Legner, Christine & Lebreton, Baptiste:

Business Interoperability Research: Present Achievements and Upcoming Challenges

Electronic Markets, 17, 3, 2007, pp. 176-186.

Introduction
Networked business models are becoming an indisputable reality in todays economy: They allow companies to offer innovative products and services (e.g. through the bundling of physical products and electronic services from different partners) and to conduct business in a more effective way (e.g. by redistributing tasks between organizations). Given the increasing need for external collaboration, firms realize that it is time-consuming and expensive to individually negotiate and set up electronic relationships with a larger number of organizations, in particular with SMEs. At the same time, they are experiencing that the manual exchange of information and the lacking electronic interoperability generates significant costs. For the sole area of concurrent product design and engineering (Brunnermeier and Martin 2002) estimate that imperfect interoperability costs the US automotive industry about $ 1 billion per year and delays the introduction of new vehicles by at least two months. As a result, firms start to consider interoperability as a competitive factor and are paying increased attention to ways for improving the interactions with their business partners. Today, interoperability is often discussed from a purely technical perspective, focusing on technical standards and IS architectures. While prior research suggests concepts for presenting, collecting, exchanging, processing and transporting data, we feel that a systematic analysis of strategic, organizational and operational issues associated with interoperability is currently lacking. The limited, but growing number of scientific publications indicates that a broader discussion related to interoperability is about to start. Recent EU-funded research activities, in particular ATHENA (Advanced Technologies for Interoperability of Heterogeneous Enterprise Networks

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and their Applications, http://www.athena-ip.org) and INTEROP (http://www.interop-noe.org), have aimed at laying the foundations of interoperability research, but still take a very technical perspective on interoperability. The goal of this introduction to the focus theme section on Business Interoperability is two-fold: First, we review prior work in order to define (business) interoperability and establish a baseline of interoperability research. We will then outline a research agenda related to business interoperability.

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Defining Business Interoperability

Although the term interoperability is often used in both the academic world and in practice, most of the publications use the term intuitively without providing a concise definition and consider interoperability as being a prerequisite to tighter integration in a distributed environment. Interoperability is often discussed in the context of technical integration related to platforms, network devices and communication protocols, as well as syntactic and semantic data formats (Peristeras and Tarabanis 2006). This is reflected by the most cited definition of interoperability by (IEEE 1990) which characterizes interoperability as the ability of two or more systems or components to exchange information and to use the information that has been exchanged (c.f. Table 1). Over the last decade, internet and web service technologies have significantly fostered interoperability at the transport and communication level (Alonso et al. 2003). But with the broader use of these technologies, a multitude of interoperability issues have to be solved at higher levels in order to allow for seamlessly integrated collaboration. Whereas many authors have underlined the need for aligning the semantics (e.g. Zhang 2004), some of them consider interoperability in the broader context of value chain integration. (Yang and Papazoglou 2000) mention business process compatibility, adaptability of business processes, leveraging legacy assets, support for business transactions and network security services as important factors driving interoperability in the context of e-commerce and integrated value chains. In this broader sense, (Legner and Wende 2006) introduce the term business interoperability which denotes the organizational and operational ability of an enterprise to cooperate with its business partners and to efficiently establish, conduct and develop IT-supported business relationships with the objective to create value. Building on the concept of networkability (Wigand 1997; Alt et al. 2000), Legner and Wendes definition covers interoperability issues which may arise at a business level, in particular multiple agreements have to be in place in order to automate interactions with external organizations (McAfee 2005; Reimers 2001). Besides the refinement of cooperation goals by contracts and service level agreements, this definition encompasses the alignment of business processes between different organizations, agreeing on the semantics, the structure and content of messages (e.g. the use of industry-specific formats) as well as the access, addressing and authentication mechanisms.

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Table 1: Definition of Interoperability

Source (IEEE 1990) LISI - Levels of Information Systems Interoperability (DoD 1998) TOGAF - The Open Group Architecture Framework (Open Group 2000) EIF - European Interoperability Framework (IDABC 2004) (Legner and Wende 2006)

Definition the ability of two or more systems or components to exchange information and to use the information that has been exchanged. the ability of systems, units, or forces to provide services to and accept services from other systems, units, or forces, and to use the services so exchanged to enable them to operate effectively together. (1) the ability of two or more systems or components to exchange and use shared information, and (2) the ability of systems to provides and receive services from other systems and to use the services so interchanged to enable them to operate effectively together the ability of information and communication technology (ICT) systems and of the business processes they support to exchange data and to enable the sharing of information and knowledge. the organizational and operational ability of an enterprise to cooperate with its business partners and to efficiently establish, conduct and develop IT-supported business relationships with the objective to create value.

In other words, while the technological interoperability research stream intends to solve the issues related to the electronic integration in heterogeneous, distributed environments, business interoperability research intends to determine how and to what extent the potential of these concepts can be reclaimed for realizing seamlessly integrated value chains. Concretely, this objective triggers the following questions: What is the value derived from an improvement of companies ability to interoperate? What are the prerequisite for achieving higher levels of interoperability within a value chain? Which agreements have to be in place between companies and which technical and organizational measures have to be taken? What is the optimum level of electronic interoperation from a firms perspective?

The scope of business interoperability having been set, we will now take a look at prior work in the field of interoperability research.

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3. Interoperability in Literature
Overview

To get a clear picture of current interoperability research, we have conducted an investigation on the diffusion of the term interoperability in academic publications. Our literature overview covers 170 academic journal publications which either contained interoperability or interoperation in their title or their key words (c.f. Table 2). Our analysis reveals that the discussion of interoperability within the scientific community started in the early 1990s with a significant increase of publications since 2004. Since the number of publications specifically dealing with businessrelated aspects of interoperability is very limited, we also include papers from relevant conferences, such as the International Conference on Interoperability for Enterprise Software and Applications (I-ESA), as well as working papers and electronic sources in the following literature review.
Table 2: Publications on Interoperability (as of May 2007) Total number of publications Year of publication 2004 - 2007 2000 - 2003 < 2000 64.5% (109) 22.4% (38) 13.5% (23) 170

Perspectives on interoperability (multiple classifications possible) Transport and communication protocols Information structure and interfaces / syntax Information content and classification / semantics Business processes and services / pragmatics Product Security Area of application / industry None / Generic Telecommunications Public sector Manufacturing Healthcare Other industries: construction, facility management, financial industries, tourism, 43.5% (74) 14.1% (24) 7.1% (12) 6.5% (11) 5.9% (10) 22.9% (39) 22.9% (39) 23.5% (40) 56.5% (96) 12.9% (22) 5.9% (10) 10.6% (18)

Source: EBSCO Online and Emerald, academic articles which contained interoperability or interoperation in key word or title

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Perspectives on Interoperability

With respect to the results of this literature analysis, we conclude that earlier research has mainly focused on the information structures and interfaces or the communication and transport level, whereas recent work introduces a broader perspective on interoperability on the one side, and increasingly addresses semantic aspects and business process compatibility on the other side. Another stream of research investigates product interoperability, in particular in those industries where complex systems are built from a larger number of components. In order to come up with a more holistic view on interoperability, a number of initiatives have tried to systemize and classify the different interoperability aspects into comprehensive interoperability frameworks, among others the e-Government Interoperability Framework (e-GIF), the Levels of Information Systems Interoperability framework (LISI) or the European Interoperability Framework (EIF). Generally, the initiators of these frameworks have been practitioners or public administrations which are pursuing the goal of standardizing across distributed organizations and avoiding technology vendor lock-in. These interoperability frameworks distinguish different layers of interoperability and describe artifacts or guidelines or standards for each of these layers. With the exception of the EIF, they distinguish the infrastructure, data / message and functions / services layer. Only the EIF introduces organizational aspects of interoperability, e.g. the definition of business goals and the modeling of business processes to enable different organizations to work together. In addition, most frameworks introduce either explicitly or implicitly an evolutionary perspective and suggest a linear advancement from lower to higher levels of interoperability. (Peristeras and Tarabanis 2006) relate existing interoperability frameworks to theoretic concepts from linguistics and semiotics and derive the Connection, Communication, Consolidation, Collaboration Interoperability Framework (C4IF) for information systems interoperability. A more holistic approach is taken by the Business Interoperability Framework suggested by (Legner and Wende 2006) who explicitly introduce organizational and management-related layers. On the basis of contingency theory, the authors argument that the maximum level of interoperability is not necessarily the optimal one and identify organizational and environmental contingencies (e.g. industry dynamics, e-business maturity) impacting this optimal level of interoperability.

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Research Contribution

Most of the existing work selects one of the perspectives which have been mentioned and either identifies the interoperability issues associated with this specific perspective or describes innovative concepts in order to solve them. Thus, the majority of the existing work can be classified as being either of exploratory or of constructivist nature. Whereas the exploratory research stream relies on case studies or surveys in order to investigate either the current state of interoperability in a specific industry or the use of interoperability solutions to improve this state, the constructivist approach proposes architectures, models and methodologies for achieving higher levels of interoperability. Reflecting the early stage of research as well as the diffusion of innovative concepts, the validation of the suggested architectures, models and methodologies is usually based on a limited empirical basis. Despite the obvious links to prior work on IOS or process and systems integration, theoretical foundation and a broader discussion of interoperability in the context of existing research is rare, the work performed by (March et al. 2000) being one of the few exceptions. Interoperability research is closely linked to the topic of standardization, since the ultimate goal of standards is to ensure interoperability and integration of different systems. However, interoperability research focuses particularly on those fields where compatibility is still low, i.e. areas with lacking or conflicting standard developments or with lacking uniform implementation of standards. This is reflected by the fact that the majority of publications explore interoperability in a limited set of industry domains, namely the public sector (e.g. Kaliontzoglou et al. 2005; Roy 2006; Guijarro 2007; Otjacques et al. 2007), health care (e.g. Egyhazy and Mukherji 2004; Eckman et al. 2007), manufacturing (e.g. Lin et al. 2004; Brunnermeier and Martin 2002) and telecommunications (e.g. Bose 2006; Moseley et al. 2004). As the adoption pace of standards has been slower than expected due to high adoption costs and the lack of network effects (Zhu et al. 2006; Jiang et al. 2006), interoperability research increasingly comes up with innovative ways of achieving compatibility on the information and process layer thus intending to minimize set up costs. (Yang and Papazoglou 2000) have been first to describe a comprehensive multi-layer architectural framework for interoperability in integrated value chains. This framework comprises a set of business components, processes and workflow applications specified for a specific "vertical" industry. The authors discuss a common business object language for describing workflows, ontologies for digital content and services as well as componentization of legacy assets. In the meantime, consensus is being reached on the critical role of open web service standards and service-oriented architectures in fostering interoperability in heterogeneous

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environments. According to the literature topics, these represent the foundation for innovative approaches to tackle interoperability issues: Information mediation is used to detect and resolve semantic heterogeneity at the information level. It is based on the idea of specifying semantic aspects (i.e., the concepts behind exchanged messages) independently from their physical representation. Ontology-based information mediation builds on an ontology specifying the conceptualization of a domain and thus creating a shared vocabulary in a community of interest. During a semantic mapping process, an actor must define a mapping derived from its native conceptual model to the ontology and vice versa. Once the semantic mapping has been performed, the actors data instances can be automatically translated (reconciled) into the representations of all the partners that have performed the same process. Information mediation concepts are further enhanced and applied to various domains. For instance, (Fodor and Werthner 2004) suggest a web services infrastructure for business-to-business integration between tourism organizations by means of an ontology-based mediation. (Madnick et al. 2003) sketch a mediation approach for semantic integration and ontology framework for the specific problem of corporate entity aggregation. (Jardim-Goncalves et al. 2006) use XMI and OWL for meta-model description of product data exchange based on STEP and its application schemas. Web services are self-contained, self-describing and modular, and they can be published, located and invoked across the web. They perform functions that can be anything from simple requests to complicated business processes. Since web services are based on open internet standards and enable flexible integration across heterogeneous technologies and platforms, their use is suggested in order to achieve cross-organizational coupling of business processes. Research has been mostly focusing on cross-organizational workflows (e.g. zur Muehlen et al. 2005). In this context, while (e.g. Zhang 2004) develops a prototype e-Procurement system using web services composition, (Liu et al. 2005) demonstrate how future B2B architectures allow the conceptualization and implementation of an interenterprise workflow-supported supply chain management system for a large Chinese motorcycle corporation.

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Impact of Interoperability

Surprisingly, very few publications have been addressing the impact of interoperability on businesses. To the knowledge of the authors, the first major analysis was performed by (NIST 1999; Brunnermeier and Martin 2002) and investigates the costs of lacking interoperability in the US automotive industry. In the report, the sequel costs of low interoperability are estimated at 1 billion dollars per year for the US industry, from the car manufacturer to the smaller third and fourth-tier suppliers. To obtain a detailed cost breakdown, NIST differentiates interoperability cost between avoidance, mitigation and delay costs which are defined as follows: Avoidance costs are the investment expenses in interoperability done to avoid future costs. Mitigation costs represent the avoidable costs through the interoperability investments in data standardization and repository. Mitigation costs encompass opportunity costs such as additional coordination efforts between partners or additional construction/destruction expenses. Delay costs occur when US manufacturers and their suppliers are not able to make their products available on a timely manner for the market and therefore forego sales and/or lose market share against non-US competitors. On the basis of this analysis (Danziger et al. 2004) make an attempt to estimate the costs of lacking interoperability in the North American automotive industry. Using a conservative estimation, the authors come to the conclusion that an inventory visibility solution adopted by the main actors in the 1st, 2nd and 3rd tier chain would achieve savings of $295 million on inventory and freight costs and savings of $198 million on the supply chain coordination process and interoperability tool maintenance. On the basis of 16 million passenger cars manufactured in the US, this would already amount for about $31 per car sold. (Gallaher et al. 2004) assess the costs of lacking interoperability in the US capital facilities industry. In their macro-economic study, the authors encompass the total life-cycle of facilities, from the design phase to the facility management phase. The scattered structure of the facility industry encompasses a network of thousands of stakeholders (among others, architects, construction companies, facility managers and service providers). The difficulty stems from the fact that each actor uses specific software and semantics to communicate and cooperate with other partners. Via an empirical study, the authors filter out the costs resulting from the inadequacies between information exchanges needs and current practices. The authors apply the same cost structure as NIST but customize the scope of delay costs to the construction industry. Delay costs occur here when the

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construction company and its suppliers have to pay compensation to the buyers or users of facilities in case of late delivery. Interestingly, the authors find out that the main victims of interoperability are not the stakeholders developing or constructing the facilities (which have already some rudimentary data exchange procedures). 60% of the total interoperability costs, 9 billion dollars (for a total $15.8 billion / year) are carried by the owners and operators of houses and commercial buildings which do not have adequate information exchange workflows and standards with the designers and constructors. Apart from the EU-funded projects ATHENA and INTEROP, case studies dealing specifically with the business aspects of interoperability are rare. (Nelson et al. 2002), for instance, investigate the impact of RosettaNet on its users in a given business relationship. They explore the relative advantage of using RosettaNet, i.e. the extent to which a potential adopting organization views the innovation as offering financial and operational benefits over previous ways of performing the same tasks. As the objective is to compute the return on investment of applying interoperable standards, this case study on RosettaNet also includes quantitative results. Their analysis shows a significant reduction of transaction costs for both manufacturer and distributor, as well as improvements in throughput and cycle time. In the context of ATHENA, several cases are depicted in (INSEAD 2006) and (Klein et al. 2007) while (INSEAD 2007) provides insights into the financial assessment of ATHENA pilot cases.
Table 3: Studies on the Economic Impact of Interoperability Case (Source) Automotive industry, product development (NIST 1999; Brunnermeier and Martin 2002) RosettaNet (Nelson et al. 2002) Interoperability issue Lack of compatibilty of CAD file formats lead to mistakes and to additional engineering work Solution proposed None, except standardization of data formats Impact assessment Lack of standardization costs 1 billion dollar per year to the US car manufacturers Managerial insights Data processing costs represent the greatest fraction of these intereoperability costs

Incompatibility of exchange formats, important setup costs for setting 1:1 relationships Lack of standardization on the exchange of inventory data preempts suppliers to set up automated connections to the inventory systems of their customers

XML-based IOS standards (e.g. RosettaNet)

Payback within less than two years for both partners (manufacturer and distributor), reduction of transaction costs and cycle time Savings of 250 million dollar per year for the three US American car manufacturers

Firms adopt XML standards when gap between old technologies and opportunities of new ones is significant A great fraction of the costs is carried by small and mediumsized suppliers. Savings on working capital costs (on inventories) represent the greatest fraction of the value created

Automotive industry, inventory management (Danziger et al. 2004)

Inventory visibility solution (connector) based on an industry standard

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Facility building (Gallaher et al. 2004)

Same as (NIST, 1999)

None, except standardization of data formats

Lack of compatibility of data formats and the unavailability of CAD files cost 15.8 billion dollar per year to the capital facilities industry > 20.000 per year for PLA

60% of the costs are carried by facility owners/operators and not by constructors and architects.

PLA/LAM (INSEAD 2006)

Lack of integration between PLAs production scheduling and LAMs procurement (exchange of unformatted excel files) 2 months lost during the recovery from breast cancer because no coordination mechanism exists

Electronic exchange of planning data

Significant network effects. PLA gets the benefits, but LAM bears the costs. Incentives alignment required Organizational improvements can already reduce transaction costs without advanced technological means. Collaborative platform required to further improve process efficiency but hampered by law Political factors may preempt the publication of processable product data although the technological issues are already solved Intraoperability plays a great role in achieving the benefits of interoperability.

Health care: Case management (INSEAD 2006)

Introduction of governance structures and processes within the decentralized network; Set up of a collaboration platform between physicians

2500 per patient cured (phase 1 without technological support)

Car configuration (Klein et al. 2007; (INSEAD 2007) Furniture manufacturers (GrandinDubost et al. 2007)

Multi-brand car dealers need to manually reenter data for each OEMs car configurator for brand-spanning comparisons Late and wrong deliveries from typing errors in the ordering process

Ontology unifying OEM-specific product model + web servicebased platform to integrate OEM car configurators Online catalogue with integrated ordering functions, improved process integration between manufacturers services

Additional revenues > 50 per car sold. Salesforce spend less time on data processing but more on acquisition Savings of 20 per order (integration and maintenance costs not included).

Based on a comprehensive review of these case studies, (INSEAD 2006) proposes an impact analysis model to quantify the value created by improved interoperability. The authors differentiate between operational (direct, quantifiable) impacts and strategic impacts. The operational assessment builds on transaction costs theory to assess the value created. The resulting interoperability impact assessment model (IIAM) identifies three different transaction cost types that are, to a greater extent, related to business interoperability: Connectivity costs, coordination costs and control costs. An application of this cost scheme is enabled thanks to the separation between day-to-day costs (execution, monitoring) and more strategic connectivity costs depending on the technical and human investments in a business relationship (see summary in Table 4). (INSEAD 2006) note that, from an operational perspective, the ex-ante / ex-post dichotomy of transaction costs does not allow a meaningful quantification of the impact of lacking interoperability.

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Table 4: Interoperability Costs Breakdown (INSEAD 2006) Transaction costs type Connectivity costs Cost driver Business relationship Definition Non-recurring costs to establish or improve a business relationship Description Interorganizational process and cultural alignment. Organizational and IT design. Software implementation costs. Integration costs Data processing costs, human interaction costs, maintenance costs, transaction fees

Coordination costs Control costs

Number of transactions Number of transactions

Recurring costs to enable and execute a transaction Costs to monitor the contractual completion of the transaction

Next to this direct and quantifiable impact, (INSEAD 2006) also identifies indirect interoperability impacts at a strategic level and uses strategic mapping concepts to structure them. Three dimensions are thus concerned by interoperability improvements at a company's boundaries: Customers, internal processes but also suppliers. Thereby, the challenge is to quantify the impact of interoperability at this level since the results depend on a wide range of factors that are not necessarily in the scope of interoperability investments.

Business Interoperability as a Research Challenge

From the review of the existing research, we identify four types of challenges that business interoperability researchers should tackle in the forthcoming years. These challenges concern (1) interoperability of integrated value networks, (2) the economic assessment of business interoperability, (3) the determination of optimal interoperability levels as well as (4) the design of internal and cross-organizational process and system architectures for interoperability.

Interoperability of Integrated Value Networks

How does interoperability in dyadic relationships interrelate with interoperability of the value network? As we have seen from existing impact assessment research, the scope of investigation either includes one actor, a dyadic relationship or the entire industry. However, integrated value chains or value networks encompassing a number of relationships between the actors have not been investigated as yet, mainly because these interorganizational relationships are complex in nature, since they involve not only the interactions between the actors but also the competitive and political environment in which the interactions are occurring. They also reflect certain organizational and technological conventions which the different actors adhere to in order to achieve interoperability. While the benefits from improving the degree of interoperability in a value chain present a compelling picture, local improvement does not automatically mean that the entire chain will

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significantly benefit from it. In addition, the benefits of interoperability may not be distributed evenly among the different actors. Even if increasing interoperability is a zero-sum or a positive-sum game, there might be instances in which implementing interoperability solutions may not be desirable for one or more partners in the value chain. Clearly, when these instances occur, external coordination mechanisms or other types of valuesharing solutions become necessary to align incentives among firms and promote the diffusion of interoperability solutions along the chain. Additional research is therefore necessary to explore how firm-level, dyadic and value chain interoperability relate. Does interoperability become a competitive factor for integrated value chains? Since competition increasingly takes place between value chains, interoperability can be considered to become a competitive factor in the future. It is obvious that some industries, e.g. the high-tech or the retail industry, have achieved higher levels of interoperability than others. However, indicators which describe the level of interoperability of an integrated value chain are still lacking. These are a prerequisite for explaining the role of interoperability and exploring whether value chains can achieve competitive advantage from being more interoperable than others.

Economic Assessment of Interoperability

How to quantify the impact of interoperability? Transaction costs theory seems to be an appropriate approach to quantify interoperability as interoperability issues are the result of the division of work and occur in the context of exchanges between economic actors. While (INSEAD 2006) has refined the definition of transaction costs to allow the quantification of interoperability improvements, empirical results confirming the pertinence of transaction costs theory for assessing interoperability investments are still missing. Next to the operational dimension, the impact of interoperability improvements on the strategic positioning of a company still remains unstructured. In this context, it would be very valuable to know whether superior interoperability levels contribute to the creation or extension of a competitive edge. Since very few strategic interoperability impact investigations have been performed apart from (Nelson et al. 2002) and to some extent (INSEAD 2007), reliable conclusions cannot be drawn on the contribution of interoperability in the achievement of a competitive advantage. What is the medium to long term impact of the suggested interoperability concepts?

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Despite the tremendous research efforts that have been spent on developing solutions to improve the interoperability of information systems, very little work has been done in analyzing to what extent firms, i.e. the real victims of interoperability gaps, would benefit from the innovative concepts that have been presented in the last 5 years. The applications that have been developed are generally presented in pilot form and thus represent an idealized form of the business problem addressed. Pilots are generally functionally tested in an isolated environment, thus leaving integration issues out of the scope. Furthermore, the published business impact assessments have been performed as an ex-ante assessment to argue for the introduction of interoperable solutions. Although the figures presented are, to some extent, high enough to catch attention and trigger a discussion concerning the implementation of these tools, the question remains whether the expected savings have been really achieved or if some unexpected costs (e.g. for integration or maintenance) have changed the rationale of the interoperability investment. Since this kind of study requires empirical observations spanning several years, reliable investigations on interoperability impacts will only be possible in the next two to three years when the first interoperability solutions have already been implemented for a significant lap of time. However, this research challenge already requires preliminary efforts in identifying now concrete implementations of interoperability-improving solutions and gathering data.

Optimal Level of Interoperability

What is the optimal level of interoperability from a firm-level perspective? Stating that firms suffer under a lack of interoperability means that business interoperability research efforts should be spent in finding out which level of interoperability a firm should strive for. As (Krschner and Thiesse 2007) already observe on a large German retailer, the optimal level of IT-supported interoperability varies between the different types of suppliers so that full interoperability does not automatically mean optimal interoperability. Logically, the first step toward improving interoperability is to define where a firm currently is and where it should be. For this purpose, interoperability frameworks (especially EIF, 2004 and Legner et al., 2006) already provide a concept to perform such kind of assessments but the determination of the target level of interoperability still remains, to a greater extent, heuristic. Which factors impact the optimal level of interoperability? Although some contingencies have been identified by (Legner and Wende 2006), the empirical validation of the links between external and internal contingencies and the level of interoperability remains one of the most

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significant business interoperability research challenges. Prior research on networked organisations and interorganisational systems provides a valuable source for identifying potential contingencies. As an example, characteristics of value chain collaboration, such as the (planned) duration of the relationship between partners (Snow et al. 1992; Sydow 1999) and their interdependence (Kumar and Van Dissel 1996) as well as the frequency and specificity of the transactions (Williamson 1998; Ciborra 1993), might impact the optimal level of interoperability.

Designing Internal and Cross-Organizational Processes and Systems for Interoperability

What are the organizational and technological measures required to reach the optimal level of interoperability? Assuming that companies have reached consensus on a desired interoperability level, decision-makers will still face the challenge of establishing interorganizational coordination mechanisms and choosing between a wide range of competing B2B integration technologies and platforms to minimize their transaction costs. Currently, the business interoperability literature has no comprehensive theoretical means explaining which interorganizational coordination and technological integration mechanisms are associated with a specific level of interoperability. Whereas the existing IOS literature has extensively studied the EDI experience (e.g. Angeles et al. 2001; Massetti and Zmud 1996; Iacovou et al. 1995), it is not clear to what extent the findings are applicable to more recent B2B integration mechanisms such as web services and semantic mediation. How do innovative interoperability concepts translate into future B2B collaboration architectures? Building on the vision of interoperability researchers, the actors within a value network will specify the set of organizational and informational conventions they adhere to by the means of shared process and information models, i.e. public processes and ontologies. The latter will be implemented and executed by a service-oriented mediation platform which supports the integration of heterogeneous information systems. Whereas the technical feasibility of these concepts has been proven, companies struggle with implementing these concepts in a productive environment as well as deciding which B2B standards and platforms they will support in the future. By developing reference architectures and methodologies, research can provide guidance to companies wishing to design their process and system architectures for meeting interoperability requirements. How to design internal process and system architectures for interoperability? In most of the interoperability cases reviewed in this article, the efforts for achieving intra-operability, i.e. seamless interoperability with the current process and system landscape left out of the scope, thus creating a bias

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in the profitability assessment of the solutions. Future research should explore to what extent lacking internal integration of processes and systems may hamper external interoperability.

Focus Theme Section

As mentioned earlier, interoperability research is at an early stage and the definitions and concepts underlying business interoperability are still under discussion. Theoretical concepts and models which are empirically validated are still highly underrepresented in the interoperability research. Interestingly, the response to the call for papers on this focus theme section reflects this early stage of research on business interoperability. Despite the great number of submissions, only one paper was accepted for publication by the reviewers. Most papers were rejected due to either a lack of theoretical foundation or insufficient validation. Unfortunately, we have not been able to accept some promising submissions for immediate publication since their research is in progress. This should be interpreted as an invitation to discover the emerging field of business interoperability and to contribute to its establishment. The paper of Petra Schubert Business Software as a Facilitator for Business Process Excellence relates to the topic of designing process and systems architectures by means of business software. The article, which is the result of an empirical investigation performed 2006 on 14 companies, shows very clearly that business software is not only a commodity in the sense of (Carr 2003) but might also become a driver for process excellence and superior corporate performance. We note from the cases that by using ERP systems companies intend to achieve seamless interoperability, referred to as with customers and suppliers in both, the primary, value-creating and the secondary, supporting processes. Besides interoperability, the intra-operability of internal units, in particular in order processing activities, is considered a major source of competitive advantage. In this context, business software appears as an instrument to achieve superior interoperability and competitive advantage, thus providing a great source of reference for further research.

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