Enterprise Resource Planning (ERP) Systems and Multi-Organizational Enterprise (MOE) Strategy

Enterprise Resource Planning (ERP) Systems and Multi-Organizational Enterprise (MOE) Strategy

Ben Clegg (Aston University, UK) and Yi Wan (Aston University, UK)
Copyright: © 2019 |Pages: 24
DOI: 10.4018/978-1-5225-7262-6.ch004

Abstract

This chapter critiques trends in enterprise resource planning (ERP) in respect to contemporary multi-organizational enterprise strategy in order to identify under-researched areas. It is based on the premise that multi-organization strategies and information systems span more than one legal company entity and are becoming increasingly important as digital Internet based systems become more prolific, and outsourcing and collaboration between companies becomes more widespread. This chapter presents a critique of literature covering theoretical, methodological and relational aspects of enterprise resource planning systems and multi-organizational enterprise strategy. The critique gives a unique perspective and highlights four major gaps in current research and points towards a trend which is referred to in this chapter as ‘enterprization.' This research could help organizations make more effective use of their information and operations systems strategies when used across more than one company. It should interest researchers, teachers, IS developers and managers.
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Introduction: Why Multi-Organization Enterprises And Multi-Organization Erp Systems Matter

This critique builds on two key definitions. First, Gable’s (1998) comprehensive definition of “ERP” which is, “… a comprehensive package software solution [which] seeks to integrate the complete range of a businesses’ processes and functions in order to present a holistic view of the business from a single information and IT architecture.” Secondly and concomitantly this research builds on the European Commission’s definition of an “enterprise”; where the term “enterprise” means, “… an entity including partnerships or associations that can be made up of parts of different companies” (European Commission, 2003). This research does not therefore consider manufacturing or service operations to be made up of a single legal company entity operating in isolation, but instead embodies multi-organizational enterprise management concepts, where parts of companies work with parts of other different companies to deliver complex product-service systems using a multi-organizational enterprise (MOE) (Binder and Clegg, 2007). An MOE will often result from a joint venture between companies as they focus on collaboratively delivering particular product-service systems (e.g. a family of cars, the construction of a building or bridge, the delivery of a complex integrated web-based shopping experience); critical interdependent and dynamic strategic relationships will develop between these company parts based on their relative core competencies.

Based on the above premises enterprise strategies and Enterprise Resource Planning (ERP) systems design and implementation, whether they are for single organizations or multi-organizational enterprises, need to go hand-in-hand. ERP systems per se have been extensively researched over recent decades and knowledge about how ERP systems work as single-company based systems are plentiful. For instance: single-company impact studies about manufacturing performance (Bose et al., 2008), single companies undertaking supply chain planning (Tarantilis et al., 2008), or single company implementation practice and business process re-engineering projects (Benlian and Hess, 2011) are easily found. These tend to be where ERP / ERPI systems are taken to be an integrated information management system supporting the operational transactions of a single company. In contrast there is a relative dearth of research into ERP systems development in a multi-organizational enterprises context, especially from dynamic and contingency perspectives, which leaves ERP systems and multi-organization enterprise strategy under-researched.

Firstly, in response to this dearth, this research critiques current literature and proposes that multi-organization ERP strategy should be better conceptualized and more clearly defined to help the evolution of ERP systems development and their deployment in multi-organization enterprises (MOEs). Secondly, this literature critique posits that multi-organization enterprise ERP systems are under-researched from a methodological perspective and as a result it is also unclear how some research methods could be effectively merged to investigate and shape ERP and multi-organizational enterprise management concepts. Thirdly, this critique posits that multi-organizational enterprise ERP systems are under-researched from a contingent perspective, as researchers need to better understand the synergies between ERP systems development and multi-organizational enterprise strategy over time (Clegg and Wan, 2013). For this purpose, this chapter determines the most frequently used keywords in relevant literature and classifies these publications according to their most commonly used (i) units of analysis (ii) theoretical perspectives, and (iii) research paradigms and techniques. The aim being to identify research gaps (Trauth et al., 1993) from literature pertaining to ERP and multi-organizational-enterprise strategy research to identify any prevailing trends.

The remainder of this chapter is structured as follows: first, the methodology for the literature critique is presented followed by sections which present identified gaps in the literature. Following these research gaps, the most relevant theoretical foundations for ERP systems development and multi-organizational enterprise management are discussed and the emerging concept of “enterprization” is proposed. Finally, the paper identifies some implications for future research based on prevailing trends.

Key Terms in this Chapter

ERP II: Web enabled information system for managing operations in organizations, these can increase potential transparency of data and operations between organizations and open up new opportunities for (multi-organization) enterprises. ERP II systems can facilitate resource planning and co-operations between different organizations at a meta-level.

ERP III: A flexible, powerful information system for operations management incorporating web-based technology which enables multi-organization enterprises to offer increasing degrees of connectivity, collaboration and dynamism through increased functional scope and scalability across parts of different organizations.

Enterprization of Multi-Organizational Enterprises: This is a pattern of behavior that explains how, at different times and circumstances in an enterprise’s lifecycle, individual companies may prefer different multi-organizational enterprise structures and use different ERP system types (e.g. continuous upgrade or reconfiguration) to satisfy their exogenous and endogenous business requirements. This may lead to the ‘internet of multi-organizational enterprise operations.

Virtual Enterprise: Temporary group of parts of different organizations exploiting a short-term high-risk opportunity. Virtual enterprises (VEs) tend to be very agile and based on new innovative technology.

Multi-Organization Enterprise: An organization in which parts of companies work with parts of other different companies to collaboratively deliver complex product-service systems.

ERP Systems: A comprehensive package software solution that integrates the complete range of a businesses’ processes and functions in order to present a holistic view of the business from a single information and IT architecture, these can vary in maturity (e.g. from ERPI, to ERPII, to the highest maturity and technologically advanced ERPIII). ERP systems were originally designed and built to overcome problems associated with fragmented and incompatible information systems, and bring together inconsistent operating practices within organizations.

ERP I: An Integrated information management system supporting the operational transactions of a single company.

Extended Enterprise: Semi-permanent group of parts of different organizations working towards joint strategic objectives. Extended enterprises (EEs) tend to be lean and agile based on technical and social competence.

Vertically Integrated Enterprise: Almost permanent and extremely well-integrated group of parts of organizations; very similar to a single legal entity. Vertically integrated enterprises tend to be lean.

Enterprization: This refers to the trend where future ERP systems development / implementation and new multi-organizational enterprise paradigms and practice (e.g. strategy and operations) are inextricably linked.

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