Promoting E-business through Vertical Is Standards: Lessons from the Us Home Mortgage Industry

Vertical information systems standards are designed to promote communication and coordination among the organizations comprising a particular industry sector; these standards may address product identification, data definitions, business document layout, and/or business process sequences. A case study of the emergence of vertical information systems standards in the US home mortgage industry is used to provide insights into three processes: (1) the way that 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 standard. Interviews with participants involved with the Mortgage Industry Standards and Maintenance Organization (MISMO), as well as meeting observations inform the case analysis. 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, inclusive and proactive policies regarding membership, a limited scope of standardization activities, an explicit intellectual property rights policy, and efforts to institutionalize the entire standardization process into a formal structure. Implications for theory and practice are discussed, with specific attention to recommendations for policy makers regarding their potential role in the promotion of vertical IS standards development.