Promoting E-Business through Vertical Information Systems Standards: Lessons from the U.S. Home Mortgage Industry

Vertical information systems (IS) standards are designed to promote communication and coordination among the organizations comprising a particular industry sector. The authors present a case study of the emergence of vertical IS standards in the U.S. home mortgage industry to provide insights into three processes: (1) the way the standardization process is structured to facilitate participation and consensus, (2) the approaches used to promote adoption of open and transparent standards, and (3) the steps taken to ensure the ongoing maintenance and integrity of the standards. Interviews with participants involved with the Mortgage Industry Standards and Maintenance Organization, as well as meeting observations inform the authors’ case analysis. The findings emphasize the importance of company and individual incentives to contribute to the process, the formal and informal governance mechanisms used to minimize conflict and develop consensus, and the inclusive and proactive policies regarding membership. Also addressed are the limited scope of standardization activities, an explicit intellectual property rights policy, and efforts to institutionalize the entire standardization process into a formal structure. Discussing implications for theory and practice, the authors pay specific attention to recommendations for policy makers regarding their potential role in the promotion of vertical IS standards development.