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Journal of Business & Industrial MarketingEmerald Article: The role of mobile technology in a buyer-supplierrelationship: a case study from the steel industry

Jari Salo

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The role of mobile technology in abuyer-supplier relationship:

a case study from the steel industry Jari Salo

Department of Marketing, Oulu Business School, University of Oulu, Oulu, Finland

AbstractPurpose – The impacts of information technology on business relationships have been of interest to managers for decades, and this stream of researchhas also steadily gained recognition among academics. However, the emergence of mobile technologies and the use of mobile solutions within businessrelationships is a less well studied area. Thus, the purpose of this research is to show how mobile solutions can be deployed within industrial buyer-supplier relationships to enhance processes, coordination and overall value creation.Design/methodology/approach – The empirical part of the research presents an in-depth case study in the context of the steel industry.Findings – It is shown that mobile technology usage has a central role in key business relationships to improve internal and inter-organizationalcoordination. Mobile technology usage grid was conceptualized from the literature to categorize the possible impacts of mobile technology deploymenton coordination.Practical implications – As a practical result, this research shows that a wi-fi infrastructure based system that uses handheld devices like PDAs can be

used to shorten and cut costs of internal and interfacing processes between buyer and supplier. In practice, the steel hardness test report measurementsand transmissions from one organization to another are made more effective.Research limitations/implications – The limitation of the research is the use of only one case study and the resulting lack of generalizable results.Future studies could include case studies in other contexts, and later a quantitative study could be conducted to validate and broaden the findings.Originality/value – The paper presents how mobile technology is used in a business relationship and what kind of impacts the usage has on therelationship. The paper contributes to the evolving bonding discussion in business relationships as well as indicates ways to use mobile technologyeffectively in a business relationship.

Keywords Buyer-seller relationships, Information technology, Mobile technology, Bonds, Steel industry, Mobile communication systems,Communication technologies

Paper type Case study

Introduction

Business relationships or buyer-supplier relationships have

been studied intensively (Sheth et al., 1988, Wilkinson, 2001,

Ritter and Gemunden, 2003). Nevertheless, the current

literature has been criticized for the lack of focus on

information technology (IT) usage in business marketing

(Reid and Plank, 2000; Sheth, 2007). As managers have

started to employ a wide variety of IT based solutions using

the internet as platform for commerce and coordination (e.g.

I-EDI, extranet, electronic marketplaces, ERP), scholars also

have realized the need to focus on the IT deployment within

relationships (Ryssel et al., 2004; Salo, 2006; Tong et al.,

2008). There is a growing body of research that focuses on

different types of technologies, such as electronic data

interchange (EDI) (Naude et al., 2000), internet based EDI(Angeles, 2000), electronic marketplaces (Hartmann, 2002;

Jap, 2002) extranets (Vlosky et al., 2000), radio frequency

identification (RFID) technology (Yang and Jar venpaa,

2005), and their influence on business relationships. It is

rightfully acknowledged that some research exists thatponders the adoption of mobile technology and its impacts

on business (Kadyte, 2005). Still, the impacts of mobile

technologies on buyer-seller relationships remain under-

researched even though it is a nascent field of scientific

inquiry (Salo, 2007). In this research we focus on the usage

and the impacts of it on business relationships. Specifically,

the way we deploy IT should be the focus area instead of

adoption as only new ways of IT usage create competitive

advantage (Mata et a l., 1995). Besides the industrial

marketing literature, the electronic commerce literature has

also noted the lack of academic research on business usage of

mobile technology (Okazaki, 2005, Scornavacca et al., 2005).

By combining these indications for further research from

marketing and electronic commerce perspectives, it can beargued that there is a clear call for research in this area.

Hence, the author aims to bridge some aspects of the

identified research gap. Theoretically, the research gap is filled

by using bonding discussion within buyer-seller relationships

(Johanson and Mattsson, 1987; Liljander and Strandvik,

1995; Buttle et al., 2002; Wendelin, 2004) to illustrate how

mobile technologies create a unique sub-bond to business

relationships. This illustration is based on a case study. The

paper is organized as follows: first, an overview of the bonding

in industrial marketing is presented. After that, mobile

business solutions are discussed to illustrate the importance of

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[DOI 10.1108/08858621211257329]

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studying the deployment and impacts of mobile solutions.

The author then provides a discussion of methodology and

illustrates the changes brought by mobile solutions to the

order-delivery process of the studied relationship between

Mill and Supplier (fictional names). Finally, the theoretical

and managerial implications are presented, along with

limitations and future research areas.

Business relationships and bonding

There are numerous research traditions with different and yet

overlapping viewpoints or ways to conceptualize business

relationships, i.e. inter-organizational relationships (Sheth

et al., 1988). These schools of thought provide insights

through a frame of reference that is aimed at illustrating some

aspects whilst intentionally or unintentionally neglecting

others (Moller, 1994). Business relationships are also

likened to channel relationships (Stern and Reve, 1980) and

buyer-seller relationships (Ford, 1980). However, the

approaches mentioned above have different underlying

metatheoretical orientations, established methods (Moller,

1994), and sometimes even different “preferable” publication

outlets. From the approaches identified this paper focuses on

buyer-supplier relationships (inter-organizational

relationships) and aims to contribute to the already existing

research. Within business relationships there are sub-

approaches, and even within the interaction approach sub-

approaches can be identified (Hakansson and Snehota, 1995;

Moller and Wilson, 1995). Many of these approaches have

their roots in Hakansson (1982). In this study, different views

of interaction approaches are seen to complement each other

and are used in parallel.

Within the business relationship discussion special attention

is given to bonds and their understanding. A bond is a

building block of a relationship that is created through

interaction between business parties. Identification of a social

bond was the starting point of studies focusing on bonding(McCall, 1970; Turner, 1970).The current academic

literature has identified 11 different types of bonds that are

pertinent in business relationships (Johanson and Mattsson,

1987; Holmlund and Kock, 1995; Buttle et al., 2002;

Wendelin, 2004). These bonds are technical, time,

knowledge, legal, economic, geographic, social, cultural,

ideological, strategic and psychological. All of these bonds

have an important role in the coordination of value creation in

industrial markets. This study illustrates the technological,

ideological and social bonds that play a crucial role when

business parties are interacting.

Usually, technical bonds refer to the connection in

manufacturing processes (Wendelin, 2004). An exception to

this view is provided by Perry et al. (2002) while pinpointing

the possibilities of creating connections in communication

processes through technologies. More specifically, if company

A produces mobile phones and company B is a supplier of its

components, it is usually the case that over time company A

and B create interfacing processes in which, for example,

R&D teams meet to plan how new products can be produced

in the most effective way. Hence, it might be the case that

company B adjusts its production so that it is more suitable to

company A. Moreover, company B might even buy some

machinery that is needed specifically to deliver the new sub-

assembly to company A. This type of adaptation and mutual

planning of the manufacturing process within a business

relationship can be seen as one type of technical bonding that

has a central function in the development of business

relationships.

Ideological bonds can be created between, for example, the

Body Shop and its suppliers, since the Body Shop is a well-

known ethical producer of skin and body care solutions.

Therefore, suppliers are willingly producing raw materials

that are ethically produced, but they are also forced toproduce these products as the Body Shop needs pure and

even organic products.

To continue with bonds, social bonds were identified as the

starting point of studies focusing on bonding (McCall, 1970;

Turner, 1970). In business exchanges, before a business

relationship is created, there are many distances between two

interacting companies. Johanson and Wiedersheim-Paul

(1975) identified social, cultural, technological, and time-

related distances. For example, social distance measures the

extent to which the actors are unfamiliar with each other’s

ways of thinking and working. In the interaction process,

social exchange plays an important role in reducing the

uncertainties or distances between the two parties

(Hakansson and Ostberg, 1975). The exchange episodes

slowly lock two companies together and involve the exchange

of emotions, feelings, and other social elements that form

social bonds between business actors (Hakansson, 1982).

Therefore, social bonds are formed between people when they

interact with each other and different work groups.

Relationships are based largely on the gradual accumulation

of trust and seldom on formal, legal agreements between the

parties. Social bonds between individuals are formed through

social exchange and ultimately after enough mutual

adjustment and time has elapsed, trusting relationships

emerge. How trust and commitment are built as part of

social exchange has been discussed vividly in different

marketing- and management-related works (Coleman, 1990:

Sako, 1992; Morgan and Hunt, 1994; Narayandas and

Rangan, 2004). Similar examples can be given for each of thebonds identified (Johanson and Mattsson, 1987; Holmlund

and Kock, 1995; Buttle et al., 2002, Wendelin, 2004).

Thus, it is evident that different types of bonds lock and

constrain but also give birth to new opportunities in business

relationships, and that bonding behavior is an important

study area. In brief, bonding can have two opposing impacts

depending on the context. First, it can have a positive impact

on a business relationship as it may enhance interfacing

processes. This is the case in the Mill-Supplier business

relationship with the adopted mobile system. The bond

created enabled faster and more accurate communication and

coordination in the buyer-seller relationship.

Second, bonding can have a negative impact, as it may

hinder cooperation with other parties. This can happen if a

supplier has intensive bonding with directly competing

companies without their consent and then cause termination

of contracts in the worst-case scenario. Also, in the contract

based software development business for mobile phone

manufacturers, this may be the case as there are only a

couple of companies capable of developing mobile-phone

specific software. Different types of conflicts of interests are

common in these cases.

When a business relationship is sliced into logical and

manageable pieces in a theoretical sense, the authors often

talk about acts, events, and episodes that form a business

relationship (Holmlund, 2004; Olkkonen et al ., 2000;

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Tikkanen et al., 2000). An episode involves an exchange

between two parties (Hakansson, 1982). An illustration of

short-term elements of a business relationship is depicted in

Figure 1.

Outlined in Figure 1 is the interaction that occurs in the

form of acts and episodes within a business relationship.

Moreover, an act can be a phone call while multiple calls and

meetings may form an episode (e.g. time elapsed betweeninitial sales call and closing). Figure 1 describes the short-

term interaction occurring within business relationships. A

business relationship refers here to a relationship where

business interactions have continued for several years (Arndt,

1979). In this time span, this interaction has created different

types and degrees of bonding to the relationship. However,

there is a problem related to dividing the business relationship

into different action sequences (Halinen and Tornroos, 1995).

Therefore, it is acknowledged that it is difficult to differentiate

when one episode ends and a new one begins. In this paper,

there has been an attempt to identify crucial acts and episodes

in the studied relationship by first considering the totality of

the business relationship. Subsequently, the study aims at

recognizing crucial episodes based on available material (e.g.

interview transcripts and newspaper articles). Based on that,

understanding impacts of mobile technology adoption and

deployment on business relationships and bonding are

evaluated and reported in the case study.

Mobile business solutions

Today, we live in mobile economy in which mobility no longer

limits our lifestyle or the productivity of managers and

employees. Mobile and wireless communication devices and

systems are commonplace in everyday life (Balasubramanian

et al., 2002).

Mobile business has been studied for a decade now

(Okazaki, 2005; Scornavacca e t al ., 2 00 5) and many

conceptual papers exist that address the general businesslogic (Dholakia and Dholakia, 2003), describe applications

employed (Balasubramanian et al., 2002; Varshney and

Vetter, 2001), and discuss suitable business models of

mobile commerce (Lee, 2001; Yuan and Zhang, 2003).

Mobile commerce is often approached from the consumer’s

perspective, and these studies have focused on the acceptance

of mobile services like text messaging, gaming, mobile

payment (Nysveen et al., 2005; Muntermann, 2005) and

the adoption and usage of mobile commerce in general

(Harris et al., 2005).

Slowly, businesses are using mobile technologies like

Blackberries and personal digital assistants (PDAs) to re-

engineer and speed up internal and connecting business

processes like order taking and after sales automation. This is

possible as employees and strategic partners can be now

connected to back-end applications needed to finalize

purchases or sales. Also many software providers (Oracle

and SAP among others) have developed their SCM, ERP andCRM systems to enable mobile connectivity. In addition to

being more convenient, this saves sales time and eliminates

extra traveling and sales costs as well as other general

administrative work. Wireless and mobility is no longer a

novelty; it has become central to various businesses, especially

in the service sector (Nysveen et al., 2005).

Moreover, m anagers can employ various m obile

technologies and devices that enable e-mails, placing orders,

and logging onto company networks from the road (Aungst

and Wilson, 2005). Today, most of the mobile devices can be

connected to the internet, and only if a manager assumes that

connection is not secured is access denied by the mobile

device. The underlying industry of these devices and systems

has undergone rapid changes in applied mobile technologies

and changes are still to come as faster and more convenient

(e.g. 4G) technologies are emerging. Furthermore, a future

area of mobile technology that needs constant pondering by

academics and managers alike is the question of connections

between mobile devices using, for example, Bluetooth and

other short-range wireless transmission to conduct mobile

business operations (e.g. sales data transmissions) as there are

security issues that need to be addressed (Stender and Ritz,

2006).

Specifically, in a business context mobile technology can be

deployed internally or inter-organizationally. Within an

organization mobile business can be used to enhance, for

example, selling activities in the form of sales force

automation (SFA) (Aungst and Wilson, 2005). Inter-

organizationally, it can be used to mobilize customerrelationship management (Sinisalo e t al ., 2007). In a

technological sense, mobile business can be initiated locally

and globally with the help of a wireless local area network

(WLAN or wi-fi) and smart devices (such as PDAs, hybrid

phones, Blackberries). It has also been observed that IT has

different impacts on firm and business partner information

coordination, both internally and inter-organizationally (Kim

et al., 2005).

Figure 2 depicts a mobile technology deployment grid that

shows the impacts of employed mobile technology to internal

Figure 1 Acts and episodes as constituting elements of relationships


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and inter-organizational (inter-firm) coordination between

business partners.

Cell 1 of Figure 2 presents a situation in which the internal

coordination impact of the mobile technology employed is

high but the inter-organizational coordination impact is low.

In this case, mobile technology may be specifically tailored to

solve internal coordination problems. For example, some

companies in the wood processing industry, especially in log-

house construction, use RFID in the manufacturing process

to tag logs in order to specify their places in ready-built log-

houses. This saves time and money when a company knows

what is being built, and two houses can even be built at the

same time with help of this system. Also, the amount of wood

waste decreases as the log is used to its full extent in the

optimized process. It is noted that RFID can also be used

inter-organizationally, but this is not always the case. Cell 2 in

F igure 2 presents a situation in w hich the internal

coordination impact of employed technology is again high,

and also the inter-organizational coordination impact is high.

In this cell, the mobile technology is tailored to the needs of the both interacting organizations. For example, the mobile

extension of ERP can be connected to both buyers and

suppliers in order to show, for example, SKU data. This

requires a high level of information coordination and

extensive IT resources. Also, the inter-organizational usage

of RFID mentioned above suits this cell. Cell 3 in Figure 2

presents a situation in which the internal coordination impact

of the technology employed is low, and also the inter-

organizational coordination impact is low. Basically this

means that company has not invested in mobile technology or

mobile technology is used on an on-demand basis, by leasing

from a specific software house. Cell 4 in Figure 2 presents a

situation in which the internal coordination impact of the

technology employed is low, and the inter-organizational

coordination impact is high. In this cell, mobile technology is

aimed at inter-organizational coordination. Some basic point-

to-point connections or ad hoc connections fall into this

category (Stender and Ritz, 2006). Sales for automation

applications or other field service applications can be used in

this manner. For example, a number of insurance companies

and their agents, as well as some employees, use mobile

technology to take a picture of a damaged vehicle and start

the claims process on site. Also, evaluations of the cost of the

damage can be started early on. This makes the process

effective and smoother for the client of the insurance

company.

Cells 2 and 4 in Figure present cases where mobile

technology is deployed inter-organizationally. In Cell 2,

mobile-technology based bond strength is high, as both

internal and inter-organizational coordination are enhanced

considerably. In Cell 4, the internal coordination impact is

weaker, which suggests a partially weaker bond between the

buyer and the seller. For key business relationships (i.e. the

most important alliances) in which commitment and trust iscreated over a long-term exchange relationship, it may be best

to create cell two types of mobile bonds, since most benefit is

derived from both high internal and inter-organizational

coordination. For second-tier relationships in which

occasional re-engineering and cost reduction is needed, Cell

4 types of bonds may be created. As suggested earlier, the

mobile business has been studied during recent years mainly

from the consumer’s point of view. How firms – and

especially industrial companies – use mobile technology is a

rarely studied area according to the literature reviews

(Okazaki, 2005; Scornavacca et al., 2005). Based on this, it

is essential to examine how mobile systems can be deployed to

enhance the business processes, e.g. order-delivery processes,

in a business relationship.

Methodology

The methodological choices in this study are guided by the

basic aim of expanding the existing knowledge on buyer-seller

relationships. More specifically, we want to understand how

mobile technology may be used to enhance ineffective

relationships. This goal requires a case study method (Yin,

1989). A case study is applicable to situations in which

researchers require deeper understanding, a solid contextual

sense, and provocation toward theory building (Bonoma,

1985). With the use of the case study method, it is possible to

receive detailed and rich information from one focal

phenomenon (Yin, 1989; Woodside and Wilson, 2003). In

fact, case studies may have more influence on marketingmanagers than surveys (Johnston et al., 1999). The business

relationship that is studied is formed between two companies

interacting. That is to say, both parties of interaction are

studied instead of one. The perspective of both parties of the

business relationship needs to be studied to be sure of the

value of the findings (John and Reve, 1982). The particular

relationships in this study were chosen because the companies

have intensively adopted IT, and a mobile solution was

acquired.

The data was collected by employing several data collection

techniques. These included public and corporate archival

research, participative observation and several in-depth

interviews with semi-structured interview questions. These

methods allowed the researcher to get as close to the subject

as possible, which enabled an understanding of the

individuals, events, and actions (Pihlanto, 1994) that

formed the content, context, and processes of the business

relationship under investigation.

In more general terms, data was collected by interviewing

key members of the relationship. Altogether 11 interviews (six

in Mill, five in Supplier) were conducted in multiple

hierarchical levels to ensure data validity (see Table I for

details).

The interviews were personal interviews and were taped

with permission. All interviews lasted from one hour to a

maximum of two and half hours and were transcribed and

Figure 2 Impacts of mobile technology on the coordination in thebuyer-seller relationship


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analyzed. Qualitative data analysis was employed to focus the

material into different themes (Miles and Huberman, 1984).

Ensuring the validity of case studies is not straightforward.Different sources of information were used, including

documents, minutes of meetings, industry reports, and plant

visits to triangulate the respondents’ answers in order to

validate the research results (Yin, 1989) and increase the

validity of the research (Eisenhardt, 1989). In practice, data

triangulation was favored as opposed to other triangulation

methods (Patton, 1987) between the numerous information

sources mentioned above to validate observations and

interpretations. The identities of the case study companies

or the informants are not revealed in the study for

confidentiality reasons.

Mobile technology usage in the Mill-Supplier

relationship

Background

The steel processing industry was chosen as the empirical

context since computerization has had a long tradition in the

industry and new technologies have a central role in the steel

industry (Chaffey, 2004, p. 15). Moreover, business

relationships in the steel or steel processing industry are

seldom examined from a business relationship and bonding

perspective. The exception to this is research conducted by

Johanson (1966). However, bonding perspective is not

employed. To elaborate further, the steel industry relies on

existing business relationships between parties as an exchange

model. Long-term business relationships between workshops,

mills, and steel wholesalers create the stability needed for steel

processing (Hamalainen, 2003). It is acknowledged that there

are studies that focus on some influences of IT in the steel

industry context (Fuller-Love and Cooper, 1994; Chan and

Swatman, 2000). However, research on the usage of mobile

solutions in the steel industry context is scarce. Based on this,

it can be argued that the steel business context is that is worth

studying, especially when companies are employing new

mobile solutions to enhance their business. To be more

precise, the narrow context of the studied business

relationship is the steel processing, for example, the

hardening and marketing of steel plates and components.

The bonding conceptualization developed was combined with

the mobile business discussion, as the basic assumption was

that a new bond or sub-bond in the business relationship

could be identified.

Early years of the Mill-Supplier relationship

The business relationship between Mill and Supplier is six

years old. Mill is a relatively large steel mill operating in

Europe, while Supplier is a subsidiary of Alpha, which is a

large Finnish steel workshop focusing on heavy steel objects

and welding competencies. Supplier provides hardening

services to Mill. A fter individual steel plates and

components are hardened, they are further processed by

Mill and then sold to their customers as part of their steel

solutions. These solutions can vary from part of an oil rig to

steel plates manufactured for military use in mine clearance

vehicles.

The Mill-Supplier business relationship is based on and hasdeveloped from an earlier 40-year old business relationship

that still exists between Mill and Alpha. Before the

establishment of Supplier, there were several negotiations

between Mill and Alpha in which they were planning the

hardening of steel plates. It was in early 2000 when Supplier

was established to serve Mill’s needs in the hardening steel

qualities from 5 mm up to 60 mm. At first, most of Supplier’s

production were sold to Mill, but today sales are equally

divided over a large customer base. This study will focus on

the interfacing processes between Mill and Supplier, and

there is an attempt to identify the changes made in the

processes that enabled both parties to work more efficiently

and effectively.

When the business relationship between Mill and Supplier

was initiated, the process from order to delivery was

conducted in the traditional means, manually by sales

assistants. First, orders arrived at Supplier by fax machine

or by phone. Orders, order confirmations and other

docum entation w ere handled m anually and order

specifications were input into the hardening machines. The

production employee provided verbal notification of the new

order to the manufacturing manager. The pricing process was

manual, along with sending the bill. All the documents were

delivered to the financial department for billing purposes, and

those were of course written on a paper and delivered

manually. Additionally, the scheduling of transportation of

Table I Interview data

Type of contact Date, duration of interview and transcribed pages

Mill

Purchasing Manager Telephone calls, e-mail correspondence, and interview November 24, 2003, 1 hour 40 minutes, 17 pages

IT Manager 1 Telephone calls and interview March 15, 2004, 1 hour 30 minutes, 25 pages

IT Manager 2 Telephone calls, e-mail correspondence, and interview March 24, 2004, 1 hour 45 minutes, 18 pages

Technology Advisor Telephone calls, e-mail correspondence, interview, and plant tour March 17, 2004, 1 hour, 45 minutes, 21 pagesProduction Planner Telephone calls and interview March 17, 2004, 1 hour 59 minutes, 30 pages

Product Manager Telephone calls and interview March 17, 2004, 1 hour 59 minutes, 30 pages

Supplier

CEO Telephone calls, e-mail correspondence, plant visit, and interview November 17, 2003, 2 hours 10 minutes, 37 pages

Production Manager Interview and plant tour November 17, 2003, 1 hour 30 minutes, 13 pages

CIO Telephone calls and interview November 18, 2003, 1 hour 45 minutes, 23 pages

Production specialist Interview and plant tour November, 17, 2003, 1 hour 10 minutes, 13 pages

CFO Telephone call and interview November 18, 2003, 1 hour 55 minutes, 20 pages


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steel plates from Mill’s factory to Supplier’s facilities and back

was done by phone or fax. The order to delivery process is

one of the key processes within a relationship, and is depicted

in Figure 3.

As Figure 3 illustrated, the order to delivery process was,

extremely laborious at the beginning of the relationship, with

multiple manual phases in which room for error existed and

there were many possible information gaps. Thus, it tookdays, which turned into weeks, to deliver hardened products

and solutions. Moreover, it was difficult to estimate whether

Supplier could harden more steels for other customers and

whether Mill would place an additional order if Supplier had

free capacity. This is one of the pain points identified in the

relationship. Consequently, Supplier could not guarantee

delivery dates. After these problems and inefficiencies were

identified by the managers of Supplier and Mill, these issues

were addressed with a sequential development program

including several internal meetings and workshops. As a

result, many of the difficulties were solved over the years.

Usage of information technologies in the Mill-Supplier

relationship

There were several steps that were taken to ensure theefficiency and effectiveness of activities in the relationship.

The first step of reorganizing the ordering activities took place

when Mill’s existing first-generation enterprise resource

planning (ERP1) system and secured internet connection

were used to transmit orders. Orders were carried out by the

manager of subcontracting with ERP while the internet-based

secure connection assisted in delivering information from Mill

to Supplier. Before this could be possible, Supplier had to

adopt a small-scale ERP1 system that would transform paper

to bits. This adoption of new technology and adaptation made

by Supplier also gave a sign to Mill that they were willing to

help in every way possible to make the business relationship

even more profitable. Similarly, Mill indicated to Supplier

through increasing orders that the relationship was worth

continuing. After an order arrived at Supplier’s ERP system it

informed production employees via e-mail of the new order. A

similar e-mail was received by Supplier’s production manager.

During the next phase, at the end of 2004, Supplier adapted

to a new pricing module for ERP along with changes to

pricing policies. Based on this change, products that already

had early based prices are now priced and checkedautomatically. When an order arrived that contained

products that were non-standardized, the order e-mail was

sent to the production manager who, depending on the order

size, solely or together with the CEO defined and input the

price information required.

It is acknowledged that these types of information

technology adaptations were not easy. However, in this case

it was easier than in other cases, as Mill has a long history of

developing information technology in the steel business. They

even had a large IT department until the late 1990s, when it

was outsourced to a large IT company. Also, Supplier had

some elementary IT skills but also used a local IT developer

w hoc developed their IT skills and knowledge in a

relationship with the Mill.

Mobile technology adoption and deployment in the

Mill-Supplier relationship

The most recent and advanced technological addition to the

business relationship is the mobile system. The main idea is to

use the mobile system to speed up inventory control, test-

report transmissions and other non-routine communications.

In a technological sense, the system is based on wi-fi

infrastructure and employs handheld computers such as

PDAs as wireless devices. The system employed was acquired

from a local mobile system developer that had earlier provided

some IT systems for Supplier and Mill. Basically, the mobile

solution renders manual and paper-based strength measuring

and reporting of results obsolete. This solution transforms

Figure 3 Order of the delivery process at the beginning of the relationship (Salo, 2007)


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reporting into a digital form that is easier to process for both

parties of the relationship. Before this new system was

adopted, reports were first carried out by writing required the

steel strength information down on a form, inputting this

information to a system, printing the report and then sending

it to Mill’s administration by post, where it was then filed.

This took a considerable amount of time and caused both

internal and inter-organizational information coordinationfailures.

Now the mobile system enables information to be input

directly into a PDA which updates Supplier’s ERP system and

provides, for example, e-mail notifications to Mill about the

new reports, which are essential for the documentation of the

steel solutions delivered to customers. Furthermore, Mill can

now receive information about Supplier’s hardening capacity,

which is crucial for generating new sales. In the past, a

hardening capacity check was manual and the information

received by Mill’s sales department was usually too outdated

to be relied upon, and thus information needed to be re-

checked. This caused delays in the production and

information flow, and caused a loss in sales. Currently,

Mill’s employees, with access codes to Supplier’s system, cannow obtain information from the real-time database updated

by Supplier’s employees and the mobile system. Figure 4

depicts the order-to-delivery process after implementing the

mobile solutions.

As mobile technology is integrated to the internal systems of

both companies it enables wider inter-organizational

coordination. Thus, strong technology-based bonds are

created that are here referred to and categorized as

technology sub-bonds, labeled a mobile bond. In other

words, it is created by the mobile IT solution employed,

which tightens the relationship and creates exit and

investment barriers for the parties to the relationship.

To summarize, each party of the business relationship made

changes to their existing procedures and routines by making

the information gaps smaller and even forcing them to close.

These adaptations were relationship-specific to a great extent.

Internal coordination within Supplier was been altered

considerably, and it is currently handled in a timely manner

and more effectively. Mill has been a forerunner in IT

deployment for long time but still, opening up internal IT

systems for this type of inter-organizational coordination is a

laborious task. Both parties handled internal coordination

well; inter-organizational efforts to coordinate IT and mobile

technology were very fruitful. Mobile technology usage is the

latest addition to this relationship. Of course, this would have

not been possible without the warm and trustful relationship

between the parties. Most importantly, the adoption of the

internet and mobile technologies has made the business

relationship more effective and efficient (“doing the rightthings” and “doing things right”). It is evident that this

transform ation has not been cheap and easy. B oth

organizations have learned considerably and Supplier has

acquired a lot of information technology. Moreover, both Mill

and Supplier have gained directly from the implementation

and usage of information technology. Mill is now more

responsive to end customer needs and Supplier is more

transparent to Mill and can fill an increasing amount of orders

more quickly. Supplier has already announced it they will

invest in extra capacity to be able to fill orders in the near

future.

Discussion and research implications

As discussed earlier, technology bonds may emerge naturally

in a business relationship or they can be created through the

intentional development and management of technological

bonds. Here, it is visible that besides traditional technological

bonds based on manufacturing, new ones have emerged that

are based on mobile technology. Therefore, it is suggested

here that adaptations made to business relationships to

accommodate changes brought by new mobile business

solutions create a new sub-bond type labeled a mobile bond.

This bond can be seen as an extension of the technology bond

concept. The bond formed in the case in this study is best

presented in the Cell 2 in the mobile technology grid

(Figure 2). Hence, internal coordination and inter-

organizational coordination is improved to a great extent by

the deployment of mobile technology. New ways of using

mobile technology will, for the time being, improve the

competitive advantage of a relationship even though

sustainability is not guaranteed. These sub-bonds of

technology bonds can also be discussed as the 12th type of

bond under labels like digital or information-technology

based bonds. It is acknowledged that strong bonds like thosepresented in Cell 2 are only recommended for key or first-tier

relationships, as the bond is costly to establish and also to exit.

The paper has closed, to some extent, the research gap by

showing how mobile technology influences bonding inbusiness relationships. This study illustrated how mobile

technology adoption and usage creates bonds in therelationships. Future research could elaborate, for example,

on case studies of how mobile bonds are created in othercontexts in order to detail the other cells presented in the

mobile technology usage grid. Research is also needed to

understand under what conditions and why bonds appear inIT usage, and how these bonds are different from other

bonds. More importantly, how these bonds impact onbusiness relationships and networks is of crucial interest to

both managers and academics. Other contexts such as thewood and paper and chemical processing industries, which

also use also mobile solutions to improve coordination at

many levels, could also be studied.

Managerially, this study has opened up a discussion of the

possible usage of mobile technology to improve relationships.

The case illustrates how a wi-fi based system was used

effectively to cut costs and streamline the order-delivery

process as well as the interfacing parts of that process. On the

one hand, with the help of the system deployed, Mill was able

to sell more steel solutions to its customers as hardened steel

solutions play a pertinent role in its total offering. On the

other hand, Supplier was able to treble its sales to Mill with

the mobile technology employed. One thing to remember is

this: it is not a question of how much IT we have in a

company – i.e. how much we invest in IT – but the quality of

IT and how we use it that that creates competitive advantage.

For managers interested in mobile solutions and how to

proceed with these ideas, a good reference point is an articleby Aungst and Wilson (2005), who suggest 11 issues that

should be covered when planning to adopt and use mobile

solutions. The five most important are:

1 the coverage (wi-fi or longer distance);

2 the mobile device platform;

3 the upgrade path;

4 the mobile application; and

5 issues with integration.


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Mobile systems such as m-ERP, mobile supply chain

management and wi-fi based internal system provide

innovative tools to create leaner and meaner machines of

any organization that has the wisdom to grasp and hold onto

mobile systems that create the mobile future. Of course not all

problems require a mobile system, but mangers ought to

understand and, more importantly, recognize their problems

and ponder whether mobile systems might provide a solution

to their problems. The main limitation of this research is theexploratory and qualitative nature of the study. The second

limitation is that only one business relationship in the steel

industry context was studied.

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About the author

Jari Salo is a Professor of Marketing at Oulu Business School.

He holds a DSc (Economics & Business Administration)

degree from the University of Oulu. Before joining the faculty

he worked as a manager in the clothing and retailing industry.

He is Adjunct Professor at the Aalto School of Economics

(formerly Helsinki School of Economics). Jari Salo has over

100 publications, some in journals such as Industrial

Marketi ng Management , Computers in Human Behavior ,

Journal of Business & Industrial Marketing and Business

Process Management Journal . He holds several editorial

positions and he is also the Editor in Chief of Journal of Digital Marketing . As well as his academic activities, Professor

Salo has several expert positions in Finnish companies and he

is also the head of the board of the consulting company

Intercircum, which specializes in digital business and

marketing solutions for leading companies. Jari Salo can be

contacted at: [email protected]


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