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Inter-organizational Systems (IOS) are network-enabled information systems that extend boundaries of an organization. There is a growing interest among researchers and practitioners to understand how the use of IOS enhances firm performance. In this study, we examine how IOS use impacts an organization’s supply chain management (SCM) capabilities and supply chain performance. Drawing on the resource-based view theory, we examine two mechanisms that are essential for enhanced supply chain performance: (a) efficient IOS external utilization regarding its networked partners and (b) the maximization of IOS organizational management capabilities in supply chain management. Using data from 193 respondents from various manufacturers and distributors of fast-moving consumer goods, we confirm all the hypotheses posited in the research model. The results demonstrate the dual effect of IOS use in …