Enterprise Systems in Small and Medium-Sized Enterprises

Enterprise Systems in Small and Medium-Sized Enterprises

Sanjay Mathrani (Massey University, New Zealand), Mohammad A. Rashid (Massey University, New Zealand) and Dennis Viehland (Massey University, New Zealand)
Copyright: © 2009 |Pages: 15
DOI: 10.4018/978-1-59904-859-8.ch013
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The market for enterprise systems (ES), continues to grow in the post millennium era as businesses become increasingly global, highly competitive, and severely challenged. Although the large enterprise space for ES implementation is quite stagnated, now all of the ES vendors are focusing on the small to medium-sized enterprise (SME) sector for implementations. This study looks at the current ES implementation scenario in the SME sector. The purpose of the study is to gain insights into what is a typical case of ES implementation and to understand how current implementations in the SME sector differ from the earlier implementations in the large enterprise sector through a perspective of ES vendors, ES consultants, and IT research firms in a NZ context. Implications for practice in implementation processes, implementation models, and organizational contexts are discussed.
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Enterprise systems (ES), also known as enterprise resource planning (ERP) systems, are large, complex, highly integrated information systems designed to meet the information needs of organizations and are, in most cases, implemented to improve organizational effectiveness (Davenport, 2000; Hedman & Borell, 2002; Markus & Tanis, 2000). These are comprehensive, fully integrated software packages supporting automation of most standard business processes in organizations including extended modules such as supply chain management (SCM) or customer relationship management (CRM) systems. ES applications connect and manage information flows across complex organizations, allowing managers to make decisions based on information that accurately reflects the current state of their business (Davenport & Harris, 2005; Davenport, Harris, & Cantrell, 2002). In a more integrated and global market, extended ES offers new functions and new ways of configuring systems, as well as web-based technology to establish the integrated, extended business enterprise (Shanks, Seddon, & Wilcocks, 2003). The market for ES continues to grow despite much speculation on its future in the post millennium era. Although most large enterprises have completed their ES implementations by now, the ES market continues to grow in the small and medium-sized enterprises (SME) sector. A number of research studies have been conducted to establish and understand the critical success factors for ES implementations (e.g., Allen, Kern, & Havenhand, 2002; Bancroft, Sep, & Sprengel, 1998; Holland & Light, 1999; Parr & Shanks, 2000; Plant & Willcocks, 2006; Sarker & Lee, 2000; Scott & Vessey, 2002; Skok & Legge, 2001; Sumner, 1999; Yang & Seddon, 2004). However, there has been little research that examines ES implementation at the strategic decision-making process level (Viehland & Shakir, 2005) and compares current implementations in the SME sector with earlier implementations in the large organizations. The purpose of this study is to examine the current ES implementations scenario in New Zealand. The main objectives of this study are to explore what is a typical case of ES implementation and to understand how current implementations in the SME sector differ from the earlier implementations in the large enterprise sector. The study does so through a practitioners’ perspective, with interview data collected from ES vendors, ES consultants, and IT research firms who are actively engaged in ES implementation. This approach differs from the organizational approach usually found in the literature. This is a replication study following a similar approach used by Shakir (2002), who also investigated aspects of ES implementation in the NZ vendor-and-consultant community. The focus of that study was to identify key drivers influencing ES adoption and implementation (e.g., Shakir and Viehland, 2004) whereas the focus of the current study is to understand how current implementations in the SME sector differ from the earlier implementations in the large enterprise sector. The current study extends and builds upon existing ES research.

Semi-structured interviews were conducted with key players of ES implementations in New Zealand including ES vendors, ES consultants, and IT research firms to explore the current ES implementation scenario. Several measures such as the number of users, modules implemented, cost of implementation, number of sites/locations where implemented, industry type, organization size, implementation phases, time to implement, implementation partners, and levels of customization were discussed to understand a typical case of ES implementation and current implementation practices. The empirical findings are analyzed and reported in this paper. This study has been conducted in a New Zealand (NZ) context which can be extended to show current trends worldwide.

Key Terms in this Chapter

Application Service Provider (ASP): An ASP is a business that provides computer-based services of specialized software to customers over a network.

Extended ERP: Extends the foundation ERP system’s functionalities such as finances, distribution, manufacturing, human resources, and payroll to customer relationship management, supply chain management, sales-force automation, and Internet-enabled integrated e-commerce and e-business

Critical Success Factors (CSF): Are the factors which are critical for an organisation or a project and which must go right to achieve the defined mission.

Customization: Altering a system’s software code to include functionality specifically wanted by an organization, although not originally included in the package itself.

Small and Medium-Size Enterprise (SME): A business enterprise independently owned by contributing most of the operating capital and managed by the owners or managers, having fewer than 250 employees and a small-to-medium market share. This number differs in different regions or countries (in some countries it is less than 500 while in others the number may be less than 100). The number may also vary depending on the type of business.

Business Process Outsourcing (BPO): Contracting of specific business task (s), such as payroll, marketing, billing etc, to a third party service provider as a cost saving measure

Customer Relationship Management (CRM): Software systems that help companies to acquire knowledge about customers and deploy strategic information systems to optimize revenue, profitability and customer satisfaction.

Supply Chain Management (SCM): Software systems for procurement of materials, transformation of the materials into products, and distribution of products to customers, allowing the enterprise to anticipate demand and deliver the right product to the right place at the right time at the lowest possible cost to satisfy its customers.

Enterprise Resource Planning (ERP): Software systems for business management that integrates functional areas such as planning, manufacturing, sales, marketing, distribution, accounting, finances, human resource management, project management, inventory management, service and maintenance, transportation, and e-business.

Business Intelligence (BI): Software tools that use the ERP database to generate customizable reports and provide meaningful information and analysis to employees, customers, suppliers, and partners for more effective decision making at the organization.

Complete Chapter List

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Editorial Advisory Board
Table of Contents
Jatinder N. D. Gupta, Sushil Sharma, Mohammad A. Rashid
Jatinder N. D. Gupta, Sushil Sharma, Mohammad A. Rashid
Chapter 1
Nancy Alexopoulou, Panagiotis Kanellis, Mara Nikolaidou, Drakoulis Martakos
Efficient response to change, both upon expected and unpredicted contingencies, is a critical characteristic for modern enterprises. This chapter... Sample PDF
A Holistic Approach for Enterprise Agility
Chapter 2
Hossana H. Aberra
SAP Business Blueprint is a vital part of SAP implementation exercise. A well-defined business blueprint may set the foundation for successful... Sample PDF
What is SAP Business Blueprint?
Chapter 3
Rogerio Atem de Carvalho
This chapter introduces the key aspects of Free/Open Source Enterprise Resources Planning systems (FOS-ERP). Starting by related work carried out by... Sample PDF
Free and Open Source Enterprise Resources Planning
Chapter 4
Brian H. Cameron
Business process modeling (BPM) is a topic that is generating much interest in the information technology (IT) industry today. Business analysts... Sample PDF
The Changing Nature of Business Process Modeling: Implications for Enterprise Systems Integration
Chapter 5
Alok Mishra
In the age of globalization, organizations all over the world are giving more significance to strategy and planning to get an edge in the... Sample PDF
Enterprise Resource Planning Systems: Effects and Strategic Perspectives in Organizations
Chapter 6
Gary P. Moynihan
An executive information system (EIS) is a software system designed to support the informational needs of senior management. The EIS is... Sample PDF
An Overview of Executive Information Systems
Chapter 7
Joseph Bradley
Enterprise Resource Planning systems have proven difficult and costly to implement. Organizations must consider the risks and rewards of embarking... Sample PDF
Enterprise Resource Planning System Risks and Rewards
Chapter 8
Andrea Masini
After observing that the pervasiveness of IT may soon render it strategically irrelevant, management scholars have recently questioned the value of... Sample PDF
ERP-Driven Performance Changes and Process Isomorphism
Chapter 9
Ronda R. Henning
The application software life cycle considers the functionality of a given collection of components within the context of a consumer’s requirements... Sample PDF
Application Integration within the Enterprise Context
Chapter 10
Sanjay Mathrani, Mohammad A. Rashid, Dennis Viehland
A significant investment in resources is required for implementation of integrated enterprise systems as technology solutions while the... Sample PDF
The Impact of Enterprise Systems on Business Value
Chapter 11
Charlotte H. Mason, Aleda V. Roth
Growing competitive pressures and escalating customer demands have led businesses to sophisticated information technology to manage costs and... Sample PDF
The Right Path to SCM-CRM Integration
Chapter 12
Euripidis Loukis, Ioakim Sapounas, Konstantinos Aivalis
This chapter is dealing with the alignment of enterprise systems with business strategy and its impact on the business value that enterprise systems... Sample PDF
Enterprise Systems Strategic Alignment and Business Value
Chapter 13
Sanjay Mathrani, Mohammad A. Rashid, Dennis Viehland
The market for enterprise systems (ES), continues to grow in the post millennium era as businesses become increasingly global, highly competitive... Sample PDF
Enterprise Systems in Small and Medium-Sized Enterprises
Chapter 14
Kerstin Fink, Christian Ploder
Small and medium-sized enterprises (SMEs) are a vital and growing part of any national economy. Like most large businesses, SMEs have recognized the... Sample PDF
Integration Concept for Knowledge Processes, Methods, and Software for SMEs
Chapter 15
Tobias Schoenherr, Ditmar Hilpert, Ashok K. Soni, M.A. Venkataramanan, Vincent A. Mabert
Although the research on integrated enterprise systems (ES) is proliferating, the knowledge base about ES implementations, usage and experiences... Sample PDF
Enterprise System in the German Manufacturing Mittelstand
Chapter 16
Darshana Sedera
Organizations invest substantial resources in acquiring Enterprise Systems, presumably expecting positive impacts to the organization and its... Sample PDF
Size Matters! Enterprise System Success in Medium and Large Organizations
Chapter 17
Joseph Bradley
ERP implementation projects normally involve a single vendor providing the packaged software for the entire system. Although most companies follow... Sample PDF
Implementing Best of Breed ERP Systems
Chapter 18
Ganesh Vaidyanathan
Enterprise resource planning systems are complex yet single, integrated software programs that runs off a single database so that the various... Sample PDF
Enterprise Resource Systems Software Implementation
Chapter 19
Calin Gurau
This chapter considers the importance of business modelling for implementing e-CRM systems. The introduction of e-business models requires the... Sample PDF
Restructuring the Marketing Information System for eCRM: An Application of the Eriksson-Penker Method
Chapter 20
Albert Boonstra
At the present moment, many hospitals are going through a process of change directed at the integrated delivery of health care. Enterprise Systems... Sample PDF
Analyzing an ES Implementation in a Health Care Environment
Chapter 21
S. Padmanaban
ERP systems have become key enablers of businesses today. While many organizations wish to adopt ERP for competitive advantage, they find choosing... Sample PDF
Designing to Deploying Customisable ERP Cost Effectively
Chapter 22
Mateja Podlogar, Katalin Ternai
This chapter introduces the ERP systems, their complexity, and especially their integration in higher education as a significant challenge for many... Sample PDF
ERP Systems in Higher Education from Regional Perspective
Chapter 23
Valentin Nicolescu, Holger Wittges, Helmut Krcmar
This chapter provides an overview of past and present development in technical platforms of ERP systems and its use in enterprises. Taking into... Sample PDF
From ERP to Enterprise Service-Oriented Architecture
Chapter 24
ERP and Beyond  (pages 329-345)
Suresh Subramoniam, Mohamed Tounsi, Shehzad Khalid Ghani, K. V. Krishnankutty
Enterprise-wide automation has already transformed the relations among suppliers, purchasers, producers, and customers. Conventional ERP helps only... Sample PDF
ERP and Beyond
Chapter 25
Gita A. Kumta
The chapter introduces the essence of ERP in government as a tool for integration of government functions which provides the basis for citizen... Sample PDF
E-Government and ERP: Challenges and Strategies
Chapter 26
Manish Gupta, Raj Sharman
A paradigm shift is occurring in identity management philosophy. User-focused identity management is one the emerging and most promising paradigms.... Sample PDF
Emerging Frameworks in User-Focused Identity Management
Chapter 27
Ramón Brena, Gabriel Valerio, Jose-Luis Aguirre
From the Knowledge Management perspective, Knowledge distribution is a critical process in organizations. As many of the other Knowledge-related... Sample PDF
Next-Generation IT for Knowledge Distribution in Enterprises
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