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Managing IT Suppliers: A Capability-Based Approach

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Supply Chain Coordination under Uncertainty

Part of the book series: International Handbooks on Information Systems ((INFOSYS))

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Abstract

This chapter addresses the opportunities for capabilities exchange within the process of interaction between a firm and an IT (Information Technology) supplier. Research on the features of this type of relationship has focused on IT implementation, relationship between IT resources, organisation performance and competitive advantage, IT outsourcing relationships and definition of IT capabilities. However, the current understanding of the context where IT capabilities are exchanged within consultancy projects and how this exchange emerges is rather limited. The chapter aims to bridge this gap by adopting the IMP (Industrial Marketing and Purchasing) group’s interaction approach as a tool to conduct an in-depth investigation of a case study to analyse the context, the parties and the interactions through which IT capabilities are exchanged. Evidence was found that interpersonal relationships between users and consultants within consultancy projects are crucial to reduce uncertainty by establishing long-lasting and stable relationships. As a result, during consultancy projects IT-related resources, in the form of IT physical infrastructures, human IT resources and IT intangible resources, are exchanged and combined to create or enhance IT capabilities. Furthermore, the success of such an exchange depends very much on the degree of social and interpersonal exchange.

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Notes

  1. 1.

    For confidentiality reasons, companies’ names are fictional. The organizational profiles presented in this chapter illustrate the companies’ features by the time this research was undertaken.

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Author information

Authors and Affiliations

  1. Faculty of Economics, University of Porto, Rua Roberto Frias, 4200-464, Porto, Portugal

    Carlos Brito

  2. Management School, Lancaster University, Lancaster, LA1-4YX, UK

    Mafalda Nogueira

Authors
  1. Carlos Brito
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  2. Mafalda Nogueira
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Corresponding author

Correspondence to Carlos Brito .

Editor information

Editors and Affiliations

  1. , Business Division, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong SAR, Hong Kong/PR China

    Tsan-Ming Choi

  2. , Department of Logistics and Maritime Stu, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong SAR, Hong Kong/PR China

    T.C. Edwin Cheng

Appendix. Relationship Episodes

Appendix. Relationship Episodes

#

Period

Episode

Main features

1

1980–1990

Engagement in a partnership to develop a solution suitable to the painting industry

Staff from customer’s IT department and staff from the IT supplier jointly developed and tested a software solution to be used in accounting and finance area

2

1999

PaintCo purchases the Electronic E-mail solution from ITSup

The customer decides to substitute their Exchange e-Mail platform by ITSup’s Lotus Notes solution (Domino platform)

3

2000

PaintCo purchases IT and services within a consultancy project to implement Workflow solutions

From the previous episode where PaintCo starts to work with Domino platform, it was possible to develop several internal workflow solutions (price maintenance, colour maintenance, products in stock maintenance based on that technology)

4

PaintCo demands the supplier for a demonstration of a CRM solution suitable to their sector

The supplier prepares a demonstration of the CRM software after having several meetings to better understand the context of painting sector. The client ends up buying a solution from an ITSup competitor

5

PaintCo demands the supplier for a demonstration of an ERP solution suitable to their sector

PaintCo decides to search for an ERP solution capable of unifying the information systems of all the companies of the group. ITSUP is shortlisted as a potential supplier

6

2001

ITSup is selected as ERP supplier which involved a first phase of needs evaluation among the client’s departments

To pre-prepare the implementation of the ERP solution in Portugal and Spain, an intensive period of meetings and discussion groups with ITSup, PaintCo and IBM as external adviser were arranged to identify what issues should be addressed by the software

7

Start-up: Implementation of ERP project starts in PaintCo’s headquarters

ERP Phase 1

Start-up of the project with an action plan divided in 3 stages (1) implementation in financial (FIN) area, simultaneously in Portugal and Spain; (2) implementation of supply chain management (SCM) area in Portugal; (3) implementation of supply chain management (SCM) area in Spain

8

ERP Phase 1: During the first stage of FIN’s implementation a number of adaptations to software were identified and developed in order to suit the painting sector

In the process of implementing and training final users, a number of non-conformities were identified. PaintCo’s users demanded for adaptations in FIN software in order to fill their needs. This involved the arrangement of numerous and frequent meetings to re-design a new FIN prototype and a long period of software development to correct non-conformities

9

2002

ERP Phase 1: Real Start-up of finance area in Portugal and Spain

The FIN area “goes live” in January 2002, simultaneously in Portugal and Spain. Period of high tension but without severe problems

10

ERP Phase 2: Implementation of ERP project continues with the SCM area in PaintCo’s headquarters

Key users from procurement, production, logistics, distribution, procurement, sales and marketing are involved with consultants to design a SCM prototype

11

ERP Phase 2: During the implementation and training of SCM final users, an outstanding number of adaptations to software were identified

Again SCM area detected a huge amount of non-conformities to software in order to suit the painting sectors which led to a new phase only dedicated to discuss those adaptations and re-design the prototype

12

2003

ERP Phase 2: Analysis of requested adaptations, decision-making on which adaptations should be developed

Given the massive number of adaptations requested by SCM final users, a long period of meetings and discussion groups with ITSup and PaintCo were arranged to structure a cost-analysis plan and identify what non-conformities should be address and what adaptations should be developed

13

A new presentation of the supplier’s CRM software is demanded by PaintCo

Once again PaintCo expresses an interest in ITSup’s CRM solution since the one implemented in 2000 was abandoned by PAINTCO’s users. Since the relationship evolved in a close partnership in last 3 years, ITSup is selected as supplier of CRM solution and implementation

14

2004

CRM Phase I: Implementation of CRM project in PaintCo’s headquarters

As PaintCo is implementing ITSup’s ERP solution, the interfaces between ERP and PaintCo’s solutions are totally compatible, and easily implemented

15

ERP Phase 2: Real Start-up of SCM area in Portugal

The SCM area “goes live” in Portugal in December 2004 after 2 years of needs evaluation, non-conformities corrections, and adaptations to software

16

2005

CRM Phase II: “CRM Dynamization Project”

PaintCo realized that for a second time users were not using CRM tools. They decided to find out the reasons behind the non-adherence and motivate the use of CRM ITs. A new project was developed with the presence of an ITSup consultant working with end-users in a daily-basis during 2 months

17

2006

ERP Phase 2: Real Start-up of SCM area in Spain

The SCM area “goes live” in Spain during 2006

18

2006 Draft schedule

CRM Phase III: “CRM mobility project”

A new project is planned after the 2005 Dynamization project. PaintCo wants to grant their commercial staff with CRM tools in PDAs (personal digital assistant)

CRM Phase I: Implementation of CRM project in Spain

The CRM area is planned to “go live” in Spain during 2006

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Brito, C., Nogueira, M. (2011). Managing IT Suppliers: A Capability-Based Approach. In: Choi, TM., Cheng, T. (eds) Supply Chain Coordination under Uncertainty. International Handbooks on Information Systems. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-19257-9_24

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