Relationships between internal and external information systems integration, cost and quality performance, and firm profitability

In this paper, since sufficient attention is not paid to the indirect effect, we propose to underestimate the influence of information system (IS) integration on the profitability of the manufacturing company. In this study, we used a structural formula model to examine the correlation between internal and external information system integration, quality and cost performance, and company profitability. Overall, the results of the mail survey of 263 member companies of the Institute of Supply Management supported the theoretical model. As a result, (a) there is a significant positive correlation between internal IS integration and external IS integration, (b) internal IS integration and external IS integration are significantly positively correlated between cost and quality performance , And related cost performance, (d) There is a great positive correlation between quality and cost performance and the company's profitability. However, the effect of IS integration inside and outside the company directly on the profitability of the company is not so big. Instead, this correlation is achieved through cost and quality performance. This shows that both cost and quality performance are intervention variables. In this research we will extend the literature on IS integration by gaining insight into the set of interrelations that are essential for obtaining the profitability of an enterprise from IS integration.

As the relationship between internal integration functions and trading partners and relationships with information sharing matures, companies should further notice that external integration opportunities are occurring. In order to maximize the value of these integration efforts, companies need to consider performance development and develop external integrated performance metrics to guide future improvements. This topic is as follows. As explained in the evaluation of internal integration performance earlier in this chapter, companies need to develop external performance indicators to monitor collaboration with trading partners in the eight main supply chain process areas. Ideally, in order to design these indicators to match the strategy of the entire supply chain, you need to establish a team of corporate members and some major partners.

In this paper, since sufficient attention is not paid to the indirect effect, we propose to underestimate the influence of information system (IS) integration on the profitability of the manufacturing company. In this study, we used a structural formula model to examine the correlation between internal and external information system integration, quality and cost performance, and company profitability. Overall, the results of the mail survey of 263 member companies of the Institute of Supply Management supported the theoretical model. As a result, (a) there is a significant positive correlation between internal IS integration and external IS integration, (b) internal IS integration and external IS integration are significantly positively correlated between cost and quality performance , And related cost performance, (d) quality and cost performance, and firm profitability.

Integration of internal and external information systems, relationship between cost and quality performance, and profitability of the company