The use of interorganizational information systems (IOS) that transcend company boundaries can change the balance of power in buyer-supplier relationships and provide entry and exit barriers in some industry segments. AnIOS is an automated information system used by 2 or more separate companies. IOSs are being implemented because of the need for fast, reliable information interchange. The airline reservation system is an example of an IOS that is shared by intra-industry rivals. However, many types of organizations can make use of IOSs to improve their service to customers and gain a competitive edge over their rivals. IOSs will also affect the organization's internal structure. At the same time, the social and public policy issues brought up by IOSs will have to be addressed to avoid unfair business practices. Premature regulation should be avoided because it will curb innovation and discourage risk taking.
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