What are the challenges unique to inter-organizational systems? How would you address these challenges? What are the advantages presented by such systems? Discuss your answer within the framework of ‘supply chain management
Unique challenges to inter-organizational system
With the ever increasing benefits of integrated supply chain management process, businesses need to invest heavily reducing challenges that reduce the effectiveness of their value chain analysis and processes, by ensuring that these processes are networked closely among the different boundaries that constitute a reliable supply chain flow of goods, processes and management decisions. Hence the process of re-designing and re-modeling these business processes have to monitored, evaluated and enhanced so as to meet the diversified need that arise from the inter-organizational connections. There are the diverse impediments that limit the effectiveness of inter-organizational systems (IOS). Some of these challenges include: high overreliance between internally and externally integrated processes, differential logical terms and processes, unmet clarifications of duties, increased financial costs, and lack of confidentiality and privacy in the supply chain flow (Clark and Stoddard 20).
Though most businesses have embraced this new technology, they are yet to find a common solution that can reduce the challenge of overreliance between tightly interlinked internal and external processes. This has overreliance reliance reduces the effectiveness and efficiency of the supply chain flow. There is a problem of differential logical terms and process, which impede the level of understanding within the value chain flow. Some decisions and processes can only be effected if they are jointly understood by all parties involved in the supply chain management. The inputs and outputs should have some sound similarities. Inter-organizational systems are also impeded by lack of privacy and confidentiality. This is caused by the openness and lack of system and process protection by decision users. There is also increased financial implication due system maintenance and periodic expenditures.
Ways of reducing these challenges
Any challenge must have a solution. The challenge of over-reliance between internal and external networks can be avoided by ensuring that there is independency within the supply chain. These systems should be designed to function as collaborative networks. The high financial implication can be lowered by contracting out other system developers to handle the flow of information within the supply chain. Diversification and internal multi-tasking of functions and operations should also be adopted. In order to ensure that there is confidentiality and privacy within the supply chain management, top decision makers have to develop closed inter-organizational systems as opposed to open systems which are easily hijacked and hacked by unwarranted parties. There should clear understanding of the logical terms and processes, so as ease the process of decision making as well as the flow of ideas within the value chain Clark and Stoddard 29).
Advantages of inter-organizational systems
Inter-organizational systems (IOS) have led to increased efficiency and effectiveness within the supply chain and logistics management in most industries. Most companies use IOS as a tool to attain high level of competitiveness. The systems have also necessitated the immediate cooperation and partnerships of the different departments that constitute the supply chain. These partnerships have also reduced the levels of expenditure, thus pushing up the profits ladder in many industries. The decision making and management execution has been made easier than before since the flow of information is fast (Clark and Stoddard 17). This has improved the communication networks within the value chain, since there are minimal hierarchies and bureaucracies to respond to when making decisions. Thus, even though IOS are expensive and substantive investment, their benefits are far more profitable than their weaknesses. Tapscott (24) asserts IOS lead to competitiveness, capacity building and faster execution of support and decision functions in the supply chain management.