The ERP Revolution: Surviving vs. Thriving
TL;DR: The research describes the stages of ERP implementation, the obstacles that firms encountered in generating benefits from the systems, and some critical success factors for getting business value from the implementation of an ERP system in business.
Abstract: This paper presents preliminary findings from a research project that examined how firms are generating business value from their investments in enterprise resource planning (ERP) systems. The research, which was done jointly with Benchmarking Partners, describes the stages of ERP implementation, the obstacles that firms encountered in generating benefits from the systems, and some critical success factors for getting business value from the implementation of an ERP system in business.
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04 Sep 2015
TL;DR: This paper reports on a comparative case study of 13 industrial firms that implemented an enterprise resource planning (ERP) system and finds that both strong core teams and carefully managed consulting relationships addressed configuration knowledge barriers.
Abstract: This paper reports on a comparative case study of 13 industrial firms that implemented an enterprise resource planning (ERP) system. It compares firms based on their dialectic learning process. All firms had to overcome knowledge barriers of two types: those associated with the configuration of the ERP package, and those associated with the assimilation of new work processes. We found that both strong core teams and carefully managed consulting relationships addressed configuration knowledge barriers. User training that included both technical and business processes, along with a phased implementation approach, helped firms to overcome assimilation knowledge barriers. However, all firms in this study experienced ongoing concerns with assimilation knowledge barriers, and we observed two different approaches to address them. In a piecemeal approach, firms concentrated on the technology first and deferred consideration of process changes. In a concerted approach, both the technology and process changes were undertaken together. Although most respondents clearly stated a preference for either piecemeal or concerted change, all firms engaged in practices that reflected a combination of these approaches.
1,086 citations
Cites background from "The ERP Revolution: Surviving vs. T..."
...signing accountability for benefits [15, 5 1, 54]....
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...effective project team staffed full time with top business and information technology people, and organization- wide commitment [6, 10, 12, 28, 45, 46, 54, 56, 66, 70]....
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TL;DR: The results of a study of the problems and outcomes in ERP projects showed that the success of ERP systems depends on when it is measured and that success at one point in time may only be loosely related to success at another points in time.
Abstract: Enterprise resource planning (ERP) packages touch many aspects of a company's internal and external operations. Consequently, successful deployment and use of ERP systems are critical to organizational performance and survival. This paper presents the results of a study of the problems and outcomes in ERP projects which was conducted under the sponsorship of an ERP systems vendor. Two basic research questions were addressed. First, how successful are companies at different points in time in their ERP experiences and how are different measures of success related? (That is, can early success be followed by failure and vice versa?) Second, what problems do ERP adopters encounter as they implement and deploy ERP and how are these problems related to outcomes? The findings showed that the success of ERP systems depends on when it is measured and that success at one point in time may only be loosely related to success at another point in time. Companies experience problems at all phases of the ERP system life cycle and many of the problems experienced in later phases originated earlier but remained unnoticed or uncorrected. These findings suggest that researchers and companies will do well to adopt broad definitions and multiple measures of success and pay particular attention to the early identification and correction of problems.
905 citations
TL;DR: With multiyear multi-firm ERP implementation and financial data, it is found that firms that invest in ERP tend to show higher performance across a wide variety of financial metrics.
Abstract: Enterprise Resource Planning (ERP)software systems integrate key business and management processes within and beyond a firm's boundary.Although the business value of ERP implementations has been extensively debated in trade periodicals in the form of qualitative discussion or detailed case studies, there is little large-sample statistical evidence on whether the benefits of ERP implementation exceed the costs and risks. With multiyear multi-firm ERP implementation and financial data, we find that firms that invest in ERP tend to show higher performance across a wide variety of financial metrics. Even though there is a slowdown in business performance and productivity shortly after the implementation, financial markets consistently reward the adopters with higher market valuation (as measured by Tobin's q). Due to the lack of mid- and long-term post-implementation data, future research on the long-run impact of ERP is proposed.
871 citations
Cites background from "The ERP Revolution: Surviving vs. T..."
...There is a small but growing literature on the impact of ERP systems; the majority of these studies are interviews, case studies, a collection of case studies, or industry surveys (see, for example [1, 17, 31, 32, 43])....
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TL;DR: The results suggest that the early literature- and case-based research on enterprise systems does not take into account the importance of several key variables, and provide guidance to managers on how best to utilize their limited resources by employing such factors at the stage in the project's life cycle when they will have the greatest impact.
730 citations
TL;DR: This model focuses at the subunit level of the organization and includes intermediate benefits through which ERP's overall subunit impact occurs (in this case at the plant level).
Abstract: We present a model of the organizational impacts of enterprise resource planning (ERP) systems once the system has gone live and the "shake-out" phase has occurred. Organizational information processing theory states that performance is influenced by the level of fit between information processing mechanisms and organizational context. Two important elements of this context are interdependence and differentiation among subunits of the organization. Because ERP systems include data and process integration, the theory suggests that ERP will be a relatively better fit when interdependence is high and differentiation is low. Our model focuses at the subunit level of the organization (business function or location, such as a manufacturing plant) and includes intermediate benefits through which ERP's overall subunit impact occurs (in our case at the plant level). ERP customization and the amount of time since ERP implementation are also included in the model. The resulting causal model is tested using a questionnaire survey of 111 manufacturing plants. The data support the key assertions in the model.
681 citations