Friday, November 12, 2010

Business Process Standards

Professor Viswanath VenkateshGreetings from the National Centre for Information Systems Research at the Australian National University in Canberra where Professor Viswanath Venkatesh, University of Arkansas, is speaking on results of a study of organisations using RosettaNet, a non-profit consortium using XML business to business (B2B) e-commerce interfaces. RosettaNet was set up by the the Uniform Code Council, Inc. (UCC). The Australian affiliate is RosettaNet Australia and European equivalent is EDIFICE (which originated working on EDIFACT messages).

Professor Venkatesh pointed out that there were thousands of technical standards from national and international bodies. He explained that there are numerous Business Process Standards (BPS) from industry bodies. There are also many Inter-organisational Business Process Standards (IBPS). These are usually non-proprietary and available for any organisation to use.

RosettaNet Partner Interface Processes (PIPs), are used to define the lowest levels of the IBPS. At the top level there are 7 clusters, divided into segments and these into PIPs. Professor Venkatesh used the example of Intel Semiconductor and World Peace Group (WPG) for chip distribution. A paper on this is avialable "Automating through RosettaNet: An Intel case study of order and payment automation in the Asia Pacific region" (Intel, January 2003).

He argued that not only did such standards reduce the amount of time needed to develop an e-commerce interface, this would also reduce carbon emissions by allowing more efficient processes. What I found interesting was that just as with function point analysis, it is feasible to estimate the cost of implementing a number of "PIPs". This aids the planning process.

This morning I read that there was a call for the Australian government to enforce inter-organisation business process standards in the superannuation industry. This is estimated to cost $1 billion to implement, but will then save $1 billion per year. There are about 250,000 superannuation funds in Australia, making this a complex process. So I asked Professor Venkatesh if IPBS could be applied on this scale. He replied that it would be best to start with the largest organisations and those doing the most business together. Of the 250,000 superannuation funds, I noticed that only about 350 have more than $50M. Presumably there are only a few funds with more than $1B. So it would be reasonable to implement e-commerce standards for the top ten.

The talk was followed by food, with wine from Dog Trap Vineyard, in the Canberra District wine region.

See also: "Assimilation of Interorganizational Business Process Standards" (by Hillol Bala, Viswanath Venkatesh Professor Venkatesh, INFORMATION SYSTEMS RESEARCH, Vol. 18, No. 3, September 2007):
Organizations have not fully realized the benefits of interorganizational relationships (IORs) due to the lack of cross-enterprise process integration capabilities. Recently, interorganizational business process standards (IBPS) enabled by information technology (IT) have been suggested as a solution to help organizations overcome this problem. Drawing on three theoretical perspectives, i.e., the relational view of the firm, institutional theory, and organizational inertia theory, we propose three mechanisms—relational, influence, and inertial—to explain the assimilation of IBPS in organizations. We theorize that these mechanisms will have differential effects on the assimilation of IBPS in dominant and nondominant firms. Using a cross-case analysis based on data from 11 firms in the high-tech industry, we found evidence to support our propositions that relational depth, rela- tionship extendability, and normative pressure were important for dominant firms while relational specificity and influence mechanisms (coercive, mimetic, and normative pressures) were important for nondominant firms. Inertial mechanisms, i.e., ability and willingness to overcome resource and routine rigidities, were important for both dominant and nondominant firms.

Key words: interorganizational relationships; business process; process standards; firm dominance; assimilation; deployment; relational view of the firm; institutional influences; organizational inertia; interorganizational system

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