Abstract This paper presents an investigation of the relationships between the factors that drive the adoption of integrated, web-based demand chain management (DCM), as well as the relationship between web-based DCM integration and service innovation performance. Data was collected from 256 companies in the health care industry. The results show that collaborative structure (e.g. competitive pressure, trust, information sharing and environmental uncertainty) and technological structure (e.g. security) have a positive and significant influence on an organization's decision to adopt web-based DCM integration. However, collaborative structure has the greatest influence by far on an organization's adoption of web-based DCM integration. The findings also show strong evidence that web-based DCM integration improves service innovation performance. We also found that web-based DCM implementation has a greater impact on service innovation performance than in organizations that only implement web-based supply or demand integration strategies. This research has important implications for organizations interested in improving their service innovation performance, as well as improving the adoption of web-based DCM integration. For example, to improve the success of web-based DCM adoption, organizations should focus on improving their collaborative structure with suppliers and customers first, before considering their technological structure. Security is also a key issue that needs to be addressed by organizations to ensure the successful adoption of web-based DCM.