Satisficing dependent customers: on the power of suppliers in IT systems integration supply chains

Abstract

Provides both a descriptive and an analytical understanding of the supply chain for IT systems integration. It explains which firms in the chain have power and how this impacts upon value appropriation. The article is structured around three parts. The first is a descriptive mapping of the supply chain based on the key functional stages. The second is a descriptive mapping of the corresponding value chain based on the revenues and gross profit margins typically being earned at each functional stage. The final section contains a discussion of the structures of power and the competitive dynamics, and by extension the appropriation of value, in the chain. Buyer ignorance and information asymmetries are identified as the key factors in this case that determines the appropriation of value.