IT Alignment in Supply Chain Relationships: A Study of Supplier Benefits

Abstract

SummaryDeployment of interorganizational information technology (IT) throughout supply chain networks has usually been championed by supply chain network leaders — large firms that typically dominate a supply chain network. In order to participate in a particular network, supplier firms must acquire the requisite IT enabling them to be technologically aligned with the network leader. This is an important decision for supplier firms that are typically smaller in size and must allocate larger portions of their budgets to acquire the necessary IT. This study evaluates the benefits gained by suppliers when investing in interorganizational IT that is aligned with their primary buyer or network leader. The findings show that IT alignment between supplier and buyer has a direct positive impact on both strategic and operational performance measures of the supplier. In addition, IT alignment impacts these performance measures indirectly as it encourages integration between firms.