1 This paper was published in J.I. DeGross, I. Benbasat, G. DeSanctis and C.M. Beath (Eds.) "ICIS '91" - Proceedings of the 12th Annual International Conference on Information Systems, New York, December 16-18, 141-152. THE STRATEGIC IMPORTANCE OF INTEGRATING ELECTRONIC DATA INTERCHANGE INTO THE ORGANISATION'S SYSTEMS 1 Paula M.C. Swatman Information Systems Programme Murdoch University Perth, Western Australia and Paul A. Swatman School of Computing Curtin University of Technology Perth, Western Australia Abstract The growing importance of Electronic Data Interchange for the rapid transmission of intra- and inter-organisational communications is becoming recognised by nearly all sectors of industry. EDI itself is little more than a faster mail service. It is EDI's capacity for integration with internal application systems and organisational functions which separates EDI from other forms of electronic telecommunications - and makes EDI a truly strategic application, offering comparative advantage at the organisational, national and even international levels. This paper discusses the results of a series of case studies of Australian organisations involved with EDI, which was undertaken to determine whether integration with internal application systems can be defined as a series of comparatively standard and recurring stages. The results of the analysis indicate that while such integration does, indeed, occur in a relatively standard manner for a large class of EDI-using organisations, there are also three other classes of organisation for each of which a different model is appropriate. Although these additional classes are small in terms of the number of organisations of which they are composed, they are significant in terms of their importance and influence on industry in general and on EDI penetration in particular. Organisational EDI integration is typically achieved in a two stage manner. Initially, EDI systems are integrated with existing in-house application systems. This first phase is itself a three-step process in those organisations approaching EDI for the first time. Secondly EDI becomes an integral part of the organisational context when re-developing the functional structure within the organisation and the corresponding Information Systems plan. This second phase of integration is by no means automatic in all organisations and is only achieved in those cases where a broadly- based, strategic view of EDI is taken by top management.