Daniel Nylén

Jonny Holmström

From Forestry Machines to Sociotechnical Hybrids: Investigating the Use of Digitally Enabled Forestry Machines

Keywords: Open innovation, value constellations, materiality, forestry industry 1

Most forestry machines being produced today include a personal computer that monitors and controls the harvester head, and an information system that stores data on every action the driver or the machine performs. Information and communication technologies (ICTs) thus provide an opportunity to improve efficiency and competitiveness and possibly also opens up new ways of working for actors in the forestry industry. The purpose of this study is to investigate how ICT can enable the transformation from selling products to selling services in the forestry industry. We investigate such transformation through conducting a case study including a number of actors from the forestry industry in northern Sweden. First, we investigate the barriers for establishing an open innovation system in forestry. Then we describe how the use of ICTs can enable the establishment of such a system. The case study shows that the forestry industry as a whole is dominated by the salient traditional value chain where the raw materials are refined to paper products and that many of the actors are committed to a closed innovation paradigm. We argue that the ICT component in forestry machines constitutes a latent potential that can be fully captured in the context of an open innovation system.

Introduction

Information and communication technologies (ICTs) enjoy a pervasive role in most societal contexts. In the past few decades, ICTs have come to play a major role in traditional industry settings [START_REF] Jonsson | Technologies for Value Creation: An Exploration of the Remote Diagnostics Challenge in Ubiquitous Computing Environments[END_REF][START_REF] Holmström | Industrial Informatics: Design, Use and Innovation[END_REF][START_REF] Zuboff | In the Age of the Smart Machine: The Future of Work and Power[END_REF]. The forestry industry is no exception as it has become a high-tech industry in recent years. The mechanization of forestry in Sweden started in the 1960s, when woodsmen using chainsaws and log-driving and transports by horse were gradually replaced by tractors and lorries. During this decade, productivity increased drasti-cally while the number of forestry workers was reduced by half. The first fully mechanical forestry machines were imported from Canada, the United States, and Russia and, in 1970, six percent of the timber was logged with forestry machines. This figure grew during that decade and was as high as 65 percent by 1980. During the 1990s, production was transformed from being of a bulk-character to being customer-oriented.

Continuous technical development has resulted in the harvesters and forwarders of today. Most machines today include a personal computer that monitors and controls the harvester head (the device in which the chainsaw is mounted) and an information system that stores data on almost every action the driver or the machine performs. ICT thus provides an opportunity to improve efficiency and competetiveness, and possibly opportunities for new ways of working. To this end, the use of ICTs in the forestry industry reflects patterns of usage found in other settings where ICTs have enabled the transformation of organizational collaboration [START_REF] Holmström | Communicating and Coordinating: Occasions for Information Technology in Loosely Coupled Organizations[END_REF][START_REF] Leonardi | Crossing the Implementation Line: The Mutual Constitution of Technology and Organizing Across Development and Use Activities[END_REF][START_REF] Leonardi | What=s Under Construction Here? Social Action, Materiality, and Power in Constructivist Studies of Technology and Organizing[END_REF], the transformation of business models [START_REF] Jonsson | Technologies for Value Creation: An Exploration of the Remote Diagnostics Challenge in Ubiquitous Computing Environments[END_REF], or flattening of organizational hierarchies to an open innovation ideal [START_REF] Westergren | Outsourcing as Open Innovation: Exploring Preconditions for the Open Innovation Model in the Process Industry[END_REF].

While previous research has emphasized the mediating role of ICTs across multiple organizational contexts [START_REF] Boudreau | Enacting Integrated Information Technology: A Human Agency Perspective[END_REF][START_REF] Rolland | Balancing the Local and the Global in Infrastructural Information Systems[END_REF], few empirical studies have demonstrated how ICT establish links between previously independent contexts [START_REF] Vaast | Trans-Situated Learning: Supporting a Network of Practice with an Information Infrastructure[END_REF], thereby allowing for more distributed work practices [START_REF] Pollock | Post Local Forms of Repair: The Case of Virtualised Technical Support[END_REF]). Our study is inspired by these recent accounts, yet our empirical and analytical basis is different. The purpose of this study is to investigate how ICTs can enable the transformation from selling products to selling services in the forestry industry. Given the ways in which firms in the forestry industry are embedded in a wider innovation system, the analysis is guided by the following research question: How can the use of ICTs enable the establishment of open innovation systems in the forestry industry?

We use the open innovation lens in pursuing the research question. In the open innovation paradigm, firms do not try to protect their innovation processes to the same extent as in the closed innovation paradigm. Firms bring in knowledge from the research of other firms and share their own knowledge with other firms. This can be done through joint ventures, spin-ins, and spin-offs. This way of doing business often requires new business models aid in making sure that the firm captures some of the value it helped to create [START_REF] Chesbrough | Open Innovation: A New Paradigm for Understanding Industrial Innovation[END_REF]. The literature on open innovation is particularly silent on the role of ICTs in open innovation settings. To this end, we seek to contribute to this domain by paying close attention to the role of ICT in the transformation processes in forestry, and how a heterogeneous set of actorsChuman as well as nonhumanCforming sociotechnical hybrids (see [START_REF] Jonsson | Turn to the Material: Remote Diagnostics Systems and New Forms of Boundary-Spanning[END_REF]).

Related Research

We begin by outlining existing research on open innovation models. Building on how firms in the forestry industry are embedded in a wider innovation system, we proceed to present existing research on materiality, enabling us to be specific about the role of IT in open innovation contexts.

Open Innovation

The term open innovation was first coined by Henry Chesbrough. In the closed innovation model, the R&D staff develops products that might eventually reach the marketCsold and distributed by the firm [START_REF] Chesbrough | Open Innovation: A New Paradigm for Understanding Industrial Innovation[END_REF]. What characterizes the open innovation paradigm, in contrast, is that firms do not try to protect their research to the same extent. Companies bring in knowledge from the research of other firms and share their own knowledge with other firms. Each firm will, of course, want to claim a certain amount of value from a given innovation, but it is not necessary that the innovation reaches the market through the internal path. Chesbrough (2006, p. 2) defines open innovation as the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respecttively. Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology.

The research on how to organize for open innovation is still very limited [START_REF] Fredberg | Managing Open InnovationCPresent Findings and Future Directions[END_REF]. [START_REF] Vanhaverbeke | The Interorganizational Context of Open Innovation[END_REF] stresses the need to address a broader scope of analysis and argues that open innovation should be analyzed not only at the firm level, but also on the dyad-, intra-organizational, and interorganizational levels [START_REF] Vanhaverbeke | The Interorganizational Context of Open Innovation[END_REF].

In their 2002 article, Chesbrough and Rosenbloom set out to answer the question: Why do successful companies often fail to capture value from new technology that they helped to create? According to Chesbrough and Rosenbloom, there are two ways that firms can capture value from new technology:

1. Through incorporating the technology in their current businesses 2. Through launching new ventures that exploit the technology in new business arenas

The fundamental starting point for Chesbrough and Rosenbloom=s theories is that a certain technology may have an inherent value, but it remains latent until it is enacted in some way. The value network created around the firm determines the role that suppliers, customers, and third parties play in influencing the value captured from the enactment of an innovation [START_REF] Chesbrough | The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation=s Technology Spinoff Companies[END_REF]. The actors in the value-creating system produce value together through rethinking their roles and interrelationships. Hence, value creation is not just adding value step after step but reinventing it by means of a reconfiguration of the roles and relationships among actors of the value creating system [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF]. In sum, value creation in constellations is determined by [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF]:

1. The resources it assembles 2. The way it can combine and govern those resources 3. The value of competing products and the competitive reactions of competing firms and constellations Fair value distribution in a value constellation is important; it is crucial that all participants profit from their participation. Some actors are automatically better off in the new constellation compared to the old value creating system. Others might be worse off and have to be compensated to stay committed to the value constellation [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF].

Materiality

The open innovation literature is largely silent on the role of ICTs in an open innovation environment. This is perhaps not surprising; IS researchers have only recently started to conceptualize how ICTs influence multiple and previously independent work practices. In their study of how a packaged software producer provides customer support, [START_REF] Pollock | Post Local Forms of Repair: The Case of Virtualised Technical Support[END_REF] illustrate how new ICTs allowed the move to technical repairs online. In a similar vein, we believe that ICTs hold the potential to enable the establishment of open innovation systems in the forestry industry.

The focus in extant research on IT-enabled change is on changes caused by increased digitization, reflecting of the more general trend within information systems research to treat IT as a Ablack box,@ disregarding which IT attributes are used and how they are used [START_REF] Orlikowski | Research Commentary: Desperately Seeking the AIT@ in IT ResearchBA Call to Theorizing the IT Artifact[END_REF]. To address this limitation, IS scholars have recently begun to pay attention to materiality issues associated with IT [START_REF] Leonardi | What=s Under Construction Here? Social Action, Materiality, and Power in Constructivist Studies of Technology and Organizing[END_REF][START_REF] Orlikowski | Sociomateriality: Challenging the Separation of Technology, Work and Organization[END_REF][START_REF] Zammuto | Information Technology and the Changing Fabric of Organization[END_REF]. [START_REF] Orlikowski | Sociomaterial practices: Exploring Technology at Work[END_REF] has argued that even though new digital artifacts play a ubiquitous role in contemporary organizations, research Alargely disregards, downplays, or takes for granted the materiality of organizations.@ She argues that Amaterial artifacts@ must be better addressed in management studies to show how they are fundamentally transformed by social practices and, subsequently, transform them: Consider any organizational practice, and then consider what role, if any, materiality may play in it. It should be quickly evident that a considerable amount of materiality is entailed in every aspect of organizing, from the visible formsCsuch as bodies, clothes, rooms, desks, chairs, tables, buildings, vehicles, phones, computers, books, documents, pens, and utensilsCto the less visible flowsCsuch as data and voice networks, water and sewage infrastructures, electricity, and air systems [START_REF] Orlikowski | Sociomaterial practices: Exploring Technology at Work[END_REF](Orlikowski , p. 1436)).

Discussing the physical and nonphysical matter of IT, Leonardi (2007, p. 816) notes how Athe impact of its material features is transformed through the social action of collective appropriation.@ For example, as people confront a specific IT (human agency) that does specific things that are not completely in their control (material agency), they contend with the material agency of the technology and find ways to maneuver around it. Indeed, material agency comes in many forms and shapes and the material agency associated with IT is, for these reasons, fundamentally different from that associated with other artifacts. To this end, we need to be specific about IT while also being specific about the ways in which IT is implicated with social practices.

Research Methodology

This paper reports on an interpretive case study based on interviews with actors from the forestry industry in northern Sweden. The case study is single case, involving multiple firms. The case study approach was chosen due to its strengths in providing a way of collecting data and analyzing a contemporary phenomenon [START_REF] Yin | Case Study Research: Design and Methods[END_REF].

The case study aimed at gaining an understanding for how work is organized in the forestry industry, which roles the different actors play, and how they are interrelated. The actors studied are mainly located in one county. A total of 11 organizations were selected for participating in the case study (see the Appendix).

Data were collected in two phases. In the first phase, four interviews were conducted. The aim was to explore how work is organized in the forestry industry in northern Sweden. The authors needed to gain an understanding for the context and to start identifying key actors. To achieve this, interviews in this phase were of an open and unstructured character. After the first round of interviews the data were analyzed. The analysis provided a deeper understanding of the phenomenon and served as input for the next round of interviews. An interview guide was created based on these insights. Nine semi-structured interviews were conducted in the second phase.

Most of the interviews were conducted in offices and meeting rooms at the client=s premises. The exceptions were two interviews conducted by telephone. In both phases, the duration of the interviews varied from 50 minutes to 1 hour, 45 minutes. The interviews were digitally recorded and later transcribed. An iterative process commenced, where the transcriptions were read several times. Emerging patterns were identified and coded with an open-ended approach, allowing grouping into themes. These themes built the foundation for the results and analysis presented in the paper.

When writing up the results and analysis sections, our ambition was to tell the story in its diversity, rather than summing up [START_REF] Flyvbjerg | Five Misunderstandings about Case-Study Research[END_REF]. All informant and firm names have been fictionalized in order to protect and respect privacy. Ultimately an interpretive case study seeks to contribute to theorizing [START_REF] Holmström | Theorizing in IS Research: What Came Before and What Comes Next?[END_REF][START_REF] Truex | Theorizing in Information Systems Research: A Confessional Tale of the Adaptation of Escalation Theory to Information Systems Research[END_REF][START_REF] Walsham | Interpretive Case Studies in IS Research: Nature and Method[END_REF], which in this particular case is focused on contributing back to the extant research on IT-enabled change. As outlined by [START_REF] Truex | Theorizing in Information Systems Research: A Confessional Tale of the Adaptation of Escalation Theory to Information Systems Research[END_REF], an ambitious research program will also seek to contribute back to the Amother discipline@ from which the analytical lens is borrowed. In this case, we will make an effort to contribute back to open innovation.

Case Study

We now present the data collected through interviews with a number of actors from the forestry industry in northern Sweden. In what follows, we will present the forestry machine supply chain, its key actors, and how the ICT component in the logging process holds the potential for radically restructuring the supply chain.

Forestry in Northern Sweden

Forestry has historically employed a large number of people in northern Sweden. As the mechanization of forestry began in the 1960s, firms producing vehicles and machines to be used were also founded in the area. Timbercut and one of its suppliers was founded in the 1960s. More start-up firms soon followed. Since then, Timbercut has gone through a number of changes in ownership as well as a number of name changes. In 2003, the firm was acquired by a large multinational enterprise. Today, Timbercut is one of the largest forestry machine manufacturers in the world. The headquarters are still located in the northern Swedish town were the original firm was founded. The site contains one of two worldwide manufacturing plants as well as the research and development (R&D) department. Among the products produced are harvester and forwarder machines.

Forestry Machines Supply Chain

Timbercut=s customers exist on a global market. Apart from their Swedish customers, most machines are sold to customers in Brazil, Canada, Finland, and Great Britain. As forestry is organized in varying ways in different countries, the customers are a heterogeneous set of actors. In northern Sweden, however, Timbercut=s customers are either logging contractors or forest owning companies. The firms range from a single person owning one machine to large forest-owning companies owning several hundred machines that are operated by as many employees.

As Timbercut has expanded its operations in the area over the last five decades, firms supplying them with components have not only remained in the area, but expanded their operations as well. Supplying firms S1, S2, and S3 are all located in the same county as Timbercut.

Our interviews with Timbercut and its suppliers (S1, S2, and S3) illustrate a tightly knit community. Many of the managers have moved between at least two of the firms. The CEOs at Timbercut, S1, and S2 all know each other through having worked together. The chairman at S1 was hired by the firm in the 1970s. Since then, he has had a long career in different firms around the world, including Timbercut, before coming back to S1 through acquiring shares and becoming the chairman. Today, S1 and Timbercut still closely collaborate on the product development of their component.

We hire S1 as contract manufacturers of certain componentsYthey are subcontractors to us.YThose components are our design.Ybut S1 are a subcon-tractorC [they] draw on or they build from our drawings.YS3, I do not think is a supplier of anything so far. We do not really have cooperation with S3. They are pretty closely linked to the other big forestry machines manufacturer instead. So that=s a bit trickier.YYeah, that=s when they are suppliers to other brands of machines that they have to try being a bit cautious. Of course, they don=t want to jeopardize their relationships with them. S2 don=t want to come to us and say, hey, now you shouldYdo this and like this. They have to be a little cautious. [TPM/Timbercut] The connections between the firms are many, as in fact suppliers S1 and S2 also collaborate with each other.

And with S2, they have their product and we buy it and of courseYthey are a supplier to us on that product and we do some welding work for them. We have close cooperation. [CEO/S1] S3 is also located in the area, but delivers components to the all of the major forestry machines manufacturers apart from Timbercut. The CEO shares his thoughts on where in the supply chain innovation takes place and whose needs S3 should satisfy.

But they [the forestry machines manufacturers] are the ones controlling what

the machine should look like. It=s their machine, their brand, their marketing, and so on and so forth. So being an inventor but not being able to determine what the machine should look like, it=s a bit of a tricky position. We can be sitting on a bunch of great ideas as we go knocking on their door. They will say, sure, that=s interesting, but we do not want to change ours, we have already invested in this production line. [CEO/S3] He also shares his thoughts on the role of the logging contractors.

The contractors who use the machines are weak. I mean, they are very weak. It is small family businesses, often with huge financial difficulties. So, therefore, we have to work with the one=s who, in the end, actually pay. And that=s the forest owning companies. [CEO/S1]

4.3

The Logging Process

Today, the logging process is close to being completely automated. Like most machines today, Northlog=s harvester machine includes a PC that monitors and controls the harvester head. It also contains an information system that picks up data from sensors located on the harvester and forwarder heads. The data covers the length, dimensions and quality of the trees that are logged. This data is fed into software installed on the PC that is mounted on every machine. The PC stores data on almost every action the driver or the machine performs. Although some manual quality controls are performed, the main focus of the driver is operating the machine and monitoring the process.

For the contractor to be able to run a well-functioning organization, the computers in the forestry machines have to be in a serviceable condition at all times. When they are not, it is practically impossible to get any work done.

Yes, it really has accelerated. Nowadays the situation is that if something breaks, for example the computer in the harvester machine, then that=s it! We=re at a total standstill, since we can=t log at all. Everything is totally dependent on computer activity in the machine. It When preparing for the logging of a new area, Northlog receives an apt-file from the customer. The apt-file specifies the length and diameter that is required by the sawing mills. The file also controls how the harvester cuts, calculates price, and detects the optimal length for a certain dimension. When the logging activities operate at normal conditions, timber is logged and forwarded to a landing point. A carrier continually picks up the timber at the landing point. The communication between the driver of the harvester machine and the lorry driver is mainly done through mobile phones and com radio.

At the end of each night shift, logging statistics are sent to the Skogsbrukets Datacentral (SDC) server. The data is transferred through a Mobitex system. The Mobitex device is connected to the PC in the harvester machine. A prd-file (production file) is saved on the PC and transferred to the Mobitex device. The data contains information about the timber harvested during the day, amounts of timber located on the clear-cut area, and amounts of timber that have been conveyed to the road.

But then of course we have a Mobitex system. And it is an old technology really.YI guess you could discuss that back and forth, but it is a functioning technology. And it has coverage everywhere.YThey=re trying NMT now and they think it seems to work fine, but I have said that the question [is] whether you should jump on every technology step.YWell, I guess that I=m thinking along the lines that in this technological march that is going on, maybe there are some steps you probably have to sit out and keep the old technology for a while. [Owner/Logging contractor]

The product manager (TPM) is aware of the fact that there are still logging contractors out there using Mobitex. He recognizes its advantage of providing full coverage in remote forest areas in the inland of northern Sweden where the customers are often located. However, he points out that

It is at a lousy transmission rate, so you can only send short text messages. And you can=t use it at all for remote desktop or to send e-mails, browse the webCit is in fact worthless. [TPM/Timbercut]

At Alpha Forest Corp., the logging manager (TLM) is responsible for making sure that the amount of timber logged corresponds to the amount that is supposed to be delivered to a number of saw mills and pulp mills each month. The teams report the volumes logged and forwarded to the landing to TLM on a daily basis. The volumes are then reported to SDC=s server. TLM can download the files containing this data from SDC=s system and transfer them to her system. These files help her to maintain control over where recently logged timber is located at the moment. She can also get an overview of the amount of timber in the forest warehouse and in the road warehouse.

The logging teams all have access to the web-based information system mapleweb, developed by Alpha. The teams can log-on to mapleweb from home. In the system, a time line visualizes the objects they are to log during the coming month. TLM has estimated the time consumption based on how many cubic meters of forest should be logged in each area and the average performance of the logging team in that type of forest.

The logging team can download information about each object from mapleweb. One of the things they download is the logging directive which contains all of the information about the type of forest in the area, etc. They can also download map files from mapleweb. This is done continuously and as soon as the logging team has finished logging an object, they log on to mapleweb from home and download all the information they need to move on and start working with the next object. In practice, the movement from one object to the next often does not happen according to the time line. TLM points out that the deliveries required by the mills often change. This means that she has to reschedule and change the order of the objects on the time line.

When logging has taken place, the timber stays approximately five to six weeks at the landing before it is transported to the mills by the carriers. According to TLM, she can at any time log on to her systems and see how much timber is in the road stock and the forest stock. This information is based on the reports that are uploaded from the harvester and the forwarder.

Knowledge and Capabilities

As the logging process has become automated and partly digitalized, the capability requirements of the drivers have changed. A key competency required of the driver is to be able to assess the terrain and have a high level of driving technique. The driver also needs knowledge of basic forestry such as assessing damage on the stem, skewness, and so forth. Apart from these skills, the driver of today also needs to have skills in computer and mechanical engineering. The driver needs to able to remove, change, and repair files when the computers are not working properly. On mechanical matters, the driver needs to be able to do trouble shooting, basic problem solving, and service on the mechanical parts of the machine. According to the contractor, there are, unfortunately, a lot of drivers that have a negative attitude toward the increased computerization. When asking the contractor which training he prefers the people he hires to have completed, his answer is no such formal training really exists. He acknowledges that there are forestry schools, but his goal when recruiting is to find a full-fledged driver that doesn=t have an effect on the overall productivity.

According to the contractor, however, they are few and far between. He also concludes that he doesn=t really believe that any training program can produce a fully qualified professional.

Digitally Enabled Vehicles

The 1960s and 1970s saw the establishment of forestry machine manufacturers and mechanical suppliers in northern Sweden. In the first decade of the new millennium, as forestry machines started becoming increasingly digitalized, actors focused on ICT emerged and got involved in forestry.

Digital Services

Timbercut=s core business is currently in selling forestry machines. Apart from selling entire machines, they sell spare parts. The services they offer are troubleshooting, technical support, and servicing when the machines break down. Timbercut is also working on a new product that only has a preliminary release date which has not yet been announced. The product is an integrated artifact and service called eTimber. It will enable Timbercut to offer remote support to their customers through a subscription-based support contract. The long-term plan is that the eTimber platform, including the hardware, will be installed in all new machines that are manufactured.

Mobile Internet coverage has been scarce in the inland areas of northern Sweden. However, this changed during 2009 as a new ISP emerged, delivering a theoretical speed of 3.1 Mbits downlink and 1.8 Mbits uplink in these areas. The eTimber hardware is ready to be connected to the PC in the forestry machines. To be able to use eTimber, the customer needs to sign up for a 3G mobile Internet service. The 3G USB modem is then plugged-in to the eTimber hardware. Although the eTimber platform will be installed in all machines, service is not activated until the customer signs up for the subscription-based support contract. Once this is done, the service technician adds the customer=s machine(s) to his support system.

Remote Operation and Digital Training

In the local area, there are also other types of actors with whom Timbercut , S1, S2, and S3 collaborate. One of these actors is the simulation firm ICT firm 2 (ICT2);

another is the research center (TRC). The CEO at S1 provides an account of his role in the start-ups of these firms.

And then, among other things, I got in contact with the Partnership Vice-Rector at the University and I got involved in starting ICT2. The Vice-Rector and I also started the Research Center. [CEO,S1] Although ICT2 received some help from Timbercut and S1, S2, and S3 in its start-up phase, it is today an established firm with customers outside the forestry industry as well. Reflecting on ICT2=s activities with the forestry actors so far, the CEO stresses one area where he would like to see more work get done.

I have thought that we should have done more with the simulation, including this idea of automated systems. I mean, not autonomous vehicles, but remote operation, where you sit in a different location than the vehicle when driving it. We have done such a project with a port cranes manufacturer. We have tried in a simulated environment, where the operator has moved out of the cabin and sits in a control room and runs the vehicles through the monitors.

[CEO/ICT2] The CEO stresses that their simulation gives an opportunity to evaluate if the operator can perform equally well, even though he does not sit inside the vehicle. TRC has performed activities with Timbercut, S1, S2, and ICT2, and has been working with Timbercut on a project with autonomous forestry machines, where the vehicle is programmed to be able to drive itself and detect and avoid obstacles. However, the research manager at TRC expresses some disappointment.

I=ve felt that the interest from Timbercut has been rather lukewarm almost from the very start.YI think it=s interesting in terms of research, but it is far ahead of the time when they can really translate it to anything. SoYthey have provided access to the machines, and made it possible to run it on the field and do tests on the machines. And it=s not a bad thing for the research team to have access to such an experimental platform. But really, you also want them to be pushing things forward. [Research manager/TRC] One of the projects that TRC has been working on is a remotely operated harvester machine. It is operated from two manned forwarding machines. However, the research manager=s view is that Timbercut does not seem to be ready for the project yet. He explains these are such high risk investments that Timbercut chooses to rather wait and monitor their competitors= moves before going ahead with such a product.

Another actor located in the area, which has had discussions with Timbercut, is ICT1. The firm started out serving mainly as a product supplying unit, designing and producing hardware for remote monitoring and communication. Today, the firm focuses on product development in a wider sense through selling software and services. ICT1 has taken on a number of Swedish industrial companies, helping them with the transition from selling products to selling services. This has mostly been done trough installing their sensors which allows, for example, an elevator to order a service technician automatically when needed.

Discussion

This paper has focused on the ways in which ICTs enable the establishment of open innovation systems in the forestry industry. The digital capabilities embedded in forestry machines have rapidly changed forestry. The move from forestry machines to sociotechnical hybrids has opened up possibilities for changes in industry structure, partnership relations, and business models.

In this paper, we have presented an argument for the utility of the concept of open innovation in the forestry industry. In particular, we have examined how ICTs can enable open innovation practices in the forestry industry. The contribution of this work is two-fold.

First, it initiates discussion about the possibility of innovation at a level that transcends and encompasses the firm level. Indeed, we have argued that ICT innovation will eventually be better understood when it can be placed in an open innovation context. Clearly, as our case illustrates, ICTs have become increasingly critical in the daily work in the forestry industry. However, the digitally enabled forestry machine can also serve as a means by which organizations can tap into and make use of the knowledge embedded in an open innovation system. Organizations and clusters of organizations can achieve long-term competitive advantage by developing and deploying core capabilities which in turn requires developing an overarching strategic intent and core values (see Tushman and O=Reilly 2006). Having said this, the possibilities for such capability-building efforts in forestry must be approached by focusing on what the barriers are for establishing an open innovation system in forestry, and how the use of ICTs could help to enable such open innovation systems. As we have seen, establishing an open innovation system in forestry involves a long journey for some of the actors involved. Our case study tells the story of the traditional value chain in the forestry industry, and in order to identify the barriers for establishing an open innovation system, we need to understand the traditional value chain that has long dominated the forestry industry.

The salient value chain is the one where the raw materialCtrees in a forestCare refined to paper products through passing a number of links. The first link in the chain consists of forest owning firms and private forest owners that decide to sell a certain amount of trees on their grounds. They purchase the services of the logging contractors in the next link. The logging contractors cut down the trees and branches are taken away. The trees are turned into timber and are transported to a landing point. Carriers, which constitute the next link in the value chain, pick up the timber and transport it to a saw or pulp mill. The timber is turned into planks or paper. The mills pass on the finished product to resellers in different industries.

The process illustrates how the product to be passes through the activities in the value chain in a certain order. The product gains value at every activity, a way of doing business that indicates a traditional way of creating value. It is also clear that forestry machine manufacturers are not an actual link in this value chain. Their role is that of a supplier to the first two links in the chainCthe forest owners and the logging contractors on which we have chosen to focus. This way of doing business and the industry culture that is likely to come with it is in itself an important barrier to overcome in order to be able to work in an open innovation system where forestry machine manufacturers and ICT specialists take an active and leading role.

There was thus a limited amount of cooperation between the links in the chain other than those directly connected. The innovation that took place in the chain is likely to be closed to influence from actors other than the previous and the next link in the chain, if open to any actor at all. The open innovation ideal was thus far from realized.

Second, we promote the understanding of digitally enabled forestry machines as hybrids. To this end, we build on the materiality discourse in information systems, specifically addressing how technological agency plays a part in the open innovation processes and outcomes. Indeed, while the open innovation literature is largely silent on the role of ICTs in open innovation environments, IS researchers have recently started to conceptualize how ICTs influence work practices [START_REF] Jonsson | Technologies for Value Creation: An Exploration of the Remote Diagnostics Challenge in Ubiquitous Computing Environments[END_REF][START_REF] Leonardi | Activating the Informational Capabilities of Information Technology for Organizational Change[END_REF][START_REF] Pollock | Post Local Forms of Repair: The Case of Virtualised Technical Support[END_REF].

The way that Timbercut and its mechanical suppliers S1 and S2 collaborate today in some respects illustrates an open approach to innovation. However, the actors actively taking part in the actual logging process are not organized according to a traditional value chain only; they are also committed to a closed innovation paradigm.

We found that Timbercut is aligned with the traditional value chain, acting as a supplier to forest owners and logging contractors, listening to their needs and turning these needs into better products. At the same time, we provided an account for how new types of actors, focusing on ICT services and solutions, have emerged and started to participate in forestry projects. However, ICT2 as well as TRC expressed disappointment with the lack of commitment from Timbercut in pushing those projects.

We argue that the way in which Timbercut is embedded in a peripheral position in the current value chain constrains their possibility of fully capturing value from the technology in their forestry machines. Although an open approach to innovation is found in the design and manufacturing of the mechanical technology, to some extent it is the use of this mechanical technology that contributes in holding the traditional value chain together. A possibility for overcoming Timbercut=s peripheral position in the current value chain is making an effort to employ an open innovation approach to working with the ICT components of the forestry machines.

With Timbercut=s new service, eTimber, their forestry machines not only store data valuable in analyzing the usage, but are also connected to the Internet. Apart from the possibility of remote support, there are arguably other latent potentials in a digitally enabled forestry machine connected to the Internet. The access to stored data and the fact that the machine is online holds the potential to enable knowledge sharing between the actors that was not possible previously.

Following [START_REF] Chesbrough | The Role of the Business Model in Capturing Value from Innovation: Evidence from Xerox Corporation=s Technology Spinoff Companies[END_REF], if Timbercut wants to fully capture the value in their digitally enabled forestry machines, there are two alternatives: incorporating the technology in their current business or setting up new ventures. The projects with ICT2 and TRC are examples of their work on new technologies together with new types of actors. However, in order to exploit that new technology and eventually translate it into new product offerings, Timbercut may consider setting up a venture with ICT1. In order to capture value in a open innovation system, new types of value constellations can be set up around Timbercut. One option is for Timbercut and ICT1 to invite customers to discuss, assess, and address their needs. A wider definition of the customer in this context could include other actors in the value chain, such as saw and pulp mills. For Timbercut to set up a venture with ICT1 would demand a high degree of openness in terms of access to data and an opening up the protocol of the ICT component in the machines. Another actor that could participate in such interorganizational knowledge sharing is Alpha, providing that they are willing to open up some parts of their system, mapleweb. This would also enable Timbercut and ICT1 to be able to determine how to design and integrate new services. Access to data from the harvester and forwarder that Northlog uses may serve the same purpose.

Conclusions

This study has addressed the following research question: How can the use of ICT enable the establishment of open innovation systems in the forestry industry?

In order to answer this question, we conducted a case study including key actors from the forestry industry in the northern part of Sweden.

The case study shows how the forestry industry as a whole is dominated by the salient traditional value chain where the raw materials are refined to paper products and that many of the actors are committed to a closed innovation paradigm. We argue that the forestry industry in northern Sweden is currently organized in a very traditional manner, in the value chain arrangement that has characterized business relations in the forestry industry for decades. This way of doing business reveals what we refer to as a traditional way of thinking about value creation, and a limited capability to see beyond the existing value chain.

The barriers identified to working in an open innovation system are hampering the evolution of the forestry industry. It should be noted that informed use of ICTs can be an aid in overcoming them. We argue that the ICT component in Timbercut=s forestry machines constitutes a latent potential that can be fully captured through a joint venture with ICT1. Further, we argue that a favorable way of doing this is through the creation of an open innovation system. ICT can enable this transition through the interorganizational knowledge sharing that it makes possible.

  has to work, otherwise you can=t use the machine.YAt best you can move it from its location. [Owner/Logging contractor] The rural areas of northern Sweden are sparsely populated. Distances between the towns are far. For the logging contractor, this means that the nearest service technician is still 55 kilometers away. This local guy will come out and help us.YHe connects a PC laptop to the machine. He has software that we don=t have access to. That=s because, you know, everyone can=t be allowed to play around with that. I mean, you can cause major disorder if you open up files and you don=t know what you=re doing. The machine will be unusable, it can even nearly become dangerous.

[Owner/Logging contractor]

About the Authors

Daniel Nylén is a Ph.D. student at the Department of Informatics, Umeå University. His research examines the digitalization of a number of contexts and industries. A particular focus is investigating emerging digital innovation processes in the media industry.

Jonny Holmström is a professor of Informatics at Umeå University, Sweden.


Karlheinz Kautz
email: karl.kautz@cbs.dk

Deborah Bunker
email: deborah.bunker@sydney.edu.au

Sameen M Rab

Michael Sinnet
email: michael@sinnet.dk

Investigating Open Innovation and Interorganizational Networks in the IT Industry: The Case of Standard Software Customization

Keywords: Open innovation, interorganizational networks, software customization

This research presents and analyzes an empirically grounded account of a new trend, open innovation, in the IT industry. The case depicts another new trend, innovation through customization of standard software as a business model, and we investigate the open innovation activities of an interorganizational network which consists of a small customizing company, a large global software producer, and other companies involved in the innovation process. We contribute to the development of a theory of open IT innovation with a theoretical framework that integrates formally separate aspects of open innovation and interorganizational networks. We extend the literature on open innovation by broadening the view from one focal firm to the relations in a network of companies that mutually contribute to innovation which occur in the different companies. Our research underlines the importance of balanced formal and informal relations, and coopetive and opportunistic behavior for the open innovation process.

Introduction

The research presented here investigates a new trend in the information technology industry. Open innovation is a novel way to create innovation where organizations open their innovation processes and cooperate with others to develop new products and services [START_REF] Chesbrough | Open Innovation: The New Imperative for Creating and Profiting from Technology[END_REF][START_REF] Kautz | Guest Editorial Special Issue on Open IT-Based InnovationCMoving Towards Cooperative IT Transfer and Knowledge Diffusion[END_REF]. However, beyond work on open source development (see, for example, West and Gallagher 2005) and in extension of these efforts, Ågerfalk and Fitzgerald=s (2008) We study open innovation by taking another future trend into account, namely innovation through customization of standard software as a business model [START_REF] Pollock | Fitting Standard Software Packages to Non-Standard Organizations: The >Biography= of an Enterprise-Wide System[END_REF].

Interorganizational relationships and networks are both decisive for open innovation and software customization. The latter has mostly been described in the literature as a general development activity which takes place within the organization that has developed the software. There is another view that looks at customization as a specialized business activity performed by an independent business: the software customizer. This view implies some interaction in interorganizational networks between the customizer and the developer to effectively customize the software [START_REF] Pollock | Fitting Standard Software Packages to Non-Standard Organizations: The >Biography= of an Enterprise-Wide System[END_REF].

Open innovation takes place in interorganizational networks [START_REF] Vanhaverbeke | The Interorganizational Context of Open Innovation[END_REF]. [START_REF] Feller | Institutionalizing Information Asymmetry: Governance Structures for Open Innovation[END_REF] provide a categorization of interorganizational relationships in open innovation based on whether these relationships are mediated or direct, and whether they seek to exchange intellectual property or innovation capability. On this basis, they call for more research that takes an interorganizational perspective on facilitating open innovation into account.

On this background, we empirically investigate the open innovation activities of an interorganizational network which consists of a small customizing company, a large global software producer, and other companies involved in the innovation process. Our research question, then, is how does open innovation take place in interorganizational networks in the IT industry?

The remainder of the article is structured as follows: in the next section we provide the theoretical background for our research and present a theoretical framework which integrates concepts of open innovation with concepts of interorganizational networks (summarized in Table 1) to study standard software customization as an instance of open innovation in our case setting. We then introduce our interpretive case study research approach and the case description. This is followed by our case analysis and the presentation and discussion of our findings. We finish with a summary of our contributions and some conclusions.

2

Theoretical Background

Open Innovation

Open innovation [START_REF] Chesbrough | Open Innovation: The New Imperative for Creating and Profiting from Technology[END_REF]) means that valuable ideas can come from inside or outside a company and can go to the market from inside and outside the company.

Organizations committing to open innovation view the outside world as a source of inspiration and accept the strategic potential of letting other organizations contribute to the innovation process. Grassman and Enkel (2004) distinguish between an outside-in process where external knowledge and technologies are acquired from outside a company, but the locus of innovation is within the company, an inside-out process where unused knowledge and technologies are introduced to the market, but mostly exploited inside the company, and a coupled process where these two processes are joined and the company works in alliance with others in various forms of cooperation; the locus of innovation lies both inside and outside the company. Heavy exchange of ideas and easy access to products is a prerequisite for open innovation [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF].

Open innovation is linked to openness with regard to access to a product, but it is also an overall strategy to improve the conditions for companies, which contribute to the innovation process [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF]; this can mean to provide inducements such as capital for start-up companies that want to further develop their products and might function as laboratories for large organizational sponsors in the innovation process.

When engaging in open innovation, companies have to understand their role with regard to other involved parties [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF]. This includes searching for new partners, providing opportunities for innovators to effectively share their knowledge and their ideas [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF], for example, knowledge sharing forums in which the developers use each other as mutual inspiration to support the creation of innovations [START_REF] Von Hippel | Democratizing Innovation[END_REF], and providing an appropriate development context, for example, suitable development tools and a product of high quality with a flexible product architecture, as well as providing further incentives in the form of new markets [START_REF] Chesbrough | Open Innovation: The New Imperative for Creating and Profiting from Technology[END_REF] where the customized solutions attract attention, but also create additional business value for the original product.

Nursing and steering an open interorganizational innovation network is significant to develop or use innovations [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF]. Interorganizational relations facilitate organizations= capabilities and willingness to open their innovation process and let innovation happen across organizational boundaries [START_REF] Simard | Knowledge Networks and the Geographic Locus of Innovation[END_REF]. The composition of the network has an impact on the innovative processes [START_REF] Vanhaverbeke | The Interorganizational Context of Open Innovation[END_REF]. It is important not to be satisfied with tying together some established interorganizational cooperation partners, but to build up a network that consists of many broad relationships instead of a network with a few and deep relations [START_REF] Simard | Knowledge Networks and the Geographic Locus of Innovation[END_REF]. This approach utilizes innovative opportunities better as the generation of ideas becomes much more unpredictable. But open innovation networks can take many forms. Organizations can participate in the research and development of an innovative product, resell the product, promote the product, or build upon the existing product [START_REF] Chesbrough | Open Innovation: A New Paradigm for Understanding Industrial Innovation[END_REF]. The knowledge and product flow between organizations in open innovation does not necessarily have to occur in the unrestricted public domain, but can take place in hierarchical relationships [START_REF] Feller | Institutionalizing Information Asymmetry: Governance Structures for Open Innovation[END_REF] or on a dyadic level [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF]. The advantages of letting other organizations contribute to the development of new products mostly outweigh the difficulties of coordinating interorganizational processes [START_REF] Chesbrough | Open Innovation: The New Imperative for Creating and Profiting from Technology[END_REF].

Interorganizational Networks

Interorganizational networks are a specific type of relation that binds organizations closely together through communication, interaction, and cooperation [START_REF] Harland | Supply Chain Management: Relationships, Chains and Networks[END_REF]Håkasson and Snehota 1995). These features provide a competitive advantage that could not have been achieved by organizations on their own [START_REF] Dyer | The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage[END_REF].

A network reduces the transaction costs for the exchange of information, minimizes uncertainty, and limits opportunistic behavior [START_REF] Williamson | Comparative Economic Organization: The Analysis of Discrete Structural Alternatives[END_REF].

Interorganizational relations depend on the degree of formal cooperation between the organizations [START_REF] Harland | Supply Chain Management: Relationships, Chains and Networks[END_REF] where organizations may have no shared objectives, deal with each other on the market, and communicate through purchase orders, to situations where organizations merge or where one organization acquires or influences others through joint ventures, strategic alliances, and minority shareholdings. Shared destiny and product life relationships see partners sharing their vision and cooperating either with regard to the organizations as a whole or with regard to individual products.

When problems arise, formal contracts are often inhibiting; informal and emergent approaches are often more usable, but organizations that know each other well and have mutual trust achieve the most effective outcomes [START_REF] Håkansson | Developing Relationships in Business Networks[END_REF]. [START_REF] Coleman | Social Capital in the Creation of Human Capital[END_REF] has defined the concept of social capital which contributes to an organization=s competitive capacities. Interorganizational networks consist of a social structure of relations of employees across the different organizations. This consists of three elements: (1) commitments, expectations, and trust, which relate to the performance of favors and services without payment based on reciprocity, (2) information channels, which provide access to less accessible information through personal relations to trusted employees in other organizations, and (3) norms and sanctions, which are the unwritten rules which exist between people and which govern how they act and behave.

An important aspect in such networks is relations that can take a form where organizations might simultaneously cooperate and compete with each other, called coopetition [START_REF] Ganguli | Coopetition Models in the Context of Modern Business[END_REF]. The objective of coopetive relations is to achieve a joint competitive advantage by competing while at the same time jointly striving for better quality in other areas. The informal knowledge exchanged in these relationships can often benefit coopetive partners; however, such relationships are difficult to manage and control and invite opportunistic behavior [START_REF] Von Hippel | Cooperation between Rivals: Informal Knowhow Trading[END_REF]. Opportunistic behavior can be reduced through close integration and nursing the cooperation between partners. Defining the scope and the rules for innovation and cooperation is one way to achieve this; another way is opening up the innovation process and letting interested parties contribute to this process.

Standard Software Customization

Standard software has existed since the 1960s [START_REF] Sawyer | Packaged Software: Implications of the Differences from Custom Approaches to Software Development[END_REF], with the aim of creating a common comprehensive business software solution which can be implemented for a broad range of businesses. Standard software hardly ever satisfies all business needs [START_REF] Scott | Enhancing Functionality in Enterprise Software Package[END_REF] and organizations want to adapt or customize the standard software for their own needs [START_REF] Simard | Knowledge Networks and the Geographic Locus of Innovation[END_REF]. Light (2001, p. 416) argues that Customization is meant to describe changes or additions to the functionality available in the standard software. It does not refer to the switching on and off of functionality that is part of the blueprint of the software, sometimes referred to as software configuration.

Software customization as a creative task goes beyond adjusting pre-defined settings; while including simple configuration practices such as the creation of reports, amendment of existing reports and/or displays, automation of existing processes, a greater effort is expended in changing existing functionality and addition of functionality [START_REF] Kuitunen | Finnish Software Product Business: Results from the National Software Industry Survey[END_REF].

In this research, we consider customization as a specialized business activity performed by an independent business [START_REF] Pollock | Fitting Standard Software Packages to Non-Standard Organizations: The >Biography= of an Enterprise-Wide System[END_REF] which is distinct from tailoring and modifying information systems through users [START_REF] Germonprez | A Theory of Tailorable Technology Design[END_REF]). Software customization businesses can then be categorized according to two parameters [START_REF] Kuitunen | Finnish Software Product Business: Results from the National Software Industry Survey[END_REF]: (1) how tailored or standardized are a software company=s products and services (tailored offerings versus standardized offerings) and ( 2) are the company=s earnings primarily based on the sales of products or performance of services (product-based business versus service based business)?

Research Approach

Our research follows the approach of engaged scholarship (Van de Ven 2007), a participative form of research for seeking advice and perspectives of key stakeholders in order to understand and theorize about a complex problem. Given the limited research literature concerning our topic, our investigation is based on an exploratory, qualitative, single case study [START_REF] Creswell | Research DesignC Qualitative, Quantitative and Mixed Methods Approaches[END_REF] of open innovation activities in an interorganizational network that consists of the small Danish software company Alpha, which customizes a software product, the large global software company Zeta, the producer of the original software product, and other companies involved.

Our research approach is inspired by [START_REF] Eisenhardt | Building Theories from Case Study Research[END_REF] and [START_REF] Walsham | Interpretive Case Studies in IS Research: Nature and Method[END_REF], who stress that in all types of research, including case study research, theory is important as an initial guide to data collection, during the iterative process of data analysis, and as a final product of the research. While it is often stated that it is not possible to generalize and certainly not to theorize from a single case study, it is possible to generalize case study findings among others in the form of a contribution of rich insight [START_REF] Walsham | Interpretive Case Studies in IS Research: Nature and Method[END_REF]. We thus used our theoretical framework to guide our data collection and analysis in order to contribute to the existing body of knowledge with rich insight about open innovation in interorganizational networks.

The empirical data for the case study was collected in semi-structured, open-ended interviews conducted by a team of two researchers. The team focused on Alpha and performed six interviews with its founders and key personnel, covering more than half of the organization=s staff, and with their partner account manager at Zeta. The interview data was supplemented with publicly available and internal company documents, especially about Zeta=s partnership program. The interviews were tape-recorded and transcribed. Subsequently the data was coded independently by the two researchers. The few differences in the researchers= conceptions were discussed and resolved in collaboration with a third researcher. To move from surface observations toward theory building and from description to explanation, a detailed narrative of the case was written. In a narrative theory, the story builds a conceptual model where the story provides a progress or sequence of events (Van de Ven 2007) which serves as an additional frame of reference for the further analysis and interpretation of the data [START_REF] Fincham | Narratives of Success and Failure in Systems Development[END_REF]. In this process, the third and fourth members of the team acted as facilitators and carefully scrutinized the narrative. The combination of interpretation and collaboration between the four researchers with different levels of involvement brought interpretive rigor to the project.

4

The Case

In this section, we describe the case setting and take as a point of origin company Alpha. As the basis for the subsequent analysis, we describe how relations were formed, changed, and disbanded in the different phases which the organization went through. We identified seven such phases and our description is a narrative in seven acts (see Table 2).

Freelance

Alpha has its origins in the company Omega. Omega, established early in 2005 as a consultancy company, focuses on a CRM (customer relationship management) product developed in 2004 by the software producer Zeta. Omega=s founders are former Zeta product managers. Omega is a Zeta partner and resells Zeta=s CRM product, but to do this they must have the technical skills for implementing the product. As they lack these skills in the summer 2005, Omega hires a freelance IT professional for technical support and product configuration. Subsequently, the business develops very quickly and another freelancer is hired. In this phase, Omega and the freelancers have an informal relationship without any direct payment for the work. Assignments are largely related to system configuration and customer-specific adjustments where some customers wish to import data from other systems into the CRM.

Launch

In the fall of 2005, Alpha is created by the freelancers focusing on consultancy tasks and adjusting the CRM for their customers, obtained through Omega=s contacts.

Importing customer data for different customers is their main focus with Omega as their strategic partner. This phase is dominated by informal guidelines and development methods. Low cost solutions are the order of the day and the informal agreements create stability which provides Alpha with a firm base for their first standard product offering. As the assignments from different customers become similar, the founders of Alpha decide to develop a standardized solution, which Omega resells to their customers and which creates most of Alpha=s initial earnings.

Partnership

The Alpha feels that the formal communication with Zeta is longwinded, so they look for new possibilities to get information about the CRM product. The Omega founders create a number of informal relations between Alpha and some Zeta developers, where those involved support each other by mutually exchanging information on the CRM product. These informal relations are advantageous for Alpha as they no longer need to utilize Zeta=s communication channels to get information on their products, thus enhancing the relationship with Zeta.

In June 2006, Alpha appears at the annual Zeta conference in the United States to present their standardized product to Zeta partners. This is the first of many international conferences Alpha uses to strengthen its network and to develop partnerships with other Zeta partners. The new partnerships consist primarily of distribution contracts with existing CRM vendors who see an advantage in including Alpha=s solutions in their portfolio. In the fall of 2006, Alpha succeeds in interesting several local Danish CRM vendors which increasingly take over contact with potential customers. This leads to the end of Omega=s role as the link between Alpha and new partners. Alpha now takes over contact with these partners and, although customers still can buy Alpha=s products from the company=s web site, Alpha chooses to change their focus from customers to distribution partners who thus become links in Alpha=s network.

Product Development

The new partner focus is an opportunity for Alpha to sell their products to a larger range of customers. Until the end of 2006, Alpha=s work assignments consist both of consultancy services and the development of their own standardized solutions. The success of their first product leads to an understanding of the large potential in dedicated product development and standardized solutions. A number of new off-the-shelf products are developed of which both the new version of their first product and a system to import business data from the yellow pages achieve Zeta certification. During 2007, the company develops a further three products based on the CRM system. All three solutions meet the demands of a broad user group and fill gaps in the original CRM product.

Lacking legal protection of their ideas, however, Alpha is forced to continuously develop new products, among others yet another new version of their first product, their major product.

Growth

As Alpha products are limited in lifespan, in January 2007, Alpha starts to develop more products leading to an increased need for resources to supply technical products with user-friendly descriptions that support their positive reputation.

To further improve this reputation, over the next few months Alpha hires a sales and promotions person as well as a couple of developers to take care of their home pageCused to distribute promotion materials, offer products and handle customer en-quiriesCas well as of their important first product. In September 2007, the founders decide to headhunt their Zeta partner account manager, who has been very enthusiastic about the company. He is employed as a sales manager, a business domain so far given low priority, and assumes an important role bringing both knowledge about the industry sector and more of Zeta=s contacts and partners with him.

Outsourcing

In the fall of 2007, more international companies start to show interest in Alpha=s primary product. Alpha chooses to cooperate with the largest CRM vendor in the United States. Delta, and launches a specific Delta product version. As Delta insists on using its own software testers in India, this collaboration becomes Alpha=s first step toward outsourcing. The positive experience with these IT professionals results in the decision to continue to use their services instead of performing tests internally.

In November 2007, Alpha contacts the Danish company Gamma, which specializes in outsourcing of IT related work tasks. Gamma offers them a solution where three highly educated developers from Pakistan with CRM experience and low salaries are assigned to product development. Despite some challenges related to the different time zones, culture, and communication, Alpha=s founders state that the decision to outsource has been favorable for the company.

At first, Alpha experiences problems with the further development of software without technical documentation, which was not an issue when developers had the necessary knowledge for this task. This leads to an effort to help the foreign developers understand and adopt the way Alpha customizes Zeta=s CRM. At the same time, all code developed abroad is reviewed by Danish developers to ensure that the developers in Pakistan follow Alpha=s guidelines. A focus is put on documenttation and governance to ensure development quality.

Merger

Finally, in spite of a historically happy relationship, in March 2008, Alpha and Omega opt to merge. Alpha sees an advantage in the merger as they want to increase their market share and extend their network and the merger provides access to more than 100 new partners worldwide.

Analysis and Discussion

The case description provides highlights of a company=s successful business model of customizing standard software in an open innovation context by closing gaps in an original CRM product through additional functionality. Alpha has moved from tailoring individual solutions for customers to the development of standardized, customized products [START_REF] Kuitunen | Finnish Software Product Business: Results from the National Software Industry Survey[END_REF]. Their primary product represents a classic functional extension of the original CRM product. The other products either fall in this category or are process automations or amendments of existing reports [START_REF] Light | The Maintenance Implications of the Customization of ERP Software[END_REF]. Since the early 1990s, Zeta has focused on opening up their innovation processes. Valuable ideas and knowledge enter and leave the organization in the research and development stages where external companies contribute with competence, suggestions, and newly developed products. To gain rich insight about open innovation in our case setting, we focus on the relation between Alpha and Zeta on a dyadic level [START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF].

We find an open innovation process where external knowledge and technologies are acquired from outside a company, and where internal knowledge and technologies are introduced to the outside. This is a coupled process; Gassman and Enkel (2004) put forward that the locus of innovation in such a case is often outside the company. We find that both focal companies innovate as a result of their mutual relationship; innovation takes place inside both companies and analogically outside of them as well.

The launch of Alpha is a direct consequence of the development and diffusion of Zeta=s CRM product; Alpha can thus be considered a spin-off company. From its start, Alpha focused on this standard product. Through Omega=s customer network, they got ideas for customizations and adjustments that were lacking in the original product. Omega=s close relationship to Zeta contributed to that development knowledge from Zeta was shared with Alpha across Zeta=s boundaries. This knowledge then contributed to Alpha=s idea of building their first product. This had decisive influence on Alpha=s certification as Gold Partner, which gave Alpha access to knowledge that is produced in Zeta=s research process. [START_REF] Yoo | Distributed Innovation in Classes of Networks[END_REF] classify open source innovation as a type of innovation network that is based on homogeneous knowledge sources and a distributed mode of control and coordination. Our case innovation network shows many of these traits, but we can also argue that Zeta is to a large extent controlling the network, thus showing traits of a centralized market with heterogeneous knowledge sources, or that Alpha much more independently follows its own path to innovation pointing toward a doubly distributed network with heterogeneous sources and distributed control. [START_REF] Feller | Institutionalizing Information Asymmetry: Governance Structures for Open Innovation[END_REF] distinguish four types of interorganizational relationships in open innovation; these are solution hierarchy, a direct relation with a focus on intellectual property; solver market, a direct relation with a focus on innovation capabilities; solution brokerage, a mediated relation with a focus on intellectual property; and solver brokerage, a mediated relation with a focus on innovation capabilities. We find a complex mesh of multiple relations which cannot be categorized so neatly; both focal companies seek knowledge in hierarchical and market relations and brokers such as Omega provide knowledge of potential solvers and solutions.

As Alpha has detailed knowledge about the CRM product, they contribute with development ideas which they believe are important to be implemented in the original product. Alpha has promoted the idea that the CRM product should interact with other vendors= data base systems. Zeta is interested in these kinds of ideas and collects them through interviews with their partners, who in the research phase put their stamp on the future product.

Zeta has created forums where people who innovate their products can ask technical questions and extend their product knowledge. Zeta has an online forum for developers who customize their standard software. The online forum only plays a small role in Alpha=s work, but it evinces Zeta=s efforts to create an information flow between its own and external developers. In Alpha=s case, the Zeta conferences played a more important role for building competences and relationships.

Zeta provides a flexible product architecture so that the innovating companies can reduce their resources; they easily can adjust and adapt components of the original product. For Alpha, it was critical that Zeta made the technical architecture more flexible so they could host their customers= solutions and thus make it much easier to maintain the software. The modular architecture of the CRM product allowed Alpha to change, add, and remove functionality without larger compatibility problems.

To attract new markets, Zeta supports the promotion of their partners= customized products. Alpha has secured that their products satisfy Zeta=s perquisites and quality criteria for product promotion and has permission to promote their products on Zeta=s home page, where Zeta=s customers seek new products and product information. Promotion at conferences has been decisive for Alpha in finding new customers.

As ideas enter Zeta=s open innovation environment, Zeta also provides inspiration to Alpha=s product development early in the process. Alpha has been accepted as a member of Zeta=s early-adopter program, which provides them in the research and the development stages with leading-edge information about new CRM product features and versions that are a source of inspiration for their own innovations. Alpha=s participation in the beta tests has the same effect. Beyond improving the original product, Alpha=s solutions ensure better utilization of the CRM product and contribute to its further sale to new markets. This is in line with Vanhaverbeke=s ( 2006) claim that a focus on open innovation emerges often when companies such as Zeta try to promote and sell their products in new markets.

Zeta is relying and dependent on other companies= contributions to their product as they cannot cover all markets; this, in particular, is valid for niche markets with special needs. They continuously provide new versions of the original product as inspiration which their partners can customize and further develop.

Zeta works actively to identify companies interested in innovating their standard software. Beyond a significant effort to promote their partnership program with a minimal participation fee, Zeta helps minor, non-certified companies by providing free support and technical advice to develop solutions that will allow them to achieve partner certification. Zeta, Alpha, and Omega use this program and build an interorganizational network where they draw from each other=s knowledge.

The formal relations in the interorganizational network are mostly made up by partners and less by customers. They have entered a number of partnerships and close alliances. Their first mutual links are created with the launch of Alpha=s primary product. Alpha becomes a registered partner, which eases their customization of Zeta=s CRM solution. This is beneficial for Zeta, which gets its product promoted through an increase of its business value. The partnership with Zeta is advantageous for Alpha, but initially far from as profitable as their relation to Omega. Their shared aims and strategic cooperation have been decisive for both partners= success on the CRM market through the creation of Alpha=s first product.

Alpha=s cooperation with Zeta on the CRM product exhibits a shared destiny based on both companies= mutual dependency [START_REF] Harland | Supply Chain Management: Relationships, Chains and Networks[END_REF]. Alpha=s product development also leads to partnerships with two of Zeta=s Danish CRM vendors. Alpha has entered these relationships to secure an increased sale of licenses for their products, which are distributed through these two partners. The partnerships are primarily a sales channel. In a similar way, Alpha has a relationship to the Zeta partner and U.S. distributor Delta, which is limited to their first product. Delta has been interested in the product and opens the US market for them.

Alpha forms a partnership with Gamma to satisfy the company=s need for more competent staff who are sourced from Pakistan. The partnership forms a reciprocal dependency and can be considered as shared destiny where both partners have an interest in a mutual progress. Alpha finally merges with Omega, strengthening the organizations= positions in their individual networks. This is an important strategic reason for a merger [START_REF] Harland | Supply Chain Management: Relationships, Chains and Networks[END_REF].

Alpha has, with Omega=s support, created strong personal links to some Zeta employees. The company=s sales manager, who has been a Zeta employee, has contributed and created a number of informal relations and commitments which Alpha carefully nurtures; for example, they are committed to providing technical help in situations where Zeta employees are not able to solve tasks themselves. This facilitates easier access to different kinds of information [START_REF] Coleman | Social Capital in the Creation of Human Capital[END_REF]) and, for Alpha, their personal links to Zeta employees means that they no longer need to go through bureaucratic information channels, but can contact the relevant people when they need knowledge about certain things in the development process, thus building their core competencies about the CRM product.

Alpha=s social structures with other organizations are strongly marked by the informal relations and personal bonds to Omega. Omega has been an important source of information and provided free advice to Alpha in its start-up phase concerning business and customer needs, and Alpha helped Omega to overcome technical problems with their CRM product. They thus strengthened their mutual trust to pool resources, knowledge, and competence. This has increased the social capital between the two organizations and decreased the need for formal rules and regulations in their cooperation.

Informal agreements typify social structures and it is difficult to identify the unwritten laws that define cooperation [START_REF] Coleman | Social Capital in the Creation of Human Capital[END_REF]. Alpha=s founders felt that they had to earn Zeta personnel=s trust by rendering themselves visible by conference attendance. They also felt that they had to constantly meet Zeta employees= expectations. By satisfying these expectations, they are in a stronger position than other Zeta partners as they can better source technical information. These activities point to a social norm where a partner profits from the unwritten rule that its activity is rewarded in the form of easy access to product information.

Trusted relationships have been identified by [START_REF] Ågerfalk | Outsourcing to an Unknown Workforce: Exploring Opensourcing as a Global Sourcing Strategy[END_REF] as a premise for open sourcing as a particular form of open innovation. A broad innovation network, as in our case, with many partners in many forms of relations carries the risk of superficial, insufficient trust; still, it is considered as having the best potential for innovation by [START_REF] Simard | Knowledge Networks and the Geographic Locus of Innovation[END_REF]. We find a network where the central partners evidently found the right level of trust.

In the relationship between Zeta and Alpha, we discover some examples for coopetive behavior. Zeta has defined the boundary between cooperation and competition, where opportunistic behavior might appear, in a formal, written contract that provides both sides with some certainty. Alpha is placed under these rules which determine the parts of the software they are allowed to customize and change in the original product. However, no formal agreement exists which describes what Alpha can customize to avoid Zeta copying their customized solution, a serious problem in open innovation environments [START_REF] Graham | The Use of Intellectual Property in Software: Implications for Open Innovation[END_REF]. Only an informal agreement exists that Zeta try to avoid updating their software with identical solutions already developed by Alpha. Zeta=s attempt to not immediately develop matching solutions is essential for Alpha=s survival and creates some trust, which characterizes informal contracts [START_REF] Ganguli | Coopetition Models in the Context of Modern Business[END_REF]. Still, most of Alpha=s products have a life span of 18 to 24 months so they are pushed to constantly develop new innovative customizations. Simultaneously, Zeta expects that Alpha will promote Zeta=s products and contributes to Zeta=s good reputation as a brand.

Opportunistic behavior and the right balance is thus a predicament for the relationship of Zeta and Alpha. Zeta does not always stay within the limits of their announced changes when they update the original product. This creates a challenge as Alpha has to put extra effort into their customized solutions. Alpha is aware of this risk, but does not feel negative about the situation. They accept it as they are conscious of the power balance that exists when they customize a larger software producer=s product and see this as a part of their living conditions. Alpha also has a dilemma: deficiencies in the CRM product are opportunities for new customized solutions, which are the basis for their business. Thus, at times they delay and limit their feedback about the product which Zeta asks for before they release a new version to customers. However, given the power balance, mutual opportunistic behavior will have more serious consequences for Alpha; thus, cooperation prevails. The results of our analysis are summarized in Tables 3 and4.

Conclusions

Most research on open innovation focuses on the firm [START_REF] Grøtnes | Standardization as Open Innovation: Two Cases from the Mobile Industry[END_REF]) and research on interorganizational networks has either investigated regional innovation networks or network characteristics [START_REF] Vanhaverbeke | The Interorganizational Context of Open Innovation[END_REF][START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF] from the perspective of one firm with the notable exception of [START_REF] Grøtnes | Standardization as Open Innovation: Two Cases from the Mobile Industry[END_REF], who has studied the phenomenon in the neutral arena of standardization outside a firm. Despite the fact that results from single case studies are not generalizable, we contribute to the development of a theory of open IT innovation with a theoretical framework that integrates formally separate aspects of open innovation and interorganizational networks. We extend the literature on open innovation as an interorganizational phenomenon by broadening the view from one focal firm to the relations in a network of companies that mutually contribute to the innovations which occur in the different companies.

This research presents and analyzes an empirically grounded account of open innovation in the IT industry. We confirm and convincingly demonstrate that initiatives such as proactive search for new partners, providing occasions for developers to share knowledge and build communities, affording a suitable development context and an accommodating product architecture, as well as making inducements available in the form of financial support and promoting innovation partners [START_REF] Chesbrough | Open Innovation: The New Imperative for Creating and Profiting from Technology[END_REF][START_REF] Simard | Knowledge Networks and the Geographic Locus of Innovation[END_REF][START_REF] Vanhaverbeke | Open Innovation in Value Networks[END_REF][START_REF] Von Hippel | Democratizing Innovation[END_REF] are all schemes that successfully support open innovation undertakings.

We also substantiate that interorganizational networks have a significant influence on open innovation processes of the cooperating organizations [START_REF] Vanhaverbeke | The Interorganizational Context of Open Innovation[END_REF]. Extending the investigation of the formal relations with the analysis of the informal relations is a contribution of our work. The network in our case primarily builds on formal partnerships with a number of different companies, but the informal relations are invaluable sources of knowledge. We thus recommend that companies involved in open innovation should support and nurture the informal relations of their employees both within and beyond organizational boundaries.

We find an extensive network with numerous collaborators in various relations. In line with [START_REF] Simard | Knowledge Networks and the Geographic Locus of Innovation[END_REF], we corroborate this as one viable strategy in open IT innovation. We also find a network in which, despite formal contracts, opportunistic behavior occurs, influencing the case companies= interorganizational innovation processes. Because of the limited life of its products, the smaller company constantly seeks and collaborates with new partners which provide information about new business opportunities. This enables the company to continuously further develop their solution to be one step in front of the original software producer. A last lesson from our case is, therefore, to monitor the balance of formal contracts, informal relations, and opportunistic behavior, and to intervene, if necessary, to not jeopardize otherwise supportive open innovation initiatives.

As we have only studied one particular instance of an open innovation in an interorganizational network, further research is needed to confirm our results and understand and support other forms of the phenomenon.

  research on open sourcingCthey study from an individual psychological contract perspective the use of the open source development model where commercial companies and open source communities collaborate on the development of software innovationsClittle insight on open IT innovation exists.

Table 1 .

 1 A Framework for Open Innovation in Interorganizational Networks: Key Concepts

	Open Innovation	Interorganizational Networks
	Idea and Knowledge Flow Knowledge Sharing Opportunities Product Access and Flow Adaptable Development Context Active Partner Search Inducements	Formal Relations $ Market $ Product life $ Shared destiny $ Minority share holding $ Strategic alliance $ Joint venture $ Merger/Acquisition Informal Relations/Social Capital
		$ Commitments, expectations, trust $ Performance of favors, reciprocity $ Admission to less accessible information through personal relations to other organizations $ Norms, sanctions, behavior governed by unwritten rules
		Coopetition/Opportunistic Behavior $ Close integration/open innovation process $ Rules/caring for cooperation

Table 2 .

 2 The Seven Phases of the Case Narrative

			Product
	Freelance Launch	Partnership	Development Growth Outsourcing Merger

  product satisfies the certification requirements in Zeta=s partnership program. In the beginning of 2006, Alpha becomes a certified partner, as an independent company officially offering Zeta-based IT-services, products, and know-how. In April 2006, Alpha becomes a Gold Zeta partner, receiving more attention, support, licenses and knowledge from Zeta. They can also preview, experiment with, and test the beta versions of products much earlier. Zeta sets up the relationship through a Partner Account Manager, but this limits Alpha=s access to Zeta=s technical knowledge which they need to adapt the CRM product.

Table 3 .

 3 Characteristics of Open Innovation in the Case

		Open Innovation
	Idea and Knowledge Flow	Coupled ProcessCoutside-in/inside-out
	Knowledge Sharing Opportunities Developer communities conferences
		Online developer forums
	Product Access and Flow	Access (e.g., through beta tests)
	Development Context	Flexible product architecture
	Partner Search	Proactive search for partners
		Technical counseling for non-certified partners
	Inducements	Spin-off support
		Cheap partner program
		Partner solutions promotion on company page

Table 4 .

 4 Findings Related to the Interorganizational Open Innovation Network in the Case

	Interorganizational Networks
	Formal Relations	Informal Relations and Social Capital	Coopetition and Opportunistic Behavior
	Mostly formal partnerships	Commitments, trust, performance of favors	Close integration/open innovation process
	Product life: Alpha/ Zeta partners (Delta	$ Alpha/Omega/Zeta: Personal, trusting relationships based on friendly turns	Rules/caring for cooperation
	and other CRM vendors) Shared destiny: Zeta/ Alpha/Gamma	Admission to less accessible information $ Alpha/Omega: Omega staff provides information about customer and business needs $ Alpha/Zeta: Zeta staff	$ Formal contract $ Defined scope of customization/ innovation Rules are broken
	Strategic alliance: Alpha/Omega	provides access to product information	$ Updates and compatibility
	Merger/Acquisition: Alpha Omega	Norms and sanctions $ Alpha/Zeta: Continuous proof of worthiness of Zeta=s staff trust	$ Copying of solutions $ Limiting feedback on functionality in original product
	Market: Customers

About the Authors

Karlheinz Kautz is Professor in Systems Development and Software Engineering at the Department for Informatics at Copenhagen Business School. His research interests are in the diffusion and adoption of information technology innovations, systems development and system development methodologies for advanced application areas, the organizational impact of IT, knowledge management and software quality and process improvement. He has published widely in these areas. Karl is a founding member and past Chairman of the IFIP TC 8 WG 8.6 on the adoption and diffusion of IT.

Deborah Bunker is an associate professor in the Business Information Systems discipline at the University of Sydney. She is also president of the Australasian Association of IS and vice chair of IFIP Working Group 8.6 (Innovation, Diffusion, Transfer and Implementation of IS). She holds a Ph.D. in Information Systems Management. Her research interests are in IS philosophy, IS management, IS adoption and diffusion, and e-Commerce/e-Business. She has published widely in these areas.

Sameen M. Rab has been a student for the degree of Computer Science and Business Administration at Copenhagen Business School and has been a researcher for the project, which builds the basis for the research described here.

Michael Sinnet has been a student for the degree of Computer Science and Business Administration at Copenhagen Business School and has been a researcher for the project, which builds the basis for the research described here.