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The Internet provides the backbone for high-speed communication, collaboration, and commerce. Originally designed in 1969 for the Department of Defense, the Internet now is a network of computer networks used by individuals and organizations to communicate information and process transactions. Prior to the wide acceptance of the Internet, one of the first types of IOISs to emerge was Electronic Data Interchange (EDI). EDI systems offered a link between two companies for the hands-off transmission of data in a fixed text-based format without the use of the Internet. As the Internet evolved, it facilitated the establishment of virtual spaces for information storage and new ways to link objects together.
As the Internet grew, individuals and firms began to create public Web sites for sharing information. While these types of Web sites do not technically fall under the umbrella of an IOIS, they can be used to provide data to current and potential business partners as well as customers. As the general public is most familiar with these types of Web spaces, these spaces will serve as a starting point for comparison and are included in this chapter. Another recent type of Web-based system is the intranet. The purpose of an intranet is to share company information with and between employees. These systems are Web sites typically created on a private local or wide area network and maintained wholly within the organization. As intranets can utilize the same Web technology as do IOISs, they also are described herein for comparison.
While the Internet handles proprietary and public information, a large share of e-commerce is accomplished using Web-based systems. Public Web sites, intranets, and several forms of IOISs use Web technology. Johnston and Vitale (1998) defined an IOIS:
…an automated information system shared by two or more companies. An IOIS is built around information technology, that is, around computer and communication technology, that facilitates creation, storage, transformation and transmission of information. An IOIS differs from an internal distributed information system by allowing information to be sent across organizational boundaries (p.154).
Using Web-based technology, IOISs incorporate Web browsers, graphical interfaces, and databases. The technology to build an IOIS is relatively inexpensive and well established. Except for security issues, such as encryption and authentication, the technology is readily available for large and small organizations. An extranet is an emerging form of IOIS that is expected to surpass EDI in e-commerce volume. An extranet exists when a company offers password- protected, limited access to a portion of its intranet to selective exchange partners outside the company’s firewall (see Figure 1). The purpose of an extranet is to provide external communications, document exchange, and even collaborative design (Lange, 1996). It offers graphical user interface tools, greater communication functionality, low technical requirements, and relatively low adoption costs in comparison to EDI. The extranet allows companies to communicate in free-form text, graphics, sound, video, as well as standard EDI format. The term “intronet” has also been used to describe this type of IOIS (Riggins & Rhee, 1998).
Figure 1: Security structure
In contrast, a B2B virtual market, also know as a “supranet,” represents a consortium sponsored and controlled network that provides seamless communication across applications (Riggins & Rhee, 1998). This network provides for collaboration and transaction processing between market members (Applegate, Austin, & McFarlan, 2002). The distinction between extranets and the B2B virtual market is significant, and therefore, each appears separately in the typology that follows. In all, these vastly different types of IOISs (EDI, extranets, and B2B virtual markets) merit researcher interest, as they are poised to reshape our business world in the Internet age.
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