The use of information and communication technologies is seen to support the innovation process in FM services (Nardelli, Scupola 2013). Companies that improve their traditional business processes, and invent and implement new combinations of virtual and physical activities through e-business, will be the most successful (Phan 2003). E-business decreases costs, but improved customer services are seen as a primary reason for e-business development (Rodgers, Yen et al. 2002). Binding together internal and external systems is a significant challenge for most organisations (Barua, Konana et al. 2001).
E-business is defined as an upper concept of a business that runs via the internet. ‘E-business is a dynamic set of technologies, applications and ‘E-business processes that link companies, customers and communities through the electronic exchange of goods, services, transactions and information’ (Chen, Ching 2002, Abu-Musa 2004, Kalakota, Robinson 2001). In FM services, the internet enables the creation of new methods of procurement and contracting, new forms of collaborative working and develops new kind of relationships with clients (Finch 2000).
E-business increases the constancy of customership, which produces profitability and operational efficiency for the service provider (Schultze 2003). The contents of e-business are crucial for providing good services and increasing the usability of e-business and the added value that business will create. Valucreating for the customer through e-business depends on how e-e-business helps to complete job tasks and enhance
employees’ own and their company’s performance (Lai, Chen 2009, Bettua 1999). A fluent information flow and information integration are the foundations for combining virtual and physical activities.
Information integration is the sharing of essential data or information between the parties involved in production (Lee, Whang 2000). As mentioned above, information integration is the foundation of integration and it becomes emphasised in the service sector (Lee 2000).
In the service sector, the supply chain (SC) centres on flows of information as well as the relationship between service provider and customer. The special characteristic of service sector SC is that the SC is bidirectional. In other words, a customer, apart from being a customer, is also one of the parties of the SC as well as a provider of input into the service process (Sampson 2000).
There are six aspects that have to be taken into consideration when developing information integration in the SC: processes and activities, information technology, information attributes, information sharing practices, collaborative foundation, and time-related aspects of integration (Uusipaavalniemi 2009).
Processes and activities implies integration of inter-party processes as well as information sharing between processes (Uusipaavalniemi 2009). Processes focus on the
inter-organisational processes rather than the functional units and departments of one organisation (Trkman, Stemberger et al. 2007).
Information technology means data systems and their integration, whereas information attributes denotes the characteristics of the information shared in an SC, such as information form, quality and availability. Information sharing practices are the functions which have to be put into action so that information sharing in SC becomes efficient.
Information sharing practices encompass the extent of information sharing practices as well as the frequency of interaction (Uusipaavalniemi 2009).
The use of information technologies (IT) increases efficiency and has a positive impact on innovation in FM services (De Jong, J. P. J., Bruins et al. 2003) by facilitating and
improving the business processes that are intended to produce innovation (Nardelli, Scupola et al. 2014).
Collaborative foundation encompasses the level of partnership as well as present
practices that increase cooperation and SC integration. It includes common goals, shared resources, confidence, commitment and performance measurement. The parties should engage to set goals together and make a plan for cooperation to achieve collaboration.
Time-related issues imply speed and timeliness in information sharing. This encompasses the timing of information sharing and information lead time (Uusipaavalniemi
2009).Supplier development by the customer
Supplier development was first used to explain manufacturers’ determination to enhance supplier’s numbers and to improve their performance (Leenders 1966). Krause’s research on supplier development states and explains the actions that come before the supplier development concept takes place, called ‘antecedents’ (Krause 1999). He identifies that:
organisations need to manage their suppliers strategically for the competitive market,
buying firms need to take a strategic viewpoint for suppliers, consider the purchasing function as a significant source of competitive advantage, and make investments in the development of suppliers’ performance and capabilities,
to increase supplier commitments, buying firms need to consider their suppliers as virtual extensions that help to motivate them to improve their performance,
the relationship between a buyer and their suppliers identifies the opportunity to invest in supplier development programmes,
communication and information sharing between the buyer and their suppliers is an important prerequisite for supplier development activities (Krause, 1999).
‘Suppliers’ have become a substantial party who are not only suppliers of goods these days – they have become strategic partners for the firm which represents the importance of their role in the value chain (Kwon, Joo et al. 2010). Supplier relationship management, or the buyer-supplier relationship, in a global supply environment refers to the concept of a management network that involves different skills and knowledge in a field and enhances the possibility of performance (Lintukangas 2011). Therefore, the relationship between buyer and supplier represents a pivotal prospect for firms to develop strategically global competitive advantage. These relationships have developed to the level of a strategic partnership relationship in a rather competitive way. (Loppacher, Cagliano et al. 2011).
Previous studies have stated that buying firms can communicate more efficiently with suppliers if they invest in supplier development including supplier evaluation, supplier training, and supplier reward programmes (Krause, Ellram 1997). Furthermore, they will communicate better if they perceive their suppliers as partners and place greater emphasis on a few serious issues (Krause, Ellram 1997). A buying firm’s tendency to engage in supplier development is affected by its perception of supplier obligation, its expectation of relationship endurance, and functional buyer-supplier communication (Krause 1999).
Partnership is understood as a bidirectional relationship that brings benefit to both parties and where both parties are committed to developing and maintaining it in a long-lasting way (Ellram 1995). A long-lasting partnership and its development is particularly
emphasised in the service business, because the consumption of a service is part of the service process and not its output, as is the case with products (Grönroos, Ojasalo 2015).
A partnership helps companies to minimise transaction costs, survive in an unsure market, decrease dependence on uncontrolled resources, reposition the company successfully in a dynamic market, share fixed costs, improve their core business, acquire access to
complementary competence, and increase the entry speed to market (Ireland, Hitt et al.
2002, Nooteboom, Berger et al. 1997).
Jylhä and Junnila have found six factors as to why the level of partnership is low in FM services. These factors are: sub-processes are optimised instead of the entire process being optimised, prices are minimised instead of costs, the process does not respond to customer values, employees are constantly overloaded, there is an inability to make improvements, and information is poorly managed (Jylhä, Junnila 2014a).
In service actions, the customer and the FM service provider are in interaction with each other and that has a big impact when the customer forms an opinion on service quality (Zeithaml, Berry et al. 1996). FM services are intangible and they are created when the customer uses them; that is why the service provider cannot promise the kind of service the customer will get (Grönroos 2000).
Suppliers have an important significance to their customer’s business and the customer’s direct involvement in the development of supplier performance is a key feature in
improving and developing quality (Krause 1999). In the service business, quality is estimated by how much value the service brings to the customer. That is why the service process as a whole must be studied rather than sub-processes, and why it should focus on decreasing costs without reducing value production to customers (Jylhä, Junnila 2014a).