Factors Affecting the Offshore Deployment of Interorganizational Systems in China: A Case Study Analysis

ABSTRACT

Because of the significant market potential in China, many international enterprises are moving their production line to China. Accompanying production offshoring is the shifting of information systems to ensure that the production processes remain efficient and effective both at home and abroad. However, many enterprises encounter problems while deploying offshore information systems in China, especially when the systems are interorganizational systems (IOS) that span organizational boundaries and involve the management of relationships among participants. Therefore, this paper aims to identify critical success factors of offshore interorganizational systems in China through a case study of a supply chain relationship based on an e-procurement system between a Taiwanese personal computer manufacturer and its Chinese partners. Although this system had been well used by Taiwanese users, the performance of this system in China was relatively unsatisfactory in terms of grant complaints from Chinese users. Based on the relational view of the firm, four IOS-specific relational factors are proposed and examined: (1) IOS-specific assets, (2) IOS knowledge-sharing routines, (3) system complementarity, and (4) IOS governance. The case analysis reveals that effective IOS governance most strongly affects the results of offshoring in China, whereas system complementarity has the least influence.