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The Importance of IT-Enabled Flexibility in Alliances

March 19, 2013 | Ali Tafti, Sunil Mithas, M.S. Krishnan | Strategy

Though strategic alliances have always been important, they are arguably more critical now than ever before. In this highly digital age, organizations rely increasingly on Internet-based or computerized products and services that require the simultaneous cooperation of multiple organizations. Customer-facing applications often draw real-time information from several companies at the same time. Research and development (R&;D) collaborations often require integration of data across organizational boundaries. And inventory-management systems frequently link multiple companies in a supply chain.

The authors' research has shown that flexible IT systems can help enable successful partnerships. But the opposite — that inflexible IT systems can hinder partnerships — is true, too. And it's something about which organizations should be careful.

One key to making IT infrastructures more flexible — as Amtrak found out — is the adoption of a service-oriented architecture (SOA). Amtrak is not the only example. Lufthansa, for its part, leveraged SOA to create a common platform with Star Alliance partners, something that would have been impossible with Lufthansa's old legacy systems. Mohawk Fine Papers Inc. (MFP) used SOA to quickly form hundreds of digital business-to-business (B2B) partnerships; the SOA adoption allows pricing information from multiple suppliers to appear instantly whenever MFP clients wish to place an order.

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