Exploring the role of network effects in IT implementation

Abstract

This paper seeks to analyze the role of network effects in relation to the adoption and use of systems for knowledge sharing in organizations and draws on recent developments within network economics to outline a theoretical perspective on the implementation of knowledge repositories in organizations. Findings from a longitudinal field study are presented to explore the concept of network effects in more detail. Commonly associated with economics, the concept of network effects can also be used in an organizational context to study adoption dynamics and use patterns when new information and communication technologies are introduced. The analysis of the field study data shows that knowledge repositories exhibit strong network effects, which can complicate the implementation process in multiple ways. The research is based on a single, in‐depth case study. Future research should study the role of network effects in relation to other technologies and organizational contexts. It underscores the need to be aware of – and try to manage – network effects when implementing knowledge repositories and other “networked” technologies. By and large, IS researchers have overlooked the role of network effects in relation to information and communication technologies in organizations. This paper begins to address this gap by focusing on the role of network effects in the adoption and use of knowledge repositories. It is suggested that the concept of network effects provides a useful theoretical lens in a number of other cases.