Andrew B. Whinston

Understanding the service component of application service provision: empirical analysis of satisfaction with ASP services

In spite of the promise and potential of improving the way organizations develop, operate and maintain information technology (IT) applications, application service providers (ASPs) have fared poorly in terms of attracting a large client base. Anecdotal evidence in the business press points to limited satisfaction among users of ASP, which calls for an assessment of determinants of satisfaction with ASP. In this paper, we draw upon the consumer satisfaction paradigm widely employed in marketing literature to analyze post-usage satisfaction with ASP services. We develop a conceptual model of satisfaction with ASP and empirically test the predictions using data from 256 firms using ASP services. Expectations about ASP service have a significant influence on the performance evaluation of ASPs, and experience-based norms have only limited significance in explaining satisfaction with ASP. We also find empirical support for the influence of performance and disconfirmation on the satisfaction with ASP. Implications for both ASPs and organizations adopting ASP services are discussed.

Research Commentary: Introducing a Third Dimension in Information Systems Design--The Case for Incentive Alignment

Prior research has generated considerable knowledge on information systems design from software engineering and user-acceptance perspectives. As organizational processes are increasingly embedded within information systems, one of the key considerations of many business processes--organizational incentives--should become an important dimension of any information systems design and evaluation, which we categorize as the third dimension: incentive alignment. Incentive issues have become important in many IS areas, including distributed decision support systems (DSS), knowledge management, and e-business supply chain coordination. In this paper we outline why incentives are important in each of these areas and specify requirements for designing incentive-aligned information systems. We identify and define important unresolved problems along the incentive-alignment dimension of information systems and present a research agenda to address them.

Building trust in online auction markets through an economic incentive mechanism

Millions of dollars change hands daily through online auction markets. However, fraud has been on the rise in these markets. Using a game theoretic approach, we propose a design of an economic incentive mechanism, the trusted third party (TTP), to serve the online auction communities. The proposed model addresses both the economic and technological aspects of online auction transactions by assigning a digital certificate to each participant. Thus, each participants identity as well as his or her reputation can be established by other market participants. The analytical results demonstrate that when online transactions take place with the assistance of digital certificates issued by a TTP, the most utilitarian course of action for a market participant is to behave honestly.

P2P networking: an information sharing alternative

Peer-to-peer networking offers unique advantages that will make it a more effective alternative to several existing client-server e-commerce applications, if it can mature into a secure and reliable technology. The paper discusses the advantages of P2P networks: load balancing; dynamic information repositories; fault tolerance; content-based addressing and improved searches. It also considers the disadvantages of P2P.

The Calculus of Reengineering

Advances in new Information Technologies IT and changes in the business environment such as globalization and competitive pressure have prompted organizations to embark on reengineering projects involving significant investments in IT and business process redesign. However, the evidence of payoff from such investments can be classified as mixed as best, a problem we partly attribute to the absence of a strong theoretical foundation to assess and analyze reengineering projects. We seek to apply complementarity theory and a business value modeling approach to address some questions involving what, when, and how much to reengineer. Complementarity theory is based on the notion that the value of having more of one factor increases by having more of another complementary factor. Further, related developments in the optimization of “supermodular” functions provide a useful way to maximize net benefits by exploiting complementary relationships between variables of interest. Combining this theory with a multi-level business value model showing relationships between key performance measures and their drivers, we argue that organizational payoff is maximized when several factors relating to IT, decision authority, business processes and incentives are changed in a coordinated manner in the right directions by the right magnitude to move toward an ideal design configuration. Our analysis further shows that when a complementary reengineering variable is left unchanged either due to myopic vision or self-interest, the organization will not be able to obtain the full benefits of reengineering due to smaller optimal changes in the other variables. We also show that by increasing the cost of changing the levels of design variables, unfavorable pre-existing conditions e.g., too much heterogeneity in the computing environment can lead to reengineering changes of smaller magnitude than in a setting with favorable conditions.

Wireless commerce: marketing issues and possibilities

Wireless commerce is viewed as the extension of Internet-based e-commerce beyond the static terminal of the PC or the Web-TV to the flexible anytime, anywhere, anyplace context of the mobile environment. While many in the industry and popular press seem to equate the world of Internet e-commerce and wireless commerce as one and the same, there are unique characteristics of the wireless technology and its usage that renders it distinctly different from and complementary to Internet based e-commerce. This difference also has important implications for the marketing of goods, services and content and for conducting marketing research using wireless technology. We first discuss the unique characteristics of wireless technology and its usage. On the basis of these characteristics, we identify and set out a series of propositions that relate to the issues of marketing and marketing research using wireless technology. In making our arguments, we view how wireless technologys contribution complement the capabilities brought about by Internet based e-commerce. Finally, we outline a marketing research agenda that will allow testing of some of the propositions put forth in the paper.

A sender-receiver framework for knowledge transfer

The shift to more distributed forms of organizations and the prevalence of interorganizational relationships have led to an increase in the transfer of knowledge between parties with asymmetric and incomplete information about each other. Because of this asymmetry and incompleteness, parties seeking knowledge may not be able to identify qualified knowledge providers, and the appropriate experts may fail to be motivated to engage in knowledge transfer. We propose a sender-receiver framework for studying knowledge transfer under asymmetric and/or incomplete information. We outline four types of information structures for knowledge transfer, and focus on the sender-advantage asymmetric information structure and the symmetric incomplete information structure. We develop formal game-theoretical models, show how information incompleteness and asymmetry may negatively influence knowledge transfer, and propose solutions to alleviate these negative impacts. Implications for knowledge transfer research and practice are also discussed.

An empirical analysis of the impact of information capabilities design on business process outsourcing performance

Organizations today outsource diverse business processes to achieve a wide variety of business objectives ranging from reduction of costs to innovation and business transformation. We build on the information processing view of the firm to theorize that performance heterogeneity across business process outsourcing (BPO) exchanges is a function of the design of information capabilities (IC) that fit the unique information requirements (IR) of the exchange. Further, we compare performance effects of the fit between IR and IC across dominant categories of BPO relationships to provide insights into the relative benefits of enacting such fit between the constructs. Empirical tests of our hypotheses using survey data on 127 active BPO relationships find a significant increase (decrease) in satisfaction as a result of the fit (misfit) between IR and IC of the relationship. The results have implications for how BPO relationships must be designed and managed to realize significant performance gains. The study also extends the IPV to identify IC that provide the incentives and means to process information in an interfirm relationship.

A Stochastic Equilibrium Model of Internet Pricing

Abstract Perhaps the greatest technological innovation of the next several decades will be universal access and utilization of the Internet. Already congestion is becoming a serious impediment to efficient utilization. We introduce a stochastic equilibrium concept for a general mathematical model of the Internet, and demonstrate that the efficient social welfare maximizing stochastic allocation of Internet traffic can be supported by optimal congestion prices. We further demonstrate that approximately optimal prices can be readily computed and implemented in a decentralized system by constructing a large computer simulation model. We also address the alternative of building excess capacity to avoid congestion.

The adoption and design methodologies of component-based enterprise systems

One of the major investments of information technologies in large companies in the past decade has been the enterprise system. Although the enterprise system has the advantages of managing and integrating almost all of the business processes in the whole company, there have been strong criticisms that the enterprise system often imposes its own logic or business process on a company and lacks flexibility and adaptability in todays dynamic business environment. The goal of this paper is to outline a new approach in enterprise system development. We analyse the factors that affect the adoption of enterprise systems. Market and business changes, and advances in information technologies call for a more flexible, open, and scalable enterprise architecture. We describe the process that Dell Computer Corporation took in adopting its component-based enterprise system architecture. The Dell example has demonstrated the importance of fit between business information systems and fundamental organizational dimensions of the company including strategy, business environment, and organizational structure. We also discuss the design methodologies for component-based enterprise system design. We take a coordination perspective, both at the software level and the organizational level, in addressing the design methodologies for component-based enterprise system development.