Title

Understanding the manifold forms of B2B integration - A transaction cost perspective

Abstract

The need for collaboration within value chains is rapidly increasing and drives enterprise to align and

electronically integrate their business processes with their business partners. As technologies evolve,

manifold forms of B2B integration have emerged – from e-mail communication to customer or

supplier portals, the exchange of EDIFACT- to XML documents, and Web Services. Although serviceoriented architectures (SOA) are considered the future of inter-organizational linkages, no empirical

studies have been found which surveyed the impact of SOA on B2B integration costs and benefits.

From a research perspective, we still lack a systematic analysis that explains how a specific B2B

integration technology impacts the effectiveness of B2B integration.

Building on transaction cost theory, this research analyzes the different forms of B2B integration with

regard to their impact on connectivity and coordination costs. Based on a field study from the automotive industry, it demonstrates that there is economic rationale for preferring supplier portals to

machine-to-machine integration based on EDIFACT or XML messages. Compared to prior

technologies, SOA reduces the costs of external integration by eliminating separate B2B integration

infrastructures and improving connectivity of internal applications. However, we find that prior

literature tends to overestimate the impact of open Internet and Web service technologies on

connectivity costs.

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