Title: Assessing the relationships among information systems integration, coordination cost improvements, and firm profitability
Authors: Adam S. Maiga
Addresses: Department of Accounting and Finance, D. Abbott Turner College of Business, Columbus State University, 4225 University Avenue, Columbus, GA, USA
Abstract: This paper used a survey questionnaire approach to obtain results about the roles of bonding cost improvement, internal monitoring cost improvement and external transaction cost improvement in mediating the impacts of internal and external information systems (IS) integration on firm profitability. Results indicate that internal IS integration is significantly associated with external IS integration. Both bonding and internal monitoring cost improvements are significantly impacted by internal IS integration, while external transaction cost improvement is impacted by external IS integration. All three cost improvements are significantly associated with firm profitability. The effect of internal IS integration on firm profitability is mediated through both bonding and internal monitoring cost improvements. Similarly, the effect of external IS integration on firm profitability is mediated through external transaction cost improvement. Furthermore, the link between internal IS integration and profitability is mediated through external IS integration and external transaction cost improvement.
Keywords: information systems integration; internal coordination costs; external coordination costs; firm profitability; cost improvements.
International Journal of Business Information Systems, 2017 Vol.25 No.1, pp.88 - 117
Received: 30 Jun 2015
Accepted: 25 Oct 2015
Published online: 16 Mar 2017 *