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ERP systems are part of a stream of IT which began with MRP and has evolved over the past 30 years (Table I). These integrated IT systems have promised substantial benefits, and many adopters have reported significant organisational improvements. However, implementations have tended to be problematic. ERP projects, in particular, have been prone to cost and time overruns, not delivering anticipated benefits, and have often been abandoned before completion (Somers & Nelson, 2001). Implementation success rates as low as 10 percent have been suggested (Ptak & Schragenheim, 1999). This is troubling, given the prevalence of ERP: it has disseminated much more widely than MRP or MRPII, with 38.5 percent of large UK businesses having implemented ERP by 2007 (ONS, 2008).
Table 1.
Major developments in integrated IT systems with dates and definitions
| MRP – Material Requirements Planning | 1970s | Optimises production by coordinating production planning with both inventory and customer demand levels |
| MRPII – Manufacturing Resource Planning | 1980s | As MRP, but integrates all functions involved in manufacturing, including finance, marketing, personnel, etc. |
| SCM – Supply Chain Management | 1980s | Integrates upstream with suppliers so that all processes in supply chain are linked, from raw materials to end product |
| CRM – Customer Relationship Management | 1990s | Standardises and integrates customer data across organisation for consistent, profitable customer relationships |
| ERP – Enterprise Resource Planning | 1990s | Fully integrates all functions and activities across organisation under a common system/interface |
Research has attributed ERP implementation failures to high consultancy costs and difficulties in aligning ERP systems with existing business processes (Nah et al., 2001), among other factors. However, this insight has brought little improvement in failure rates (Zhang et al., 2005). Alongside research on ERP has been a broader literature on IT implementation.
Dating from the 1960s, this research has focused on single, standalone (or ‘discrete’) IT systems such as word processing software (Davis et al., 1989) and expert systems (Leonard-Barton & Deschamps, 1988). A consistent finding throughout has been the importance of organisational (i.e., structural and cultural) characteristics for implementation success.