An empirical evaluation of existing IS change theories for the case of IOIS evolution

EMPIRICAL RESEARCH

An empirical evaluation of existing IS change

theories for the case of IOIS evolution

Kai Reimers1,Robert B. Johnston2 andStefan Klein3

1School of Business and Economics,

RWTH Aachen University, Aachen, Germany;2School of Business, University College Dublin,

Dublin, Ireland; 3School of Business and

Economics, University of Munster, Munster,

Germany

Correspondence: Kai Reimers,RWTH Aachen University,Johanniterstr. 22-24, 52064 Aachen,Germany.Tel: þ49 241 40923-0;Fax: þ49 241 40923-18;E-mail: [email protected]

Received: 9 August 2010Revised: 22 September 20112nd Revision: 5 April 20123rd Revision: 8 October 20124th Revision: 28 January 20135th Revision: 8 March 2013Accepted: 12 March 2013

AbstractThe phenomenon of inter-organizational information systems (IOIS) evolution

has not yet been adequately researched and understood. We present and

analyse empirical data from a case in which electronic ordering in the Australianpharmaceutical industry evolved over a 30-year period from closed to quasi-

open systems. We analyse this revelatory case using a practice-theoretical

framework to make visible the phenomenon of IOIS evolution. An essentialcharacteristic of this framework is the distinction between and symmetrical

treatment of material, normative and ideational structures within the practices

that constitute the IOIS. Against the findings of this case study, we thenevaluate two promising models of long-term IS change, namely Porra’s (1999)

Colonial Systems model and Lyytinen and Newman’s (2008) Punctuated Socio-

technical IS Change model. These models are selected as highly elaborated IS

exemplars of two classes of theories of organizational change, namelyevolutionary and dialectical theories. We find that these two models can only

partially explain our findings. Finally, we make suggestions for developing

more comprehensive theoretical models within these two classes of IS changetheories. In practical terms, our paper shows that the transformation from

closed to open IOIS may require adoption of longer time frames than are

usually assumed and closer attention to norms and rationales usually neglectedin IS projects.

European Journal of Information Systems (2014) 23(4), 373–399.

doi:10.1057/ejis.2013.7; published online 30 April 2013

Keywords: inter-organizational information systems (IOIS); systems evolution; long-termIS change; Colonial Systems model; Punctuated Socio-technical IS Change model;practice theory

IntroductionInter-organizational information systems (IOIS) are widely regarded as keyenablers of structural and institutional change. For instance, in thepharmaceutical distribution industry studied in this paper, IOIS areexpected to contribute to the modernization of the industry, which faceschallenges from changing demographics, increasing service expectations,increasing labour cost, and the threat of fraud (Hillestad et al, 2005; Celeste& Cusack, 2006). IOIS now have a five-decade history and there exists aremarkable diversity in the forms these systems have taken in variouscountries, particularly in the extent of standardization, and in thetrajectories along which they have evolved over this period in responseto local environmental changes.

However, little research attention has been paid to date to understandingthe evolution of IOIS over such long time scales. This is partly because,with a few exceptions discussed later, the IOIS literature has inheritedthe traditional IS interest in adoption and implementation of systems at

European Journal of Information Systems (2014) 23, 373–399

& 2014 Operational Research Society Ltd. All rights reserved 0960-085X/14

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the time scale of particular projects (see e.g. Robey et al,2008). Evolution of IOIS on longer time scales presentstwo new phenomena that cannot be explained whenfocusing on adoption and implementation of particulartechnologies. First, IOIS, once in existence, display asurprising degree of persistence. For example, computerizedreservation systems in the airline industry in use todaydate back to the early 1960s (Copeland & McKenney,1988; Farhoomand, 2000; Granados et al, 2008); efforts toreplace long-established EDI systems by newer – andsupposedly superior – XML-based systems have provedsurprisingly difficult (Wareham et al, 2005). Second, theyoften undergo extensive transformation. For instance, theIOIS that we study in this paper evolved from proprietaryclosed systems to a quasi-open common ordering plat-form in roughly 30 years. We consider these two aspectsto characterize the phenomenon of system evolution,namely the retention of important elements over extendedtime periods (persistence) and the transformation of thesystem with respect to some important characteristics. Asyet there is little empirically grounded theory to accountfor both persistence and transformation of IOIS. Theresearch question addressed in this paper, therefore, is:Are existing theories of IS change adequate to explainthe phenomenon of IOIS evolution? Specifically, we willevaluate the adequacy of two models that we havesystematically chosen as highly elaborated instances oftheorizing long-term change in IS against an empiricalcase of IOIS evolution in the Australian pharmaceuticaldistribution industry over a period of 30 years.

Traditional units of analysis used in IS are not suitablefor evidencing IS change on time scales of several decadesthat we will consider because concepts typically usedsuch as organizations, discrete technologies, or projectsare not sufficiently long lived: organizations involved inearly stages may cease to exist, actions and intentionscharacterizing particular projects may not carry throughthe whole period, and generations of successive technolo-gies may be involved. Moreover, system change on suchlong time scales cannot be attributed uniquely to particularcausal agents such as technology, organization structures,or intentions of actors. Rather, social and technical aspectsneed to be considered jointly and holistically (Pickering,1995; Orlikowski & Scott, 2008; Orlikowski, 2010).

To construct an appropriate narrative of system changeover such a long time period thus requires the use ofconceptual tools that can bring to the fore the continuity ofsystem change at a higher level of analysis than is usual,and which also do not privilege either the technical orsocial aspects. We argue that practice theory provides such aconceptual lens as it takes practices that have a lifespanbeyond that of organizations, projects, and technologies asits basic unit of analysis. Moreover, the notion of practicecomprises technical equipment and social structures in away that allows for their holistic and symmetric description(Reckwitz, 2002; Reimers et al, 2010 and 2012).

Consequently, to answer our research question we firstdevelop a theoretical framework based on practice theory

that allows us to conceptualize IOIS as well as theirevolution at this higher level of analysis. This frameworkviews IOIS as constellations of practices that are linkedthrough specific boundary structures such as commondata formats. Importantly, the IOIS is seen as consistingof these practices, as a constellation, rather than simplyas the technical components that link these practices.Each practice is then analysed into three dimensions –ideational, normative, and material – which facilitatesevidencing instances of both transformation and persis-tence on the level of individual practices. In addition,evolution of the entire IOIS can also be evidencedthrough changes in the constellation of practices.

To evidence the phenomenon of IOIS evolution in ourcase, we use our framework to analyse the interview datain three steps. First we conduct theoretical coding ofinterview transcripts to provide evidence of persistentand changing structures in the practices and the con-stellation of practices involved in the IOIS. After asystematic dating of the codes, we use these codedfragments as a frame over which to construct a narrativeaccount of transformation and persistence of the IOISevolution to make the data intelligible to readers notfamiliar with the case context. Finally, this narrative isencapsulated in four high level observations about theevolutionary process, which constitute the findings ofour case study. Our theoretical framework is thus expres-sly not intended to explain IOIS evolution but solely tomake the phenomenon of IOIS evolution visible.

The findings from our case analysis are then used toevaluate the potential of two extant models of long-termIS change to explain the phenomenon of IOIS evolution,namely the Colonial Systems (CS) model by Porra (1999)and the Punctuated Socio-technical IS Change (PSIC)model by Lyytinen & Newman (2008). The CS model canbe characterized as an evolutionary change model thatdraws on a biology-inspired mechanism to account forlong-term IS change. The PSIC model explains long-termIS change as resulting from dialectical tensions betweenstructural elements of the systems. In contrast to our owntheoretical framework these two models aim at explain-ing long-term IS change and thus contain statementsabout possible mechanisms that potentially account forthe observed IOIS evolution. Our evaluation reveals thatwhile both models can, in principle, explain importantaspects of the evolution of electronic ordering systems inthe Australian pharmaceutical distribution industry, theydo not fully explain the phenomenon. We thereforefinally explore promising ways to extend evolutionaryand dialectical approaches. While several such possibi-lities are identified, we conclude that the phenomenon ofIOIS evolution cannot be satisfactorily explained byexisting approaches to system change in the IS literature.

We contribute to the literature in several ways. First,we characterize the phenomenon of IOIS evolution assimultaneously exhibiting system persistence and trans-formation, and show how this can be evidenced in thecase data. Second, we present a significant empirical case

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European Journal of Information Systems

that shows in detail how IOIS evolved from closed,proprietary to quasi-open electronic ordering systems. Inview of the broad literature on path dependency (David,2001; Garud et al, 2010; Dobusch & Schu�ler, 2012) wefind it noteworthy that this kind of system transforma-tion came about through an emergent, evolutionaryprocess that merits scrupulous empirical and theoreticalstudy. Third, we expose a gap in the extant system changeliterature at the scale IOIS evolution. Finally, we exploreextensions to existing ways of theorizing change in IS toaccount for the phenomenon of IOIS evolution.

Understanding IOIS evolution is also of practicalrelevance as efforts to develop and implement new IOISincreasingly take place in a context characterized by theexistence of an ‘installed base’ (Hanseth, 2000) of evolvedIOIS that were usually initiated long ago. Thus, imple-mentation of IOIS resembles adaptation of existing systemsmore than adoption of new systems, that is, efforts topurposefully shape the evolution of IOIS. By understandingthe conditions under which IOIS might evolve in desireddirections and, conversely, the processes by which existingIOIS reject certain external perturbations (including somedeliberate change initiatives) we might eventually be ableto make theory-based recommendations for appropriateindustry and government policy.

IOIS and evolutionIn this section, our purpose is to motivate our choice ofthe CS and the PSIC models as promising candidates forexplaining the phenomenon of IOIS evolution. Weproceed in three steps. First, based on a recent review of51 systematically selected theory-based empirical studiesof IOIS by Robey et al (2008), we argue that most IOISresearch so far has studied IOIS change from a projectperspective and thus only considers short-term IOISchange. Next, we consider the limited IS literature thatdoes discuss change on time scales greater than indivi-dual project duration. Using a scheme proposed by Vande Ven & Poole (1995) we classify this literature into fourtypes of theories and then argue that only two of thesefour types, dialectical and evolutionary, are, in principle,capable of explaining IOIS evolution as characterized bythe twin aspects of persistence and transformation.Finally, we identify the two change models by Porra(1999) and Lyytinen & Newman (2008) as promisinginstantiations of evolutionary and dialectical changetheories, respectively, for explaining the phenomenonof IOIS evolution.

Robey et al (2008) classify the main themes of empiricalresearch on IOIS into adoption, governance, and organi-zational consequences of IOIS. Adoption studies gener-ally draw on theories of technology acceptance andadoption, mostly at the organizational level, with just afew treating the extra-organizational environment usingthe concepts of network externalities, trust, or institu-tional conditions. Governance research on IOIS centreson the electronic markets hypothesis (Malone et al, 1987).Organizational consequences largely concern strategic,

operational, or relationship outcomes of IOIS adoptionfor organizations or networks of organizations. Thus, alarge proportion of IOIS research uses short time framesthat are generally limited to episodes immediately before,during, or after a specific IOIS implementation project.As a consequence of this project focus, system change isoften treated as exogenous to the IOIS project as strategicchoice or environmental response.

There are a small number of papers that do address IS orIOIS change over longer periods of time. On the basis ofVan de Ven & Poole’s (1995) classification of differentmotors of organizational change, these models can becategorized as life-cycle-based, teleological, dialectical, orevolutionary. Theories based on the life-cycle conceptexplain organizational change as following a pre-deter-mined sequence of development stages. Examples ofsuch theories are the Stages Hypothesis of Nolan andcolleagues (Nolan et al, 1993) and the life-cycle model ofenterprise systems of Markus & Tanis (2000). Teleologicaltheories explain organizational change as intended andunintended consequence of purposeful organizationalchange actions. Examples include Volkoff et al’s (2007)model of IS implementation and Kanellis & Paul’s (1997)model of IOIS adaptability. Dialectical theories explainchange as resulting from some imbalance between oppos-ing forces. Examples of dialectical IS change theories areLyytinen and Newman’s PSIC model (2008) and somestudies of ERP implementation such as those by Robeyet al (2000) and Besson & Rowe (2001). Evolutionarytheories explain organizational change as resulting fromretention, variation, and selection of organizationalroutines or some other salient organizational structure.Examples are the CS model by Porra (1999) and Pentlandet al’s (2012) model of IS change based on the evolutionof routines.

For our purpose of exploring IOIS evolution, life-cycle-based theories and teleological theories are not suitable.Both types of theories can explain persistence but arelimited for explaining system transformation. Transfor-mation within a life-cycle theory is limited by the fixedset of stages that the theory specifies. Teleological theorieswould explain persistence by reference to original goalsof some relevant actors. While unintended consequenceswill introduce random variation to a certain extent, theoriginal goals may ensure that system evolution con-verges around a stable state (alternatively, the system maychange erratically). However, the original goals areassumed exogenous to the theory and thus their changecannot be explained. Hence, teleological theories canexplain system transformation only to the limited extentof changes that support strategies and tactics for thepersistence of original goals. Consequently, we will notconsider these generic mechanisms of change further inour IOIS context.

In contrast, both dialectical and evolutionary theoriescan in principle explain both persistence and transforma-tion. Dialectical theories conceive of persistence as abalance between opposing forces and of transformation

IS change theories and IOIS evolution Kai Reimers et al 375


as a response to growing imbalances. As the systemmoves to a new balanced or stable state, importantelements of the former stable state may be retained butnow are arranged in a transformed manner. Evolutionarytheories capture these two phenomena through theimplied change mechanism borrowed from biologicalevolution of variation, selection, and retention, whichensures that crucial elements are retained as the systemtransforms by adapting to a changed environment.

Among these two categories of theories we consider themodels offered by Lyytinen & Newman (2008) and Porra(1999), respectively, to be good candidates for evaluat-ing the potential of evolutionary and dialectical changetheories to account for the phenomenon of IOIS evolu-tion. First, both models are generic in the sense that theyhave not been tailored to specific types of informationsystems but claim to be generally applicable in the ISfield. Second, both models are good representatives oftheir respective classes of change theories as they drawexclusively on the core mechanisms that each classassumes. Third, both models are highly developed inthe sense that they offer multiple non-equivalent predic-tions that can be used for evaluating their explanatorypower. To avoid repetition, we will set out these twotheories in more detail later where we evaluate themagainst our findings for the case study.

A practice-based framework for IOISWe now present our own practice-based framework thatwe apply to our case data to make visible the phenom-enon of IOIS evolution. This framework defines IOIS as aconstellation of practices and thus radically differs fromstandard definitions of IOIS as technical systems that linkseveral organizations (Kaufman, 1966; Barrett & Konsynski,1982; Cash, 1985; Johnston & Vitale, 1988; Meier &Sprague, 1991; Swatman & Swatman, 1992; Holland &Lockett, 1993). Rather, in our framework an IOIS is aconstellation of practices connected through a specificboundary structure. Thus, cross-organizational electronicsystems (such as Electronic Data Interchange and Elec-tronic Marketplace software), which are the focus oftraditionally defined IOIS, are just one (technical)component under our definition, namely IOIS boundarystructures.

This IOIS definition incorporates the social dimensionas an integral component into the main unit of analysis,as the embedding of technology in social structuresultimately accounts for whether and how technology isused (Orlikowski et al, 1995; Pentland & Feldman, 2008).Our definition of IOIS as a constellation of practicesestablishes a unit of analysis that allows for the socialembedding of technology to be traced over time rightfrom the start, rather than having to add social aspectslater on into the analysis. However, the framework doesnot propose any mechanism of how this change comesabout. Rather, it is a high level theory used to describe thephenomenon of IOIS evolution. We will demonstratethat such a framework is appropriate for evaluating

extant explanatory theories, such as the two models ofIS change by Porra (1999) and Lyytinen & Newman(2008). We therefore use this model (1) to define the unitof analysis, a specific constellation of practices, and (2) asa basis for coding our empirical data.

The main problem to be addressed by any theoreticalframework for describing IOIS evolution is that it shouldreveal system change over an unusually long time period.We have chosen practice theory for this purpose becauseits basic unit of analysis, practices, have potentially longexistence compared to other possible units such as actors,tasks, certain technologies, projects, and even organiza-tions that can all disappear over the time periods that weconsider here. In addition, practice theory views techni-cal change as but one component in a larger social amalgamreproduced in practices (Reckwitz, 2002; Reimers et al,2010 and 2012), together with ideas and norms that givemeaning to technology and thus stabilize it over time. Atthe same time, practice theory allows for all componentsof a practice to change and adapt. For our purpose wedraw on a specific version of practice theory developed byLave and Wenger (Lave & Wenger, 1991; Wenger, 2002)who have developed the notion of communities ofpractice.

The foundational idea for Lave & Wenger (1991) is thatthe notion of apprenticeship can be generalized to amodel of social learning, which provides a new basis foranalysing social systems. Wenger (2002) has extendedthis idea by elaborating the concept of a community ofpractice (CoP), a group of people who engage in a com-mon enterprise, continually re-negotiating the meaningof their enterprise, mutually engaging with one anotherfor help and support, and reproducing the know-how andunderstanding that characterizes their practice (Wenger,2002).

Wenger (2002) proposes that two processes are goingon simultaneously in social learning. These processes aremost easily illustrated by the extreme case encounteredin apprenticeship. New members to a CoP becomeattuned to social structures reproduced in the practiceby observing the behaviour of experienced members andresponses to their own engagement in action. They thenattempt to make sense of these observed patterns in termsof possible structures, which could have enabled andconstrained these actions. Apprentices thus attempt toidentify social structures by stepping back from theirdirect involvement in a practice to let social structuresstand out, as if frozen in a snapshot. Wenger (2002) callsthis process reification. On the other hand, apprenticesengage in producing their own performance patterns inan attempt to prove their mastery of certain skills that areessential in their practice. They thus throw themselvesinto a practice, exposing themselves to coaching andcriticism by established members of the community.Wenger calls this process participation. In reifying apractice, apprentices take themselves out of participationtemporarily to throw into relief the structures that con-strain and enable the behaviour of competent members;



in participation, apprentices put aside all efforts to makesense of the behaviour of others but immerse themselvescompletely in action.

As apprentices become more competent their perfor-mance skills become perfected, less reflected upon, andmore automatic. At the same time, social structuresappear less like rules determining behaviour and are onlypresent as the shape and style of behaviour that char-acterizes the particular practice. While reification andparticipation are explicit processes in apprenticeship theyare also continually but tacitly drawn upon during thecoordinated performances of competent practitioners.Thus, in Wenger’s version of practice theory, these are thetwo central processes that define a practice and maintainthe existence of the CoP.

Alternatively, we can pay attention to the products ofthese processes. On this view, reification reveals therelatively durable elements, the social structures that arereproduced in a CoP. Participation makes visible the moreephemeral patterns of social interaction among members.Durable socially reproduced elements and ephemeralsocial interactions are core theoretical constructs in allforms of practice theory (Giddens, 1984; Bourdieu, 1990;Schatzki, 2005; Pentland & Feldman, 2008). Nuancesexist in how these constructs are defined and named,depending on orientation and application. For ourpractice-theoretical framework of IOIS we will be placingemphasis on these observable products of reification andparticipation, which we call social structure and perfor-mance patterns, respectively. Figure 1 illustrates the basicelements we draw from Wenger’s practice model andpractice theory more generally.

We now take these basic concepts and apply them todevelop our own practice-based framework for IOIS.There are three steps, which are our own contributionbeyond Wenger’s theory of communities of practice andstandard practice theory notions. First, we distinguishthree particular dimensions of structure and patternsappropriate to describing IOIS. In doing so, we pave theway for our method of evidencing objective traces ofpractices (see next section). Second, we adapt a conceptfrom Wenger to define boundary structures that link the

practices making up an IOIS. This concept provides a linkfrom our practice-based conception of IOIS to the cross-organizational information technology of the traditionalview. Finally, we define an IOIS using the concept ofconstellation of practices from Wenger (2002).

We distinguish between three dimensions of socialstructure: material, normative, and ideational. Materialstructure refers to constraints and affordances experiencedbodily. Normative structure refers to actors’ ‘moral sense’,which helps them to distinguish right from wrongactions. Ideational structure refers to causal ideas thatactors use to rationalize their actions. These threedimensions of structure have counterparts in correspond-ing performance patterns, namely patterned flows ofmaterial things (including movements of the humanbody), sanctioning patterns, and discursive patterns. Obser-vation of such patterns guides new CoP members informing their skills and understandings as they becomecompetent members. For instance, observation of mov-ing bodies and things not only makes material structuresvisible but also informs about their affordances; observ-ing how equipment is used in a practice helps anewcomer to understand the purpose and effectivenessof that equipment and develop their own skills in itshandling. This is strictly similar to how normative andideational structures are reproduced so that our treat-ment of materiality as a form of social structure iswarranted (Bourdieu, 1990; Reckwitz, 2002). Specifically,observation of discursive patterns reveals to the novicevalid cause–effect or means–ends relationships acceptedin the community that then guide his or her actions.Similarly, experience of sanctioning behaviour, for examplereprimanding of an apprentice in a CoP, reveals moralunderstandings that are reproduced in a practice.

Our division of social structure and performancepatterns into separate dimensions is largely analytical. Itis motivated by our purpose of obtaining a theoreticalframework for describing IOIS practices. It is also broadlyin line with the literature. In the context of analysingprocesses of institutionalization and de-institutionaliza-tion, analytical separation of the moral dimension fromactors’ beliefs and rationales is increasingly recommended(North, 1981; Granovetter, 1994; Bowker & Star, 2000;Schatzki, 2005; Lawrence & Suddaby, 2006; Green et al,2009; Maguire & Hardy, 2009). Including the materialdimension is motivated by the technological nature ofIOIS. Moreover, it has been argued that materiality needsto be treated symmetrically with other dimensions ofsocial structure in order to improve our understanding ofIS change (Leonardi & Barley, 2008; Orlikowski & Scott,2008; Orlikowski, 2010; Reimers et al, 2010 and 2012).Thus, distinguishing between material, normative, andideational structure promises to capture importantaspects of the phenomenon of IOIS evolution.

We interpret the idea of a boundary object from thepractice literature (Star & Griesemer, 1989; Wenger, 2002)to define a boundary structure (material, normative, orideational) shared across two or more CoPs. Boundary

Reification

Practice

Participation

Social Structures

Performance Patterns

Durable aspects of practice

Ephemeral aspects of practice

Social learning

Figure 1 The main concepts of practice theory, adapted from

Wenger (2002).



structures are reproduced in two or more CoPs and thusconnect the CoPs by allowing communication andcoordination to occur between members of differentCoPs. For example, standardized product numberingsystems serve as boundary structures between practicesthat trade with each other because they coordinateoperations while at the same time allowing nuancedlocal interpretations of their meaning to be reproducedseparately at the local levels.

The existence of boundary structures linking severalCoPs defines a particular grouping of CoPs that willbe useful in defining an IOIS, and which we call aconstellation. The term is a specific case of the notion putforward by Wenger (2002) to take account of the fact thatpractices are never closed but necessarily have relations ofvarious kinds with clusters of other practices. The nameemphasizes that any given clustering is perspectival(like stellar constellations) and our particular perspectiveis the alignment through boundary structures.

We can now use this framework to define an inter-organizational information system as a constellation ofCoPs located in separate groups of organizations, whichare connected through specific material IOIS boundarystructures. IOIS boundary structures can be either a shareddefinition of data or a shared data processing application,including a shared database. Such technical boundarystructures are ‘brittle’ in the sense that they are notinterpretatively flexible (Star & Griesemer, 1989) and thusneed to be continually re-aligned. For example, boundarystructures can be given new meaning by rationalizingthem in a different manner or by associating them withnew norms, which enables continued use of boundarystructures when conditions are changing significantly. Inthis way our model conceives of the alignment of prac-tices in an IOIS as an on-going practical socio-technicalachievement, rather than a passive property of a set ofextended information technologies. Figure 2 shows thekey concepts of our practice-based model of IOIS.

Our framework provides a convenient way of eviden-cing evolution of IOIS. Above, we have characterized IOISevolution through the terms persistence and transformation,

meaning that certain non-trivial elements of an inter-organizational information system are retained over timewhile the system transforms with regard to certaincharacteristics. First, we distinguish two types of changes,namely changes on the level of individual practices andchanges in the constellation of practices making up anIOIS. Practice-level changes can be tracked over time byrecording material, normative, and ideational structuresthat are reproduced in the constituent practices at dif-ferent points in time. Change is indicated by the appear-ance or disappearance of structures. Constellation-levelchanges are described as the appearance or disappearanceof practices that make up the constellation. Figure 3visualizes these two types of changes.

Using these two levels of change we can now be preciseabout persistence and transformation of the IOIS. Persistenceis the continuation of a particular practice within theconstellation. Persistence is evidenced through instancesof structure that are reproduced over an extended periodof time. Transformations of the IOIS are larger-scalechanges that are irreversible in the sense that evolu-tionary theorists use this term (Dawkins, 2006). On thebasis of our framework, we evidence transformation bythe emergence of clusters of material, normative, andideational structures that reference and reinforce eachother to provide a consistent and recognizable newaspect of the system and, at the same time, contradicta previously dominant cluster of structural instances.The appearance of a new practice is a prima facieindication of a transformation since this necessarilyimplies the appearance of a novel cluster of structuralinstances.

The framework also provides a suitable basis forevaluating the selected IS change theories because boththeories characterize an information system throughnotions of structure. The CS model of Porra (1999) usesthe notion of structure as retention of the (phylogenetic)history of a colony. Thus, material, normative, andideational structures reproduced in the practices can beseen as a record of a colony’s evolutionary developmentin that theory. The PSIC model of Lyytinen & Newman

IOIS Practice

MaterialStructure

IdeationalStructure

NormativeStructure

MovementPatterns

Discursive Patterns

SanctioningPatterns

NS MS IS

IOIS Material Boundary Structure

NS: Normative StructureMS: Material StructureIS: Ideational Structure

NS MS IS

IOIS

Practices

IOIS Constellation

of Practices

Figure 2 Main concepts of our practice-based framework for IOIS.



(2008) uses the notion of deep structure to characterize asystem on multiple levels. As tensions between compo-nents of deep structure build up, the system’s balance willbe punctuated, implying a sudden change towards a new(temporarily stable) state. These components of deepstructure can be seen as particular clusters of ideational,normative, and material structures encapsulating thehistorical development of the practices.

Research design and methods

Choice of research unit and methodThe choice of research object was driven by the nature ofthe phenomenon under study and our particular con-ceptual lens. Our view of an IOIS is that it is a con-stellation of interacting practices. Thus our research unithad to be wide enough to encompass several distinctorganizational-level practices forming the IOIS constella-tion, and as such, larger than the single or dyadic organi-zational level normally chosen for IOIS studies. Inaddition, in order to disclose evolution of these practicesthe study had to embrace a significant episode ofevolution, including practice formation, necessitatingan exceptionally long time scale compared to typical ISstudies of a single technology project or adoption instance.Consequently, we chose to study multiple organizationswithin two adjacent echelons of a supply chain con-nected by electronic ordering and replenishment systemsin a particular industry over a period in which it wasknown that the organization of the industry had changedsignificantly.

The chosen research method was similarly dictated bythe nature of the IOIS context and our choice of a

practice lens. Even when the unit is chosen as the inter-action of two echelons in a given supply chain, the unitwill not be free of influence of parties outside the unit(other echelons upstream and downstream, governmentregulators, technology providers, and standards bodies,for instance). Thus, inherently IOIS is a phenomenonthat is difficult to separate from its environment, anempirical situation for which field-based case studyresearch is recommended as an appropriate methodology(Yin, 2009).

Although we are studying evolution of IOIS over a his-torical period we chose semi-structured interviews as ourmain data collection method rather than archival material.The reason for this choice is that we are not concerned,by and large, with past events. Rather, we are concernedwith the structures that are and were reproduced in thepractices that underpin the interviewee’s descriptionsand interpretations of events. Thus, while contemporaryreports could give useful, and to some extent objective,information about past events, they are of little use forevidencing the social structures that were reproduced inthe practices at the time and which gave meaning tothese events for practitioners. This is particularly true fornorms and rationales. We thus restricted our use ofdocumentary sources to clarifying the timing of theappearance of structures.

Case selectionFor the actual case we chose interactions that occurred inthe Australian pharmaceutical distribution supply chain,particularly between drug wholesalers, retailers (pharmacies),and technology providers in relation to the introduction

1a,1b...Structures

Practice 1

Structures2a,2b ...

Practice 2

Constellation

Structures1a,1b...

Practice 1

Structures2a,2b,2c ...

Practice 2

Constellation

Structures1a,1b ...

Practice 1

Structures2a,2b,2c ...

Practice 2

Constellation

Practice 3

Structures3a,3b ...

Practice level change

Constellation level change

Time 1

Time 2

Time 3

Figure 3 Evidencing change and persistence in our practice-based framework for IOIS.



and standardization of electronic ordering over theperiod 1980–2009.

The pharmaceutical industry was chosen because: (1)there is a long history of adoption of electronic opera-tional systems crossing organizational boundaries in thisindustry (Cavaye, 1995; Payton, 2000; McGrath & More,2001; Fedorowicz et al, 2004; Celeste & Cusack, 2006;Braa et al, 2007; Conway & Perrin, 2008; Plomp et al,2011); and (2) while medicine manufacturing is a globalindustry, distribution of medicine is still a highly domesticbusiness (Geiger & Goldschmidt, 2009) allowing theresearch boundary to be maintained at the nationalindustry level.

The Australian industry in particular was chosenbecause it provided a revelatory case (Eisenhardt, 1989;Pare, 2004; Yin, 2009). The electronic ordering andreplenishment systems there have evolved from initiallyclosed systems using proprietary standards to a quasi-open system for the whole industry over a period ofthree decades. The opening up of these systems wasnot imposed on the participants but emerged througha bottom-up process. Thus, while the systems linkingpractices in this industry have a long continuous history,they have also undergone transformation in relation tothe important characteristic of openness. While weacknowledge that cases of transformation from proprie-tary to open systems are familiar from the literature,this case is unique in that this process emerged entirelywithout intervention of a central actor. Thus, this indu-stry provides a case in which a transformation that wasprima facie evolutionary is observable. We thereforesubmit that a single case design can be justified inview of this unique and revelatory development pattern(Yin, 2009).

Data collectionThe main data sources were interviews and supplemen-tary publications. Between March 2006 and February2009, 18 interviews were conducted involving whole-salers, vendors of so-called Point of Sale software (POSvendors) and pharmacies. Table 1 gives details of theseinterviews. All interviewees had many years of industryexposure that, in most cases, covered the whole case timespan (from the early 1980s to 2009). Interviews lastedbetween half an hour and 2 h with an average durationof 65 min. All interviews were tape recorded and tran-scribed, yielding 388 pages of transcriptions, whichconstitute our primary data set for coding.

In addition, we drew on published documents forconstructing a timeline and for dating structures asdescribed below. For this dating purpose a total of 21documents were used consisting of published reports,websites of companies, Wikipedia pages about compa-nies, governmental websites, and those of trade associa-tions, all of which were archived.

Data analysisData analysis proceeded in four steps.

First, the relevant constellation of practices that madeup the IOIS under study was defined. It consists of threeconnected practices: (1) the wholesalers’ practice oftaking and processing orders from pharmacies includingoperating and maintaining their order taking and pro-cessing systems; (2) the POS vendor practice concernedwith development and maintenance of pharmacy POSsystems, which consisted, among other things, of updat-ing product codes and communication protocols accord-ing to wholesalers’ requirements; (3) the pharmacies’

Table 1 Summary of interviews

Type of firm Job title of interviewee Date of interview Mode of interview Duration (min)

POS vendor A Owner, CEO 12 March 2006 In person 120

POS vendor B General Manager of Technology, Health 29 April 2006 Telephone 60

Wholesaler A Technical manager customer support 28 April 2006 Telephone 70

Wholesaler B Supply chain manager 12 March 2006 In person 70

Wholesaler B IT manager 14 March 2006 Telephone 35

Wholesaler C Head of IT for pharmaceutical distribution 19 April 2006 Telephone 48

Wholesaler C IT manager 19 April 2006 In person 70

Pharmacy A Proprietor 13 September 2007 In person 66

Pharmacy A Stock manager 13 September 2007 In person 30

Pharmacy B Pharmacist and former proprietor 29 January 2009 In person 62

Pharmacy C Pharmacist 28 January 2009 In person 73

Pharmacy D Pharmacist 3 February 2009 In person 30

Pharmacy E Pharmacist 13 February 2009 In person 50

Pharmacy F Proprietor 29 January 2009 In person 53

Wholesaler C & POS vendor Ca Head of IT and manager of own POS system 3 February 2009 In person 90

POS vendor A Retail product manager 4 February 2009 In person 82

Wholesaler B General Manager of Technology, Health 5 February 2009 In person 62

Wholesaler D Manager of information systems 6 February 2009 In person 107

aThis is the only wholesaler who also owns a POS vendor; the interview was jointly conducted with a representative of the wholesaling division and

one from the POS division.



replenishment practice involving the placement of orders(electronic and manual) and stock management.

Second, the transcripts were read looking for refer-ences to structures that constrained or enabled actionof participants of the practices. A description of thereference based closely on the text passage was recordedin a spreadsheet database as an instance of a struc-ture. One hundred and ninety-eight such instances wereobserved. When essentially the same idea, norm, ormaterial condition reoccurred in other interviews thesetext passages were coded as a single instance of the samestructure. One hundred and seven unique structureswere thus identified and their identification was verifiedby two researchers. Of these, 50 were identified in morethan one and as many as eight interviews. Put anotherway, only 57 of the 198 references recorded failed tooccur again.

Third, these instances were then coded according totheir structural type, relevant practice, and approxi-mate date of appearance. Coding rules were developedand iteratively refined, and all coding changes weredocumented in a separate journal in order to applysimilar principles across the whole data set and thusensure measurement validity (Reimers & Johnston,2008).

The most important of our coding rules concernthe way instances of structure were assigned to thethree dimensions of structure. Material structures con-strain and enable bodily movements and are experi-enced bodily. Technical equipment is usually easilyidentified as a material structure; however, we alsoincluded all instances of structure that involve externalincentives under this category as these incentivesare also usually considered to be material. Normativestructures refer to moral rules and are indicated byformulations such as ‘should’ or ‘ought’. Normativestructures are usually not considered in IS studies, soevidencing these is a novelty of this research. Idea-tional structures refer to shared beliefs about cause–effect relationships and are indicated when informantsoffer a rationale or explanation for a behaviour or aphenomenon. The following example illustrates thedistinction between normative and ideational struc-ture. Instance #56 reads:

For pharmacies, using the IT system offered by the banner

group makes updating product data easier because product

range and data services are closely tied.

This is coded as a rationale since a cause (product rangeand data services are closely tied) is linked with an effect(ease of updating product data). The following instance,#55, which also relates to pharmacies’ use of IT systemsoffered by banner groups, is coded as a norm because itexpresses, through the word ‘should’, an expectationwithout giving a reason:

Pharmacists should use the IT system which is marketed by

their banner group.

Instances of structure were then associated with oneof the three practices that constitute the IOIS based onthe criterion that this instance is actually reproduced inthat practice. This usually implied that we had a referenceto that instance from a representative of the practicewith which that practice was to be associated. However,it might be that an informant speaks about a normbut explicitly refers to another practice for which it isrelevant, in which case we would associate this normwith that other practice to which the informant referred.In contrast, in the interview an informant may appro-priate that norm and also defend it as justified, in whichcase we would conclude that this norm is reproduced inthe practice that (s)he represents. The same procedurewas applied to material and ideational instances. It wasfound in the coding that all structures pertinent tothe opening of the IOIS system could be assigned toone of these three practices, which validates ouroriginal choice of the practices comprising the constella-tion. On the basis of these associations we could alsoidentify structures (material, normative, ideational) thatwere shared across practices, that is, boundary structures inour model.

Fourth, we developed a set of rules to enable a consistentmethod of dating instances of structure across our data set.We sought to establish an approximate date of origin ofthe structure in a practice. We could not rely on interviewdata for dating instances because interviewees would onlyoccasionally specify dates that could be associated withstructure appearance. We therefore established a rule thatall instances are dated based on external documents toensure consistency. In cases in which we did not find anexternal document that provided a specific date for theappearance of an instance we applied the ‘principle of firstlogically possible appearance’; for example a norm thatreferenced a specific material structure could haveemerged only once that material structure was in place.It was mostly possible to rely on external documents fordating instances of material structure while normative andideational structures were mostly dated according to thelatter principle.

Data presentationThe main outputs of the data analysis are the codedinstances of structure. However, presenting the codedinstances in tabular form alone would not be effectivebecause they would be hard to decipher for the reader notfamiliar with the Australian pharmaceutical industry. Wetherefore have chosen to additionally narrate the evolu-tion of electronic ordering systems based on our codeddata by connecting the coded instances in a meaningfulway and by supplementing context information wherenecessary. This allows us to present in an intelligible andaccessible form all the information collected through theinterviews while at the same time protecting against biasby tying the narrative at every point to specific instancesof structure identified through a rigorous coding proce-dure. We stress that we see this narrative as a way of



contextualizing the coded data; it should not be viewedas a history of events.

Validity and reliabilityValidity of the coding was supported by extensivediscussions among the researchers on the nature of thestructure constructs and how they could be evidenced intextual fragments. Consequently, the structure constructswere precisely defined as well as theoretically groundedby our own analysis of practice perspectives (Reimers &Johnston, 2008). Published sources were used to tri-angulate and supplement time information provided byinterviewees.

Extensive attention was paid to reliability of our datacoding (Yin, 2009). Memos capturing various versions ofthe coding rules for structures and dating were held inthe coding database along with a revision history. Codingwas independently checked by two researchers and dif-ferences resolved into refined coding rules. Our detaileddescription of the coding rules above supports reprodu-cibility of the coding.

The validity of our narrative reconstruction of changesin structure over time depends on two assumptions. Thefirst is that interviews over a recent 3-year period provideacceptable evidence of structures and processes that haveexisted in the past. In support of this procedure we offerseveral lines of argument. First, all interviewees werepractitioners with many years of pharmacy industryexposure that, in most cases, covered the whole periodof the narrative produced (from the early 1980s to 2009).Second, in any case we are not relying on recollections ofspecific events and our narrative is not constructed fromsuch recollections. Rather, the narrative is constructedover a scaffold of coded and dated instances of structureextracted from conversations with interviewees about thelogic and rationale of technology changes. The codingprocedure provides a highly structured and uniformapproach to this. Thus, in the narrative we are notpresenting an oral history, but rather a structured contentanalysis of conversations about the past. Third, we usedindependent and largely factual sources wherever possi-ble to validate the nature and timing of the technologyevents that form the topics of these discussions. However,we specifically did not want to rely on published third-party interpretations of events. This is because we want topresent evidence of structures (interpretations, beliefs,rationales, and norms) that are shared in, and constrainand enable behaviour within, the particular practicesthemselves. A traditional historiographic approach topublished sources would not provide direct evidence ofshared beliefs, rationales, and norms that actuallystructure behaviours of the participants of the practices.

The second issue is the extent to which the structureswe evidence are reproduced in the respective practices asa whole. First, the speakers of the conversation fragmentsfrom which the structures are identified are well enrolledin the practice and thus can and do speak for it. Thevalidity of this is their immersion in the practice over a

long period, discussed earlier. Second, many of thestructures occurred multiple times in interviews withinthe practices. Forty-seven per cent of all structure codesoccurred more than once and some up to eight times(only 28% of structure references failed to be repeated inthe interviews), and given that not all topics werediscussed with all interviewees this provides strongsupplementary evidence that the structures were beingreproduced in the practices. Third, we have good cover-age of the industry with our interviews as indicated inTable 1. Fourth, these interviewees are discussing beliefsand behaviours of the industry as a whole rather thantheir own experiences. Last, the researchers’ own sig-nificant familiarity with the industry, provided by 7 yearsof research in four national pharmaceutical industries(Reimers et al, 2010), offers a measure of safety againstgross mistakes in our analysis.

The problems presented above would apply to anyempirical attempt to research change over long timescales, required by the topic, without decades of long-itudinal observation. We contend that our structuredapproach to coding and our theoretical justification, thatwe are identifying pertinent traces of change, provide anovel and significant level of external validity comparedwith accepted standards in IOIS case research.

Finally, while statistical generalization is impossiblebased on a single case, we contend that the descriptionsof evolution that we produce using our practice lens,summarized in the findings, are unlikely to be unique tothe particular Australian pharmaceutical supply chainsetting. This is because, although the conversations in theinterviews refer to specific events in that industry, thestructures and changes in structures for which we findevidence are much less specific (Seddon & Scheppers,2006; Yin, 2009). The validity and reliability measuresdescribed above are consistent with existing guidelinesfor case study research (Pare, 2004; Yin, 2009). Theauthors were independent researchers and were in noway employed by the industry or acting as consultants.

Case overviewThe around 5000 pharmacies in Australia are mostlysupplied by three national wholesalers. These so-calledfull-line wholesalers provide about 4000 prescriptiondrugs and other non-prescription healthcare products,termed over-the-counter (OTC) products. About 10% ofsupplies are provided by regional wholesalers who focuson a specific segment of the total product range, the so-called short-liners. Beginning in the 1990s, manufacturersof ‘generic’ prescription drugs whose patent protectionhas expired also ship directly to pharmacies.

Over the last three decades, the three full-line whole-salers have maintained roughly equal market shares.They used to have a regional focus but during the 1990sexpanded through acquisitions of local competitors tobecome national players. During the same period, phar-macies have increasingly expanded the OTC segment sothat the dispensing area in which they sell prescription



drugs has shrunk relative to the total shop space. Whilewholesalers are legally forbidden from owning pharma-cies, recently all three wholesalers have formed their ownmarketing groups, which between 1500 and 2000pharmacies have joined. These so-called ‘banner groups’offer catalogues, signage, and uniforms to pharmacies,among other services. Pharmacies thus convey theimpression of belonging to a retail chain while they arelegally independent units.

In the early 1980s, the full-line wholesalers had startedto offer electronic ordering facilities to pharmacies. Theseinvolved portable data entry devices (PDEs) that could beused to scan a barcode printed on shelf labels to create anelectronic order. These barcodes represented proprietaryproduct codes unique to the various wholesalers. Phar-macy personnel scan items to be replenished and man-ually enter the number of products to be ordered. Ifplaced in a dedicated cradle, an electronic data connec-tion with the wholesaler is automatically established andorder data transmitted. These orders are automaticallyprocessed into the wholesaler’s order entry system and anelectronic invoice notifying the pharmacy about out-ofstock items is returned to the pharmacy. Pharmacieswould then order such items from a secondary wholesalerby telephone. In the 1990s, pharmacies began to usecomputerized POS systems to manage sales and inven-tory. These systems also supported electronic ordering.Although the influential European Article Number (EAN)standard for retail product numbers was increasingly usedon retail packs in the pharmaceutical industry, replen-ishment ordering was still based on the proprietaryproduct codes of each of the three wholesalers. In thelate 1990s, POS vendors began to maintain cross-reference files that mapped the three sets of proprietaryproduct codes onto one another. As a result, pharmaciescould now order electronically from all three wholesalers.

In the 2000s, several initiatives towards truly openelectronic ordering systems occurred. First, the so-calledPeCC initiative (Project electronic Commerce and Com-munication for Healthcare), driven mostly by govern-ment, proposed an Internet platform (PEG) with theexpress purpose to link all three distribution stages,manufacturers, wholesalers, and pharmacies. However,this system was ultimately only used to support orderflow between wholesalers and manufacturers. Second,some new entrants attempted to establish their ownelectronic ordering platform to automatically routeorders from pharmacies to the lowest cost supplier.However, this initiative also failed. Finally, the POSvendors set up a common Internet-based platform calledPharmX through which electronic orders are routed frompharmacies to wholesalers. This system became opera-tional in 2007.

Results of data analysisWe now present the results of our data analysis in tabularform (Tables 2–7) and in the form of a narrativedescribing the evolution of electronic ordering from

proprietary closed systems to quasi-open systems. Indoing this, we draw on the subset of coded structureinstances that directly have a bearing on this significantchange and we make frequent references to the codedstructure instances that support the narrative. We alsodraw on our understanding of the context of this changeobtained through the interviews. We present the resultsin narrative form for two reasons: (1) To make the datapresented in the tables more accessible to the reader notfamiliar with the case context; and (2) to present the fulldata set obtained from the interviews rather than just thereduction that the coded data presents.

We present the narrative and the tabulated codes by eraand practice. We organize time into six eras reflecting keychanges in the systems as revealed by the interviews. Forclarity we begin each era with a summary of the changesthat characterize the era and then follow this with thedetailed evidence that support this interpretation. Theinstances in tabular form are given at the end of each sub-section.

Pre-1980s–1985: electronic ordering as a newcompetitive weaponThe first period was characterized by the desire ofwholesalers to extend internal order taking systems topharmacies in order to provide differentiation of services.As a consequence, the first electronic ordering systemscontained a number of proprietary elements, specificallyproprietary product codes and communication protocols.

Prior to the introduction of electronic ordering systemsin the early 1980s, wholesalers sought new means to increasethe strength of linkages with pharmacies. Wholesalersbelieved that their strategic means for obtaining a com-petitive advantage were severely restricted by law as wellas by sound business tactics. On the one hand, theybelieved that it was not feasible to tie pharmaciescontractually (#3), nor could they own pharmacies, asalready mentioned. At the same time, they believed thatthey lacked a superior bargaining position vis-a-vispharmacies, despite their much larger size and theirindustry’s much greater concentration relative to phar-macies. Specifically, wholesalers argued that, in contrastto pharmacies, they were barred from collective actionwhile pharmacies could cooperate, for example in thearea of joint procurement (#4, #5). An established meansof tying pharmacies to a given wholesaler was thepractice of helping new pharmacists to start up theirbusiness, for example by providing loans. As a conse-quence, wholesalers expected that pharmacists wouldstay loyal to them commercially, a norm that was sharedby pharmacists (#12).

In this situation, wholesalers saw the possibility ofsetting up electronic ordering systems as an opportunityto gain a competitive advantage (#6). The first electronicordering systems were developed in the early 1980sand they contained a number of proprietary elements,particularly proprietary communication protocols andproduct codes (which wholesalers were already using



internally). These protocols and product codes were builtinto various pieces of equipment supplied to pharmacies,including the PDEs, docking stations, and shelf labels (#11).Also, wholesalers started to offer twice-daily deliveries asthey argued that increased delivery frequencies in con-junction with electronic ordering capabilities allowed phar-macies to convert inventory space into sales areas (#7).

1986–1990: EAN gains momentumWhile the technology of the electronic ordering systemsdid not change in this period, the context in which theywere used changed significantly through the increasinglegitimacy and availability of the international standardproduct code (EAN), but which was resisted in thisindustry. This gave rise to a number of rationales thatprovided a new ideational base to support continued useof proprietary systems.

The second half of the 1980s saw the diffusion of theEAN standard product code in Australian retail industries,which potentially offered a legitimate open alternative tothe wholesalers’ proprietary product codes. While thewholesalers’ proprietary product codes continued to beused in the industry despite increasing legitimacy of theEAN code, wholesalers developed a number of rationalesfor continued use of proprietary product codes (#14, #15,

#16, #20, #21), some of which were not actually factual.While the POS vendors came into existence only in theearly 1990s, they share some of these rationales favouringproprietary product codes (#20, #21).

1991–1995: appearance of a new ‘POS vendor’ practicedisrupts incumbentsAs electronic ordering became a component in newlyinstalled POS systems in pharmacies, a new player, POSvendors, became important for the further developmentof the electronic ordering systems. Norms and rationalesin the wholesaling and pharmacy practice needed toaccommodate existence of the new practice.

The first half of the 1990s saw increasing use bypharmacies of computerized POS systems for sales record-ing, which also provided capabilities such as inventorymanagement and electronic ordering. In contrast to theprevious PDE-based ordering systems, POS systems weresupplied by independent vendors and thus, according toAustralian law, could not be used to force ordering fromonly one supplier (#23). Yet, setting up electronic linkageswith a wholesaler required that a wholesaler’s proprietarycommunication protocols and product codes wereimplemented and maintained in the POS systems (#40).POS vendors argued that creation of a system-to-system

Table 2 Coded instances for the first era (pre-1980s to 1985)

No. Description Practice Type Date first appear

1 A modem-based electronic communication infrastructure is available everywhere in

Australia.

Whole Mat Early 1980s

2 Full-line wholesaling is necessary in order to provide equal service to the ‘community’. Whole Ideat 1973

3 Wholesalers cannot bind pharmacies contractually because this would violate the law and

the pecuniary interest of pharmacies.

Whole Ideat 1974

4 Wholesalers cannot cooperate through their trade association because that would invite

massive trouble with regulatory authorities.

Whole Ideat 1974

5 Although pharmacies are small relative to wholesalers, they still have an equal bargaining

position because wholesalers cannot work together.

Whole Ideat 1974

6 Proprietary electronic ordering systems can yield a competitive advantage for some time. Whole Ideat Early 1980s

7 Wholesalers offer twice-daily deliveries in order for pharmacies to reduce their inventories. Whole Ideat Early 1980s

8 Pharmacies compete on service to the extent that they would rather borrow from

competitors than ask customers to come again if a drug is not in stock because of the

nature of the product.

Pharm Ideat Pre-1980s

9 Pharmacies don’t make special effort to obtain out-of-stock items because people will

realize that one cannot stock all items.

Pharm Ideat Pre-1980s

10 While all three wholesalers are still mostly owned by pharmacists as a legacy of their

cooperative structure, wholesalers are prohibited from owning pharmacies.

Whole pharm Mat 1939

11 Wholesalers have supplied pharmacies with hand-held devices that can be used for

ordering (but can also be used for stock taking); they also supply them with shelf

labels containing their proprietary product codes; the PDE devices come with

product codes, ordering software and modems, which automatically establish a

telephone connection with the wholesaler’s system. Wholesalers have staff that

maintain these devices (software, product codes). Pharmacies generally have

installed only their primary wholesaler’s systems; sometimes, they have also installed

their secondary wholesaler’s systems.

Whole pharm Mat Early 1980s

12 Pharmacies should be loyal to wholesalers. Whole pharm Norm Pre-1980s

13 Competitors should not ‘cream off’ the market. Whole pharm

vendor

Norm 1973



connection with a wholesaler’s order taking system couldbe justified economically only if that wholesaler hadnational coverage (#35). Apart from implementing such aconnection, POS vendors also had to maintain the legacyinterfaces, which was burdensome as wholesalers fre-quently changed their systems. Moreover, POS vendorsbelieved that it was difficult to detect causes of problems

frequently encountered by pharmacists when sending outelectronic orders since they had to support these systemsremotely without having direct access to them (#34).

Conversely, wholesalers viewed the task of maintainingtheir electronic ordering systems as becoming morecomplex since they were facing a fragmented POS marketand thus the difficulty of ensuring smooth ordering

Table 3 Coded instances for the second era (1986–1990)


14 The proprietary numbering scheme exists for historical reasons and the EAN is not

adopted because changing over is not worthwhile.

Whole Ideat 1986

15 The EAN cannot currently be used at the retail end because it is not precise enough. Whole Ideat 1986

16 The EAN is not sufficiently widespread because pharmacies do not have sufficient market

power to demand it.

Whole Ideat 1986

17 GS1 has it own agenda; therefore, government has to enforce a standard. Whole Ideat 1986

18 Wholesalers are regionally concentrated because of regional warehouse infrastructure. Whole Ideat 1990

19 The EAN cannot currently be used at the retail end because it is not reliable. Vendor Ideat 1986

20 The EAN cannot currently be used at the retail end because it is not unique. Whole vendor Ideat 1986

21 Proprietary product codes persist because government failed to push for standardization. Whole vendor Ideat 1986

22 Pharmacies began to computerize as a result of a law that required that reimbursement

claims had to be submitted on diskette.

Pharm vendor Ideat 1989–1990

Table 4 Coded instances for the third era (1991–1995)


23 Anti-trust law stipulates that POS systems cannot limit pharmacies to buy from only one

wholesaler.

Whole Mat Early 1990s

24 Pharmacies should use POS systems properly so as to set them up for automatic

replenishment.

Whole Norm Early 1990s

25 Software vendors should be more professional in their approach to software development. Whole Norm Early 1990s

26 Maintaining the electronic ordering system is complex because the POS market is highly

fragmented.

Whole Ideat Early 1990s

27 A proprietary electronic ordering platform used to be effective in locking-in customers;

moving to an open platform may lead to a loss of customers.

Whole Ideat Early 1990s

28 The dispensing and POS systems of pharmacies can interact if they are from the same

vendor.

Pharm Mat Early 1990s

29 Pharmacies do not regularly compare prices of products because that would take too much

time, even on the POS system.

Pharm Ideat Early 1990s

30 Pharmacies prefer not to order from secondary wholesaler because of higher costs. Pharm Ideat Early 1990s

31 Setting up POS systems for automatic replenishment is currently seldom done because it

involves too much work.


32 Automated replenishment is not done because this would not allow for the same level of

control (over stocks) as manual re-ordering.


33 When price and service are on par, there is no reason to switch to another wholesaler. Pharm Ideat Early 1990s

34 Since POS systems are installed in pharmacies it is difficult to identify the cause of problems

that occur when pharmacies want to send orders to wholesalers electronically.

Vendor Ideat Early 1990s

35 System vendors require that a wholesaler has national coverage to justify creation of a link

between their systems and that wholesaler’s system because there are no standards.


36 Pharmacies should place orders through their POS systems and not through phone calls. Whole pharm Norm Early 1990s

37 Pharmacists are adoption laggards because they do not like change. Whole pharm Ideat Early 1990s

38 One ‘big five’ systems vendor (NU systems) is half-owned by the pharmacy guild. Whole vendor Mat 1991

39 POS systems do not allow for direct price comparison among wholesalers. Whole vendor Mat Early 1990s

40 POS systems can communicate with the order taking systems of all three wholesalers;

however, this requires that partner-specific communication protocols are implemented on

both sides.

Whole pharm

vendor

Mat Early 1990s



operations across multiple POS systems (#26). At thesame time, they were wary of opening up the electronicordering systems since they feared a loss of customers ifthese were free to order from any wholesaler (#27). Theyalso developed a number of normative expectationsregarding how pharmacists and POS vendors should usethe ordering equipment. Specifically, they expected thatpharmacies place orders through POS systems, ratherthan over the phone (#36) and that they set up POSsystems for automatic replenishment through specifyingre-order stock levels (#24). Regarding POS vendors, theyexpected that they adopt a more professional approach tosoftware development (POS vendors were frequently seenby wholesalers as hobby pharmacist programmers) (#25).

Pharmacists typically selected primary and secondarysuppliers. While pharmacists shared the norm that theyshould place orders through their POS systems withwholesalers (#36), they also developed a number ofrationales why the use of POS systems for automaticreplenishment was infeasible contrary to wholesalers’expectations (#31, #32). Limited order routing capabil-ities were not seen as a problem because pharmacists triedto avoid ordering from their secondary suppliers as theybelieved that this would increase their costs (#30) andbecause they did not see a reason to change their primarysupplier if that supplier’s prices and service levels werenot worse relative to others (#33). Somewhat contra-dictory to this rationale, pharmacists typically did not

Table 5 Coded instances for the fourth era (1996–2000)


41 Wholesalers have created an ordering platform (PEG) for placing orders with suppliers,

which can also be used for so-called turnover orders but not for placing orders by

pharmacies.

Whole Mat 1996

42 Pharmacies should make due diligence when selecting POS software with regard to the

POS vendor’s ability to maintain cross-reference files.

Whole Norm 1998

43 POS vendors should accurately maintain cross-reference files. Whole Norm 1998

44 The wholesaler as aggregator of electronic orders reduces costs by replacing a n:m

structure by a n:1:m structure.

Whole Ideat 1996

45 Extending PEG throughout the whole supply chain is not in the interest of wholesalers

because of the threat of disintermediation.

Whole Ideat 1996

46 Software vendors can gain a competitive advantage by maintaining accurate cross-

reference files.

Whole Ideat 1998

47 As competition intensity increased, it was important to enable pharmacies to easily switch

between wholesalers so that wholesalers could demonstrate their superior price and service

levels.

Whole Ideat 1998

48 To escape from the squeeze of price and service level competition, creation of marketing

groups is effective for wholesalers.

Whole Ideat Late 1990s

49 Promotional measures of wholesalers can only be applied to the ‘front of shop’ articles in

order to not threaten the protected status of pharmacists.


50 Ordering systems are not standardized because high profit margins did not create the

pressure required for wholesalers to cooperate.


51 Manufacturers use the PEG platform because it shortens response time. Whole Ideat 2000

52 Proprietary extensions to shared electronic ordering systems can yield a competitive

advantage.

Whole Ideat 2000

53 Increasingly, manufacturers (mostly of generics) establish loyalty schemes with pharmacies

directly.

Pharm Mat 2000

54 Pharmacists should mostly order from the wholesaler behind their banner group. Pharm Norm Late 1990s

55 Pharmacists should use the IT system that is marketed by their banner group. Pharm Norm Late 1990s

56 For pharmacies, using the IT system offered by the banner group makes updating product

data easier because product range and data services are closely tied.

Pharm Ideat Late 1990s

57 Pharmacies are tied to incumbent wholesalers because it is difficult to obtain similar deals

with new wholesalers.

Pharm Ideat Late 1990s

58 Introduction of the value-added tax has strongly pushed the use of POS systems because

these systems made calculating VAT more effective and accurate.

Whole pharm Ideat 2000

59 Software firms should not force their e-business systems on non-negotiable terms onto

incumbents.

Whole vendor Norm 1996

60 Pharmacies’ POS systems contain proprietary product codes of wholesalers (PDE codes); in

most systems, all three wholesalers’ codes are implemented though, but not always error-

free; through this mapping, pharmacies can use PDE codes for orders to any wholesaler.

Whole pharm

vendor

Mat 1998

61 Wholesalers own marketing groups (‘banner groups’) that provide financial and marketing

incentives to pharmacies that reward customer loyalty.

Whole pharm

vendor

Mat Late 1990s



compare prices across wholesalers because they believedthat this would take too much time, even when using thePOS systems (#29). In line with this belief, POS systemsdid not have the capability to directly compare pricesacross the several wholesalers (#39).

In sum, the involvement of a new player, POS vendors,in this period was accompanied by the appearance of newnorms and rationales reflecting that change. Wholesalersbelieved that their operations had become more difficultthrough the emergence of the new POS vendor practice.Wholesalers and pharmacists held some contradictorybeliefs regarding suitable use of the POS systems.However, as wholesalers started to appreciate the lock-in effect through proprietary elements that had foundtheir way into the new equipment for electronic order-ing, pharmacies accepted the primary vendor system foroperational simplicity. Consequently, as the new practicebrought a new material element to the incumbentpractices, disturbances of their norms and rationalesoccurred and were gradually resolved.

1996–2000: opening up of the proprietary orderingsystemsElectronic ordering systems became significantly moreopen during this period as a result of POS vendorsimplementing and maintaining cross-reference files thatmapped the several proprietary codes of wholesalers ontoone another. This change coincided with a shiftingstrategic stance of wholesalers to banner groups, whichrequired the opening up of electronic ordering systemsaccompanied by new norms that referred to maintenance

of the cross-reference tables. The pharmacy practice alsoreflected this change through the appearance of normsand rationales that accommodated use of electronicordering within the new strategic game.

In the late 1990s, one large POS vendor began tomaintain so-called cross-reference files that mapped theproprietary product codes of the large wholesalers ontoone another. Using these cross-references, their POSsystems could route orders based on any of the largewholesalers’ proprietary product codes to any wholesaler(#60). This allowed pharmacies using the system toorder freely from all large wholesalers. Other POS vendorsquickly followed suit, so that pharmacies were freed fromthe factual ties to a particular wholesaler through theirelectronic ordering systems.

In contrast to earlier periods, wholesalers now saw thisnew capability as a crucial component in their increasingefforts to leave their regional niches and establish nation-wide distribution networks. They now rationalized that,as they entered into each others’ regional markets, theyneeded to be able to demonstrate to potential customerstheir capability for superior service, which required aneasy way of placing orders with them (#47). This, in turn,required that all POS vendors maintained accurate cross-reference files, not an easy task given continual changesin the product codes of all wholesalers. Further rationalesand norms emerged, which supported this new stance.Regarding POS vendors, wholesalers believed that POSvendors could gain a competitive advantage by main-taining accurate cross-reference files (#46). Moreover,wholesalers entertained a normative expectation that

Table 6 Coded instances for the fifth era (2001–2005)


62 The wholesaling market needs consolidation because profits are getting ever lower. Whole Ideat 2003

63 Pharmacists are not business people and therefore need professional support. Whole Ideat 2003

64 Wholesalers cannot supply supermarkets because this would cause pharmacists to cut

relations with them.

Whole Ideat 2003

65 Access to pharmaceutical retailing market is limited to professionals. Pharm Mat 2004

66 Pharmacists should devote a sizable part of the business area as well as of their time to

dispensing as opposed to retailing.

Pharm Norm 2003

67 Incumbent system vendors don’t have to charge as much as new entrants for the new

e-business system because they can reap intangible benefits from the system.

Vendor Ideat 2004

68 Incumbent system vendors are in a better position than outsiders because trust is necessary

for building a new system while trust takes a long time to build.

Vendor Ideat 2004

69 Support by the Pharmacy Guild can help but also hinder the development of PharmX

because of conflict of interest.

Vendor Ideat 2004

70 The spread of broadband connections makes it more difficult and expensive to maintain

modem-based connections.


71 The Internet will help to standardize communication protocols because systems

can connect to a dedicated piece of hardware.


72 Government should provide direction on issues of general eHealth strategy. Whole vendor Norm 2004

73 Software firms should not ‘direct’ order traffic by allowing for price comparison

(rather than act as a neutral channel).

Whole vendor Norm 2004

74 A new system (including PharmX) can be more easily established if promoted by the

pharmacy guild.

Whole vendor Ideat 2004

75 Broadband Internet access is available nationally. Whole pharm

vendor

Mat Early 2000s



POS vendors maintain accurate cross-reference files (#43).Regarding pharmacies, wholesalers expected that theyexercise due diligence when selecting their POS vendor toensure that their POS systems accurately route electronicorders to all three large wholesalers (#42). In contrast totheir earlier explanations, wholesalers now believed thattheir own failure to develop standardized orderingsystems was a result of high profit margins in the earlierperiods (#50). While wholesalers now ceased to viewelectronic ordering systems as suitable means for strategicmaneuvering, they developed or acquired so-calledbanner groups that provided financial and other incen-tives in order to strengthen their ties with pharmacies(#61). They now saw these, rather than electronicordering systems, as effective means to alleviate everincreasing competitive pressure (#48).

This new strategy was reflected in corresponding normsand rationales that emerged in the pharmacy practiceduring the late 1990s. On the one hand, pharmacistsrationalized that they were still tied to their primesuppliers because they feared that by switching suppliersthey would forego financial incentives such as cumula-tive discounts (#57). They also believed that it would beadvantageous to buy the POS system, which was offeredby their banner group as this would lead to smootherservices (#56). In addition, pharmacists also felt norma-tive pressure to use the IT systems offered by their bannergroup (#55); finally, they accepted as a norm that theyshould order from the wholesaler that owns their bannergroup (#54), a variation on the earlier norm according towhich pharmacists should be loyal to their wholesaler (#12).

2001–2005: premonitions of an Internet-hubWhile the onslaught of ‘New Economy’ business modelsin this era was successfully fended off, the idea of anInternet-based hub began to coalesce among POS vendorsas a solution to a pressing operational problem that theyhad inherited from the past proprietary electronic order-ing systems, specifically the persistence of proprietarycommunication protocols.

In the early 2000s, diffusion of the Internet dominatedthe further development of the electronic orderingsystems. On the one hand, broadband Internet connec-tions became available to pharmacists throughout Aus-tralia (#75) thanks to a government programme; on theother hand, a number of new entrants attempted toestablish Internet-based ordering platforms as alterna-tives to the existing systems. As such, they were seen byPOS vendors as a serious threat and POS vendors devel-oped a number of rationales explaining why they aremore efficient as the incumbent custodians (#67, #68).They also started to contemplate the idea of an Internet-based electronic ordering hub themselves and howto best implement this idea (#69, #74); these rationaleswere partly shared by wholesalers (#74). The diffusionof broadband Internet connections were partly seenas causes for new operational problems (#70) andpartly as an opportunity to standardize communication

protocols (#71). This was important to POS vendorsbecause, in the previous period, maintenance of legacyinterfaces to wholesalers’ ordering systems was perceivedas an unnecessary and costly burden.

2006–2009: next stage of opening up of electronicordering systemsThis period was characterized by (1) the appearance of apotential new practice and (2) a further opening up of theelectronic ordering systems. Operation of a new Internet-based hub for routing electronic orders suggests that anew practice, whose enterprise is the technical inter-mediation of wholesalers’ order taking and POS systems,was emerging. Establishment of the Internet-based hubsoftened the potential lock-in effect through proprietarycommunication protocols of wholesalers. Concurrently,POS vendors, as the main drivers of this development,increasingly developed antagonistic relations with whole-salers as reflected by contradictory norms and rationales.

In the late 2000s, the envisioned new Internet-basedordering platform, called PharmX, became operational(#103). It was jointly set up and owned by four large POSvendors (#92) and allowed electronic orders to be routedthrough a common gateway. While PharmX still had tosupport the proprietary communication protocols of thethree large wholesalers, it simplified maintenance of thePOS systems as the vendors had to implement andmaintain only one link to PharmX rather than multiplelinks to the several wholesalers’ systems.

Wholesalers had initially opposed creation of PharmXbecause they feared that pharmacies might use it todirectly order from manufacturers (#81). Prior toPharmX, wholesalers rationalized that POS vendors didnot have the capability to set up a common Internet hubcooperatively (#105) and that they needed to resist suchefforts (#82). After PharmX was successfully launched bythe POS vendors, wholesalers rationalized that the POSvendors were too weak to enforce a common communi-cation protocol onto the wholesalers (#85) and that,contrary to their earlier belief, PharmX would notdisintermediate them because of the efficiency advantageof wholesaler-based distribution (#86). They further didnot believe that PharmX would simplify their task ofmaintaining the electronic ordering systems as theyargued that they still had to maintain the point-to-pointlegacy systems (#83). However, they also saw an advan-tage in PharmX in that it promised to eventually replacethese point-to-point connections through an Internet-based hub (#104). Wholesalers felt that the costs ofoperating PharmX should not be levied on them since itwas unfair that they paid for the free order routing itprovided (#79). Accordingly, they had insisted thatpharmacies refund the routing fees that PharmX charges(#107). Wholesalers also altered their former strategy oftwice-daily deliveries by reverting back to one deliveryper day, now arguing that this would reduce unnecessarycosts (#84). Also, they now believed that web-basedordering systems that are integrated with the ERP systems



Table 7 Coded instances for the sixth era (2006–2009)


76 Wholesalers have ERP systems that interact with their order-taking and invoice-sending

systems.

Whole Mat 2006

77 Government limits the maximum margins wholesalers can earn; at the same time,

government provides financial incentives to compensate wholesalers for their

commitment as a full line service provider.

Whole Mat 2006

78 Wholesalers should use the EAN. Whole Norm 2006

79 Wholesalers should not have to pay for the costs associated with free order routing capability. Whole Norm 2007

80 Competition by short-liners is not an issue because margins of wholesalers are guaranteed

by government.

Whole Ideat 2006

81 PharmX poses the threat of dis-intermediation because suppliers could use it to directly

take orders from pharmacies.

Whole Ideat 2007

82 Resistance to new e-commerce systems is a collective good because if one yielded,

the others would have to follow.

Whole Ideat 2007

83 Maintaining the electronic ordering system is complex because of legacy systems. Whole Ideat 2007

84 Wholesalers cut down delivery frequency to once per day because this way they can

avoid unnecessary costs.

Whole Ideat 2007

85 The software vendors are too weak to enforce a common interface onto the wholesalers. Whole Ideat 2007

86 PharmX won’t disintermediate wholesalers because the direct delivieries are not as efficient

as deliveries through wholesalers.

Whole Ideat 2007

87 Extending the ordering back-office functions allows wholesalers to free call-centre

people for field work.

Whole Ideat 2009

88 Proprietary elements for electronic ordering built into POS systems can yield a

competitive advantage.

Whole Ideat 2009

89 Wholesalers should appreciate when pharmacists are loyal. Pharm Norm 2009

90 Pharmacies prefer late cut-off times because that enables them to respond to customer

requests more quickly.

Pharm Ideat 2007

91 Declining margins force pharmacies to become more professional healthcare providers. Pharm Ideat 2009

92 Four system vendors have created a joint venture to operate the new e-business system PharmX. Vendor Mat 2006

93 IT vendors should wind down their proprietary communication features and contribute

them to PharmX.

Vendor Norm 2007

94 Wholesalers should not dictate the way of doing business with them; rather, this should

be decided by clients.

Vendor Norm 2007

95 The costs of (distributing) software updates enforced on the vendors by wholesalers

should be carried by wholesalers.

Vendor Norm 2007

96 Distribution of software updates to individual installations in pharmacies is not cost

effective (vs a hub-model).

Vendor Ideat 2007

97 Cooperation among POS vendors is difficult because of monopoly concerns among

wholesalers.

Vendor Ideat 2007

98 To counter the market power of wholesalers, collective action by POS vendors

(in setting up PharmX) was effective.

Vendor Ideat 2007

99 Unified systems need to be initiated by IT firms because wholesalers have entrenched

interests in old technology and retailers are not powerful and independent enough

to force change.

Vendor Ideat 2007

100 Full-line wholesalers have difficulty jointly operating an electronic order system because

of competitive conflict.

Vendor Ideat 2007

101 The PharmX initiators are not keen on government funding because, in the past,

it has not helped new systems to become successful.

Vendor Ideat 2007

102 Declining margins force pharmacies to become more like retailers. Whole pharm Ideat 2006

103 POS vendors offer online ordering through a common Internet-based platform called

PharmX that, however, is still based on proprietary protocols and PDE codes of wholesalers.

Whole vendor Mat 2007

104 The main advantage of the PharmX initiative is that it promises to replace [replaces] the

modem-based point-to-point connections through an Internet-based hub.

Whole vendor Ideat 2007

105 The software vendors are too small individually to set up an industry-wide e-commerce system. Whole vendor Ideat 2007

106 POS vendors are also selling pharmacies PDE-like devices that function like PDE devices

but add a few more functions as well.

Pharm vendor Mat 2007

107 Wholesalers can charge pharmacies for sending orders through PharmX (for which they

have to pay themselves).

Whole pharm

vendor

Mat 2007



that all wholesalers had implemented at that time (#76)could yield a competitive advantage (#88). Wholesalersnow also felt that they should be using the EAN codesrather than their own proprietary product codes (#78).

In many ways, norms and rationales of POS vendors haddiverged from those of the wholesalers. While theyinitially shared the sceptical stance of wholesalers withregard to their ability to set up PharmX collaboratively(#105) and had some concerns of their own (#97), theylater rationalized that they were in a unique position todo just that (#98, #99, #100) and that they did not evenneed or want government support for their initiative(#101). Naturally, POS vendors predominantly saw theadvantages of PharmX for more efficient softwaredistribution (#96) and replacement of point-to-pointconnections, a rationale shared by wholesalers (#104).Normatively, POS vendors felt that wholesalers wereunfairly asking them to shoulder the costs of maintaininglegacy electronic ordering systems (#95) and that whole-salers should not decide which systems to use forelectronic ordering, which should be decided by thepharmacist clients (#94). However, they also blamedthemselves in that they felt that POS vendors shouldwind down proprietary communication features builtinto POS systems and transfer responsibility for theseinstead to the PharmX initiative (#93). Yet, they alsobegan to distribute to pharmacies PDE-like devices thatincluded functions additional to the earlier ones pro-vided by wholesalers (#106).

Pharmacists experienced an increasing distance fromwholesalers as reflected in a new norm, namely thatwholesalers should appreciate when pharmacists areloyal (#89).

In sum, we see emergence of a proto-practice of tech-nical intermediation between pharmacies’ POS systemsand wholesalers’ order taking systems. The emergence ofthis potential new practice is accompanied by increasingcontradiction of norms and rationales between POSvendors and wholesalers and marks a further step in theopening of the electronic ordering systems.

FindingsFrom our analysis using the theoretical coding and thenarrative construction in the previous section we arrive atfour general observations about the phenomenon of IOISevolution in the case.

First, we note that the development process shows thehallmarks of the kind of change that we earlier defined asevolution. The case describes the transformation ofelectronic ordering systems as these evolved from closed,proprietary to quasi-open systems. The opening cameabout through numerous changes on the level of indi-vidual practices in terms of the appearance of newideational, normative, and material instances of structureas well as through the emergence of a new practice onthe level of the constellation of practices, an aspect of theopening process addressed in our second finding below.The many changes on the practice level include the

addition of cross-reference files and norms and rationalessupporting this change in material structure as well asreinterpreting the business value of electronic orderingsystems. At the same time, important elements havepersisted throughout this transformation process. Regard-ing material structures, while the specific equipment haschanged (for example from PDEs to POS systems andfrom modems to Internet connections), importantelements remained; use of proprietary product codesand communication protocols continued as the codesbecame embedded in successive generations of electronicordering equipment. In addition, against the backgroundof the narrative we can see the functional continuityfrom PDE to POS systems as different material structuresfor order placement. Regarding normative and ideationalstructures, we also found elements that persisted through-out the development process. For example, the norm thatpharmacists should be loyal to ‘their’ wholesaler (#12)reappeared in the context of banner groups, now in theform that ‘pharmacists should order from the wholesalerbehind their banner group’ (#54). The earlier rationalethat electronic ordering systems can yield a competitiveadvantage (#6) reappeared in the period 2006–2009 whenweb-based ordering systems were connected with ERPsystems as ‘proprietary elements for electronic orderingbuilt into POS systems can yield a competitive advantage’(#88). While these coded structures are distinct at thelevel of individual coded instances (as indicated by theirseparate codes) our narrative analysis provides a con-text that makes their continuity apparent. In short, weobserve both persistence and transformation, whichjustifies characterization of the development process asan evolutionary process.

Second, we observe the appearance of a new practice,the POS vendor practice, which was crucial for theopening up of electronic ordering systems. Mostlyrecruiting its practitioners from the existing pharmacypractice, POS vendors did not see their main business indeveloping and maintaining electronic ordering systems;rather, such tasks were viewed as an unwelcome andcostly extra burden put onto their shoulders by whole-salers. However, POS vendors de facto took over asignificant part of developing and maintaining theelectronic ordering systems. Moreover, they subsequentlybecame the main driving force in opening up the systemsby first adding cross-reference files to their softwareproducts enabling free order routing, and later by settingup the PharmX gateway. Thus, emergence of this newpractice contributed significantly to the developmentand opening of the electronic ordering systems. Althoughthis practice, as mentioned, was mostly established byformer pharmacists, we did not find any evidence ofshared norms and rationales between these two practices.Instead, six out of eight relevant shared norms andrationales that we did identify across all three practicesare shared between the wholesaling and the POS vendorpractice, which suggests that the POS vendor practice iseither more closely related commercially or has more



intense interactions with the wholesaler practice thanwith the pharmacy practice. Observation of the appear-ance of a new practice along with the continuation of theother two practices also strengthens our first finding,since it makes clear that we also observe persistenceand transformation on the level of the constellation ofpractices.

Third, we observe that during IOIS evolution thepractices involved in the electronic ordering systemsmutually adjust to one another. Such adjustmentsinclude emergence of norms and rationales that speakof conflict across practices as well as accommodations ofnorms and rationales with newly arisen situations. Forexample, the wholesaling practice adjusts to the newlyemerged POS vendor practice by developing normsand rationales about it. One such rationale states thatmaintenance of electronic ordering systems has becomemore complex because the newly emerged POS market ishighly fragmented (#26). Regarding norms, wholesalersexpect that POS vendors become more professional intheir approach to software development as they viewedthem as having started as hobby programmers (#25).Moreover, the wholesaling practice also adjusts tochanges in existing practices. For example, wholesalersbelieve that software vendors can gain a competitiveadvantage by maintaining accurate cross-reference files(#46), a rationale that reflects the changed stance ofwholesalers vis-a-vis the benefits and drawbacks ofproprietary product codes. Similarly, wholesalers expectthat pharmacies exercise due diligence when selectingPOS software to ensure that their POS vendors accuratelymaintain cross-reference files (#42). Furthermore, thismutual adjustment of practices was essential for effec-tively opening up the electronic systems. For example,wholesalers and vendors needed to agree on how to payfor PharmX (#107); wholesalers and POS vendors ad-justed their normative and ideational stances, respec-tively. Regarding norms, wholesalers asked that theyshould not have to pay for free order routing capability,which would be enabled through PharmX (#79) whilePOS vendors asked that wholesalers pay for the costs ofdistributing software updates, also enabled by PharmX(#95). Regarding rationales, after initially fearing PharmXwould disintermediate them (#81), wholesalers laterrationalized that PharmX will not disintermediate thembecause their intermediation offers logistical cost advan-tages (#86). Thus, the opening up of the electronic order-ing systems can only be understood when, in additionto technical changes, ongoing adjustment in normsand rationales concerning the use-practices is consideredas well.

Fourth, we observe that the transformation of the systemsfrom closed, proprietary to quasi-open systems cameabout gradually rather than through a singular event orrapid change in a short period of time. By gradualtransformation we mean a process that occurs in small,empirically identifiable steps that cumulatively result insystem transformation as defined earlier; moreover, the

notion of gradual transformation also implies thatthe process extends over a relatively long period of time.The beginnings of this process are associated with theemergence of the POS vendor practice (not initiallymotivated by openness), as now it was legally proble-matic to tie pharmacies to a wholesaler through theelectronic ordering system. It then continued throughthe increasing diffusion of cross-reference files and,importantly, corresponding norms and rationales thatsoftened the lock-in effects of the proprietary productcodes. It ended (within our case’s time span) with theestablishment of the PharmX gateway, which produced asimilar effect with regard to the proprietary communica-tion protocols. Thus, the whole process took, at the veryminimum, 15 years within our case that spans 30 years.Thus, while the opening up of the electronic orderingsystems was triggered by the appearance of the new POSvendor practice, that event was only the first develop-ment step in a long process of change characterized bygradual and mutual adaptation of the several practices inall three structural dimensions.

DiscussionWe now consider the implications of our findings in rela-tion to the current state of theorizing long-term systemchange in IS. We begin by evaluating against our findingsthe two specific theories we selected as exemplars of thedialectical and evolutionary approaches to IS change, theCS model of Porra (1996, 1999, 2010) and the PSIC modelof Lyytinen & Newman (2008). We then use the evalua-tion of these specific models to reflect on the possible roleof evolutionary and dialectical approaches to change fora theory able to fully capture and explain the evolution ofIS at the inter-organizational level.

The CS modelPorra (1999) argues that previous accounts of change insystems theory have drawn either on mechanistic ororganic metaphors, which provide an explanation onlyfor incremental feedback-driven change (homeostasis).Porra proposes to address this inadequacy by drawing ona particular variant of biological evolution theory. UsingEldredge & Gould’s (1972) model of punctuated equili-brium, Porra argues that in biological evolution theorytwo mechanisms for change are recognized that operateon different time scales and different units of analysis.One is continual variation and selection at the geneticlevel, which accounts for variation among individuals ofa species and the other is the less frequent but moredramatic creation of new species of organisms. In orderto bring to systems theory this second mechanism ofchange, which she argues is essential for understandingevolution of information systems on long time scales,Porra introduces a new unit of analysis to systems theory,which she calls a colony. Colonies are voluntary collec-tions of individuals that share a common history,common methods for realizing both stability and radicalchange, and a common local context (Porra, 1999, p. 39).



By extension, a CS is defined ‘as a collection ofindividuals who share a history and an environmentand who cooperate directly or indirectly for the main-tenance of the colony’ (ibid., p. 56). Porra proposes thatthe homeostatic mechanism of traditional systems theoryexplains stability and gradual change within colonieswhile shared history and context explains identitymaintenance. However, it is the creation of new coloniesfrom old (the equivalent of speciation) that explainsinstances of radical change on system evolution timescales. Creation of new colonies occurs by a mechanismcalled ‘punctuated prototyping’. During periods of stasis,colonies experiment with new forms of organization andtechnology that have not previously existed in thecolony. One or more of these prototypes may provecrucial for survival in a new environmental reality. Inthat case one or more new colonies may form aroundthese prototypes and continue as new colonies inheritingthe colony’s history up to that point but developing theirown history and context (identity) from there-on. Thismay occur either through the ‘mother colony’ transform-ing into one of its successful prototypes through an oftenviolent instance of radical change, called a punctuation,or through a ‘splitting of lineages’ when the prototypeabandons the mother colony and continues an indepen-dent existence from there on (Porra, 1996, p. 295). Forapplications of the CS model see Porra et al (2005) andPorra & Parks (2006).

Porra’s theory of IS evolution can be summarized bytwo claims. First, she argues that IS evolution does notproceed smoothly and steadily but that phases of stasisand gradual change are interlaced with phases of rapidchange; second, she argues that such rapid changes comeabout either through a ‘splitting of lineages’ (whichwe will refer to as ‘bifurcation’ here) or through thepunctuation of mother colonies, while phases of stasis aremaintained through a process called homeostatic adapta-tion. Radical change can result from bifurcations andpunctuations but not from homeostatic adaptation.

The PSIC modelThe PSIC model of IS change presented by Lyytinen &Newman (2008) is based on three theoretical assump-tions: IS change phenomena need to be analysed onmultiple levels, are punctuated, and are socio-technical.

The model comprises four levels of analysis: the worksystem (the IS), the building system (the project), theorganizational context, and the environmental context.Systems on each level can be characterized by a ‘deepstructure’ consisting of some basic components and theirrelationships. However, the deep structure is elaboratedonly for the work and the building system, both of whichconsist of four components: actors, tasks, (organizational)structure, and technology. In periods of stability or equi-librium, these elements are in a state of balance. Astensions between some of these elements occur and grow,called ‘gaps’, the system becomes potentially unstableand ‘invites’ a change action or ‘critical incident’, also

called an ‘event’. These may then cause the system tochange incrementally or radically, revert to the old state,or move into a transient period in which the system doesnot stabilize.

Incremental and radical changes are distinguished withreference to the system’s deep structure: only radicalchange implies that the system’s deep structure is altered.Changes in any system or on any level can propagate toother systems and levels triggering further changeprocesses. Three reasons are given that support stabilityof the deep structure: historical path dependence, struc-turational reproduction, and organizational inertia(habit, routines, etc.). Tensions among the componentsof a system thus need to grow beyond a certain tippingpoint to invite a change action and thus trigger a changeprocess. For an application of the PSIC model, seeLyytinen et al (2009).

In sum, the PSIC model predicts that change ispunctuated, meaning that phases of relative stability,characterized by minor fluctuations around an equili-brium, are punctuated by phases of rapid change. Phasesof rapid and radical change are preceded by growingtensions among a system’s basic components. Thus,radical change results from tension among the elementsof deep structure at the particular system level.

Evaluation of the CS and PSIC models against ourfindingsOur first finding is that the observed IOIS developmentprocess was evolutionary, showing system transformationas well as persistence. Both models can, in principle,account for this finding. The CS model explains systemtransformation through the concept of punctuatedprototyping while the history is retained either in thepunctuated mother colony or inherited by the newlyindependent daughter colony, thus ensuring persistenceas well. The PSIC model describes system transformationas a series of events that alter a system’s deep structurewhile important elements of the deep structure may beretained, thus also accounting for persistence.

Second, we found that the appearance of a new prac-tice, the POS vendor practice, significantly contributed tothe eventual opening-up of the electronic orderingsystems. Explaining such events is the hallmark of theCS model through its notion of ‘splitting of lineages’ thatresult in the appearance of a new colony. Many POSvendors were pharmacists before entering that newpractice, suggesting that the POS vendor practice bifur-cated from the pharmacy practice. However, we foundthat the POS vendor practice shared a large number ofstructures with the wholesaling practice, which wouldalternatively indicate an origin in the wholesaling prac-tice. Below, we will discuss this ambivalent finding inmore detail. In any case, the CS model can, in principle,account for the emergence of a new practice. In con-trast, the PSIC model has no immediate vocabulary fordescribing and explaining such events. Instead, they



would have to be described as exogenous changes in theenvironmental context.

Our third finding states that an important part of IOISevolution consists of mutual adjustment of the severalpractices involved. While the CS model considers how acolony bifurcates, it does not explicitly analyse how anycolony co-evolves with other colonies because the CSmodel does not consider collections of colonies. Likewise,the PSIC model does not describe how several work systemsco-evolve through mutual adjustment; instead, any coordi-nation would result from a common building system thathas some measure of hierarchical control over them.Ultimately, its hierarchical layering of levels and systemsprevents consideration of mutual adjustment of worksystems in separate organizations, which do not have anexplicitly hierarchical governance structure (most IOIS).

Our fourth finding is that system transformation, theopening up of the electronic ordering systems in our case,came about gradually. While this finding seems tocontradict any model based on notions of punctuatedchange, both models can potentially account for thisobservation to the extent that the change can be inter-preted as a succession of punctuations. The CS modelexplains IS change by two mechanisms, homeostaticadaptation and punctuated prototyping; only the lattercan account for system transformation. The opening upof the electronic ordering systems would thus have to beexplained by one or more punctuations. The CS modelrecognizes bifurcations and transformations of mothercolonies as punctuations. Since we observed only onebifurcation at the beginning of the 15-year period (andpossibly the appearance of the new intermediary practicerepresented by PharmX at the end of that period),bifurcation cannot account for the gradual nature ofthe opening up of the electronic ordering systems.However, it is possible to explain this process as asuccession of punctuations in which the several practicesinvolved in the system, modelled as colonies, spawned

prototypes (some of which turned out to be well adaptedto new environmental realities) and then adopted theseprototypes, possibly shedding parts of their old structureand re-organizing their histories to accommodate thenew forms. On this interpretation the appearance ofcross-reference files would be viewed as prototyping,resulting in a punctuation when this prototype becomesinfluential in the mother colonies. Equally, an explana-tion based on the PSIC model would break up the wholeprocess into several shorter episodes characterized bystability and state changes. Again the innovation ofmaintaining cross-reference files by POS vendors wouldbe modelled as a punctuation. However, now the under-lying mechanism is state change. By constructing anarrative consisting of numerous punctuations, bothmodels could thus be made consistent with our finding,albeit the mechanisms through which such punctuationsare explained by the models would differ.

In sum, both theories can potentially model thephenomenon that we evidence but only at the level ofindividual practices since they do not have concepts toaddress the inter-organizational nature of the phenom-enon. The CS model does not explicitly elaborate mutualadjustment relationships between colonies except thosethat exist in an instance of a splitting of lineages. ThePSIC model does not include concepts for describingloosely coupled, specifically non-hierarchical work sys-tems (most IOIS). As a result, neither is capable of fullyaccounting for the transformation that we observe sincethis requires, in addition to describing changes at thelevel of practices, a description of changes at the level ofthe constellation of practices. Our evaluation of the twotheories is summarized in Table 8.

Potential of evolutionary notions of change for a theoryof IOIS evolutionWe have chosen the CS model as a highly elaboratedversion of existing evolutionary approaches to long-term

Table 8 Evaluation of the CS and PSIC models against our findings

Finding number y y can be explained by the CS model? y can be explained by the PCIS model?

1: Change is evolutionary Yes, transformation can be explained through

punctuated prototyping and persistence through

reproduction of history and identity

Yes, transformation can be explained through state

transitions following on growing tensions in deep

structure and persistence through retention of

structural elements during state transitions

2: Appearance of new

practices

Yes, appearance of new practices can be explained

through the concept of punctuated prototyping

(bifurcation)

No, appearance of new practices (systems) would have

to be seen as unexplained changes in the environment

3: Mutual adjustment

of practices

No, the model does not consider explicitly mutual

adjustment relationship between several practices

(colonies)

No, the model does not consider the relationship

between several work systems

4: Transformation

is gradual

Yes, gradual transformation can be explained as a

series of punctuations in which mother colonies

transform into one of their successful prototypes

Yes, gradual transformation can be explained as a series

of state transitions (punctuations)



IS change. These are theories that employ a biologicallyinspired mechanism to explain long-term change in IS.However, this model was not designed for the broaderIOIS context. Yet, there are no conceptual reasons thatwould exclude, in principle, application of this evolu-tionary change mechanism to the case of IOIS evolution.Indeed, we have shown that the CS model explains animportant part of our story, namely the appearance of anew practice that was important for the eventual openingup of the electronic ordering systems. We thereforepropose that theories employing evolutionary changemechanisms, exemplified by the CS model, are a validand promising basis for a theory of IOIS evolution.

However, we also observed that one important finding,mutual adjustment of practices, cannot be explained bythis particular model in its present articulation. Thus, apromising route towards building an evolutionary theoryof IOIS evolution would be to build on essential ideas ofthe CS model, specifically the notions of colonies as basicunits of analysis and of bifurcations, and to complementthese by a more explicit ‘ecological component’ describ-ing how several colonies evolve through interacting witheach other. The present CS model (Porra, 1996, 1999,2010) considers in detail only ‘vertical’ evolutionaryinteractions between colonies, meaning that parentcolonies spin off new colonies that inherit the parent’shistory up to the point of bifurcation. However, it mightbe possible to explain ‘horizontal’ interactions amongcontemporaneous colonies (as we observed) as an evolu-tionary process that accounts for co-evolution andmutual adaptation. As a by-product, such a mechanismwould also offer an alternative explanation for thegradualness of the transformation process because,in keeping with our findings, bifurcations could beinterlaced with phases of gradual change driven by ahorizontal evolutionary mechanism rather than throughmother colonies punctuating into successful prototypes.Although our data are not sufficient to explore thesealternative explanations in a definitive manner, we didnot find hints of radical changes in the several practicesduring the 15-year period that would be suggestiveof punctuations. Explaining gradual transformationthrough horizontal evolutionary interactions betweencolonies might thus offer an interesting possibility fortheorizing about IOIS evolution. Moreover, horizontalevolutionary interactions between colonies might alsoexplain our finding that the POS vendor practice sharesmore instances of structure with the wholesaling practicethan with the pharmacy practice from which it probablyoriginated. As POS vendors subsequently engaged inintense, often conflict-laden interaction with whole-salers, it is possible that ideas and norms have migratedinto the POS vendor practice, which, originally, werereproduced only in the wholesaling practice.

Another possible, and we feel promising, route consistsof reconsidering the basic unit of analysis. Porra uses thenotion of a colony that has a rich set of connotationsderived from the biologically inspired evolutionary

mechanism involved. However, it might be easier torelate her ideas to a social theory of IOIS evolution if sucha theory is built over the notion of communities ofpractice. Indeed, these two units share a number ofsimilarities and a level of conceptual compatibility, as weshow briefly in the appendix.

Potential of dialectical notions of change for a theory ofIOIS evolutionWe have selected the PSIC model as a highly elaboratedexample of a dialectical approach to theorizing IS changebut, again, this model has not been specified with IOISevolution in mind. Yet, the dialectical approach exem-plified by the specific PSIC model potentially explainsour finding of gradual opening by constructing anarrative consisting of numerous punctuations or statetransitions, driven by the build-up of tensions in the deepstructure of the sub-systems involved in the IOIS.However, a theory of IOIS evolution based on the PSICmodel as presently articulated would have to view anIOIS as a hierarchically governed system.

An alternative and possibly more promising route todeveloping a dialectical theory of IOIS evolution con-sists of conceptualizing the motor of change throughtensions between IOIS components (or practices in thelanguage of our IOIS model). The components of theIOIS would thus be seen as practices or organizations thatneed to be balanced in some way. As tensions betweenthese units build up, the need for a punctuation grows,which might even result in the emergence of a new unit.Indeed, we have found some evidence in our dataof increasing levels of tension between practices asexpressed through contradictory norms and ideas risingbefore the appearance of the new PharmX (proto-)practice. These were partly resolved after the latterbecame operational, suggesting that the several practiceswere realigned in a new balanced configuration. Rodon &Sese (2010) have explored this route for the case of anIOIS implementation project and for the post-implemen-tation phase (Rodon et al, 2011).

ConclusionsWe set out to answer the question: Are existing theoriesof IS change adequate to deal with the phenomenon ofIOIS evolution? We began by characterizing the phenom-enon of IOIS evolution as persistence and evolution.Using a theoretical framework for describing IOIS as aconstellation of practices we have evidenced persistenceand transformation of structural elements of electronicordering systems in the Australian pharmaceutical in-dustry that evolved from closed and proprietary, to quasi-open systems over a period of 30 years. We synthesizedthis case into four findings that we then used as abenchmark to evaluate two broad approaches to systemchange from the existing IS literature against our case oflong-term IOIS evolution. We found that each candidatetheory could explain several but not all of our bench-mark findings and therefore conclude that existing IS



approaches to change as presently developed can onlypartly explain the phenomenon of IOIS evolution.

We have made four contributions to the IS literature.First, we provide a method for disclosing the evolution ofIOIS in our case by coding the raw data using a theoreticalframework derived from practice theory. This makesmanifest simultaneous persistence and transformationof these systems, which we argue is constitutive of thephenomenon of system evolution. Second, based on thisframework and our empirical data, we show that openinformation infrastructures can evolve from an installedbase of proprietary closed systems. Our systematic datacoding and analytical narrative also provide detailedinsights into how this process operates. Specifically, wehave shown that, in addition to technological innova-tions, changing rationales and moral norms can openup new development paths, a result that is difficult toreconcile with traditional notions of path dependency.No other account of IOIS evolution at this level of detailcurrently exists. Third, we have investigated two impor-tant proposed change mechanisms from the IS literaturefor their ability to explain our benchmark finding aboutIOIS evolution and find them only partially adequate inthis broader context. Fourth, based on this evaluation,we have suggested routes towards developing theoreticalmodels that can explain the phenomenon of IOISevolution more comprehensively than the two theoriesthat we have evaluated.

We believe that a better understanding of IOIS evolu-tion will be of great practical importance, for example, inthe area of e-health where politicians and practitionersexpect that creation of open information infrastructureswill contribute to better services and more efficientprovision of services. However, creation of such systemsis usually viewed from the familiar perspective of ISprojects that have clearly bounded start and outcomeconditions and that can be managed according to prin-ciples of rational design and implementation. Recogniz-ing that these systems are never built from scratch(Hanseth, 2000) and that they evolve according to some,as yet, poorly understood principles seems to be a firststep towards a more effective method of achievingdesired outcomes through creation of open informationinfrastructures. The theoretical models evaluated in thispaper imply different kinds of managerial interven-tion possibilities, such as nurturing prototypes throughenvironmental isolation and screening and exploitingtensions in the deep structure of sub-systems. Thus, inorder to better anticipate which measures will be effectiveone first needs to be more confident regarding the extent

to which existing IS change models can explain thephenomenon of IOIS evolution. However, we can alreadyconclude that seemingly path dependent developmenttrajectories can open up in unexpected ways whileunderstanding and possibly managing such processesrequires a much longer time horizon than is usuallystudied by IS academics and practitioners. In addition,attention to the currently neglected ideational andnormative dimensions of systems as advocated bypractice theory seems to be essential for better under-standing and management of (IO)IS change projects.

Like all research the study has limitations. First, thedata were collected in a single industry. The chosenindustry was ideal for studying evolution of IOIS becausea significant transformation to the IOIS emerged in abottom-up way over the three-decade period covered.Second, data were collected between 2006 and 2009 andthus data collection was mainly retrospective. This wasnecessitated by the impracticality of longitudinal studiesof this time scale. Third, we used interviews as the maindata collection method. This was necessitated by theinadequacy of historical documentary sources for our taskof uncovering structures that underlie sense making inIOIS practices. Thus the limitations were mainly dictatedby the nature of the project of evidencing IOIS evolutionat time scales longer than individual projects and withoutprivileging either technological or social dimensions.

On the basis of our conclusion that the actual mech-anism of IOIS evolution is not yet fully understood,further more fine-grained empirical study of IOIS changeas it happens would be a fruitful direction for futurework. This will require methods different from those usedhere for retrospective description of the phenomenon. Inparticular, practitioner interview as a method has limita-tions for evidencing extant practices that are deeplyroutinized. On the one hand, practitioners tend to beblind to the most routine aspects of their current prac-tices, and on the other hand, what drives these practicesis often opaque to outside observers (Reimers et al, 2013).We have work in progress testing novel data collectionmethods appropriate to studying existing practices andtheir change mechanisms.

AcknowledgementsWe would like to thank three anonymous reviewers for their

engaged, thoughtful, and careful support through fiverevisions. The first and the last author would like to acknowl-

edge support by the Deutsche Forschungsgemeinschaft

(grant number 1328/2-2).

About the authors

Kai Reimers is Professor of Information Systems at RWTHAachen University, Germany. He earned a doctorate ineconomics from Wuppertal University and a venia legendi

at Bremen University. From September 1998 to August2003, he worked as a Visiting Professor at the School ofEconomics and Management, Tsinghua University, Beijing,



supported by the German Academic Exchange Service(DAAD). His main fields of research are inter-organizationalinformation systems, IT standardization, and managementof large information systems.

Robert Johnston is Professor of Information andOrganisation at University College Dublin. His mainresearch areas are electronic commerce, supply chainmanagement, inter-organisational information systems,and theoretical foundations of IS. He has 140 refereedpublications, many in leading international journals,including Information Systems Research, ManagementScience, European Journal of Information Systems, Com-munications of the ACM, International Journal of Elec-tronic Commerce, Electronic Markets, Journal of Stategic

Information Systems, and Supply Chain Management.Before becoming an academic he spent 13 years as anIT practitioner.

Stefan Klein is Professor of Interorganizational Systemsat the University of Munster. Previously, he held posi-tions at University College Dublin, Ireland; University ofKoblenz-Landau, Germany; and University St. Gallen,Switzerland. His current research areas are informationinfrastructures, network economy, information manage-ment, and the transformation of work. He studiespractices of technology use and organizational transfor-mation from an individual to an industry level. He haspublished widely and is a member of the editorial boardof several international IS journals.

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Appendix

Comparison of colonies and communities of practice(CoP)The concept of CoP was developed to describe sociallearning as a process through which novices becomecompetent members in groups that have formed around

a common interest, craft, or profession (Lave & Wenger,1991). Later, Wenger (2002, pp. 72–73) characterized aCoP by three aspects: through mutual engagement mem-bers form collaborative relationships; members continu-ally negotiate the ‘point’ of the practice, its meaning,



which is called the joint enterprise; finally, over timemembers reproduce a set of shared norms, ideas, andother resources, which provide the means on which

members draw in their day-to-day activities, called theshared repertoire. These three characteristics can bedirectly related to Porra’s (1999, 2010) definition of CS,as illustrated in Figure A1.

Porra (1999) has characterized the CS model along 10categories by contrasting it with the mechanistic andorganic metaphors that she claims dominate the organi-zational and IS literature. We draw on this list ofcategories to highlight similarities and differences be-tween the CS and the CoP models on the level of deepertheoretical assumptions (see Table A1).

Both models emphasize the importance of sharedhistory (phylogeny) while only the CS model considersits evolution. Furthermore, both models are similar withregard to the categories of ontogeny, change, structure,

Table A1 Comparison of theoretical assumptions between the two models

Category Colonial Systems Communities of Practice

Phylogeny Evolutionary history and the mechanism of prototyping

resulting in punctuation of homeostasis.

Does not include the idea of evolution. Shared history is

encapsulated in shared stories and meaning.

Ontogeny Lifetime history: this is not a characteristic of colonies but

of individual organisms.

Does not assume that CoPs have a life cycle.

Change Refers to change in stable periods; adaptation to local

changes through homeostasis.

Acknowledges the need for continual reproduction and

re-invention.

Boundaries Two types: (1) temporal boundaries defined through

past and current membership as having contributed to

evolutionary history by time spent in the colony; graded

and multi-membership possible based on time spent in

the colony; (2) spatial boundaries as defined by every-

thing that has been ‘touched’ by the colony, i.e. what is

within the reach of its members’ senses (reach).

Two types: (1) borrows the concepts of boundary object/

spanner, which refer to the boundary of the CoP; graded

and multi-membership possible; (2) regarding the practice,

the bounding concept is defined by enrolment allowing for

degrees of enrolment.

Complexity Colonies develop their own mechanisms and use these

to regulate their internal complexity. Complexity reg-

ulation relates to punctuations (bifurcations) and stable

times between these.

No specific statements on this issue.

Structure The function of structure is to preserve and to store

history.

Distinguishes between ephemeral and durable aspects;

ephemeral structure is apparent only in action, reified

meaning and history maintain durable structure.

Growth Describes how a colony becomes populous and how a

colony bifurcates.

Is not explicit on this issue.

Goals Ideals tend to remain stable as they are related to the

identity of a colony; goals can refer to shorter time scales

and are thus flexible.

Goals are continuously being renegotiated as meaning.

However, the joint enterprise is relatively immutable

because it is definitive of the practice.

Power A colony is autonomous, i.e. it defines its own goals; the

degree of influence of individual members is related to

the time spent in the colony.

The CoP defines its own enterprise and pursues it. The

notion of power is not emphasized.

Control Colonies develop complex control mechanisms to adapt

to their environment; have discretion over their impact.

Has a weak notion of environment in keeping with the anti-

dualist roots of practice theory. However, it has notions of

regulation – primarily conformity and reflection.

mutual engagement

joint enterprise

shared repertoire shared common history

common local context(being-in-the-world)

cooperation for maintenance of colony

ColonyCommunity of practice

Figure A1 Similarity of the core concepts of colony and CoP.



goals, power, and control. However, with regard tochange and control the CoP model is not explicit andour characterization here is inferred. The main differenceconcerns the emphasis that the CS model puts on changeover long time periods. This difference shows up underphylogeny, as mentioned, but also in the other threecategories just listed. Regarding boundaries, in the CSmodel a colony is bounded in a current context as well asthroughout its historical evolution so that the definitionof boundary is also time-based. Moreover, the interest ofthe CS model in evolution also shows up in its concept of

complexity: colonies have means of regulating theircomplexity (in contrast to mechanistic and organicsystems), including the possibility to bifurcate. The CoPmodel does not consider this issue. Finally, the CS modelis naturally interested in the issue of growth, which,again, comes about through bifurcations of existingcolonies, while the CoP model does not address this issue.

Thus, the CS model and the CoP model share largelysimilar theoretical assumptions and there are no contra-dictory assumptions. Therefore, it is possible to apply Porra’sanalysis to a model of IOIS as constellations of practices.



Documents

An empirical evaluation of existing IS change theories for the case of IOIS evolution