JUSTIFICATION/MOTIVATION

Enterprise application software is an integrated software package which purpose is to support most of the operations of an organization (PESSANHA, 2007). It has introduced in the market in the early 1990’s, known as Enterprise Resource Planning (ERP), as an evolution of the Material Requirement Planning (MRP) systems created two decades earlier. The enterprise application software comes to life when it is installed in the information technology environment of a firm.

The application software development organizations (software houses, SHs hereafter) are those that create the enterprise application software, and in some cases are responsible for its implementation as well. Nevertheless, in the majority of the cases, consulting companies (CCs hereafter) are those in charge of the application software implementation in the customers. The CCs are organizations or business units devoted to consulting services, activities that may involve business processes modeling (management consulting), enterprise application software implementation (implementation consulting), system development, and system maintenance services, all human capital-based activities.

In the enterprise application software business ecosystems there is a practitioners’ common assumption that the partnership between SHs and CCs is a channel type of relationship. Channel relationship is characterized by transactions governed by hierarchy (RING; VEN, 1992; WILLIAMSON, O. E., 1991) that directs the behavior of the parties involved in the relationship: SH defines what is the strategy of introducing its products and/or services to market, and recruits by contract third parties (channels) interested in performing their strategy. One might conclude, then, that innovation diffusion degree is a function of the efficiency of the governance that allows full strategy implementation. However, the relationship between SHs and CCs does not have this kind of governance; actually parties should work together in order to bring a joint value proposition (enterprise application software plus services) that fulfills market requirements or goes even beyond. In other words, they are hybrid organizations (WILLIAMSON, O. E., 1991), where the set of arrangements relies neither on markets nor on hierarchies to coordinate the relationship. This relationship can be defined as strategic alliance (GULATI, 1998), having characteristics such as complex services in which human assets play a crucial role, and which association takes advantage of brand names; also there is technology development and transfer (MÉNARD, 2002), and they are established in loosely coupled networks called business ecosystems (MOORE, 1993; PELTONIEMI, 2005; WILLIAMSON, P.; DEMEYER, 2010).

One major challenge is to reach an agreement on the content of the value proposition. Its composition is a result of technical and commercial negotiation between SHs and CCs that involves, for instance, the confrontation of technology options based on each party’s own interpretation of the market’s requirements vis-à-vis their resources and capabilities for fulfilling them. The agreement ultimately establishes the integration of resources and capabilities from both sides that conforms the value proposition, along with necessary modus operandi definition that will allow the value proposition delivery. Another challenge is precisely its delivery, where the attributes, attribute performances, and consequences arising from use of the proposed solution (software plus services) should produce planned benefits (WOODRUFF, 1997) in a timely way, i.e., obtaining the anticipated IT results on time, on budget, on performance and integrated to legacy infrastructure (BARNEY; CLARK, 2007). And, on top of that, there is the risk of opportunistic behavior, still.

SHs tend to offer innovative, state-of-the art technology. It is related to their resources and capabilities, but more important, it is part of  their corporate strategy: SHs pursue the strategy of product leadership, where “[the] critical function is the Research, Development and Engineering” (FLEURY, A. et al., 2004, p.171), focusing on the technology scale up in order to achieve greater adoption as fast as possible. On their turn, CCs are not committed to bring innovation to the market. As services companies, their corporate strategy is different from the SHs: they have a customer-oriented strategy, where sales and marketing play critical functions driving services development that optimize market’s (customers’) competitive strategy (FLEURY, A. et al., 2004; STABELL; FJELDSTAD, 1998). The lack of commitment (by strategy) to innovate is likely to difficult CCs to move towards innovation adoption (HANNAN; FREEMAN, 1984).

RESEARCH PROBLEM

The increasing adoption of enterprise applications software over the last 15 years has led the Brazilian market to a higher level of maturity on the usage and exploitation of such technology, especially among large corporations. Most recently, as a consequence of the economic development the country is experiencing, more and more medium and small companies are also joining the adopters group. This phenomenon has attracted much attention in the practitioner literature, especially about the technological trends, such as cloud computing, mobility and applications, big data analytics, and new solution generation (CARVALHO, 2011), and the challenges SHs and CCs will face for transforming trends into reality (DOVER et al., 2012). In other words, how SHs and CCs coordinate themselves in such a way that makes them capable for building (and eventually deliver) a value proposition imbedded with innovation that will meet (or even exceed) market expectations, while reduces the risk of opportunistic behavior.

The coordination SHs and CCs have to establish between them in order to bring new technologies to the enterprise application software business ecosystem in Brazil seems to be under-investigated (to our knowledge) in scholarly research. In response to this research gap, the paper will report a discovery journey into the business ecosystem in search of the coordination and incentive mechanisms between four major CCs (two global, large corporations; one global, medium company; and one local, small firm) and one global SH for new technologies introduction. We consider that it will bring starting-point information that might both provide practitioners with more substance for a broader understanding of innovation introduction that may feed their strategic planning, and open an avenue for further research on business ecosystem coordination for new technologies introduction in the software industry.

By crossing the bridge over the research gap, the reader will have a brief review of the business ecosystem literature (IANSITI; LEVIEN, 2004; IANSITI; RICHARDS, 2005; MOORE, 1993, 2006; PELTONIEMI, 2005; WILLIAMSON, P.; DEMEYER, 2010), which will set the ambience. The relationship between SHs and CCs, then, will be viewed under the lens of partnerships and alliances (DOZ et al., 2000; GULATI, 1998; MÉNARD, 2002, 2006; TODEVA; KNOKE, 2005), that allow the reader to identify governance structure (GULATI; SINGH, 1998; GULATI et al., 2009; HAMEL, 1991; MÉNARD, 2002, 2006; RING; VEN, 1992; WILLIAMSON, O. E., 1991; ZANINI, 2007) and inertia (DOZ, 1996; HANNAN; FREEMAN, 1984) characteristics in the interactions for new technologies introduction (ZHU et al., 2006).

METHODS

Research Strategy

A lack of prior theorizing about a subject makes the exploratory approach an appropriate choice. However, this approach is in general too open, making it difficult to drive problems or questions to a clarification (COLLIS; HUSSY, 2005). In turn, qualitative research is largely used for examination of and reflection on perceptions in order to reach an understanding of social and human phenomena (COLLIS; HUSSY, 2005), but “considers that the views and field practices are different due to various subjective perspectives and social environments related to them” (FLICK, 2004, p.22). We decide, then, to work on a descriptive type of research, that can at the same time narrow the focus, once makes a description of the phenomena behavior (COLLIS; HUSSY, 2005) and keeps the highest fidelity possible on data, since the researchers’ role does not disturb the target research environment.

Data Collection & Analysis

We will gather the data from publicly available information at Internet, and face-to-face, recorded interview, based on a semi-structured questionnaire containing open questions that, after transcription, will be subject to a codification, which process will be inspired by the content analysis methodology of Bardin (2007), where we will proceed with a thematic categorical content analysis, having predefined categories based on relevant literature.

DISCUSSION

Innovation generates economic development. SHs believe their innovations can contribute to economic development by making organizations more productive, better managed, more sustainable, more innovative, through the use of their software technology. CCs have the same perspective about their services. However, none of them, alone, can make their value propositions (thus their organizations) successful. The strategic alliance (GULATI, 1998) seems to be a logical, perfect link that unites complementary resources and capabilities of SHs and CCs towards a broader, combined value proposition. But ironically, the business’ very nature of the two types of organizations (products for SHs, and services for CCs) might drive to distinct business strategies (product leadership for SHs, and customer orientation for CCs). Might? What are the coordination and incentive mechanisms able to align ex ante and ex post conflicting interests so SHs and CCs can coordinate themselves for building and delivery of a joint value proposition? Is there a tipping point, for instance, where CCs embrace innovation that does not necessarily meet only customers’ perceived necessities?

EXPECTED RESULTS

This paper will identify the coordination and incentive mechanisms between SHs and CCs for new technologies introduction.

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