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Erp research agenda(imds)


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Erp research agenda(imds)

  1. 1. Enterprise resource planning (ERP) systems: aresearch agendaMajed Al-MashariDepartment of Information Systems, College of Computer and InformationSciences, King Saud University, Riyadh, Saudi ArabiaIntroductionEnterprise resource planning (ERP) systemscan be regarded as one of the most innovativedevelopments in information technology (IT)of the 1990s. With the growing interest ofmany organizations in moving fromfunctional to process-based IT infrastructure,ERP systems have become one of today’smost widespread IT solutions. According toHeald and Kelly (1998), it was projected that,in 2002, organizations’ total spending on ERPapplications would reach $72.63 billion. Whathave motivated organizations to implementERP systems are their integration andstandardization capabilities, flexible client/server architecture, and their abilities todrive effective business reengineering andmanagement of core and support processes(ComputerWorld, 1998).While ERP systems have traditionally beenused by capital-intensive industries, such asmanufacturing, construction, aerospace, anddefence, they have recently beenimplemented in the finance, education,insurance, retail, and telecommunicationssectors (Chung and Snyder, 2000). ERPsystems are now considered the standardtechnology on which many organizations areoperating their business, and they are,therefore, known by the specific ERPstandard they are adopting (Sweat, 1998).From a historical point of view, the conceptof ERP has advanced from the MRP systemsin the 1970s and the MRPII systems in the1980s. Currently, SAP, Oracle, PeopleSoft,Baan, and J.D. Edwards are considered thetop ERP vendors. Despite the differences inthe marketing policies of their vendors, thesepackages have similar offerings andshortcomings, and they still adopt theMRPII’s model for the manufacturingplanning components of their systemproducts (Gray and Landvater, 1989). Overall,ERP systems are beneficial in providingsupport for all variations of best businesspractices, in enabling the implementation ofthese practices with a view towardsenhancing productivity, and in empoweringthe customer to modify the implementedbusiness processes to suit their needs (Rao,2000).As the widespread application of ERPsystems continues, the need for a newresearch agenda to address various issues inthis context has never been more urgent.ERP repeatedly topping the list of themes inmajor academic information systems (IS)conferences reflects the dire need forresearch in this rapidly emerging field. Inone aspect, ERP combines bothorganizational business processes and totalorganizational IT into one integrated system(Chung and Snyder, 2000). Both ITpractitioners and researchers are still notable to determine the potential impact of ERPadoption on adopting organizations.Based on a comprehensive review of muchof what has been written so far about ERP,Figure 1 highlights the major streams of ERPresearch. This paper, by reviewing availablestudies and exploring future researchavenues, aims to present a new agenda tofurther the research on the ERPphenomenon. In particular, the paperhighlights several dimensions relating toERP adoption, technical aspects of ERP, andERP in information systems (IS) curricula.These are discussed in the following sections.ERP adoptionTotal quality management (TQM) andbusiness process re-engineering (BPR)movements are believed to be among thecontributing factors to the heightenedThe Emerald Research Register for this journal is available at current issue and full text archive of this journal is available at[ 22 ]Industrial Management &Data Systems103/1 [2003] 22-27# MCB UP Limited[ISSN 0263-5577][DOI 10.1108/02635570310456869]KeywordsEnterprise resource planning,Research, Change managementAbstractThe continuing development ofenterprise resource planning(ERP) systems has beenconsidered by many researchersand practitioners as one of themajor IT innovations in thisdecade. ERP solutions seek tointegrate and streamline businessprocesses and their associatedinformation and work flows. Whatmakes this technology moreappealing to organizations is itsincreasing capability to integratewith the most advanced electronicand mobile commercetechnologies. However, researchin the ERP area is still lacking andthe gap in the ERP literature ishuge. Attempts to fill this gap byproposing a novel taxonomy forERP research. Also presents thecurrent status with some majorthemes of ERP research relatingto ERP adoption, technicalaspects of ERP and ERP in IScurricula. The discussionpresented on these issues shouldbe of value to researchers andpractitioners. Future researchwork will continue to survey othermajor areas presented in thetaxonomy framework.
  2. 2. attention to the employment of IT in keybusiness functions (Soliman, 1998). Severalresearchers point to the linkages betweenERP and BPR, where the former isconsidered a driving technology of BPR. ERPsystems are seen to be effective in tying thebusiness functional units with the variousorganizational information systems and theirassociated databases, which in the end cansupport the strategic aims of modernorganizations (Soliman and Youssef, 1998).One of the major challenges in ERPadoption is flexibility assurance.Organizations will always need to integratenewly-acquired business functionalities intoits data processing systems with theminimum time possible (Gupta, 2000). Theflexibility of ERP systems refers to the extentto which an ERP system may be dynamicallyreconfigurable to define new business modelsand processes (Stedman, 1999). However, oneof the major drivers of implementing ERPsystems is their competence of beingdesigned based on best practices and theirability to standardize business processes andsystems (Cooke and Peterson, 1998; Kellerand Teufel, 1998; Rick, 1997). Organizationsview ERP-enabled standardization as a vitalmeans to integrate dispersed organizationalsystems, provide a seamless access toinformation organization-wide, and makeinformed decisions on strategic and dailybusiness matters (OÈ sterle et al., 2000).However, standardization in ERP context iswithout shortcomings. Several researcherspoint to the fact that standardization mightbe achieved at the cost of flexibility (Bancroftet al., 1998; Keller and Teufel, 1998; Pawlowskiet al., 1999; Scapens, 1998; Vercoulen andWegberg, 1999), which is another importantbusiness requirement for organizations toaccommodate emerging changes in businessprocesses and IT systems (OÈ sterle et al., 2000).However, it is at the ERP package selectionphase that a balance between standardizationand flexibility should be considered, based ona careful determination of industrial andorganizational demands (Keller and Teufel,Figure 1Taxonomy of ERP research[ 23 ]Majed Al-MashariEnterprise resource planning(ERP) systems: a researchagendaIndustrial Management &Data Systems103/1 [2003] 22-27
  3. 3. 1998). Attention to other important factors isalso important to ensure a balancedimplementation approach.The adoption of ERP system in anorganization requires intense efforts,focusing on both technological and businessthemes of implementation. Critical to thesuccess of these efforts is the adequateorganizational preparedness for embarkingon ERP. The following list developed by Rao(2000) describes the major factors that have tobe considered in the preparation stage of ERPimplementation:Infrastructure resources planning ±making sure that adequate infrastructureis planned for in a way that it becomesreliably available well in time (both forthe pre-implementation and the post-implementation stages).Local area network ± ensuring networksupport for any ERP or other applications.Servers ± deploying adequate server/network, even during the training/modeling phase.PCs ± introducing new PCs with latestconfiguration that would be quiteadequate for most ERPs.Training facilities ± establishing adequatetraining center to work as competencycenter.Human resources planning ± focusing onbuilding a teamwork environment whereteam size spans across the entireorganization.Education about ERP ± ERP educationshould be carried out across theorganization about ERP success andfailure practices.Commitment to release the right people ±ERP is recognized as a difficult butnecessary project, and the best peoplemust work full-time on the project.Top management’s commitment ± topmanagement must have a change mindsetthrough learning at all levels.Commitment to implement ``vanillaversion’’ ± ensuring minimalcustomisation and quick implementation.Ability and willingness to consider anongoing site as a Greenfield site.Reasonably well working manual systems± carrying out audit exercise to find thecurrent status and correspondingcorrective actions.Strategic decision on centralized versusdecentralized implementation.Gupta (2000) finds that the keys to successfulimplementation of ERP are related tosecuring top management commitment,forming cross-functional task forces to linkproject management with business units,carrying out an assessment exercise ofhardware requirements, making deploymentin a step-by-step introduction rather than allat once, starting early planning on usertraining and support, streamlining decisionmaking to move implementation quickly, andbeing patient as ERP implementation takestime. Cissna (1998) finds that factors relatingto top management support, assignment ofbest people to implementation teams, andstrong involvement of people from the fieldare important in reducing the resistance tochanges involved in ERP implementation.Gupta (2000) illustrates several commonproblems associated with ERPimplementation. Among these is theresistance to change, when, for example,some employees become reluctant to learnnew techniques or accept newresponsibilities. Another problem is relatedto unplanned cost associated with newrequirements emerging after the freezingstage. A third problem is poor training ofend-users, who, when the system is up andrunning, do not know how to use it andmaintain it continually.Future research in this area may focus onconducting a series of case studies andempirical studies on ERP deployment withregards to specific stages of implementation.It would be interesting to investigate,through a critical factor approach, howorganizations have gone through the ERPimplementation. Other themes of study canbe ERP’s influence on IT and humanresources infrastructure, strategicalignment, knowledge management andorganizational learning, outsourcing andapplication service provider and competitiveadvantage.Technical aspects of ERPA number of researchers highlight severalERP issues related to the technical side ofimplementation. One of these issues isrelated to the increasing use of the Internet,which has raised the biggest challenge facingERP suppliers. This challenge relates mainlyto the need of addressing the global accessissues and deployment of informationsystems that would accommodate to intra-organization and extra-organization needseffectively. Moreover, ERP systems need tostimulate these technologies to providecomplete (best business practices), usable(highly productive) and adaptable (easilyinstalled and maintained) applicationsystems (Rao, 2000).Chan (1999) proposes an evaluationframework for the different IT architectural[ 24 ]Majed Al-MashariEnterprise resource planning(ERP) systems: a researchagendaIndustrial Management &Data Systems103/1 [2003] 22-27
  4. 4. choices for ERP systems based on identifyingthe requirements of eight componentsrelating to: network infrastructure, serveroperating systems (OS)/platform, database,data ownership, client OS/workstations, Webenablement, prerequisite user skills, and ITcapacity. In addressing the problem thatmany organizations face when attempting tokeep up with the new versions of theiralready implemented ERP system, Pu Ng andChan (1999) develop an economic model ofERP life-cycle cost to assist in determiningthe best time to select an upgrade and thebest time to complete its implementation.Umar and Missier (1999) illustrate aknowledge-based decision workbench tool toreduce the time and effort spent onintegration and migration tasks in ERPimplementation. This workbench helps theuser to define appropriate strategies, decidearchitectural configurations, select asoftware package and plan for theimplementation project. Seethamraju (1999)suggests that future ERP systems will bedeveloped based on components rather thanmodules and will be designed for incrementalmigration rather than massivereengineering. He also predicts that the focuswill be on managing dynamic rather thanstatic configuration, which, in turn, requiresmanaging multiple sourcing and partnershiprelationships. Sato et al. (1999) put forwardseveral areas for future research, includingintegrating ERP and other systems on theInternet, modeling the effects and outcomesof various customizing changes in ERP,developing an ERP-oriented approach toprocess modeling, and the application of ERPsystems in home business domains. Gable etal. (1997) suggest researching whether ERPimplementation requirements should bespecified in the same way as for designingand developing a custom system. They alsosuggest examining those uniquecharacteristics of R/3 that influence both theaudit of its implementation and its post-implementation review, as well as onmeasuring the cost of switching from legacysystems to ERP systems and exploring theorganizational approaches used inanticipating costs.ERP in IS curriculaIn response to the widespread application ofERP systems, academic institutions arebecoming more concerned about how tointegrate the teaching of these emergingtechnologies into their current IS curricula.This originates from the market demand forhighly qualified ERP specialists (HewittSurvey, 1999). Various frameworks andmodels have been put forward to meet thiscritical demand.Elam et al. (1999) consider the ERPeducational strategy as a curriculumintegration mechanism to readjust theeducational delivery by moving from a focuson standard functional areas towards anintegrated business process approach. Theirapproach is that this strategy can beaccomplished by providing an intimateunderstanding of business processes,integrating management and technologyskills, imparting knowledge on the power ofintegrated business processes, and using theERP as an enabler of cross-functionaleducation. However, Gibbon and Aisbett(1999) suggest that ERP systems should betaught through understanding the history ofbusiness information requirements. Therationale behind this approach is that thecomplexity of ERP systems can be bestunderstood by looking at how modernrequirements have developed over time fromsimple beginnings. Based on a realization ofthe barriers of the lack of ERP knowledge andexperience of academic staff, and theperceived need for students to gain hands-onexperience, Hawking et al. (1999) illustrate anapproach to integrating ERP teaching in theIS 1997 curriculum model across 11 levels ofknowledge relating to fundamentals of IS,personal productivity with IT, IS theory andpractice, IT hardware and software,programming, data, file and objectstructures, networks andtelecommunications, analysis and logicaldesign, physical design and implementationwith both DBMS and programmingenvironments, and project management andpractice. Hawking et al. (1999) suggest thatalliances with ERP vendors have enabledsome universities to offer innovative ERPteaching. This principle of such vendorpartnership is adopted by Ongkasuwan (1999)who proposes a framework for incorporatingR/3 into the MIS curriculum of MBA andBBA programs. The aim of his framework isto arrive at a cost-effective approach to ahigh-level teaching standard based on nineessential R/3 software modules.Other research efforts in this area includethe work of Stewart and Rosemann (1999)who develop a ``win-win’’ collaborativeapproach that local universities can use tocapitalize on their own expertise andcompete in the global educational market.Their approach adopts the principle of taskallocation based on local expertise, togetherwith the establishment of collaborativecurriculum development teams acrossvarious institutions. Quinton (1999) also[ 25 ]Majed Al-MashariEnterprise resource planning(ERP) systems: a researchagendaIndustrial Management &Data Systems103/1 [2003] 22-27
  5. 5. provides some recommendations andguidelines concerning the inclusion of R/3into a business curriculum in the context of astrategic alliance with an ERP vendor. Hesuggests five steps necessary for developingknowledge about R/3. These are:1 introduction to the ERP concept;2 introduction to the business processapproach;3 introduction to the basic concepts of theR/3 system;4 instruction in a particular businessmodule; and5 faculty training in the application of theindividual system modules.On the other hand, Victor et al. (1999) studythe interdisciplinary approach of theUniversity of Applied Science, Cologne,which focuses strongly on practical demandsand requirements by industry andcommerce, and encourages students to attendlectures that impart knowledge and skillsranging from programming to businessprocess modeling using R/3. Stewart andGable (1999) propose the use of case study andaction research approaches in researchingand teaching aspects of postgraduate ERP-related programs. They believe this approachenriches the theoretical side of practice andprovides insights to industry sponsors. Theyargue that it also has the potential to providestudents with pragmatic skills of researchand increase their ability to understandproblems associated with ERPimplementation.From a practical perspective, Gable et al.(1997) identify a number of issues that need tobe addressed before incorporating ERPteaching in the IS curriculum. These includeknowledge of how ERP systems are utilizedin the current IS curriculum, justifying theneed to incorporate ERP teaching in the IScurriculum, and ascertaining ways ofcovering ERP systems in IS major subjects inundergraduate programs. From a researchpoint of view, Elam et al. (1999) propose thedevelopment of a set of metrics for measuringthe effectiveness of ERP teaching and thecurriculum. This includes measuring thereal and exact value of ERP knowledge in thejob market and the impact of teaching qualityand quantity on it. It also concernsmeasuring the increase in course or programrelevancy or school prestige. Gable (1998)suggests examining the influence of factorslike the pervasiveness of the ERP packages inthe world/regional/local market, theanticipated longevity of the inherenttechnology, and market demand for relatedexpertise on research and curriculum.ConclusionWith the increase in organizations’consideration to measure customerprofitability and retain customers, manycustomer-focused applications and analyseshave begun moving from theory toimplementation through creative, innovativeand motivated organizations that aim toprovide a tremendous and unbeatablestrategic advantage (Rao, 2000).ERP vendors will continue to extend theirsystems to include Web-based procurementapplications, to support the onlineoutsourcing and maintenance processes ofERP systems (Gupta, 2000). Other majorefforts relating to the continuousdevelopment of ERP systems are dedicated toembedding more Internet-based features thatprovide organizations with global reach totheir suppliers and customers.This paper has presented a survey ofresearch relating to some major ERP issues.The paper has illustrated a taxonomy of ERPresearch that is believed to be covering themajor issues in this important field. Muchresearch is still needed to better understandthe ERP phenomenon from a balancedperspective. Several themes have beendiscussed in this paper, and future work willcontinue to survey the other areas describedin the framework. It is expected that thecurrent and future work will collectivelyprovide researchers and practitioners with agood reference to research and practice inthis emerging field.ReferencesBancroft, N., Seip, H. and Sprengel, A. (1998),Implementing SAP R/3: How to Introduce aLarge System into a Large Organization,Manning Publications, Greenwich, CT.Chan, S. (1999), ``Architecture choices for ERPsystems’’, in Proceedings of AmericaConference on Information Systems’99,pp. 210-12.Chung, S. and Snyder, C. (1999), ``ERP initiation ±a historical perspective’’, in Proceedings ofAmerica Conference on InformationSystems’99, pp. 213-15.Chung, S. and Snyder, C. (2000), ``ERP adoption: atechnological evolution approach’’,International Journal of Agile ManagementSystems, Vol. 2 No. 1.Cissna, T. (1998), ``ERP software implementationbrings pains with its gains’’, Electric Light &Power, No. 76, pp. 43-4.ComputerWorld (1998), ``Big retail SAP project puton ice’’, ComputerWorld.Cooke, D. and Peterson, W. (1998), ``SAPimplementation: strategies and results’’,Research Report 1217-98-RR, The ConferenceBoard, New York, NY.[ 26 ]Majed Al-MashariEnterprise resource planning(ERP) systems: a researchagendaIndustrial Management &Data Systems103/1 [2003] 22-27
  6. 6. Elam, J., Murphy, K., Becerra-Fernandez, I. andSimon, S. (1999), ``ERP as an enabler ofcurriculum integration’’, in Proceedings of the3rd Annual SAP Asia Pacific Conference,pp. 13-20.Gable, G. (1998), ``Large package software: aneglected technology?’’, Journal of GlobalInformation Management, Vol. 6 No. 3, pp. 3-4.Gable, G., Heever, R., Erlank, S. and Scott, J.(1997), ``Large packaged software: the need forresearch’’, in Proceedings of the 3rd AnnualSAP Asia Pacific Conference, pp. 381-8.Gibbon, G. and Aisbett, J. (1999), ``Teaching ofSAP R/3 through an understanding of thehistory of business informationrequirements’’, in Proceedings of the 3rdAnnual SAP Asia Pacific Conference, pp. 70-7.Gray, C.D. and Landvater, D.V. (1989), MRPIIStandard Systems, Oliver Wright LimitedEssex Junction, VT.Gupta, A. (2000), ``Enterprise resource planning:the emerging organizational value systems’’,Industrial Management & Data Systems,Vol. 100 No. 1.Hawking, P., Ramp, A. and Shackleton, P. (1999),``IS’97 model curriculum and enterpriseresource planning systems’’, in Proceedings ofthe 3rd Annual SAP Asia Pacific Conference,pp. 78-88.Heald, K. and Kelly, J. (1998), AMR ResearchPredicts ERP Market Will Reach $72.63 Billionby 2002, AMR Research, Boston, MA.Hewitt Survey (1999), ``Hewitt’s 1999 HotTechnologies Survey’’, available, G. and Teufel, T. (1998), SAP R/3 Process-Oriented Implementation, Addison-Wesley,Harlow.Ongkasuwan, M. (1999), ``A framework foradopting SAP R/3 into MIS curriculum’’, inProceedings of the 3rd Annual SAP AsiaPacific Conference, pp. 115-18.OÈ sterle, H., Fleisch, E. and Alt, R. (2000), BusinessNetworking, Springer, Berlin.Pawlowski, S., Boudreau, M. and Baskerville, R.(1999), ``Constraints and flexibility inenterprise systems: a dialectic of systems andjob’’, in Proceedings of America Conference onInformation Systems’99, pp. 791-3.Quinton, A. (1999), ``Organizing, planning andimplementing SAP R/3 into anundergraduate business curriculum’’, inProceedings of the 3rd Annual SAP AsiaPacific Conference, pp. 119-26.Rao, S. (2000), ``Enterprise resource planning:business needs and technologies’’, IndustrialManagement & Data Systems, Vol. 1000 No. 2.Rick, M. (1997), ``IT integration programmed forglobal operation’’, Chemical Week, Vol. 159No. 6, pp. 21-7.Sato, R., Hotaka, R. and Noguchi, H. (1999), ``ERPand business process engineering ineducation’’, in Proceedings of the 3rd AnnualSAP Asia Pacific Conference, pp. 127-33.Scapens, R. (1998), ``SAP: integrated informationsystems and the implications for managementaccountants’’, Management Accounting,Vol. 76 No. 8, pp. 46-8.Seethamraju, R. (1999), ``ERP and businessmanagement ± new directions for educationand research’’, in Proceedings of the 3rdAnnual SAP Asia Pacific Conference, pp. 133-9.Soliman, F. (1998), ``Optimum level of processmapping and least cost business processre-enginerering’’, International Journal ofOperations & Production Management, Vol. 18No. 9/10, pp. 810-16.Soliman, F. and Youssef, M. (1998), ``The role ofSAP software in business process re-rengineering’’, International Journal ofOperations & Production Management, Vol. 18No. 9/10, pp. 886-95.Stedman, C. (1999), ``Tracking changes ± a must inERP projects; business users sometimes failto realize importance’’, Computerworld,pp. 41-2.Stewart, G. and Gable, G. (1999), ``Applying thecase study and action research methods topost-graduate studies of enterprise processingsystems implementations’’, in Proceedings ofthe 3rd Annual SAP Asia Pacific Conference,pp. 159-70.Stewart, G. and Rosemann, M. (1999), ``Developingindustry strength university education inenterprise resource management throughinternational collaborative efforts’’, inProceedings of the 3rd Annual SAP AsiaPacific Conference, pp. 148-58.Sweat, J. (1998), ``Enterprise application suites arebecoming a focal point of business andtechnology planning’’, InformationWeek.Umar, A. and Missier, P. (1999), A Knowledge-based Decision Support Workbench forEnterprise Resource Integration andMigration, Telcordia Technologies,Morristown, NJ.Vercoulen, F. and Wegberg, M. (1999), ``Standardselection modes in dynamic, complexindustries’’, in Proceedings of the IEEEConference on Standardisation and Innovationin Information Technology (SIIT), pp. 1-11.Victor, F., Mayr, R. and Amon, O. (1999), ``Doingthe right thing right ± experiences on aninterdisciplinary SAP R/3 education project’’,in Proceedings of the 3rd Annual SAP AsiaPacific Conference, pp. 171-9.[ 27 ]Majed Al-MashariEnterprise resource planning(ERP) systems: a researchagendaIndustrial Management &Data Systems103/1 [2003] 22-27