How Do Suppliers Benefit from Information Technology Use in Supply Chain Relationships?1

Supply chain management systems (SCMS) championed by network leaders in their supplier networks are now ubiquitous. While prior studies have examined the benefits to network leaders from these systems, little attention has been paid to the benefits to supplier firms. This study draws from organizational theories of learning and action and transaction cost theory to propose a model relating suppliers’ use of SCMS to benefits. It proposes that two patterns of SCMS use by suppliers—exploitation and exploration—create contexts for suppliers to make relationship-specific investments in business processes and domain knowledge. These, in turn, enable suppliers to both create value and retain a portion of the value…