Direct Marketing: An International Journal

B2b inter-organisational digitalisation strategies: Towards an interaction-based

approach
Reimer Ivang, Morten Rask, Robert Hinson,
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DMIJ
3,4 B2b inter-organisational
digitalisation strategies
Towards an interaction-based approach
244
Reimer Ivang
Department of Business Studies, Aalborg University, Aalborg, Denmark
Morten Rask
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Department of Management, Aarhus School of Business,

University of Aarhus, Aarhus, Denmark, and
Robert Hinson
Department of Marketing, University of Ghana, Legon, Ghana

Abstract
Purpose – Digital technology is increasingly important for businesses as it has the capability to
enable, support and sometimes influence the overall strategic direction of the corporation. This paper
investigates business-to-business (b2b) inter-organisational digitalisation strategies in one of
Denmark’s biggest companies with an annual turnover of e3 billion and over 30,000 employees. This
paper specifically seeks to understand to what extent the widely used strategic continuum (planning –
incremental) is sufficient to understand the process of creating inter-organisational digitalisation
strategies in the case.
Design/methodology/approach – This paper utilises degree of freedom analysis (DFA). DFA is in
essence a “pattern-matching” between theoretical propositions and observations in a set of data. Inline
with the DFA tradition in-depth interviews were conducted and finally the results and interpretations
are returned to the respondents for final feedback.
Findings – This paper concludes that a strategic continuum spanning planning to interaction, where
the incremental approach is in the middle is more powerful as an analytical tool in relation to the specific
case. The case further illustrated that the actors in the empiric context utilising the digital technology
successfully mostly organised their strategic work as described in the interaction approach to
digitalisation strategy.
Practical implications – The study demonstrates a pragmatic route to deepening digitalisation
success in a large firm with considerable e-business investments.
Originality/value – Documenting the need for new thinking and theorising in the area of digitalisation
strategy. This paper opens the organisational black box relating to how strategy actually is performed
and, thus, helps to develop a more holistic understanding of how strategies are developed and
implemented. Finally, this is one of the few studies utilising DFA to understand digitalisation strategy.
Keywords Communication technologies, Corporate strategy, Large enterprises, Denmark
Paper type Research paper

Introduction
Direct Marketing: An International Identifying, implementing and using information technologies (ITs) is challenging.
Journal Research interest in IT implementation was raised decades ago and has been discussed
Vol. 3 No. 4, 2009
pp. 244-261 ever since (Bondarouk, 2006). Digital technology and the different possibilities that are
q Emerald Group Publishing Limited
1750-5933
represented by implementing the technology internal or external to companies are
DOI 10.1108/17505930911000856 constantly growing. Implementing new digital applications leads to increasing
 digitalised buyer-supplier relationships with new opportunities and threats as a result. B2b
A case in point is Ivang and Sørensen (2005) who note that electronic auctions change digitalisation
existing relationships towards a more competitive nature in spite of sellers wanting to
engage in value adding relationships. Rask and Kragh (2004) however, document that strategies
buyers do not only participate in e-marketplaces with the sole strategy of exploiting
suppliers: buyers also use e-marketplaces to find new or alternative suppliers.
The strategic management literature contains various perspectives, definitions and 245
descriptions of how to define the concept of strategy (Mintzberg et al., 2001). The concept
of strategy has become an umbrella term, covering a set of practices designed for moving
or changing a company into a new position in an existing market, to locate and penetrate
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a new market or to even better utilise digital technology. It is generally agreed that
companies, in order to stay competitive, need a strategy for utilising IT applications in
the areas of e-business. Utilising IT in relation to customers (Evans, 2001; Cagliano et al.,
2003; Birkhofer et al., 2000; Good and Schultz, 2002; Lord, 2000) is no exception.
However, the answer to, how this strategy is created and what method, will result in the
best performance is still unanswered. Therefore, we still need to understand how
companies optimally reap the long-term advantages from the investments in IT. The
e-business, IT and strategic information systems planning literature is quite clear on
how digital applications are identified, developed and implemented. However, the
proposed methods, techniques and procedures are definitely not the same, spanning
from a comprehensive planning oriented approach to a more loosely conceptualised
incremental approach. This is reflected in the general strategy literature (Mintzberg et al.,
2001; Farjoun, 2002; Pettigrew, 1987; Drejer and Printz, 2006).
Using Salmela and Spil (2002) as our basis, it is possible to identify two distinct
approaches to developing a digitalisation strategy. We define an approach, as a set of
goals, guiding principles, fundamental concepts and principles (Iivari et al., 1998). The
taxonomy developed by Salmela and Spil (2002) gives an instructive insight, and is
developed as a continuum covering two distinct approaches. The two approaches are
placed on the continuum so that at the left side, the strategic process starts with analysis,
planning and ends with action in the form of implementation. At the right side of the
continuum, the incremental approach is placed where planning is handled in shorter
cycles and thus, the information from implementation is introduced into the planning
process on a regular basis. These two distinctive approaches are well research and
developed (King, 1978; Premkumar and King, 1994; Raghunathan and King, 1988;
Sambamurthy et al., 1993; Vitale et al., 1986; Pyburn, 1983; Earl, 1993). However, in the
light of some more recent literature (Bondarouk, 2006; Holmqvist and Pessi, 2006;
Bhandari et al., 2004) we perceive a third and alternative approach may be coming to the
fore. This approach is more oriented towards improvising and interaction in the sense
that actions are the starting point and analysis is introduced as reflection in groups.
Moreover, Kanter (2002) notes the capabilities of improvising and acting without the
complete plan as some of the distinct differences between pacesetters and laggards in the
field of utilising digital technology. Kanter (2002) thus proposes that the capability of
placing action prior to, and not after analysis, is a clear indicator of success in the area of
e-business. The process of developing a digitalisation strategy for the customer (in the
supplier related area) thus, becomes an iterative process where actions in the sense of
prototypes and experiments are the bases for strategy development. The results are via
reflection converted into new actions, and thus the strategy is the result of intended and
 DMIJ emergent processes. In the light of these new developments within the area of
3,4 digitalisation strategy, we set out in this paper to answer the following two research
questions:
RQ1. What approaches are used to develop strategies for utilising digital
technology towards customers?
246 RQ2. Is the continuum spanning from planning to incremental enough to
understand the strategic practices performed in the case?
We set out to answer these research questions by means of a case study analysis of one of
Denmark’s biggest industrial companies. What we seek to do in the case discussion is to
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generate insights related to strategic digitalisation approaches and the usefulness of the
same, in their bid to serve customer audiences. The rest of this paper is set out as follows.
In the next section, there is a literature review, and in third section, the methodology
adopted for the paper is discussed. The last sections of the paper dwell on the
presentation and discussion of the study’s findings as well as the conclusions of
the paper.

Literature overview
The planning and incremental approaches to digitalisation strategy is widely used and
described. However, it is also very clear that the interaction-based approach is gaining
more and more momentum as research in the area is growing. Each of the three
approaches offers different explanations for behaviour in terms of outcome and processes:
(1) The rational planning model, posits that members of organisations will make
rational decisions that will provide maximum benefits to the firm. This approach
is typically associated with stable conditions where structures can be identified
and the future can be predicted. Predictability is the main argument for engaging
in formal procedures involving data collection and analysis (King, 1978;
Premkumar and King, 1994; Raghunathan and King, 1988).
(2) The incremental model utilises a planning terminology but acknowledges that
the future cannot always be predicted. Therefore, organisational plans must be
updated on a regular basis. Planning is, however, still possible and beneficial
(Sambamurthy et al., 1994; Ciborra, 1994).
(3) Finally, the interaction approach to strategy making shows that the future is
always in a state of flux, and thus not possible to predict. Only through actions
and the derived reflections will it be possible to understand and act in this
ever-changing environment (Venkatraman, 2000; Holmqvist and Pessi, 2006). It
must be noted that this interaction approach is not as well developed and
described in the literature as the other two approaches. This is the case in the
general strategy literature (Fuglsang and Sundbo, 2005) and also in the literature
that deals with digitalisation strategy. We therefore call for more research to fill
this gap.

Based on a literature study, a prediction matrix is developed in Table I. We draw on an

analytical framework as the conceptual basis for our case investigation. We draw
conceptually on a matrix created based on Wilson and Woodside (1999) and Wilson (2004),
and their degree of freedom analysis (DFA). DFA is in essence a “pattern-matching”
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Planning Incremental Interaction

Statement ID Indicators approach approach approach Theoretical identification

Size of plan 1a Large, complicated and highly integrated Yes No No King (1978), Premkumar and King (1994),
with overall strategy Raghunathan and King (1988)
1b Smaller and loosely integrated with No Yes No Sambamurthy et al. (1994), Ciborra (1994)
overall strategy
1c Actions, ideas and prototypes substitute No No Yes Venkatraman (2000), Holmqvist and
plans. Plan derives from action and Pessi (2006)
reflection
Approach to analysis 2a Formal, multiple analyses are used as Yes No No Earl (1988), Raghunathan and King
inputs to the planning process (1991), Bergeron et al. (1991)
2b Personal experiences and judgment are No Yes No Sambamurthy et al. (1993), Vitale et al.
used to derive plans (1986)
2c Implementation is based on analysis. No No Yes Holmqvist and Pessi (2006), Bhandari
Reflection of actions in groups substitute et al. (2004)
data collection and analysis
Planning organisation 3a Planning is based on formal Yes No No Galliers (1987), Earl (1988)
representation by many different groups
3b Planning is based on an informal network No Yes No Pyburn (1983), Vitale et al. (1986), Earl
of a few key individuals (often executives) (1993)
3c Both network and hierarchy. The No No Yes Bhandari et al. (2004)
interplay of the two is essential
Basis for decisions 4a Formal methods and criteria are the basis Yes No No Ein-Dor and Segev (1978)
for decision
4b Shared group understanding of a few key No Yes No Sambamurthy et al. (1994), Ciborra (1994)
individuals is the basis for decision
4c The results derived from experiments No No Yes Bondarouk (2006), Holmqvist and Pessi
and prototypes. Did the prototype result (2006)
in the expected value?
Plan implementation and 5a Plans are periodically reviewed to adapt Yes No No Galliers (1987)
monitoring to changed circumstances
5b Plans are continuously reviewed to adapt No Yes No Earl (1993), Vitale et al. (1986),
to changed circumstances Sambamurthy et al. (1993)
5c The result of sense-making creates the No No Yes Bondarouk (2006), Bhandari et al. (2004)
basis for the next step. Organisational
members are at the same time enabled
and constrained by others in the
organisation
digitalisation

analysis matrix
strategies

Degree of freedom
B2b

247

Table I.
 DMIJ between theoretical propositions and observations in a set of data. The researcher notes
3,4 the degree of match to the theory in terms of “hits and misses”, and thus, there is a created
link between theoretical propositions to case study data. This approach is one way of
conducting a critical test, which implies testing the relative empirical strengths of
competing theories. The heart of DFA is the development and testing of the “prediction
matrix”. The prediction matrix sets up the “pattern”, based on theory, to be either
248 confirmed or disconfirmed by the case data. The statements in the prediction matrix are
analogous to the hypotheses in the sense of traditional statistical hypothesis testing.
Below, our prediction matrix is presented.
The matrix clearly shows that the three approaches are distinct and thus very
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different. We will use these three approaches as our analytical model for understanding
the different cases. Thus, we will use it to validate if there is a need for all the three
approaches, or if two approaches (planning and incremental) are enough.

Research strategy and data collection

In order to develop an insight into how reality operates in the different business areas
(BAs) that was included in the study we actually moved our office to the company
headquarters and for a couple of month in order to meet, observe and interact with the
involved individuals within their natural context. Thus, we were for a time residing in
the reality that we were researching. The research process, however, started a couple of
month before moving offices, as we in correspondence with the DFA tradition, started
the research by familiarising with the existing knowledge base in relation to developing
and implementing inter-organisational digitalisation strategies.
So the first step in our research process was to ground the research in the extant
literature. This meant developing a prediction matrix based on different theories already
(Wilson and Wilson, 1988). The prediction matrix is constructed based on the well-known
strategic continuum already developed in the field of digitalisation strategy (Salmela and
Spil, 2002; King, 1978; Premkumar and King, 1994; Raghunathan and King, 1988;
Sambamurthy et al., 1993; Vitale et al., 1986; Pyburn, 1983; Vitale et al., 1986; Earl, 1993;
Bondarouk, 2006; Holmqvist and Pessi, 2006; Bhandari et al., 2004). The continuum is
spanning from planning, over incremental, to interaction[1]. From the literature, the three
theories include:
(1) the rational planning approach (King, 1978; Premkumar and King, 1994;
Raghunathan and King, 1988);
(2) the incremental approach (Sambamurthy et al., 1994; Ciborra, 1994); and
(3) the interaction based (Venkatraman, 2000; Holmqvist and Pessi, 2006).

The prediction matrix is developed based on five basic strategic attributes that helps
decide what digitalisation strategic approach has been used. They are:
(1) size of plan;
(2) approach to analysis);
(3) planning organisation;
(4) basis for decisions; and
(5) plan implementation and monitoring.
 Having carefully developed the predication matrix our field work started. As typical in B2b
DFA research we used personal interviews to create and document the ten different digitalisation
cases. In DFA research, the researcher must carefully design data collection forms in
order to avoid including items that favour one of the competing theories described in strategies
the predictive matrices. In this study, we have applied the following approaches:
.
availability of survey forms;
.
semi structured interviewing; and
249
.
cross interviewer data collection.

The different approaches are explained hereafter:

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(1) As noted in Wilson and Woodside (1999) objectivity and verifiability will be
improved if the actual survey form is made available for independent
examination. Therefore, we here present the basic interview guide used for the
survey. The interview guide was created on the basis of the theories used to
construct the prediction matrix. The interview guide was piloted in two
interviews and subsequently adapted. Hereafter the same interview guide was
used for all interviews.
Interview guide:
.
What is your job title? What are your work responsibilities?
.
Background information on strategic process – what was decided, how,
when and by whom?
.
Please describe, in your own words, the decision making process that you
and your colleagues experienced in developing the inter-organisational
digitalisation strategy?
.
Who else participated in the process?
. How long time did the strategy process last? When did it start/stop?
.
How did you decide on the strategy?
.
How is the strategy documented? (Can I see it) What defines a high-quality
strategy?
(2) The interviews were semi structured; similar questions were asked of each
respondent, but questions were open ended. The questions were across broad
areas of digitalisation strategic activities and as such, the interviewer could ask
for details on relevant points. In addition, documents pertaining to each case
(i.e. strategy documents, workshop summaries, go live events, etc.) were
analysed. Being semi structured, the question order and probes did not follow
exactly the same route for all interviews, because of elaborations by respondents
when answering. The questions in the interview guide were, however, covered by
all respondents.
(3) The use of one interviewer only in the collection of case data my increase the
possibility of interviewer bias. Therefore, the two interviewers conducted
multiple interviews in the same case study and then, the two compared their
mental and written material. All in all two-three interviews was conducted in
each case and a total of 27 interviews were conducted to create the case material
covering the ten different BAs of the company.
 DMIJ After the data are collected, trained judges then reviewed the information to note hits or
3,4 misses to items in the prediction matrix. This means that transcripts and archival
material were reviewed by two trained judges (the two first authors) to note the extend to
which tenets of the three approaches was supported by the data. Interview recordings,
transcripts and the final mapping was reviewed by a consultant from the company in
order to verify facts and eliminate apparent paradoxes. Finally, the results was
250 presented at a combined workshop were all BAs had the opportunity to correct if
mistakes had been made.
The above discussed different approaches secure that the validity and objectivity of
this study is high and that the created data actually reflect the reality in the different
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cases. The fact that actors from the reality under investigation were not only involved
in the phase of data collection but have been involved from the beginning through data
collection, analysis and presentation of the analysed results secures that there are
correspondence between the created data and the reality.

Data collection
As already mentioned above we used several approaches to secure validity and
objectivity in the study. Therefore, this section will focus more directly on the
particulars of the actual data collection, e.g. how many participated in the study, how
were they recruited, and the genders, ethnicities and ages of the participants.
First of all only ten of potential 15 BAs in the company participated. The reason for
this were that the remaining five BAs decided not to participate in the survey. Some of
the declining BAs were relative new and therefore had not reached any significant
sales or some had not focused on the digital area and therefore did engage in strategic
work in the field. Other was in the process of restructuring and therefore did not have
the resources to participate. Having analysed the composition of the five declining BAs
and comparing them to the ten BAs that decided to participate made it clear that this
did not represent any bias towards the survey. In other words the comparison made it
clear that the declining five BAs did not represent any extreme situation in relation to
the research focus.
In total, 27 interviews was conducted and a total of 45 respondents was involved as
respondents. The number of 45 is reached as a result of more than one respondent
being present at some of the interviews. All the respondents were employees of the
company and therefore no customers or other externals were involved in the study.
The respondents were recruited based on their involvement in utilising the digital
technology towards customers in their respective BA. This means that a total of 30
respondents were identified based on their involvement in the digitalisation strategic
process. These were typical marketing managers, sales vice presidents, web masters,
online managers and IT project managers. At the end of each interview the respondent
was shown a list of the other respondents and was asked if they had knowledge of
other respondents that were interesting for the study. This snowballing approach
(Bryman and Bell, 2008) resulted in 15 additional respondents was added to the list.
The composition of the respondents is as follows:
.
Gender: 32 participants were male and the rest (13) were female.
.
Ethnicities: in total, seven different ethnic groups participated. They were:
Denmark, UK, France, Germany, USA, The Netherlands and Italy.
 .
Age: 28 of the participants were between 40 and 50. The rest (17) were older. B2b
.
Location: they came from four locations: Denmark, Germany, Italy and The digitalisation
Netherlands. strategies
The process of data collection was conducted over a period of four month were we
resided at the company premises. The close interaction made it possible to confront the
different respondents when there was doubt in relation to analysis or understanding of 251
the created data. This close interaction further improved the validity of this study.

Research setting
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The empirical research was conducted in one of Denmark’s biggest industrial

companies. The company has over 22,000 employees and an annual turnover of above
e3 billion. The company has production in over 20 countries and sales in over 130
countries, covering all continents on the globe. The company consists of three relatively
autonomous divisions with a total of 15 BAs, of which ten are included in this study. The
ten BAs have been analysed via extensive interviews and dialogues, in order to localise
nuanced strategic approaches and successes chalked by utilisation of the same. Each
individual BA has the direct responsibility for marketing and sales. The BAs serve
customers worldwide and work as independent sales organisations. The BAs focus on
developing new products and making additions and features to original product
designs. Today, competitors are increasingly able to produce products that can
substitute the company’s products and therefore competition is intensifying.
The company is the market leader within many of the markets and is producing and
selling mechanical products used in heating, cooling and air conditioning. The company
only operates in business-to-business markets, and thus, only sells its products to other
businesses (typically original equipment manufactures who integrate these components
into sophisticated equipment that are used in a large number of different industries).
Typically, frame agreements covering one or several years are signed and the products
are supplied on a weekly or monthly basis. The products are not pure commodities, but
rather maintenance, repair and operation supplies. However, over time, the company
has experienced industry evolution and some of the products have gone from very
complex and highly unique products through a process of standardisation to be
regarded as nearly a commodity. Price is an increasingly important issue in the
communication between the buyer and the supplier. The data for this research
were collected in 2006.

Results
The analysis clearly shows that different key actors in the different cases interpret and
understand the environment as being stable and slow moving. The actors’ main
argument for this perception of the environment (markets, customer relations,
technological development, etc.) is that, the products and customer relationships have
not changed significantly in the many years that the company has been in existence.
This finding in relation to the earlier discussion on strategic approaches and the
perception of the environment indicates that the actors were using planning
approaches because the stable market conditions were understood by the actors as
predictable. However, the findings, that the matrix below documents, interestingly
shows that there is a large span of strategic approaches in the company (Table II).
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3,4

252
DMIJ

Table II.

analysis results
Degree of freedom
Statement
Plan
Approach to Planning Basis for implementation
Size of plan analysis organisation decisions and monitoring
Planning Incremental Interaction
Cases 1a 1b 1c 2a 2b 2c 3a 3b 3c 4a 4b 4c 4a 4b 4c (%) (%) (%)

1 X X X X X 100
2 X X X X X 80 20
3 X X X X X 80 20
4 X X X X X 60 40
5 X X X X X 40 60
6 X X X X X 20 80
7 X X X X X 40 60
8 X X X X X 20 80
9 X X X X X 100
10 X X X X X 100
 We find three groups of cases, namely the planning, incremental and interaction B2b
oriented cases. The findings in the above matrix illustrate the cases on the left side of digitalisation
the table and the scores related to the planning, incremental and interaction strategic
orientation on the right side of the table with the identification of the current indicators strategies
in between.
There are several interesting findings in the matrix. We will only deal with the
findings that we find the most interesting, in relation to the purpose of this paper: 253
. the hits in relation to the different strategic approaches; and
.
what approaches have been perceived as most successful by the actors in the
case?
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(1) The hits in relation to the different strategic approaches

Looking at the different hits in relation to the strategic approaches, it is clear that all
three approaches are represented in the case. However, the incremental approach is the
approach that has the highest amount of hits compared to the other two approaches.
In the cases where the incremental and the interaction approaches were used, there was a
very distinct difference between how the two are practiced. It was obvious that the actors
using the incremental approach still had a tendency to leave planning to executives, and
implementation to employees at lower ranks of the organisation. This means that
planning and implementing capabilities were split. This was not the case in the
interaction cases. These findings can be seen in several of the statements as evidenced in
statement five, where executives who were not involved in implementation had a need
for different types of monitoring and reporting processes. This need was not so
significant in the interaction cases because the executives were involved in the
implementation, and thus got first hand information.
The fact that the incremental approach is the most used approach in the case can be
explained by the fact that in reality, there will often be an element of incrementalism in
many of the situations. The incremental element is often represented because human
beings accumulate learning, and approach each situation every day with a mindset,
a recipe they have acquired from the past, which they use to understand the present in
order to design actions to cope with it (Stacey, 2003).
In the empiric reality, it was very clear that the incremental approach often took the
form of planning processes, which did not succeed as a result of the high complexity that
characterise the context of inter-organisational digitalisation. In other words, the actors
ventured into the project of defining e-business strategy with a planning mentality. But
when the planning approach clashed with the high degree of complexity that exists in
the area of utilising the digital technology in the inter-organisational area (towards
customers), the processes often had to divert to the beginning because the findings
changed the basic understandings of the strategic work. In other situations, the planning
processes were so comprehensive that the time used on data gathering and analysis was
so extensive. Therefore, the reality changed and the projects lost their relevance. As an
example, one strategic project was based on a very big customer, but in the process of
planning, the customer was bought by a competitor and the project therefore lost its
relevance.
These results impact the discussion relating to the different strategic approaches in
different ways. First, it can be surmised that there is a need to work with three different
approaches and not only two as seen in Salmela and Spil (2002). The results from this
 DMIJ analysis indicate that the incremental approach often results from planning approaches
3,4 that get derailed and have to be started all over. Therefore, one result of this could be to
cancel the incremental approach, and simply work with a continuum spanning from
planning to interaction. The research clearly shows that these two are distinctive and
very different. Therefore, they are purified and can function as distinct theoretical
categories. The incremental approach in the empiric reality receives hits, which are both
254 related to planning and interaction, therefore fulfilling the borderline between planning
and interaction. However, we call for more research in this field to determine if two or
three approaches constitute the most correct theoretical arsenal. Our research, however,
clearly shows that we get a more powerful analytical tool by adding the interaction
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approach to the strategic continuum. The analytical strategy containing

three approaches enables us to understand and explain the diversity of significant
different approaches to digitalisation strategy documented by the empirical case.

(2) What approaches have been perceived as most successful by the actors in the case?
We now discuss issues related to the success of implementing and utilising digital
technology towards customers. Looking at the empirical data, it is obvious that the cases
where the actors have understood and performed inter-organisational digitalisation
strategy as interaction and sense-making activity, has been most successful.
This confirms Kanter’s (2002) results relating to pacesetters and laggards. The
success reached by the actors using the interaction-based approaches became very
obvious when the results of our analysis were presented to the company. For many of the
actors, these presentations were the first time that they had met their colleagues from
the other BAs. When these actors met, the actors using the planning approaches were
astonished to learn how far advanced the actors using the interaction-based approaches
were, in utilising the digital technology.
From the discussions that these meetings generated, it was obvious that the
interaction-based approaches enabled the actors to progress very far with digital
technology in relation to digital tools, and applications offered to the customers. It is
important to understand that when we are discussing success with utilising digital
technology, we use the terminology success in a relative manner. So looking at the ten
different BAs, it was obvious that the actors using the interaction-based approach were
the most successful as they had the most digital tools developed and set into action with
customers. They had more visitors on their webpages and much more applications
implemented. Looking at user perception studies, it was also very significant that the
users of the digital applications were much more satisfied in the interaction-based
situations compared to the users of the two other approaches.
One reason why the interaction-based approach was the most successful was the
fact that the actors in the ten different BU’s could be put into two distinct groups:
(1) believers; and
(2) non-believers of digital technology.

By this we mean that in the cases where actors were using the interaction approach it
was obvious that these actors were believing in the digital technology, and thus these
actors were occupied with locating where and how to deploy the technology in
practice and not so much “if” and “why”. The cases that were using the planning and
incremental approaches were pre-occupied with cost/benefit analysis and return
 on investment calculations. This indicates that the actors to a higher degree were B2b
non-believers and were thus searching for arguments to convince management and digitalisation
staff of the company, to place the digital technology on the agenda and allocate
resources. This means that the believers are using the interaction approach to locate strategies
the areas where the digital technology makes the biggest impact, and they are also
extending the boundary for what is possible and thereby innovating and introducing
new tools to the customers. Therefore, the believers are constantly dealing with the 255
questions of how and where to apply the digital technology in relation to customers
and not “why” and “if” questions. The non-believers are more focused on arguing and
thus focusing on the “why” and “if” questions. Thus, they are not progressing at the
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same speed as the believers. While this means that the believers progress faster in the
beginning, it also means that they make many mistakes and that several systems and
solutions are created. The non-believers could learn from this and thus create more
effective solutions from the beginning, and thereby they have the possibility over time
to catch up and even overtake the believers.

Discussion
The research described in this paper documents the fact that several different strategic
approaches have been used, in the empirical context, to create strategies for utilising
the digital technology in the supplier-customer relationship. Furthermore, it was
documented that the interaction-based approach was the most successful compared to
the other two. If we draw attention to Perez (2002) and her insights on technological
revolutions and bubbles, it becomes obvious how the world has experienced five
different technical revolutions, with the ICT revolution as the most recent, in the last
300 years. Perez (2002) documents that the five different revolutions have progressed
over two similar consecutive periods:
(1) the early installation period, which consists of an eruption stage and a frenzy
stage; and
(2) the deployment period, which consists of a synergy stage and a maturity stage.
The two overall periods are typically separated by a downturn of crash.

Using this map as our guide, we agree with Jelassi and Enders (2006) that the current
ICT revolution is in the early synergy stage of the deployment period. The main
argument for placing the ICT revolution in this stage is the bursting of the dot.com
bubble that occurred in 2000 and early 2001. This crash is according to Perez (2002) a
typical event that indicates that the installation period is ending, and the deployment
period is beginning. The first stage of the deployment period is the synergy phase,
which is described as a period where a vast interaction process must take place among
engineers, managers, sales and service people, and obviously consumers, about how
the new technology can be utilised. The reason for this is that the world of computers,
flexible production and the internet has a different logic. Suddenly, in relation to the
new technologies, the old habits and regulations become obstacles. This means that a
new context must be created and a new “common sense” must emerge and be
propagated (Perez, 2002). It is not sufficient just to have the appropriate technology in
place. In addition, managers need to be willing and able to abandon previous ways
of doing things, and start using the new technology in such a way that it actually
creates value.
 DMIJ In relation to this paper, we ask ourselves what strategic approaches are the most
3,4 appropriate when the goal is to create new understandings and engage in processes
which will result in the emergence of a new common sense? The current research clearly
shows that the interaction approach was used, and we also found strong indicators that
this approach was the most successful. In the light of Perez (2002) and the above
description we must state that our findings correspond with the work of Perez (2002).
256 The synergy stage is a stage where a lot of experimentation has to be conducted, in order
to locate where and how the technology can be utilised. This means that there are no
clear boundaries and stable structures which can serve as bases for predictions, as the
planning literature states. Therefore, the strategic mindset must open for innovation and
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the creation of the unknown. In this context, the interaction approach is the most
appropriate and therefore there is a need for more research in this area.
We agree with Salmela and Spil’s (2002) call for more research on the interaction and
emergent approach to developing an inter-organisational digitalisation strategy, and as
noted before Fuglsang and Sundbo (2005) directly state that this approach in the general
strategy literature is not well developed. This indicates to us that there is a clear research
gap that needs to be filled with subsequent research. Thus, we are currently in a situation
where the most successful strategic approach is not sufficiently researched and
conceptualised.
Utilising the digital technology in the customer-supplier context is closely connected
to innovation and thus, this is experienced as highly unpredictable and insecure.
We propose a new strategic approach which is the interaction based approach because
strategies in very dynamic and flux situations are best implemented via interaction
(Weick, 1995). The interaction based approach is designed as an open-ended innovative
process and therefore, the actors do not have a well-defined plan to seek comfort in it.
The interaction-based approach should be understood as a process defined by a set of
value creating activities which together create the room and possibilities for strategising
to occur. We propose the following model as an overall framework for an
interaction-based approach to utilising digitalisation strategy. The model starts with
action and introduces analysis as reflection.
As shown in Figure 1, the process of developing and implementing digital solutions
via the interaction-based approach is very different from other similar innovation
models such as the “innovation funnel” (Dooley and O’sullivan, 2000) and the second and
third generation “stage-gate” (Cooper, 1994), because the process focuses on actions and
the thereof obtained interaction. The other traditional models undergo traditional
planning process with data collection, analysis, formulation and implementation.
The starting point in the model is typically an action or “chaos” as Weick et al.
(2005) describes it. The actions will work as interruptions to the existing flow of
understanding, and thus initiate reflection and sense-making. This sense-making is the
basis for individual and group based interactions which can initiate
reconceptualisation of existing meaning structures, and thus make individuals and
organisations capable of making the impossible, possible. During the reflection phase
the experiences are grouped and categorised so that the experiences of individuals are
accessible for a larger group of organisational actors (Weick et al., 2005). To aid the
reflection, this phase will often involve the use of theoretical models, concepts, external
or internal actors, etc. According to Bondarouk (2006) the spreading of the experiences
and reflections is an essential phase that distinguishes individual and organisational
 Downloaded by UNIVERSITAS TRISAKTI, User Trisakti At 00:35 30 September 2018 (PT)

Knowledge is Discussion and Common

New idea Experiment Reflection spread and common adaptation and
shared understanding decision

The created
Knowledge and
Idea is tested in Through formal knowledge is On the basis of
Ideas occur from experience
collaboration and informal discussed by the common
interaction with create basis for

Phase 1
with a customer channels is the the team understanding a
customers or reflection,
who is knowledge members from decision and
other which emerge
interested in spread and both the adaptations are
departments in as a common
participating in shared in the network and decided – shall
the company understanding
the experiment organisation the hierarchical we kill or scale
in the team
organisations

New idea or further Knowledge is Discussion and Common

development of Experiment Reflection spread and common adaptation and
existing idea shared understanding decision

Knowledge and The created

The experiment is Through formal On the basis of
experience knowledge is
to continue. A new and informal the common
The experiment is create basis for discussed by

Phase 2
team is formed and channels is the understanding
initiated and new reflection, the team
more customers, knowledge a decision and
experiences are which emerge members from
markets, spread and adaptations are
created. as a common both the network
applications are shared in the decided – shall
understanding and the hierarchical
involved organisation we kill or scale
in the team organisations

Interaction-based
digitalisation

digitalisation strategy
strategies

framework
B2b

Figure 1.
257
 DMIJ experience-based interactions. When using the experience based interaction in an
3,4 organisational setting, the exchange and spreading of the experiences is an essential
task as these experiences can act as interruptions, and this initiates the sense-making
which is so essential. The exchange and spreading of experiences include many
different formal and informal activities as conversations, meetings, presentations, etc.
It is in this phase that the experiences through conversations start to exist and thereby
258 the basis for future actions is created (Taylor and Every, 2000).
The creation of a common understanding involves a common acceptance and respect
for different ideas, conceptions and understandings. The goal is not to agree on one single
“correct” understanding, but to a higher degree, to see it as an exchange of different
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meanings of how the digital technology can be used in a customer-supplier relationship.

It is sense-making activities which all the actors through conversation articulate their
experiences, understandings, interpretations and reflections. If there exists a big
disagreement in this phase it is often a good idea to redo the experiment in a new setting.
In the last phase the “now what” (Weick et al., 2005) question is asked. Should the
experiment continue or should it be discarded. The process as it is described above should
not be regarded as a linear process but much more as an iterative and cyclic process.

Conclusion
This study investigates what strategic approaches are used to develop strategies for
utilising the digital technology towards customers, and more in detail, if the well-known
strategic continuum spanning from planning to incremental can explain the strategic
practices in the case. The study completes prior efforts by examining the viability of a
third strategic approach in the context of developing an inter-organisational
digitalisation strategy. We find that the interaction-based approach is the most
optimal strategic approach to be used in the context of inter-organisational digitalisation
strategy, since the approach is based on practices which can handle the challenges of
complexity and inconsistency. This is the main reason why there is evidence in the cases
which show that the interaction approaches have been the most successful. This leads us
to conclude that based on the current study, the most optimal strategic approaches for
developing inter-organisational digitalisation strategies is the interaction approaches.
Our interaction-based approach is an extension of the classical digitalisation
strategic discussion, which only discusses a continuum that spans from planning to
incremental approaches (Salmela and Spil, 2002). The works most closely related to
ours are the ongoing discussions in the general strategic literature (Mintzberg et al.,
2001; Farjoun, 2002; Pettigrew, 1987; Drejer and Printz, 2006) where different
approaches to strategy are identified and explained. It, however, does not seem that
this discussion is not reflected in the literature that related to the development of
strategies for utilisation of the digital technology. From a practice standpoint, we
believe that the interaction-based approach represents one of the most pragmatic
approaches in digitalisation strategy development, for firms operating in both
developed and developing countries’ contexts. We however call for more research
within this area to complete the digitalisation strategic gap. Especially, in relation to
elaborate the findings on how strategies are developed and implemented in other
empirical settings. The managerial implication of the interaction approach
demonstrates a pragmatic route to deepening digitalisation success in large firms
with considerable e-business investments.
 Note B2b
1. We have decided to call it for the interaction based strategic approach. This we have done digitalisation
because the actors in the case that perform this strategic approach are grounding their
strategic work very muck in the interaction with the external world. This means that strategies
developing and implementing strategy is combined in the same basic set of actions. There is
no formal planning but very much interaction. In the literature the approach is also called
learning (Mintzberg et al., 2001) and strategizing (Weick, 1995). 259

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Corresponding author
Reimer Ivang can be contacted at: ivang@business.aau.dk

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