Knapp, Constance

Shin, Namchul

English

AIS Electronic Library (AISeL)

Association for Information SystemsAIS Electronic Library (AISeL)AMCIS 2001 Proceedings Americas Conference on Information Systems(AMCIS)December 2001Impacts of Enterprise Resource Planning SystemsSelection and ImplementationConstance KnappPace UniversityNamchul ShinPace UniversityFollow this and additional works at: http://aisel.aisnet.org/amcis2001This material is brought to you by the Americas Conference on Information Systems (AMCIS) at AIS Electronic Library (AISeL). It has been acceptedfor inclusion in AMCIS 2001 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contactelibrary@aisnet.org.Recommended CitationKnapp, Constance and Shin, Namchul, "Impacts of Enterprise Resource Planning Systems Selection and Implementation" (2001).AMCIS 2001 Proceedings. 203.http://aisel.aisnet.org/amcis2001/2031046 2001  Seventh Americas Conference on Information SystemsIMPACTS OF ENTERPRISE RESOURCE PLANNING SYSTEMSSELECTION AND IMPLEMENTATIONConstance A. KnappSchool of Computer Science and InformationSystemsPace Universitycknapp@pace.eduNamchul ShinSchool of Computer Science and InformationSystemsPace Universitynshin@pace.eduAbstractEnterprise resource planning (ERP) is an approach for managing and integrating business processes acrossorganizational functions and locations. This study looks at the organizational impacts from a businessperformance point of view, seeking answers to the question, how do organizations evaluate ERP systemimplementation? This is a multi-part project.  In the first stage of this project we will develop a theory aboutthe impact of ERP selection and implementation on business performance. We will be using multi-site casestudies to build the theory. This paper will report on the results from the first case study. We will develop atheory about ERP implementation and performance based on these case studies.Keywords: Enterprise resource planning, business process reengineering, business performanceIntroductionEnterprise resource planning (ERP) is an approach for managing and integrating business processes across organizationalfunctions and locations. ERP systems are based on interoperable application modules and serve all major business functions,including manufacturing, marketing, finance, accounting, and human resources. Much of the published literature looks at ERP systems from the point of view of penetration of ERP systems (van Everdingen,et al., 2000), success or failure with a particular vendor (Anonymous, 1999; Diana, 1999; Gibson, et al., 1999), critical successfactors relating to ERP (Bingi, et al., 1999; Holland and Light, 1999; Holland, et al., 1999), and implementation issues that mightmake an ERP implementation different from any other software implementation project (Marcus, et al., 2000; Scheer andHabermann, 2000; Soh, et al., 2000; Sprott, 2000; Willcocks and Sykes, 2000).This study looks at the organizational impacts from a business performance point of view, seeking answers to the question, howdo organizations evaluate ERP system implementation?Goals and Objectives of the ResearchCompanies adopting ERP systems expect improved business performance because ERP systems support the entire businessprocess and integrate them across business functions and locations (Shin and Knapp, 2001).  However, despite these strongorganizational incentives, adopting ERP systems does not assure improved business performance (Davenport, 2000; Dong, 2000;Jesitus, 1997; Poston and Grabski, 2000). The on-going research project will examine what motives companies have for installing ERP systems, both stated and unstated,and if firm’s stated objectives are reached. We will look at what companies said they would get out of ERP systems, and  whatthey did get. We will study how success was measured and how benefits were assessed, and what impact the ERP implementationhad on the firm’s business performance. Business performance will be assessed both from a financial perspective, looking atfinancial results, and a marketing perspective, assessing competitive advantage.Knapp & Shin/Performance Impacts of ERP Systems Selection and Implementation2001  Seventh Americas Conference on Information Systems 1047This is a multi-part project. In the first stage of this project we will develop a theory about the impacts of ERP selection andimplementation on business performance. Research MethodologyWe will be using multi-site case studies to build the theory. Case studies are appropriate for this type of work (Curtis, et al., 1988;Darke, et al., 1998; Goodhue, et al., 1992; Holland and Light, 1999; Lee, 1989; Yin, 1993; Yin, 1994). We will conduct semi-structured interviews with key people in the organization, including the CIO, the CFO, and members of the team that implementedthe ERP package in the organization.   We will also examine written material, such as memos, internal publications and externalreports (where available) discussing the project.Preliminary Findings From preliminary interviews, we have learned that the decision to purchase and install an ERP system is often made by high levelexecutives who may not understand information systems. The decision to install an ERP system may be made for political, tacticalor strategic reasons.  The difficulties of installing such a complex software package are often underestimated. When organizations say that they have implemented an ERP system, do they mean that they have installed all the modules or onlysome of the modules?  Preliminary interviews suggest that  CFO might have more influence than other executives might in theorganization because the financial modules sometimes drive the ERP system implementation. This may result in only the financialmodules being implemented; it often results in the financial modules being implemented first. This raises the question, whatconstitutes an ERP implementation? Are there performance differences in firms that have installed only the financial modules,all the modules, or something in between?Finally, these preliminary interviews suggest that in most cases a vendor or a consulting company presents an organization witha methodology that is to be followed. This methodology may or may not suit the organization. Does the choice of a methodologyfor implementation of an ERP affect business performance?Future WorkWe will develop a theory about ERP implementation and performance based on the multiple case studies. Further work will alsoanalyze the performance impacts of ERP systems quantitatively to test the theory, employing published financial and marketingdata. Future papers will report on the theory and its robustness.ReferencesAnonymous “Refiner uses software to optimize maintenance processes,” Oil & Gas Journal (97:21), 1999, pp. 64.Bingi, P., Sharma, M.K. and Godla, J.K. “Critical issues affecting an ERP implementation,” Information Systems Management(16:3), 1999, pp. 7-14.Curtis, B., Krasner, H. and Iscoe, N. “A field study of the software design process for large systems,” Communications of theACM (31:11), 1988, pp. 1268-1287.Darke, P., Shanks, G. and Broadbent, M. “Successfully completing case study research: combining rigour, relevance andpragmatism,” Information Systems Journal (8), 1998, pp. 257-272.Davenport, T.H. Mission Critical: Realizing the Promise of Enterprise Systems, Harvard Business School Press, Boston, MA,2000.Diana, A. “Hunter group installs two ERP solutions,” Computer Reseller News,:859), 1999, pp. 85.Dong, L. “A Model for Enterprise Systems Implementation: Top Management Influences on Implementation Effectiveness,”Proceedings of the 6th Americas Conference on Information Systems, 2000, Gibson, N., Holland, C. and Light, B. “A Fast Track SAP R/3 Implementation at Guilbert Niceday,” Electronic Markets), 1999,pp. 190-193.Goodhue, D.L., Kirsch, L.J., Quillard, J.A. and Wybo, M.D. “Strategic Data Planning: Lessons from the Field,” MIS Quarterly(16:1), 1992, pp. 11.Holland, C. and Light, B. “A Critical Success Factors Model for ERP Implementation,” IEEE Software), 1999, pp. 30-36.Enterprise Systems1048 2001  Seventh Americas Conference on Information SystemsHolland, C., Light, B. and Gibson, N. “A critical success factors model for enterprise resource planning implementation,”Proceedings of the 7th European Conference on Information Systems (ECIS99), Copenhagen, Denmark, 1999, pp. 273-287.Jesitus, J. “Broken Promises,” Industry Week,:November 1997, pp. 31-46.Lee, A.S. “A Scientific Methodology for MIS Case Studies,” MIS Quarterly (13:1), 1989, pp. 33-50.Marcus, M.L., Tanis, C. and van Fenema, P.C. “Multisite ERP implementations,” Communications of the ACM (43:4), 2000, pp.42-46.Poston, R. and Grabski, S. “The Impact of Enterprise Resource Planning Systems on Firm Performance,” Proceedings of the 21stInternational Conference on Information Systems , 2000, Scheer, A.-W. and Habermann, F. “Making ERP a success,” Communications of the ACM (43:4), 2000, pp. 57-62.Shin, N. and Knapp, C. “The Organizational and Economic Impacts of Enterprise Resource Planning Systems,” Proceedings ofthe 2nd Annual Global Information Technology Management World Conference , Dallas, TX, 2001, pp. forthcoming.Soh, C., Kien, S.S. and Tay-Yap, J. “Cultural fits and misfits: Is ERP a universal solution?,” Communications of the ACM (43:4),2000, pp. 47-51.Sprott, D. “Componentizing the enterprise application packages,” Communications of the ACM (43:4), 2000, pp. 63-69.van Everdingen, Y., van Hillegersberg, J. and Waarts, E. “ERP adoption by European midsize companies,” Communications ofthe ACM (43:4), 2000, pp. 27-36.Willcocks, L.P. and Sykes, R. “The role of the CIT and IT function in ERP,” Communications of the ACM (43:4), 2000, pp. 32-39.Yin, R.K. Applications of case study research, SAGE Publications, Newbury Park, California, 1993.Yin, R.K. Case study research: design and methods, 2nd. edition , SAGE Publications, Thousand Oaks, California, 1994.

Impacts of Enterprise Resource Planning Systems Selection and Implementation

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Impacts of Enterprise Resource Planning Systems Selection and Implementation

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