Although there has been a stream of research on the benefits of electronic data interchange(EDI) systems during the last decades, possible interrelationships among those individual factors of EDI systems benefits have been largely ignored and thereby ...
Although there has been a stream of research on the benefits of electronic data interchange(EDI) systems during the last decades, possible interrelationships among those individual factors of EDI systems benefits have been largely ignored and thereby were not adequately examined. Furthermore, very few studies empirically investigated such interrelationships of EDI effectiveness factors even though a limited number of studies theoretically suggest that EDI benefits factors possibly have casual relationships each other in a hierarchical manner. In this regard, this research empirically investigates the existence of interrelationships of EDI benefit factors first, and the characteristics of their interrelationships. Finally, this research aims to develop a general casual relationships of EDI effectiveness factors. In order to identify factors constituting the effectiveness of EDI systems, this research identified a comprehensive set of items indicating EDI benefits based on the previous studies of EDI effectiveness, and collected data from the 202 companies which already experienced EDI system implementation. The result of factor analysis derived out five factors constituting the effectiveness of EDI systems: strategic advantage, time reduction in business process, accuracy improvement, cost reduction, and improvement of business process quality. A hierarchical causality model of the above five factors was derived and tested using a structural equational modeling analysis. The results indicated that the hierarchical model was generally acceptable from the diverse fitness indication, and all causal relationships among EDI effectiveness factors were found significant except the relationship between time reduction and improvement of business process qualiy factors.