Success and Failure in Building Electronic Infrastructures in the Air Cargo Industry

Abstract

Reasons behind the failure and success of large-scale information systems projects continue to puzzle everyone involved in the design and implementation of IT. In particular in the airline industry very successful (passenger reservation) systems have been built which have totally changed the competitive arena of the industry. On the cargo side, however, attempts to implement large-scale community systems have largely failed across the globe. Air cargo parties are becoming increasingly aware of the importance of IT and they understand the value that IOS could provide for the total value chain performance. However, whereas in other sectors IOSs have been very successful, there are only fragmented examples of successful global systems in the air cargo community, and the penetration of IOS in the air cargo industry is by no means pervasive. This case describes the genesis and evolution of two IOSs in the air cargo community and identifies plausible explanations that lead one to be a success and one to be a failure. The two examples are drawn from Europe and from Hong Kong SAR. Thecae clearly demonstrates that it was the complex, institutional and technical choices made by the initiators of the system in terms of their competitive implications that were the main causes for the systems’ fate. The case thus concludes that it was the institutional factors involved in the relationships of the stakeholders that led to the opposite manifestations of the two initiatives, and that such factors should be taken into account when designing and implementing large-scale information systems.