1. Industrial Marketing Management 32 (2003) 585 – 594
A six-stage model of the buying process for ERP software
Jacques Verville*, Alannah Halingten
Department of MIS and Decision Science, College of Business Administration, Texas A&M International University,
5201 University Boulevard, Laredo, TX 78041, USA
Received 1 October 2001; received in revised form 1 October 2002; accepted 1 November 2002
Abstract
This paper presents a model of the Enterprise Resource Planning (ERP) software acquisition process that reflects the findings from the
four cases examined in this study. This ERP acquisition process model includes six distinctive, yet interrelated, processes (planning,
information search, selection, evaluation, choice, and negotiations). This paper depicts the principal processes and many of the constituent
activities, issues, dynamics, and complexities that pertain to the acquisition of ERP software. The results from this study contribute to the
identification of processes that are part of this type of acquisition. Further, this model also suggests complexities that are worthy of further
investigation, in and of themselves, if for no other reason than that they could prove the limit of generalizability of the model.
D 2003 Elsevier Science Inc. All rights reserved.
Keywords: Enterprise Resource Planning (ERP) software; Acquisition; Planning; Evaluation; Negotiations
1. Introduction Halingten, 2001). Indeed, what processes do organizations
use and what are the specifics involved in those processes?
Since the early to mid-1990s, the Enterprise Resource In recognition of the importance of this issue and of the
Planning (ERP) software market has been and continues to sizable risk that organizations take when they decide to buy
be one of the fastest growing segments of the information this type of technology, the study that is presented herein
technology (IT) industry with growth rates averaging from focused on how organizations go about the task of acquiring
30% to 40% per year (Eckhouse, 1999). With worldwide ERP packaged software applications.
sales of ERP software estimated to exceed US$22 billion by Taken beyond the bounds of studies carried out in
the year 2001 (PricewaterhouseCoopers, 1999; Yankee organizational buying behavior (OBB) on the influencing
Group, 1998), it has been further estimated that by the year factors mitigating the buying process, this study focused
2002, packaged applications would represent a significant on the buying process itself and identified its (the proc-
portion of most IT portfolios (Meta Group, 1998). With ess’s) major components. It also revealed several issues
costs equaling several thousands, hundreds of thousands, relevant to the need and readiness of the organization both
and even millions of dollars, ERP packaged software for the acquisition process as well as for the new ERP
purchases are high expenditure activities for organizations software. Further, it revealed issues relevant to the imple-
that consume significant portions of their capital budgets. mentation of the ERP and brought to light the complexity
While overall IT expenditures already represent a significant of the process at the detail level. The results of the study
portion of ongoing capital expenditures for many organiza- prove, contrary to the wide-standing belief that IT acquis-
tions and will continue to increase, little is known about itions are done routinely and fairly simply, that acquis-
how these expenditures are made, or more precisely, what itions of this nature (for ERPs) are complex, involved,
organizations have to go through when they buy IT such as demanding, and intensive.
ERP packaged software (Verville, 1998, 2000; Verville & Prior to proceeding with the study, a brief review of the
literature on ERP from the field of management information
systems (MIS) and OBB was carried out. A methodology
was then selected, and other appropriate tools were used to
* Corresponding author. Tel.: +1-956-326-2532. carry out the analysis and draw conclusions, all as presented
E-mail address: jverville@tamiu.edu (J. Verville). below.
0019-8501/03/$ – see front matter D 2003 Elsevier Science Inc. All rights reserved.
doi:10.1016/S0019-8501(03)00007-5

2. 586 J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594
2. Literature review 3. Theoretical background
2.1. Enterprise Resource Planning In the past 30 years, within the field of industrial
marketing and more specifically the area of OBB, concep-
ERP research has concentrated on implementation and tual models such as Webster and Wind’s (1972) General
postimplementation issues (Esteves & Pastor, 2001; Ver- Model of Organizational Buying Behavior and Sheth’s
ville, 2000). (1973) Model of Industrial Buyer Behavior have been
The type of problems and issues that arise from the im- developed to understand organizational buying. Webster
plementation of ERP systems range from specific issues and and Wind’s model incorporates the concept of the buying
problems that can come up during the installation of an ERP center whose response to purchase is analyzed as a function
to behavioral, procedural, political, and organizational chan- of four classes of variables: individual, interpersonal, organ-
ges, etc., that manifest subsequent to the installation (Apple- izational, and environmental. Sheth’s model attempts to
ton, 1997; Benson & Rowe, 2001; Bingi, Sharma, & Godla, describe and explain all types of industrial buying decisions
1999; Glover, Prawitt, & Romney, 1999; Miranda, 1999; and is characterized by three main elements: (1) the psy-
Sieber, Siau, Nah, & Sieber, 1999; Stafyla & Stefanou, chological characteristics of the individuals involved; (2) the
2000). conditions that precipitate joint decision making; and (3) the
While much attention is directed to implementation, conflict resolution procedures affecting joint decision mak-
postimplementation, and other organizational issues, the ing. Both the Webster and Wind and the Sheth models
acquisition process for ERP software is for the most identify factors that influence the buying process. Both
part being ignored. This issue is important, however, models also include a distinction as to whether the buying
because as the stage proceeding the implementation decision is a group/joint or individual/autonomous decision.
process, it presents the opportunity for both researchers However, neither model provides any hint as to the con-
and practitioners to examine all of the dimensions and struct of even a general buying process that is used by
implications (benefits, risks, challenges, costs, etc.) of organizations.
buying and implementing ERP software prior to the Further to these models of OBB, Robinson, Faris, and
commitment of formidable amounts of money, time, and Wind (1967) developed a buygrid framework, which incor-
resources. porates ‘‘buyphases or buystages.’’ These stages represent
the sequence of activities often performed in an organiza-
2.2. Organizational buying behavior tional buying situation. These activities include: (1) recog-
nition of need and a general solution; (2) determination of
In addition to the above, a review of the literature from characteristics and quantity; (3) description of characteristics
the field of industrial marketing and, more specifically, the and quantity; (4) search for potential sources; (5) acquire and
area of OBB was also conducted. It revealed that little analyze proposal; (6) evaluate proposals and select suppliers;
research has focused on the IT (or ERP) acquisition (7) select an order routine; and (8) performance feedback and
process (e.g., packaged software) itself. According to evaluation. Another model proposed by Hillier (1975) con-
Geisler and Hoang (1992), whose study focused on the centrates on individual involvement in organizational buy-
purchase of IT by service companies, most of the literature ing, buyer – supplier functional interrelationships, and
has not stemmed from research studies, but rather has been industrial buying as a corporate process. Yet another model,
generated by practitioners who focused on the critical developed by Choffray and Lilien (1980), addresses the
issues facing managers in the acquisition of IT and has issues of individual differences in choice formation and
been prescriptive in nature (e.g., research in the area of interorganizational differences in buying behavior.
industrial purchasing or OBB has concerned itself with the While many conceptual models of the buying behavior of
development of integrated conceptual models and the organizations have been developed, there has been a lack of
empirical verification of hypotheses pertaining to specific research to extend and test these models (Ward & Webster,
aspects of industrial buying or OBB, Choffray & Lillien, 1991). According to these authors, the lack of specificity of
1980). these models is one of the reasons why researchers have not
While this literature is rich in its study of various aspects designed follow-up research. Another reason is their gen-
of purchasing behavior within organizations, none of these erality, which leads to their major strengths and weaknesses
studies has focused on the actual acquisition process itself, (Ward & Webster, 1991). According to Johnston and Lewin
not to mention the acquisition of IT or ERP packaged (1996, p. 2), these models having been developed during the
software. The current focus of OBB continues to be the ‘‘early stages of theory development’’ provided only general
same, largely ignoring the advent of IT. categories of constructs expected to influence organizational
Neither the field of MIS nor the field of OBB has buying behavior, and as such, failed ‘‘to capture all of the
adequately considered the acquisition of ERP software. concepts, variables, and relationships involved.’’ Theoret-
Hence, little insight has been provided from either of these ically, certain aspects of these models of OBB may reflect
areas. some of the buying ‘‘realities’’ for IT, while others may not.

3. J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594 587
One major assumption, that existing OBB models may be Since the focus of this study was directed toward the
inadequate in their explanation of the IT (e.g., ERP soft- process for acquiring ERP software, neither the type of
ware) acquisition phenomenon, is made for the following software nor the source of the software was considered
reasons: (1) OBB studies have focused mainly on buying significant to this study.
behaviors and their influences; (2) the orientation of The main unit of analysis for this study was the ERP
research conducted in the area of OBB has produced a acquisition process of organizations and the individuals
‘‘tunnel vision’’ effect with respect to the conceptualization directly associated with it (most of the informants were part
of OBB research due to the limited focus of these studies of the acquisition teams).
(Wind & Thomas, 1990); and (3) they overly emphasize In each of the cases, the technological solution that was
influences on the buying unit while neglecting the dynamics acquired impacted the organization, not only on a financial
of the processes involved. A study of the buying process level (the cost of the technology varied from US$1 million
itself could serve two purposes: (1) to identify the construct to US$86 million), but also on a strategic level (this was one
of the buying process, in this case, for ERP software, and (2) of the primary reasons that they were acquiring the soft-
to identify some influences and behaviors that, in effect, ware).
could lend corroboration to those identified in Webster and
Wind’s (1972) general model. The first of these two points 4.1. Data collection
is that which is the focus of this paper.
Data collection was conducted in two parts. The first part
consisted of semistructured interviews. Interviews were
4. Research methodology conducted with 19 individuals, each lasting approximately
1 h and 15 min. The informants, all of whom were directly
Due to the nature of the study, the research strategy was a involved in the acquisition process, included for OMEGA,
multiple-case design with four organizations that had the Director of Information Technology, the Manager of
recently completed the acquisition of an ERP solution. Capital Equipment Purchasing, a Project Director, a Project
The rationale for the multiple-case design was that as a Control Officer and a Technical Project Manager; for LIMA,
research strategy, the focus was to understand the dynamics the Global Network and Corporate Chief Information
and complexities present within each case; these being the Officer (CIO), a Contract Administrator, a Technical Project
processes, critical issues, and influences on the software Manager, a Senior Adviser of Information Systems (SA-IS)
acquisition within the organization (Miles & Huberman, and the Director of Billing Services and Outsourcing; for
1994; Yin, 1989). GAMMA, the Financial Systems Project Manager, an IT
Since the area of ERP acquisition is a relatively new area Engineer from Information Technology Planning (Technical
of research, the case study approach provided the means for Team Leader for the Financial System), a member of the
an in-depth analysis of the construct of the ERP acquisition Procurement Group, an IT Analyst from Information Tech-
process. This approach was particularly well suited for this nology Development (Technical Team Leader for the Mate-
study because it unveiled a multitude of factors and dimen- rials Management and Inventory System [MMIS]), and the
sions that make the acquisition of ERP software such a Manager of Inventory Management (member of the Reen-
complex process. Four cases from various sectors of indus- gineering Group); for Keller, the VP of Information Sys-
try were used for this study. Only four cases were chosen tems, the VP of Personnel, the Corporate Materials
because of the complexities involved in studying the ERP Manager, and a Plant Manager.
acquisition process, the number and availability of individ- Open-ended questions were used throughout the inter-
uals involved in the process for each case, personal financial views. They allowed for flexibility and provided the ‘‘pos-
constraints, and the time limitation to conduct the study. sibilities of depth; they [also] enable[d] the interviewer to
A comprehensive study of each case was done that clear up misunderstanding[s] (through probing), to ascertain
involved conducting the interviews and collecting the data, a respondent’s lack of knowledge, to detect ambiguity, to
writing up the data, and analyzing it. Once all of the encourage cooperation and achieve rapport, and to make
individual case descriptions, analyses, and reports were better estimates of the respondent’s true intentions, beliefs,
completed, a cross-case analysis was conducted and the and attitudes’’ (Kerlinger, 1986, pp. 442– 443). As it so
final cross-case analysis report prepared. happened, the informants sometimes gave unexpected
Site selection for the study was made according to the answers that indicated the existence of relations (activities,
following criteria: (1) the acquisition had a significant tasks, and influences) that were not originally anticipated,
impact on the organization; (2) the acquisition was signific- and this added to the richness of the cases.
ant, totaling several hundred thousand dollars or more; (3) For this study, the opening question for the interview with
the type of packaged solution that was acquired was of a each informant was as follows: (for the evaluation)
complex nature such as ERPs; (4) the acquisition was a new ‘‘Describe in your own words what the various parts of the
purchase; and (5) the acquisition of the software was evaluation process.’’ Following the informant’s description,
recently completed. follow-up (probing) questions were used to clarify an issue

4. 588 J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594
or to delve for more information. These follow-up questions While surveys enable precise extrapolation of results to a
also allowed for the development of ideas without constrain- defined population (Maxwell, 1996), case studies are more
ing the exploratory nature of the study. The same interview- limited in their focus. As such, a single or a few cases are
ing protocol was observed with all of the informants. The poor representations of a population of cases and may be
second part of the data collection consisted of gathering poor grounds for generalization. This having been said, a
archival information from various sources within the organ- single case as a negative example can establish limits to
ization and included documentation from the acquisition grand generalization (Maxwell, 1996; Yin, 1989). Hence,
project, plans, designs, best practices, policies, standards, case studies are of value in refining theory and suggesting
RFP/RFI/RFQ, matrices/grids, letters and memos, reports, complexities for further investigation, as well as helping to
etc. These documents, when available, allowed for a closer establish the limits of generalization.
examination of what happened during the ERP acquisition Although the generalizability of the study’s findings to a
process. greater population is yet to be determined, ‘‘there is no
obvious reason not to believe that the results apply more
4.2. Validity generally’’ (Maxwell, 1996, p. 97). This study appears to
have ‘‘face generalizability’’ based on the ‘‘similarity of
The data from this study were validated using a dynamics and constraints’’ on the organizations within this
triangulation method, first, within each individual case, study to other organizations (Maxwell, 1996). Moreover, the
and then for all four cases together. For this, a triangulation outcome of this multiple-case design gives us ‘‘confidence
of sources (diverse range of individuals and organizations), that [our] emerging theory is generic’’ (Miles & Huberman,
methods (of data collection: interviews, archival informa- 1994, p. 29) and therefore applicable for the acquisition of
tion, and documents), and theories (theoretical base [OBB]) packaged software by other organizations, in addition to
was done. For example, the triangulation of data sources those involved in this study. Since ‘‘the generalizability of
within one case was repeated in each of the other three cases qualitative studies,’’ according to Maxwell (1996), ‘‘usually
and then for all of the cases together. The results show that is based [. . .] on the development of a theory that can be
while each of the cases is different with regard to the type of extended’’ (p. 97), the results of this study provide a step
software solution that was being acquired, the same process towards the generalization of the theory (model) to a larger
was developed, similar tasks were performed, similar population.
influences impacted the process, and similar characteristics
emerged.
To guard against other possible validity threats, all of the 5. The cases
interviews were audiotaped for subsequent transcription and
for verification of accurate interpretation. Member checks Below is a brief summary of the cases from this study.
were performed during which the informants were asked to The four organizations (pseudonymously named, with the
review the transcription of their interviews for verification exception of Keller) that participated in it were:
of the content therein and, if necessary, to amend or add to
them. Follow-up questions were asked, when required, to OMEGA, a large international carrier, provides air
further clarify ambiguities, discrepancies, or to reconfirm transportation services for passengers and cargo both to
information. Feedback was also obtained from other indi- domestic and international arenas.
viduals who were independent of the study as an additional OMEGA purchased PeopleSoft’s ERP solution (finance,
means of verification. human resources, and payroll applications) for the sum of
US$86 million. The ERP acquisition process that
4.3. Limits of the study OMEGA went through took approximately 9 months
and was completed by the summer of 1996. Its
The limitations of this study can be linked to the choices subsequent implementation was completed in the
that were made regarding the research and specifically relate scheduled timeframe and was regarded a success.
to the newness of the research topic, that being the acquisi- GAMMA is a holding company for a gas and electric
tion of ERP software, the minimal amount of research that utility and nonutility energy business.
has been conducted to date in this area, and the methodo- GAMMA completed the purchase of Oracle’s ERP
logy that was used for the study. solution (finance and related applications) at a cost of
Given the lack of literature on this specific subject, the US$6.5 million in March of 1997. Its ERP acquisition
case study approach was selected as the best means to gain process took approximately 6 months from start to finish.
the maximum knowledge and understanding about pack- This case is especially significant because it highlights
aged software acquisition activities, issues, dynamics, and the need to verify sources of information.
complexities. However, each method has its strengths and LIMA—LIMA is a North American-based overseas
drawbacks, and the case study approach is no exception. It carrier, which maintains commercial relations and
is more limited than surveys in terms of generalizability. operates facilities that allow domestic network operators

5. J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594 589
and other service providers to exchange telecommunica- that was developed for the acquisition process. A com-
tion traffic with 240 countries and territories. parative or cross-case analysis of the cases highlighted
LIMA International was founded in 1995 and currently both similarities and principal differences between the
has 200 employees worldwide. Its headquarters are approaches that were used by the organizations presented
located in the Washington, DC area and it is the global above.
carrier subsidiary of LIMA. As per Miles and Huberman’s (1994) suggestion, data
LIMA started but did not complete the purchase of a from the four cases were compiled, by theme, into matrices
proposed US$10 million packaged ERP solution that represented the cases and enabled us to view important
(international billing system). Owing to the strategic similarities and differences between them. This last point is
nature of the intended purchase, an impasse on the particularly relevant because a high incidence of similarities
issues of code ownership and cost brought the business in the data supports theoretical replication across the cases,
negotiations to a halt. The ERP acquisition process that which in the end, is the purpose of multiple-case design
the organization went through was, nevertheless, quite (Miles Huberman, 1994; Robson, 1993; Yin, 1989, 1991,
rigorous and presents some interesting insights and 1994).
lessons that would be of value to other organizations, While a few differences were noted (at the detail level)
among them, the influence of new management on the between the four cases, the high incidence of similarities
overall process. between the cases, when taken together, provided strong
Keller Manufacturing was established in 1895 as a evidence to support the notion of six distinguishable
manufacturer of farm wagons and did so until 1943 when principle themes (processes). In addition, many of the
it began manufacturing household furniture. Today, this variables (elements) that were laid out in the study came
organization has over 700 employees in three manufac- through in the data. Several similar characteristics about
turing plants in the United States (two of them located in the acquisition process were also noted between all of the
Indiana [Corydon and New Salisbury] and one in cases as well as several influences that impacted on the
Culpepper, VA) and manufactures over 2000 different process. Together, these findings revealed a ‘‘picture’’ of
oak and maple legs, seats, and other components (with the buying process for ERP software. The buying process,
over 100 separate procedures) that are required in the as derived from the data, will be modeled in the following
assemblage of its products. section.
Keller Manufacturing purchased an ERP solution As mentioned, six major themes were readily identifi-
(manufacturing execution system) from Effective Man- able across all of the cases and were supported by the data
agement Systems (EMS) for approximately US$1 (Fig. 1): planning, information search, selection, evalu-
million. Keller’s ERP acquisition process took approx- ation, choice, and negotiations. While the themes (pro-
imately 11 months and was completed in August of cesses) are interdependent, with some embedded in whole
1996. Regarded as a great success, the implementation of or in part in other themes, for analysis purposes, each of
EMS’ software was completed within the scheduled the themes was analyzed as an independent and distinct
timeframe with only a few minor problems. process.
While each of the cases was different, most notably
with regard to the industry and the type of software they 6. Model of the ERP acquisition process (MERPAP)
purchased, similar approaches were used nevertheless to
acquire the ERP software solutions. These approaches This section presents a model that was developed from
varied somewhat depending on the type, impact and cost the findings of four case studies. While all of the cases were
of the software solution; the sensitivity of the require- different with regard to the type of ERP software solution
ments; the nature of the organization; and the schedule that was being acquired, an overview of the findings
Fig. 1. MERPAP. The dotted lines in the diagram indicate the flow of information between the processes. The solid recursive arrows between the processes and
the planning process indicate the ongoing nature of activity/feedback/adjustment/input between them.

6. 590 J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594
presented in the cross-case analysis shows that all went looking at issues that were pertinent to the acquisition.
through the same process and performed similar tasks to While still in the planning phase, and as a planned task of
reach their acquisition objectives. The model that will be the information search process, organizational and systems
presented shows how four organizations in today’s complex requirements were defined and various criteria were estab-
IT environment proceeded with the buying process. lished. Some of this information was subsequently used for
Based on a comparative analysis of the individual cases, the marketplace analysis during which information on
a high-level model of the ERP acquisition process, which is vendors and their solutions was screened using high-level
referred to as ‘‘MERPAP,’’ was developed. Fig. 1 shows the vendor, functional and technical criteria, the end result of
interrelated and iterative nature of each of the individual which was a long list of vendors/solutions. Beyond this,
processes that constitute MERPAP. the teams put together their RFPs and sent them out to the
The MERPAP consists of six distinct and iterative vendors on their long lists. This brings us to the ‘‘end’’ of
processes: planning, information search, selection, evalu- the planning process.
ation, choice, and negotiations. Information was the lifeblood of the acquisition process
The structure of the process is as follows: (1) the and its flow was ongoing. As a result, the information
MERPAP begins with planning, (2) the MERPAP ends search process was continuous from almost the very start
with negotiations, (3) the MERPAP is nonlinear, (4) some of the acquisition process. While the flow of information
of the processes are done concurrently, (5) some of the was for the most part ongoing, there were pockets of
processes are embedded, (6) all of the processes, with the concentrated information searching and gathering activities.
exception of ‘‘choice,’’ are iterative, (7) all of the pro- Some of these ‘‘pockets’’ occurred during the planning
cesses, with the exception of ‘‘choice,’’ are recursive, and process proper. Other ‘‘sporadic spurts’’ of information
(8) each process is causal and results in products (deliv- input occurred during the selection process when ‘‘new’’
erables) that are used by another process. The dotted lines information was received from the vendors in their RFP
in the diagram indicate the flow of information between responses as well as with the incoming flow of other
the processes. The solid recursive arrows between the information from referrals, etc. Other spurts of information
processes and the planning process indicate the ongoing also fed the evaluation and negotiations processes. Con-
nature of activity/feedback/adjustment/input between them, sequently, there was concurrency of several processes with
i.e., between information search and planning. For the information search process—planning, selection, evalu-
example, as new information is fed into the MERPAP, ations, and negotiations.
plans for the information search process or for the other Also concurrent to the planning, information search,
processes are subsequently adjusted or changed. Activity selection, and evaluation activities were the business nego-
between the processes is highly iterative and for the most tiations that were in the midst of happening with the back
part, not sequential in a linear fashion. However, at certain and forth interactions between the teams and the vendors.
points in the MERPAP, there is a sequential ‘‘next pro- With only minor variations, this pattern was apparent in all
cess’’ progression that takes the teams from the planning four cases.
process to the information search, selection, evaluation, The same holds for the selection process proper which
and choice processes, ending finally with the negotiations began following the return of the RFI/RFP/RFQ responses
process. from the vendors. A review of the RFI/RFP/RFQ responses
(using detailed criteria to evaluate the vendors and the ERPs
6.1. The concurrent and iterative nature of the processes functionalities and technical dimensions) occurred and the
within MERPAP vendors deemed most likely to meet each organization’s
needs were retained. A more intense evaluation of the
Across all four cases, the majority of the time spent vendors also occurred at this point using Dunn Bradstreet
during the acquisition process was in the planning process reports, among others (see Table 1).
with planning and preparations being done for the other The evaluation process was highly intensive and
parts of the acquisition process. involved both an evaluation of the ERP software on two
For all of the acquisition teams, planning began very fronts and an evaluation of the vendors. Again, there was
shortly after the decision was made to purchase an ERP. concurrency of this process and the planning, information
Then, shortly thereafter, once some initial meetings had search, selection, and negotiation processes. This process
occurred to get things underway and the acquisition teams was also revisited several times during the course of the
had been formed and had met to do some planning, etc., acquisition process, three of which occurred using three
then the search for information began. The search for different levels of information: first, using high-level ‘‘gen-
information included the gathering of information on the eral’’ information/criteria and requirements for screening
organization’s requirements and following that, the estab- available vendors and ERP products during the information
lishment of selection and evaluation criteria. At the same search process; second, using a more detailed level of
time, the acquisition team was developing its acquisition information/criteria and requirements during the selection
strategies, setting its acquisition project time frame, and process; and lastly, with an even more refined level of

7. J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594 591
Table 1 based on the ‘‘new’’ information that was received by the
Vendor evaluation criteria
teams.
. Ability to assist the organizations with the implementation In the discussion that follows, a brief recap of each of the
. Association with or the availability of third party vendor/partners
processes within the MERPAP is presented, their principal
. Vision (future plans and trends regarding the direction of the technology
and or strategic positioning) elements highlighted, and the data from the cases that
. Financial strength supported these findings were summarily discussed.
. Market share (sales volume, size)
. Annual growth rate 6.2. Planning process (MERPAP-P)
. Customer support
. Product recognition
. Range of products At the detail level of each process is identified the
. Ability to meet future needs multiple issues, dimensions, and complexities, as well as
. Ability to provide references the high level of risk and uncertainty that are inherent to
. Reputation the buying situation for packaged software. Given the
. Vision and/or strategic positioning of the vendor
numerous factors, issues, and dimensions that all contribute
. Longevity of the vendor
. Qualifications, experience, and success in delivering solutions to to the complexity of this type of acquisition, a priori
organizations of a similar size, complexity, and geographic scope reasoning could lead us to conclude that the best way to
. Quality of the vendor’s proposal deal with it would be to include a step or phase in the
. Demonstrated understanding of requirements, constraints, and concerns buying process in which to address them, and this is
. Implementation plan that properly positions the proposed solution to
precisely what was done in each of the cases. Hence, one
achieve the maximum level of business benefits
. Implementation services of the major findings of this study is that the MERPAP,
. Implementation strategy unlike the process(es) used for other types of organizational
. Support services buying, includes a planning process during which the
. Etc. acquisition teams addressed as many issues as possible
and planned the various activities and phases (processes) of
the MERPAP.
information/criteria and requirements during the evaluation The planning process of the MERPAP (MERPAP-P)
process proper. The evaluation process proper was used to contains seven categories. Together, these elements and
confirm the first-ranked vendor from each of the four teams’ their constituent breakdown reflect a ‘‘picture’’ of what
short lists. occurred in the planning process.
There was also some concurrency between the end of
the business negotiations process and the beginning of the 6.2.1. Acquisition team formation
choice process, which indicated the possibility of a ‘‘last This first element played an important role in the success
minute’’ change in the choice of ERP vendor/solution that of each of the acquisition projects. In the formation of each
could occur due to an impasse in negotiations between the acquisition team:
organization and the initial vendor-of-choice. The case of
LIMA exemplified this scenario and brought LIMA’s a project leader was selected. The project leaders were
acquisition process to a halt. Since this involved ‘‘informa- not always from the organizations’ IT departments. In
tion,’’ the information search process continued concur- two of the cases, for example, the project leaders were
rently to the choice process. For the most part though, the from Finance (GAMMA) and Quality Control (Keller).
choice process occurred on its own. the skills (user-area defined/function-specific; technical;
Lastly, the legal negotiations process, which began at the leadership, managerial, organizational, problem solving,
conclusion of the choice process. Although the majority of decisionmaking; administrative; negotiation; etc.) that
the issues that needed to be included in the final negotiations were required for the acquisition team were identified.
should have been covered during the business negotiations, Each individual team member needed to have skills that
the legal negotiations process was undoubtedly the recipient enabled them to assume a specific set of tasks or res-
of ‘‘new’’ information as the final details were worked out ponsibilities within the project.
for the contract. Once completed, delivery and implementa- cross-functional/multidisciplinary team members were
tion of the ERP software began. selected.
The processes were also iterative. The input of ‘‘new’’ each of the roles of the individuals that were on the team
information into the acquisition process during the selec- were identified and defined, some of which included the
tion, evaluation, or negotiations processes often called for following: project leader; task-specific roles such as for
the acquisition teams to revisit the planning process and the information search; the role of liaison between the
adjust or modify their plans and/or tasks for those pro- vendors and the acquisition team; department/user-area-
cesses. This was seen in all of the cases with refinements specific roles such as for finance, human resources,
being made to previously established (as in the early stages manufacturing, etc.; the role of technical team leader; the
of the planning process) criteria and/or requirements, etc., roles of users on the team; the roles of departments like

8. 592 J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594
purchasing, etc. Each individual team member needed to Table 2
Selection/choice and evaluation criteria (examples)
perform a functional and/or advisory role based on their
abilities or past experiences. Each team member also . Improvement over current systems
. Customization
needed to understand each role as it belonged to each
. User interfaces
team member, as well as those roles, which were shared . Is the platform that the organization intends for the proposed solution to
among members. operate on ideal for optimum performance?
an assessment was made as to whether outside experts/ . Is the organization’s existing DBMS compatible with the proposed
consultants were needed to complement the acquisition solution?
. Can the proposed solution integrate into the organization’s existing
team members’ skills.
hardware architecture?
both users and IT staff were selected. Members of the . What is the architecture of the proposed solution: client/server, two-tier,
acquisition team were drawn from the various depart- three-tier, or other?
ments that were to be impacted by the ERP. . What is the capacity (minimum and maximum) of the proposed solution?
a representative from the Purchasing Department was . Scalability of the system
. Training (in-house or external to the organization; does vendor conduct
selected to be on the acquisition team and they were
the training or is outsourced?)
involved right from the earliest stages of the acquisition . Performance
process. . Security features
the long-term availability of individuals was considered . Implementation
when they were being recruited for the acquisition team. . Etc.
the ‘‘crossover’’ involvement of many of the acquisition
team’s members from the acquisition project to the
implementation project was also considered. The primary 6.2.5. Acquisition issues
reasons for this were project memory and continuity. The acquisition teams considered as many issues, factors,
and concerns as possible that could have affected the
acquisition at hand, i.e., business process reengineering
6.2.2. Acquisition strategies (BPR), technical issues such as Y2K, etc. In doing so, they
The strategies that each team developed for the ERP planned for what to do in case potential problems arose later
acquisition helped reduce some of the uncertainty associated in the acquisition process. Since these issues could also have
with this process. Among the strategies that were developed: affected the implementation of the ERP, the acquisition
OMEGA brought all of the vendors on their long list together teams approached these issues with an eye toward the
in one location for an information session and as a ‘‘weeding’’ implementation. For OMEGA and Keller, for example,
mechanism; LIMA had product demonstrations at the ven- one such acquisition issue was BPR and its ramifications.
dors’ sites; and Keller visited vendor referrals. A major implication of buying an ERP solution is that it will
require the redesign of existing processes in the areas in
6.2.3. Requirements definition which the software will be applied. While on one hand,
The acquisition teams defined the organization’s require- Keller was especially interested in significantly revising
ments for the ERP solution. For this, the teams analyzed many of its existing processes, OMEGA was extremely
and/or defined: (1) their organization’s existing technolo- cautious and hesitant about introducing changes, especially
gical environment; (2) the functional requirements; (3) the major ones, into their organization to the point that this issue
technical requirements; (4) the organizational (business, influenced their final choice of ERP solution.
procedural, and policy) requirements; (5) the different user
areas and functions; (6) existing processes in the areas that 6.2.6. Marketplace analysis
were to be affected by the new software; and (7) as many This category reflects a part of the information search
problems and opportunities as possible. process that occurred during (and was embedded in) the
planning process. During this analysis, the acquisition team
6.2.4. Establish selection/choice and evaluation criteria was able to determine who the major players were in the
The teams also established their selection/choice and marketplace for the ERP that they were seeking. This
evaluation criteria prior to contacting any vendors or analysis was conducted using high-level criteria to evaluate
looking at ERP solutions. These criteria were based on both the vendors and the functional and technical features of
information that was gathered from the users and other the software and resulted in a short long list of potential
sources (see Table 2 for examples from the cases). They vendors and solutions.
were used in part for the marketplace analysis, the selec-
tion process, and for the three different areas/types of 6.2.7. Deliverables
evaluation that were performed during the acquisition Various deliverables resulted from the execution of each
process. They were also used to create questionnaires of the foregoing elements. A few examples of the deliver-
and grids/matrices that were used during the evaluation ables from the planning process included the construction of
process. the RFP (the primary deliverable), the formation of the

9. J. Verville, A. Halingten / Industrial Marketing Management 32 (2003) 585–594 593
acquisition team, and the creation of a short long list of process, it was carried out, in part, during the planning
vendors. process (embedded in the marketplace analysis) and was
ongoing throughout the rest of the MERPAP during the
6.3. Information search process (MERPAP-I) selection (during the review of the RFP/RFIs), evaluation
(with client referrals and input from other sources), and
The MERPAP-I was found to be an iterative process business negotiations (ongoing dealings with the vendors
since information was always feeding the acquisition pro- throughout the MERPAP) processes. As for the functional
cess. It consists of two principal elements: information and technical evaluations, they were carried out, in part,
screening and information sources. Information sources, during the selection process and then, more intensively,
both internal and external sources, provided the acquisition during the functional and technical evaluation processes.
process with differing types of information. This informa- The criteria and strategies that were established during the
tion was screened in accordance with the level of scrutiny planning process were used to implement all three types of
warranted by the stage at which the acquisition team was at evaluations.
in the acquisition process. Several key factors regarding
information came into play during this process and among 6.6. Choice process (MERPAP-C)
them were: (1) the type or nature of the information that was
to be gathered; (2) the credibility of the sources, whether Choice (MERPAP-C), as a process, followed as a natural
internal or external; (3) the credibility of the information result of the abovementioned processes. In all cases, a final
that was obtained; (4) the reliability of the sources, whether recommendation was presented to an outside group (steer-
internal or external; (5) the reliability of the information that ing committee or board of directors) who authorized the
was obtained; (6) outside references; (7) client referrals from final choice. It could be argued that ‘‘choice’’ was the
the vendors; and (8) the possibility of information overload natural outcome of the evaluation process and should have
and confusion. been included as its end result (a deliverable of the evalu-
ation process). This would have occurred had the final
6.4. Selection process (MERPAP-S) choice rested solely with the acquisition teams. However,
since an outside body to the acquisition team was respons-
The selection process (MERPAP-S) was the intermediary ible for the final choice in all of the cases, it seemed more
stage between the planning process and the evaluation appropriate to designate it as a separate process.
process. It consisted of only two principal elements: ‘‘Evalu-
ate RFI/RFP/RFQ Responses’’ and ‘‘Create Short list of 6.7. Negotiations process (MERPAP-N)
Vendors/Technologies.’’ The first one dealt with the review
of the RFI/RFP/RFQ responses from the vendors, and the Lastly, the negotiation process (MERPAP-N) of the
second pertained to the deliverable of a short list of vendors/ MERPAP is divided into two types of negotiations, business
products. To a limited extent, some recursive activity was and legal, and it is the business negotiations process that
noted in all of the cases, between the MERPAP-S and both was continuous throughout most of the MERPAP. As many
the planning and information search processes, and to a issues as possible were addressed in the business negotia-
greater extent, between this process and the evaluation tions phase. Then, once tentative agreements were reached,
process. Subsequent to the acquisition teams’ review (a and the choice made, legal negotiations ensued that led to
mid-level, moderately intensive evaluation) of the RFI/ the completion and sign off of the final contract.
RFP/RFQ responses, in all of the cases, there was recursive
activity by the teams back to planning, with the acquisition
teams revisiting their plans and refining their criteria. 7. Summary
Decisions arising from adjustments in their plans led the
teams to revisiting the information search process. This Within this paper was presented a model of the ERP
recursive activity had the teams recontacting the vendors software acquisition process (MERPAP) that reflects the
with requests to resubmit in part or in full, their RFI/RFP/ findings from the four cases examined in this study. The
RFQ responses according to the teams’ refined criteria. MERPAP includes six distinctive, yet interrelated, processes
Then, when the amended responses were received from (planning, information search, selection, evaluation, choice,
the vendors, the teams would conduct a second evaluation, and negotiations).
thereby revisiting once again the evaluation process. This high-level model depicts the principal processes that
pertain to the acquisition of packaged software. It is not,
6.5. Evaluation process (MERPAP-E) however, without its limitations. First, the model is limited
to the findings from the four cases in this study. Second,
The evaluation process of the MERPAP (MERPAP-E) since the model is limited to the findings of this study, it is
consisted of three distinct areas of evaluation: vendor, not generalizable to a larger population. While the model
functional, and technical. As to the vendor evaluation represents the ERP packaged software acquisition process

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