Making Sense of Information Technology Investment on Type of Supply Chain Governance

This study makes sense of how information technology (IT) investment supports and relates to SCG and its conceptions (transactional and relational). The authors conducted a qualitative research using exploratory case studies in two large Brazilian companies and two major suppliers. Top supply chain executives of these companies were interviewed. We found differences in how these companies invest in IT to govern their supply chain. In the first case, we identified a more relational type of governance that was mainly based on the company’s relationship with its suppliers which was driven by the desire to achieve a greater market share. Here IT investments were used to improve sales and enable operations planning projects where all systems were being integrated. In the second case, we identified transactional governance as the predominant form. This reflects the presence of a great number of suppliers, low partnership and low supply on time delivery rate. Thus, investments on e-procurement and ERP are being made to achieve more relational governance through integration with their suppliers.