A Theory of Constraints approach to interorganizational systems implementation

Abstract

Interorganizational systems (IOS) may provide substantial benefits, however many organizations are reluctant to implement them. This empirical research takes a novel approach and develops a model of IOS feasibility, which is based on the Theory of Constraints (TOC). It introduces the notion of maximal infeasibility, which is the highest among the values of five factors: economic infeasibility, organizational infeasibility, technological infeasibility, risks, and lack of financial resources. The highest value was selected because implementation is hindered even if only one of the feasibility requirements is not fulfilled. Data collected from 139 medium and large Israeli business organizations validated the model, and indicated that strategic motivation is the main driving force for an organization to initiate or to join an IOS, while the main barriers are organizational infeasibility issues such as lack of management support or uninterested potential partners. Adopting a TOC approach to IOS implementation may assist organizations to overcome these obstacles and increase the chance of a successful implementation.