web Consortium (W3C), which coordinates many different specifications concerning the Web.

Combination of the two dimensions "Standards object" and "standards coordinator". Hence it helps to clarify what kind of standard a certain research work is considering. As already mentioned, this does not completely exclude other types of standards, especially the bordering ones.

SDOs

Organisations engaged in developing and promoting standards are called standards development organisations (SDOs), be they a governmental organisation, a consortium or a formalised user community. In many cases, the differences are not obvious if both firms and governmental departments are participating in the SDO, as with UN/CEFACT

The influence of such SDOs varies from national to international in its reach. For instance, the Deutsches Institut für Normung (DIN), the American National Standards Institute (ANSI), and the National Institute for Standards and Technology (NIST) are national SDOs, while the Comité Européen de Normalisation (CEN) and the European Telecommunications Standards Institute (ETSI) cover Europe. In the face of globalisation, international standardisation is playing an increasing role. The most important international SDO is ISO, which covers many different topics from screws to management practices. For information systems, the Institute of Electrical and Electronics Engineers (IEEE), the Internet Engineering Task Force (IETF), the International Telecommunication Union (ITU), the Organisation for the Advancement of Structured Information Standards (OASIS), and the World Wide Web Consortium (W3C) are the most important SDOs.

The Standardization Process

Farrell/Saloner (1986) give the main reason why one should use standards. A standard creates “demand-side economies of scale: there are benefits to doing what others do. These benefits make standardisation a central issue in many important industries.”

Technical Development of Standards

Theoretical approaches to technical design aim at the creation of functioning standards specifications. They can be divided into two perspectives. One is concerned with the required activities for managing the actual development projects, while the other develops and discuses technological alternatives.

Management of Specification Development Fomin et al. (2003) suggest transferring the insights of Cooper/Kleinschmidt (1996) from general product development. In an empirical study, they identify the main factors influencing the success of product development. In this subsection, I summarise their insights with respect to standards development. Three areas are most critical for successful product development: the development process, the product strategy, and the invested resources.

Technical Details

Economic Decisions on Standards

Neo-Classical Economics

Neo-Institutional Economics

Concept of Web-based Interorganisational Standards

Advantages :

• low cost
• ubiquitous – การมีอยู่ทั่วไป * existence of many experts
• พัฒนาstandardใหม่ได้เร็วขึ้น

การปรากฏตัวของ Web Service Standards:

• Internet
  • คือ standard ที่สร้างการเชื่อมต่อของ ระบบเครือข่ายที่ต่างชนิดกัน โดยไม่คำนึงถึงขนาดของเครือข่าย และ Technologyที่ใช้
  • standard สำคัญของInternet คือ Transmission Control Protocol (TCP) and the Internet Protocol(IP)
  • Purpose of Internet คือเพื่อสร้างdata communication โดยที่ไม่มีศูนย์กลางในการควบคุมระบบ
  • International Telecommunication Union(ITU) and International Organisation for Standardisation (ISO) ได้มีส่วนร่วมในการทำให้ Data communication มีมาตรฐาน
    • มาตรฐานX.25 จาก ITU และ Open System Interconnection(OSI) จาก ISO ไม่สามารถตาม TCP/IP ทันได้
    • TCP/IP develop by Internet Engineering Task Force (IETF) * after unsuccessful racing:
      • เน้นเรื่องการควบคุมจากศูนย์กลางบนnetwork connection
• Web
  • คือ standard อีกอย่างหนึ่งที่ใช้Internetเพื่อแจกจ่าย/เผยแพร่ Application
• Computer firm
  • นำตัวอย่างInternetมาใช้ และได้สร้าง open standard เพื่อ open software.
  • เช่น IBM open source software such as Linux, Eclipse
  • open Web standards เช่น XML, Soap and WSDL

EbXML

RosettaNet