ERP Adoption by Public and Private Organizations-A Comparative Analysis of Successful Implementations

By Alves, Maria do Ceu; Amaral Matos, Sergio Ivo | Journal of Business Economics and Management, June 2013 | Go to article overview
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ERP Adoption by Public and Private Organizations-A Comparative Analysis of Successful Implementations


Alves, Maria do Ceu, Amaral Matos, Sergio Ivo, Journal of Business Economics and Management


1. Introduction

Nowadays no one would dispute that information technology has become one of the most important cornerstones of an enterprise's ability to successfully compete in the global market place (Yusuf et al. 2006). Despite the downturn in the global economy, there has been a worldwide trend of Enterprise Resource Planning (ERP) implementations resulting in key initiatives among ERP vendors, with some having established new divisions dedicated to the public-sector (Thomas, Jajodia 2004). The worldwide market for ERP solutions is expected to grow at a Compounded Annual Growth Rate (CAGR) of 4.8 percent over the next years (ARC 2006). According to a new ARC Advisory Group study "Enterprise Resource Planning Worldwide Outlook" (ARC 2006), the market was $16.67 billion in 2005 and is forecasted to be over $21 billion in 2010. The recent AMR Research report forecasts are higher. "We predict an 11% CAGR for the ERP market through 2011" (Jacobson et al. 2007), with the public sector investing heavily in ERP systems (Raymond et al. 2005). So, with organizations increasingly opting to implement ERP systems, there is an increasing need to understand the reasons presented to justify this option. Implementing an ERP system is a difficult task and not much research has been done in this area. Usually "the ex-post evaluation of ERP systems is necessary not only to justify the investments made in these systems, but also and above all to better manage the benefits sought by organizations from these systems" (Uwizeyemungu, Raymond 2010). In this study, an ex-post evaluation is needed to ensure that the organization under study corresponds to a successful implementation of ERP systems.

In recent years, changes in the business climate have led to significant changes in management processes of organizations. Similarly, developments in information technology and business reengineering process, have led to major strategic changes often associated with the implementation of ERP systems in organizations.

Organizations have become more complex in terms of their corporate structure and geographical dispersion due to phenomena such as the globalization of business. On a daily basis, they produce large amounts of information, resulting in different systems, which need to be addressed. As a way to overcome this problem, organizations have been integrating their systems into a single operating system. This system, which allows integrating all the information produced in an organization is called the ERP system (Shang, Seddon 2002) and affects the entire logistics chain. "An ERP implementation usually affects both suppliers and customers due to the transformation that generally occurs through the technical integration of software, hardware and processes" (Malhotra, Temponi 2010). But the main objective in an enterprise information system is to control the information within the whole enterprise, and even in the whole supply chain, in order to obtain competitive advantage" (Botta-Genoulaz et al. 2005).

In the public sector "Governments worldwide have increased efforts to streamline their business processes and support public services enabled by various technologies. At the core of eGovernment technology enablers are enterprise resource planning (ERP) systems" (Wagner, Antonucci 2009). ERP systems are also considered a solution to the growing information requirements within the public-sector (Spano et al. 2009).

The government of Portugal is exploring new and better ways of delivering its services to the Portuguese people, including alternative service delivery, public/private partnerships, and privatization. Portugal has an advanced infrastructure containing two major portals; the Citizen's portal and the Enterprise's portal. Both are considered as main access points for interaction with the public administration (ENISA 2010). The strategic use of information technologies is playing a key role in this modernization process.

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