Journal of Scientifi c & Industri al Research Vol. 58, March - April 1999, pp 242-252

EDI Diffusion in Malaysia - Towards A Multiple Perspective Framework

Mahfuzah Kamsah Faculty of Computer Science and Information Technology, Univers ity of Malaya 59 100

Kuala Lumpur, Malays ia e-mail : mahfuz@ fsk tm. um.edu . my.

and

A T Wood-Harper Ti me Rescarch Ins titute,Salford Universi ty, M5 4WT, Greater Manchester, Un it ed Kingdom

e-mai l: A.T.Wood- l-I arper@.c ms.salford.ac .uk

EDI is a com pl ex, inter-organi sat ional in nova ti on whi ch requ ires a mul ti-theoreti cal interdi sc iplinary framework [0 examine its di ffu sion. Such a framework is pro posed taking into account multipl e theoreti cal perspecti ves for methodological and analyti ­cal pu rposes of a diffusion study. The framework has been used in a study of EDI di ffusion among firms in Malaysia. Prelimi­nary fin dings show that a coordi nati on prob lcm forms a signi ficant barri er to the adopti on of the tcchno logy.

1 Introduction

EDI implementation in M al ays ia began whe n the

Cab inet Co mmittee On Infrastructure and In vestment

made a decis ion on 24th April 1989 to imple ment an EDI syste m for customs c learance and trade fac ilitat ion in the country's ma in port. Thi s was fo ll owed immedi ­

ate ly by severa l stud ies undertaken by loca l and fo re ign consu ltant s to study the feas ib ility ofEDI implementa­

tion in the country. Proposa ls for EDI implementation

as a result of these s~u dies wc re later subm itted to the

Government and opera tional isat ion of an EDI p il o t

projec t commcnced in 1992. To oversee the EDI imple­mentati on program in Malays ia , the Government formed

th e EDl Impl e me ntati o n Coo rd in at io n Co mmittee (EDIICC). A ll prev ious E DI ini ti ati ves then came uncle r

the umbre ll a o f the E DlTCC. ln the same year, the E lec­troni c Data Inte rchange Malays ia Sdn Bhd (EDI Ma­lays ia) was formed as a commerc ia l pl atform for the

na ti ona l projec t impl e me nt a ti o n. In A ug ust 1993, Dagang-Net was establi shed to serve as a c learing house

for M alays ian EDI users and al so as a one-stop connec­

ti vity channe l. T he foc us of EDI impl ementati on in Ma laysia has

been trodefacilitation and Il on-trade./aciliw lioll ({Clivi­lies l T hese acti vities complemcnt the Government 's de­sire to e liminate impediments to trade li ke costly paper-

work and procedural red tape. Trade./acililaliol1 initi a­

ti ves to expedite cargo c learance and increase effi c iency

at the ports have led to the development o f EDI-based

systems in several government agencies. T he Port Klang Co mmuni ty System (PKCS) is the first E DI-based port

community system in M a lays ia w hich in c ludes pa rti es

such as the Port Klang Authority, Customs, exporte rs,

importe rs, forwarding agents, shippin g agents, hauling

agents, port ope rators, and banks. Since its incept ion in

PKCS, turnaround time be tween submi ss ion and c lear­

ance has been reported to be reduced by 60 to 70 per­

cent whil e informati on accuracy has im proved s igni fi­

cantl y with automated data entry validati on and the e limi­nati on of re-key ing at e ve ry station. PKCS al so covers the e lectronic submi ss ion and approva l o f import and ex port permits and va rious trade certifi cates from sev­

era l government agenc ies suc h as the M ini stry o f Inte r­national Trade and Indu stry (MITI) and the Depart ment of Vete rinary Sc ience (DVS).

The MITI-EDI programme, aimed at supporting tex­

tile ex port pe rmit process ing, establi shed an e lec troni c link between tex til e ex porters and MITT. It enables timely and accurate submi ss ion and process in g of applica ti ons

for quota a ll ocati ons, ex port permits and ex port visas for tex til e products. Process lead ti me is ex pec ted to be reduced from c ne week to one day.

KAMSAH & WOOD-HARPER EDI DIFFUSION IN MALAYSIA 243

Smart Card

R&D clusters

Figure 1- EDI as an underlyi ng technology ror Multimedia

The DVS-EDI program dea ls w ith the electronic trans­mi ss ion of app licati ons and approvals of certificate of health and Islamically slaughtered li vestock as we ll as payments and app lications for .import permits for li ve­stock and meat products. The project establi shes a sys­tem for direct communicat ion between importers, the DVS , Customs, and banks.

The trade facilitation program will see community systems mode lled afte r PKCS being imple mented at other ports and airports in Malaysia beginning with the Kuala Lumpur Internat iona l Airport at Subang. Similar EDI-based systems are also currently being des igned or implemented involving major organisations in various industries such as telecommunication, gas and petroleum, electronics, shipping, insurance, automobi le, and health2.

The non-trade fa cilitation programme inc ludes the establi shment of e lectronic fund transfer (EFT) through Ringgit-Net that provides infrastructure for handling retail transactions . Finally, in aiming to provide a com­plete portfolio of electronic services, local and interna­tional VAN services have forged strategic alliances to allow Dagang-Net subscribers to have the connectivity to participate in international electronic commerce.

Bes ides its undeniabl y crucial ro le in the develop­ment of electronic commerce in the country, EDI also serves as an underlying technology for other govern­me nt initi a ti ves w ithin Multimedia SuperCo rridor

(MSC). The MSC is a government mega project launched earl y thi s year to serve as a "testbed" for seven flagship app li ca ti ons, namely, e lectro ni c gove rnm e nt , te lemed icine, research and development c lu ster, world­wide manufacturing web, borderless marketing centre , multimed ia funds haven, and the world's mUltipurpose smart card (Figure I).

National EDI Implementation Framework To ensure the success of the pilot national EDI project,

the Government has developed an EDI implementati on framework outlining operational requirements and phys i­cal infrastructure that need to be in place before mes­sages could be exchanged by various trading partners within the EDI community' . The framework is illustrated in Figure 2

Installation of the National ED I Clearing Centre (NEDICC)

The NEDICC or Dagang-Net was installed in June 1993 and its services were offi c ially launched in Au-

244 J SCI IND RES VOL 58 MARCH - APRIL 1999

Legal Issues Establishment of National

Clearing Center Security I National EDl

Implementation Establishment of Pricing ] Framework Operating Framework

Application Development of ED I Development Standards

Service ccntc;;j for SMEs

Figure 2 - The national ED! implementation framework

gust 1993. It acts as a clearing house which provides, amongst others, two key services namely electron ic data interchange and electronic mail for its users. Dagang­Net EDI service is a business tool which helps compa­nies transmit structured commerci al documents elec­tronically, based on internationally agreed UNIEDIFACT standards. Dagang Net e-mail is an electronic mail ser­vice which allows companies send regular messages to other companies; both at home and abroad. It is inte­grated with Dagang-Net EDI services wherever possible using the same communications and data transfer pro­cedures for Dagang Net EDI connecti ons.

Dagang-Net a lso pro vides fin anc ial E DI faciliti es known as Ringgit-Net to its subscribers to fac ilitate the exchange of financ ial transac tions via EDI. Typical ap­pli cati ons include trade pay ments, payro ll payments, standing orders, trade fin ancing, and e-mail services.

Development of ED! Standa rds

The Malaysia EDIFACT Committee (MEC) of the Prime Mini ster 's Department was established to develop and promote the EDI standards. The MEC has to date developed more than twenty EDI messages for electronic customs import decl arati on submi ssions and fin ancial messages for electronic duty payments as well as the ir implementation guide lines compatibl e to th e UN/ EDI FACT standards. To fac ilitate the development of messages , the foll owing Working Groups were formed.

• Customs and Transport Working Group . • Finance and Insurance Working Group. • Education and Awareness Working Group . • Technical Assessment Work ing Group.

Establishment of Operating Framework (a) Legal

The Legal Task Force was fo rmed to investigate all legal barriers that affected the implementat ion of ED I in Malays ia. To date, the Evidence Act, Banker 's Book Ev idence Act, Penal Code, Companies Act and Customs Act were amended to facilitate EDI implementation.

(b) Security

The Dagang-Net security was implemented in-line with the recommendations of Trade fo r EDI Interchange System (TEDIS) program of the Commiss ion fo r Euro­pean Community (CEC); Bank Negara Malays ia and Association of Banks of Mal ays ia minimum security guide lines "and the Banking Industry Group of Austra­lia.

(c) Pricing

Pricing was guided by EDICC with the conditi on that the electronic charges would be cheaper or at leas t equal to the costs of the manual system.

(d) Application Development

A priority was establi shed to first implement ED 1-based Customs Informati on Sys tems and EDI-based

KAMSAH & WOOD-HARPER ED! DIFFUSION IN MALAYSIA 245

community systems at all entry points beginning with Port Klang and Subang. This is followed by the installa­tion of the EDI-Communication Server for Port Klang Computer System by EDI Malaysia, the vendor who has been given the responsibility by the Government to over­see and execute the ED! implementation in the country. As there was no EDI expertise during the initial stage of implementation, the vendor took the initiatives to de­velop the front-end applications for the clients.

(e) Educationffraining/Promotion

The EDI awareness training programmes aimed to educate the potential EDI adopters as well as the public are also being planned and executed by the responsible parties, in this case being EDI providers and ED! pro­moter agencies such as the Malaysian R?yal Customs and Excise Department. The contents of the training programmes are organised to suit the groups they are targeted for.

(f) Establishment of Customers Support Strategies

To handle problems that may arise during the imple­mentation, the vendor provides "helpdesk" and customer support services for the clients .

(g) Establishment of Service Centres

ED! shops were also established by the EDI vendor with the aim to assist small and medium enterprises (SMEs) who usually have small and infrequent transac­tions to get equal opportunity to use EDI services. For example, in order to overcome the cost problem, small traders and importers are either to consolidate among themsel ves and share the cost of hardware and software or use the EDI services offered at the EDI shops.

2 Research Motivation Even though perceived benefits from EDI implemen­

tation in Malaysia have been encouraging, the uptake of its implementation is somewhat slow]. One would ex­pect that one reason for the disappointing outcome is that the business community in Malaysia is reluctant to implement EDI systems or lack of awareness of its im­portance in improving business or lack of necessary skills to do so. Yet, this conclusion can be too hasty as so far no relevant study has ever been undertaken in Malaysia. An in-depth study is thus required to examine the diffu­sion of this complex technologies .

The adoption of EDI has been studied from the per­

spective of diffusion of innovations4, 5 which focuses

on the attributes of the technology. Recent research

has also focused on the inter-organisational nature of EDI by specifically considering the relationship between the two organisations considering EDI4.6 . As EDI adopt­ing organisations become involved in electronic trad­ing, their nature of business changes from competitive to cooperative, which, in tum, creates interdependency among them. As a result, control and coordination arises as a pressing issue in managing interdependencies among these organisations. Research in this area is still in its infancy and the nature of the problem is more complex than it appears as it involves technical, social, as well as intra- and inter-organisational aspects.

The inherent complexity and unpredictability of the inter-organisational systems poses a formidable chal­lenge to the control, planning, and resource management. In order to cooperate under such complex technologi­cal, organisational, and political circumstances, both the promoters and adopters of the EDI-based inter­organisational system need to be aware of its character­istics as well as of the needs and expectations of the other partners 7. Yet, because of their characteristics, the level of EDI use in the inter-organisational system are not only influenced by the behavior and desires of the direct participants, rather the perceptions of all the stake­holders, that is of any individual, group, organisation or institution who can affect the inter-organisational sys­tem under study need to be understoodx.

In this study, the authors seek typical EDI diffusion patterns in Malaysia and factors affecting the adoption . Building on the results of prior research by the authors on the integration of EDl to existing systems in govern­ment organisationsY" o, the study proposes a multi-theo­retical framework to examine the electronic integration among EDI adopting organisations in Malaysia. Prima­rily, the study addresses control and coordination issues in managing the diffusion of EDl innovations across organisations and the interdependency issues among these organisations . The proposed multi-theoretical framework has the two-fold purpose of describing the role of coordination mechanisms in diffusion manage­ment of EDl and to delineate the specific character of electronic integration - in relation to the functional structure of inter-organisational networks -among the networked organisations.

The rest of the paper is organised as follows. The subsequent section describes the theoretical perspectives which form a framework that will be used to study the EDI diffusion . In Section 4, the research design for the

246 J SCI IND RES VOL 58 MARCH - APRIL 1999

[ MULTIPLE PERSPECTIVE FRAMEWORK . - Stakeholder A n alysis through assumption surfacing

' technique I - Soft System s Methodology - Supporting theories

I 1 1

Technical Intra-

Perspective organ izationaJ

Perspective (T) to)

I I

·1·.· Personal

Perspective (P)

r

." ' .

1 ___ _ -l . In te r-

. Iorganizatlo I

-I

nail e I Perspectiv

I (E) 1

----l .... .

Multiple Perspective Analysis

Figure 3- A multiple perspecti ve framework and analysis

study is described emphasising the triangulation of quan­titative and qualitative methods. In Section 5, the au­thors discuss the preliminary findings of the pilot study, and finall y in Section 6, expected contributions of thi s to theory, practice, and policy making are presented.

3 Research Frameworlk

Multiple Perspective Framework An innovation is an idea, practice, or object that is

perceived as new to an ind ividual or other units of adop­ti on). Diffusion of innovati on is the process by which an innovation is communicated th rough certain chan­ne ls, over time, among the members of a society'. The innovation is naturally evolutionary in the sense that each member of the soc ial system innovates in adopti ng and adapting the communicated innovati on to the ir own set­tings .

To understand in-depth the dynamics of an informa­ti on technology (IT) diffus ion, in thi s case EDI, a mul­tiple perspec ti ve framework as advocated by Mitroff and Linstone II is proposed . The concept of multiple per pec­ti ves is intended to overcome dominati on by the techni­cal perspective (T), for the multiple perspective approach includes two other perspec ti ves namely the personal perspecti ve (P) of the indi vidu a ls in vo lv d and the organisational (0) or institutional perspective of the social system in questi on 12 . Figure 3 illustrates the above perspecti ves .

Th e environmental perspecti ve (E) is added to the diagram to depict the external perspective of the sur-

rounding environment which may directly influence the decision-making process of the organ isation. Environ­mental factors may include perceptions held by the trad­ing partners (in the case of EDI) , political, legal, cul­tural, physical , technological, and economic. Each of these perspectives is of value in that it views a system through a distinct lens and offers perceptions not en­compassed by the others . The perspecti ves represent

different knowledge interests and thu s need to be con­

s idered jointly. There are no simple rules for balanc ing the requirements of different perspecti ves because they cannot be reduced in any meaningful sense to a single perspective. Thus, in us ing multiple perspecti ves one needs to be able to apply methods that refl ect the di ffer­ent knowledge interests, to be aware of the limitations of different methods, and to use judgment to reach a baiance l l. 12

In this study, the authors intend to focus on a descrip­tion of the EDI implementation and diffusion process, g iving attention to the problems of interpreting the con­

text in which the implementati on takes p lace (an 0 per­

spec tive). Soft Systems Methodology (SSM) is one ap­proach used to mode l the context of the imp lementation process. Stakeholder Analysis addresses aspec ts of the P and E pe rspec tiv es us in g assump ti on surfac in g

technique" ' ''' The T perspecti ve is developed using tra­ditional data- and mode l-based analysis as we ll as hi s­torical data and technical reports.

The multiple perspective approach described above is supported by several underly ing theo ries. Bes ides

KAMSAH & WOOD-HARPER EDI DIFFUSION IN MALAYSIA 247

Innovation Diffusion Theory ·

oordination h~ ;ory

Inter­organizational Systems Relationship ·

Socio-Econom ic Framework

Figure 4- A multi-theoretical framework to study ED! diffusion

Rogers Innovation Diffusion Theory, other supporting theories such as the inter-organisational theory'4, the Coordination Theory '5, and the Socio-economic Framework'4 are also adopted to give direction in data collection as well as in making sense of the data (Figure 4). A brief description of each theory/framework and the justification of its use in our study are given here.

Rogers' Innovation Diffusion Theory Rogers' Innovation Diffusion Theory 16 is the closest

any researcher has come to presenting a comprehensive theory of diffusion. Based on his review, Rogers found four general concerns in diffusion research: the pro-in­novation bias, individual-blame bias, recall problem, and issues of equality. The first three are relevant to IS field where it concentrates on IT diffusion in business organisations. Pro-innovation bias is perhaps the most serious problem of diffusion research . It assumes that a n innovation should be diffused and adopted by all members of a social system; that it should be diffu sed more rapidly ; and that the innovation should neither be reinvented nor rejected. This assumption, however, is in direct contrast with IT innovations because it is not easy to describe innovations of this type as distinct, sepa­rate, and unchangeable entities. For example, in the dif­fusion of EDI technology, which is the concern of this study, the adopters of ED! mould the technology in ac­cordance with their own perceptions and needs '7"x. For this reason, Rogers' traditional diffusion theory was criticised for not being robust enough to accommodate innovations that do not possess the unchanging charac-

teristic. Further, the theory only addresses individual per­ceptions of innovation attributes which only reflect in­dividual and technical perceptions of the innovation. Lack of concern on organisational and inter­organisational perceptions of the diffusion process is considered a serious flaw of the theory. Research shows that the diffusion of innovation theory only partially ap­plies to IT and that other approaches to complement this theory should also be considered IY.

Inter-organisational System (lOS) Relationship The inter-organisational relations are affected by both

endogenous and exogenous factors. The endogenous factors such as current firm strategies, patte rn s of specialisation and division of labour, high quality stan­dards, and, not the least globalisation of trade facilitate rising interfirm transactions 14. Many exogenous factors, in particular, structural changes in industries and changes in government's policies are affecting transaction at­tributes and thereby increasing transaction costs: rela­tionship-specific investments, product attributes, demand uncertainty, and technological uncertainty20. As a result, non-contractible issues of inter-firm relations namely re­liability and trustworthiness of the partner, commitment to quality, and innovation become more salient.

Also, in the establishment of lOS, the role of media­tors is becoming more significant in the process of re­solving conflicts among the organisations. In the case of EDI adoption, where there is no single organisation influential enough to initiate e lectronic trading unilater­ally there is a need for a mechanism or institution to

248 J SCI IND RES VOL 58 MARCH - APRIL 1999

mediate between organisations, negotiating the form of ED! and coordinating its implementation21 • The nego­tiation role involved agreeing the scope of the trading network, which primarily concerns the transactions to be included, the data to be exchanged and the physical and virtual boundaries of the community.

Coordination Theory Coordination may be defined as the act of working

together harmoniously and coordination theory is the body of principles describing how thi s should be achieved with respect to how activities can be coordi­nated or actors can work together harmoniouslyl5.

There must be one or more actors, performing some activities which are directed towards some ends or goals.

. The goal-relevant relationships between the activities are interdependencies. Interdependence between activi­ties can be analysed in terms of common objects that constrain how much each activity is perfOlmed. There are several types of interdependence namely prerequi­site, shared resource, and simultaneity.

Coordination may be described in terms of succes­sively deeper levels of underlying processes22 . For in­stance, many coordination processes require that some decisions have been made and accepted by a group. Group decisions, in tum, require members of the group to communicate in some form.

Successful EDI initiatives are characterised by the strong involvement of future participants of the EDJ network, whereas in less successful initiatives the coor­dination efforts are undertaken by third-parties and not controlled by adopters2J. In cases where adopters do not come together spontaneously, industry associations prove to be very effective foundation. There are two possible explanations for this. First, if potential users control the coordination process the elements of the future EDI net­work can be adapted to llser needs much fa"ter than in a third-party development process, since in the latter case results are usually checked against user needs only af­terwards. Secondly, if organisations invest resources in the coordination process they are more likely to use the EDI network when set up.

The Socio-Economic Framework This framework developed by Klein 14, is based on

Parsons' Theory of Social-action Systems. The theory is used as a frame of reference to differen tiate the ge­neric functions of networks and to analyse the interpen­etration among them. This framework, namely the four-

function schema of action (adaptation, goal attainment, integration, and latent pattern maintenance), is used to describe the intricate relationship of network functions, and to explain developmental trends.

Inter-organisational networks are seen as constituted by four generic functions: functional differentiation, in­terpenetration, and stratification. lOS are thus interpreted as dynamic configurations of these functional domains . This approach addresses the position of networks on a systemic meso-level between institutional macro-struc­tures and the micro-level of fi rm strategies. It focuses on the internal dynamics of structural change and the redefinition of the strategy within a given network .

Klein applied his schema to inter-organisational net­works, whereby he developed his framework by illus­trating the functional properties and their interpenetra­tion that characterise networks . Organisations imple­menting EDI can be viewed as networked organisations. This study's empirical analysis will have to identify these functional interpretations in these networked organisations and in particular study interdependencies and dialectical tensions among these dimensions that may arise during the process of ED! diffusion.

4 Research Methodology The goal of the empirical work of this study is to ex­

amine the diffusion mechanisms and patterns of EDI among selected government organisations and thei r par­ticipating agencies. The proposed multi-theoretical framework guides the formulation of the study as well as provides methods for the inquiry and analysis of the empirical data. The study consists of multiple sites24

which aims at delineating typical patterns in the diffu­sion and to distill theoretical constructs that can explain the evolution of these patterns.

The study is divided into two distinc t phases, as il­lustrated in Figure 5.

Phase I is an exploratory study which was conducted at the Royal Customs and Excise Department, Depart­ment of Veterinary Services Ma~aysia and the Port Klang Authority between early February and end of March this year. Data collection involved semi-structured interviews and document rev iew. Interviews were conducted with computer managers and senior sys tems analysts in these organisations to gain insights into the organisations' EDI programs as well as problems encountered in the imple­mentation process. Iacovou et ai's EDI Adoption GuideF5

/" I I

KAMSAH & WOOD-HARPER ED! DIFFUSION IN MALAYSIA 249

-• Intermediate Work Phases Methods/Techniques/Tools

Products/Outputs "

- ~

Phase i Exploratory Study ,

Exploratory Formal and informal intervIews, document review - Case Study . Narrative case

descriptions, tentative ~ . ! Interdlsclplmary literature reVIew, research proposal r--- .. selected for relevance to the ---. . . research problems . Research

Design -Researcher' s philosophical stance

Revised Research r f--

I toward research Proposal

~ Phase ll-in-depth l Multiple Tlleoretical Framework

Case Study (Rogers Diffusion Theory) ,

~ Coordination Theory, SSM

~ --- Inter-organizational Theory .

Data ~

Sei1lJ-structured and'ui1stnlctllred . Collection --r-- interviews, direct observation,

/"" document and archival records, - V . Field notes, intervie\" reviews, survey transcripts r-. -- .Empi.-ical : Quali.tative analysis

Analvsis software . Theoretical ~hame'voikJ--- ~ ~ narrative descriptions, • . .

descriptive statistics r-. -; ~

Multiple Perspective r-- Framework, Hemeneutic

Rcp0l1 analysis, Stakeholder Report Writing-up Intention Analysis,

Innovation models, SSM

.-

Figure 5- The overall research design

was adapted to provide guide lines in constructing ques­ti onn a ires fo r co nductin g inte rv ie w s with th e organi sations. To study EDI initiati ves at the national level, interviews were conducted with the Head of IT Di vision of the Malays ian Manpower and Administra­ti on Planning Unit (M AMPU) and staff from the Secre­tariat of the Malaysia EDIFACT Committee(MEC), also at M AMPU. F inally, interv iews were also conducted with EDl prov iders in the country in order to understand the role of EDI vendors in providing fac ilities and ex­perti se in the implementati on. Where permitted, the in­terviews were taped fo r later review and transcri pti on. The analys is was developed using the transcripts and

fi eld notes by the authors, who were al so present during the interviews . The authors' intention was to understand the strategy or strategies adopted by the organisation, thereby no specific frameworks or models were used in the analys is process .

In the second phase, the study is still at an early stage. Here, the study is more foc used in nature by concentrat­ing on selected organi sations partic ipating in the Port Klang Community Systems (PKCS). The PKCS was chosen mainly because it is one of the pioneers in the ED! implementation, hence, more experienced in man­agin g the adoption of the techno logy. T he proposed

250 J SCI IND RES VOL 58 MARCH - APRIL 1999

multi-theoretical framework, as described in Section 3, has been applied to study indep'th the actual nature of EDI diffusion within and among these organisations. At the same time, roles of central agencies such as MAMPU, Treasury and training institutions have also been stud­ied. The case study will later be analysed using the Multiple Perspective Framework with the objective of gaining understanding of the EDI implementation pro­cess in Government organisations and drawing more general insights concerning top management and IS prac­titioners ' roles and perspectives, and the implications of these on practice. The insights from the multiple per­spectives which includes multilevel process analysis will be used to produce practical guidance in the form of an EDI implementation framework.

The main body of data in this phase is the recall data that has 'been elicited through formal and informal in­terviews. In this study, both moderately structured and unstructured interviews have been used. However, in the early stage of the study, the nature of the interviews was more unstructured in order to learn about the object organisation. Other modes,of collecting empirical data include direct observation; and secondary sources re­view which include repotts, archival records, newspa­per articles, minutes of various meetings during preinnovation and implementation period, and other rel­evant documents. A small survey has also been con­ducted to understand the problems faced by small and medium enterprises (SMEs) in the country covering those who already have installed EDI and those who have not.

To increase validity and reliability of the methods used, several measures have been taktfn. The multiple sources of information have been triangulated and in­consistencies have been clarified with further questions and additional sources. During the analysis of data, the initial interpretations have been presented to the sub­jects who could offer comments and corrections.

5 Preliminary Findings and Discussions

EDI is inter-organisational in nature which enables inter-organisational technology transfer between the "hub" organisation and its "spokes"2x. As such, prelimi­nary findings of the study show several prominent is­sues concerning inter-organisational relationships, in par­ticular the management of inter-organisational conflicts,

and the coordination of tasks and resources, and power among the participating organisations.

Inter-organisational conflicts may arise due to two main reasons. First, conflicts arise as a result of abuse of resources, asymmetric information, differences in expectation from the system, corporate culture of the participant, and imbalance of power between different participants6 . Secondly, conflicts may also occur when there is no single plan or vision for the future shared amongst the stakeholders. This can be partly explained by the nature of interorganisational systems which may make it impossible for certain stakeholders to be aware of the whole system. As a result, they may act against suggested plans. Also, the suggested plans may be unre­alistic as they may reflect only some views about the inter-organisational systems in question and hence fail to address aspects that may be critical for certain stake­holders.

In this study, the nature of conflicts that had stemmed most likely as a result of the first reason. Such conflicts, at the beginning of the ED! implementation, had cre­ated dissatisfaction to the participating agencies nota­bly the SMEs. For example, high cost investment in the EDI facilities and low perceived benefi ts of EDI at that time made them suspicious of the EDI promoters' cam­paigns to promote increased usage of ED!.

Poor coordination of task among the participating agencies is also recognised as one of the barriers to suc­cessful ED! implementation in thi s study. Preliminary findings showed that unclear definition of roles and re­sponsibilities has resulted in either duplicated effort of some tasks or left the tasks unattended . In one of the studied organisations, the management was more con­cerned with the deployment of authority to the branch offfices. For example, to really exploit the benefits of­fered by ED!, the decision to approve permit applica­tion has to be made closer to the applicant, i.e. , at the country's major entry points. Such devolution of power to branch officers need to be carefully rev iewed and con­stantly monitored so as to refrain abuse of power at a lower end. Coordination problems are also observed among the lead agencies (selected agencies responsible to oversee the EDI project) in terms of integrating ideas and disseminating information amongst themselves as well as to the adopters and potential adopters of ED!. Actions are currently being taken to form a framework

KAMSAH & WOOD-HARPER ED! DIFFUSION IN MALAYSIA 251

to address the issue as well as to facilitate communica­tions among the parties.

Another issue of major concern is the lack of mea­sures and studies to evaluate technical and social im­pact of EDI implementation in Malaysia and the need for close collaboration between VAN providers to for­mulate a plan to effect data sharing across the VANs' databases.

While the findings from the preliminary study are insufficient to provide insights to the diffusion problems of EDI, these do provide direction for the authors to fo­cus the second phase of the study on pertinent aspects and to look at the problems more holistically from vari­ous perspectives . At this stage, the effectiveness of the framework is yet to be fully exploited as the in-depth study is still ongoing.

6 Expected Contributions of the Study

The potential contribution of this study to theory and practice is three-fold: First, it will provide insights in the role of an organisation in the diffusion of ED!. Sec­ondly, this study will help researchers understand the relationship between the benefits organisations seek from an EDI technology and the strategy they attempt to ac­complish with the technology. Thirdly, the study will also have strong implications for Malaysian IS practi­tioners and policy-makers , whereby they can benefit from the proposed multi-theoretical framework to pro­vide them important guidelines in EDI implementations. In addition, identification of the interorganisational and inte r-functional coordination problems may create awareness of the emerging, critical role of IS practitio­ners in facilitating communication and integration be­

tween participating organisations .

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