Academic journal article Competition Forum

Toward Process-Oriented ERP Implementation

Academic journal article Competition Forum

Toward Process-Oriented ERP Implementation

Article excerpt

EXECUTIVE SUMMARY

This paper is a case study of ERP implementation, with a focus on the process perspective of the implementation. The research methodology employs a fact-based principle that combines quantitative and qualitative methods. Data was collected and examined at corporate level of the subject organization. A model of integrating ERP and business process has been developed based on the findings. The paper concludes with findings, implications and recommendations for the future research.

Keywords: Business Process, Enterprise Systems, ERP, Implementation, Performance, Competitive Advantage

INTRODUCTION

The study is motivated by three observations. First, corporate investment in Information Technology (IT) continues unabated (Bakos 1992; Devenport, 1993; Broadbent and Weill, 1997; Teach, 1997). Second, it is a consensus among business and academic communities that the enterprise system is a top issue in IT management (Niederman et al., 1991; Brancheau et al., 1996; Boar, 1997; Information Week, 1999). Third, investigation and research work in the enterprise system area is still at its early stage. Existing conceptual frameworks need to be further tested, substantiated and refined. Particularly a further understanding of the relationship between the enterprise system and corporate performance would have enormous potential to benefit the firm's long-term IT strategic performance.

With a focus on the process perspective of ERP implementation, this paper employs a fact-based principle that combines quantitative and qualitative methods. An anonymous high-profile ERP implementation case-HFC is selected as the firm for the basis of this research. A model of the enterprise system implementation for competitiveness has been developed based on the findings of the case study. The paper concludes with findings, implications and recommendations for the future research.

LITERATURE REVIEW

In the early 1980's the information systems literature began to address how IT can provide competitive advantages (e.g. Parsons, 1983; Rockart & Scott Morton, 1984; Benjamin et al.,1984; Cash and Konsynski, 1985; Porter and Millar, 1985; Johnston and Vitale, 1988).

While IT investment has been linked to significant productivity improvements (Osterman, 1986; Brynjolfsson and Hitt, 1993), many authors reported that the benefits of IT were disappointing at best and that IT investment has failed to yield significant productivity gains, hence the productivity paradox (Roach, 1985, 1991; Franke, 1987; Loveman, 1988; Parson et al., 1990; Strassman, 1990; Barua et al., 1991; Weill 1992). Skepticism about the potential of IT applications for achieving competitive advantage encouraged research to ascertain whether IT can be a source of sustainable competitive advantage. There is increasing support in the literature that IT per se cannot generate an enduring competitive advantage (Hopper, 1990; Kettinger et al., 1994; Mata et al., 1995).

Today, an enterprise information system such as ERP (Enterprise Resource Planning) is becoming the dominant IT infrastructure (Caruso, 2003). Discussions about the competence of managing ERP have been emerging in the literature, including a stage maturity model for ERP planning systems use (Holland and Light, 2001); two-stage multi-item scale ERP competence constructs (Stratman and Roth, 2002); ERP and best of breed (Light et al., 2001); critical factors for successful implementation for enterprise systems (Nah et al., 2001).

The integration of business processes and enterprise information systems (EIS) is usually implemented under the contexts of a firm's very unique historical, business and technological situations, with the intrinsic and contextual complexities and causal ambiguity. While the integration is a very challenging task, the outcome may be an EIS that is impossible to be imitated by competitors. Thus this issue of managing the integration process warrants empirical studies and it is the focus of this paper. …

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