The Impact of Supply-Side Electronic Integration on Customer Service Performance

Published at: Journal of Operations Management 31(6), 2013, pp. 363-375

45 Pages Posted: 11 Nov 2013

See all articles by Ling Xue

Ling Xue

Georgia State University

Gautamn Ray

University of Minnesota - Twin Cities - Department of Operations and Management Science

Vallabh Sambamurthy

Michigan State University - Department of Accounting & Information Systems

Date Written: November 10, 2013

Abstract

Although information technologies have been expected to directly enhance firm performance in specific value chain activities (e.g., supplier performance or customer service performance), their advanced capabilities offer the promise of organizational integration and spill-over benefits. Enterprise systems provide firms with platforms for electronically integrating their supplier and demand chain activities. Spill-over benefits refer to the impacts that occur when IT investments in one organizational domain benefit performance in a different value chain side of the firm. Supply-side electronic integration (SEI) refers to the use of electronic means to integrate the exchange of information and transactions with suppliers through enterprise systems. In our research, we examine whether SEI generates spill-over effects on customer service performance, over and beyond firms’ direct investments in customer-side digitization. We also examine whether structural attributes of the firm (e.g., vertical integration, diversification, and centralization) moderate the effects of supply-side electronic integration on customer service performance. Our analysis of a secondary dataset of InformationWeek 500 firms shows that SEI helps firms realize cost-savings in their customer service performance, especially if they are less vertically integrated. In addition, SEI investments help diversified and centralized firms achieve cross-selling with their customers. We also find that SEI is more likely to help decentralized and diversified firms achieve customization in their customer service activities. These results suggest that SEI helps firms achieve twin goals in customer service: cost reduction and revenue expansion. Overall, our research reveals how supply-side electronic integration could generate benefits in customer service performance in firms.

Keywords: Electronic integration; Customer service; Supply chain management; Vertical integration; Diversification; Decentralization

Suggested Citation

Xue, Ling and Ray, Gautamn and Sambamurthy, Vallabhajosyula, The Impact of Supply-Side Electronic Integration on Customer Service Performance (November 10, 2013). Published at: Journal of Operations Management 31(6), 2013, pp. 363-375. Available at SSRN: https://ssrn.com/abstract=2352473

Ling Xue (Contact Author)

Georgia State University ( email )

35 Broad Street
Atlanta, GA 30303-3083
United States

Gautamn Ray

University of Minnesota - Twin Cities - Department of Operations and Management Science ( email )

Minneapolis, MN 55455
United States

Vallabhajosyula Sambamurthy

Michigan State University - Department of Accounting & Information Systems ( email )

270 North Business Complex
East Lansing, MI 48824-1034
United States

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