An interorganizational system (IOS) is a system between organizations, or "shared information system among a group of companies." The most common form of interorganizational system is electronic data interchange, which permits instantaneous computer-to-computer transfer of information.
Overview
Interorganizational system allow the flow of information to be automated between organizations in order to reach a desired supply-chain management system, which enables the development of competitive organizations. This supports forecasting client needs and the delivery of products and services.
Interorganizational system helps to better manage buyer-supplier relationships by encompassing the full depths of tasks associated with business processes company-wide. In doing these activities, an organization is able to increase the productivity automatically; therefore, optimizing communication within all levels of an organization as well as between the organization and the supplier. For example, each T-shirt that is sold in a retail store is automatically communicated to the supplier who will, in turn, ship more T-shirts to the retailer.
Organizations might pursue an interorganizational system for the following reasons:
- Reduce the risk in the organization
- Pursue economies of scale
- Benefit from the exchange of technologies
- Increase competitiveness
- Overcome investment barriers
- Encourage global communication
An examples of interorganizational systems is the Sabre (computer system).
“ understanding of environmental uncertainty are leading to the horizontal relationships across organizations."