An executive summary for managers and executive readers can be found at the end of this issue

Numerous articles in the business press cast doubt on the contributions of IT to firm performance, and a number of scholars claim that the real value of IT is questionable (Baker and Abrahams, 2001; Baker and Sinkula, 1999; Brynjolfsson, 1993; Brynjolfsson and Hitt, 1998; Kettinger et al., 1994; Powell and Dent-Michallef, 1997). IT productivity has been debate since the 1970s (Brynjolfsson, 1993; Thatcher and Oliver, 2001). Some researchers report either no effect or even a negative influence of IT on firm performance (Brynjolfsson, 1993; Brynjolfsson and Hitt, 1996; Kettinger et al., 1994; Loveman, 1991; Mukherjee, 2001; Panko, 1991; Powell and Dent-Michallef, 1997; Rai et al., 1996; Roach, 1987; Strassmann, 1990). For instance, Kettinger et al. (1994) report that 24 firms out of 30 experienced negative consequences of IT investment on market share or profits within five years of IT deployment. Powell and Dent-Michallef (1997) also found no effect of both in-store IT and

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Journal of Business & Industrial Marketing 20/4/5 (2005) 169-178

e Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10.1108/08858620510603846]

beyond-store IT on overall store performance in their survey of retailers.

Coupled with this paradox, the recent disappointing outcomes of IT investment raise questions about the vital role of IT within a firm or supply chain (Taylor, 2003). For instance, managers of some small auto part suppliers in Detroit area are pessimistic about the actual benefit of Covisint, the newly introduced electronic market forum in the automobile industry for supply chain activities, despite the recent excitement and high expectations. Although they well recognize the ultimate potential it offers, their actual experiences revealed less than what they expected. The electronic market forum was formed by few key US automakers and, subsequently, parts suppliers that are interested in doing business with those automakers were requested to join in order to have access to business opportunities. That is, through the market forum, the major automakers strive to integrate their supply chain electronically. However, it turns out to be a push by the leading original equipment manufacturers (OEMs) (Willsher, 2003). According to Willsher (2003), "suppliers, sub-suppliers and sub-sub suppliers, all saw this as yet another example of the big boys forcing them to do business their way, pushing risk down the line and squeezing them on price until their automotive engineering pips squeaked." Surrounding the same electronic forum, the actual benefits firms perceive differ drastically, depending on the perspective they take: key automakers versus part suppliers.

This study explores the role of IT in channel relationships and firm performance in the context of supply chain communication systems (SCCS), seeking plausible explanations for the IT paradox in the literature. Supply

Journal of Business & Industrial Marketing 20/4/5 (2005) 169-178

e Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10.1108/08858620510603846]

Daekwan Kim, S. Tamer Cavusgil and Roger J. Calantone chain communication system is a key element of supply chain management systems (SCMS)[1] and is defined as an information system that links channel partners in order to carry out supply chain activities such as electronic transactions, quality and cost calibration, and collaborative forecasting and planning (Bowersox et al., 1999; Roberts and Mackay, 1998; Stank et al., 1999b; Tang et al., 2001). A typical SCCS incorporates some elements of various corporate information systems within SCMS including enterprise resource planning (ERP) system, customer relationship management (CRM) system, and advanced planning (AP) system among others. One traditional element of a most typical SCCS is electronic data interchange (EDI), which have contributed to the success of an SCMS significantly (Humphreys et al., 2001; Roberts and Mackay, 1998). However, there are emerging technologies of SCCS (e.g. Radio Frequency Exchange and Satellite Technology) that are likely to play a crucial role in supply chain communication.

This study explores two research questions. First, it investigates whether, and in what way, a firm's adoption of advanced information technology influences its own and partner's coordination activities. We assess the empirical relationship between IT as a resource and coordination activities of the firm and its partner as a firm capability. Second, we examine how IT adoption for SCCS influences firm performance through enhanced channel capabilities of the firm and its partner. With these research questions, we attempt to clarify the conditions for little or no link between IT adoption and firm performance (Andersen and Segars, 2001; Baker and Abrahams, 2001; Fisher, 2001; Loveman, 1991; Panko, 1991; Weill, 1991) and for the recent convoluted experience with IT by some firms (Taylor, 2003).

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