Enterprise Resource Planning: An E-Entrepreneurial Challenge

Enterprise Resource Planning: An E-Entrepreneurial Challenge

John Douglas Thomson (RMIT University, Melbourne, Australia)
DOI: 10.4018/978-1-61520-597-4.ch013
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The Enterprise Resource Planning (ERP) entrepreneurial venture challenge for the innovators was to develop an ERP database using standard generic database software within existing resources and available data at lowest cost in minimum time. The generic ERP database model so developed was completed as a part time task by two innovative entrepreneurs over twelve months for the Australian Department of Defense. They used standard generic database software, existing data, with no additional resources or external consultants. This action research was undertaken on a longitudinal basis by the two entrepreneurs networking closely with the many internal and external stakeholders. The Australian Department of Defense is a complex, high tech Australian Federal Government Department of around 90,000 employees. In 2008-09 the Australian Department of Defense will spend more than $9.6 billion acquiring and sustaining military equipment and services, and will employ over 7,500 people in more than 40 locations around Australia and overseas (Department of Defense, 2009). This comprises the procurement of defense capability products (goods and services) and their support and maintenance from almost every industry sector, on a global basis. Hundreds of small to large enterprises are dependent on the Australian Department of Defense for such orders. The anticipation of the developers of the ERP database was that this entrepreneurial venture could not only help the Australian Department of Defense become an inclusive knowledge based learning society, but subsequently provide an inexpensive database model for other organizations, large or small.
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Enterprise resource planning (ERP) is an organization wide computer software system used to manage and coordinate all the resources, information and functions of a business from shared data stores (Esteves, & Pastor, 2004). An ERP system can facilitate the smooth flow of common functional information and reduce cycle times. However, without top management support having an appropriate business strategy, plan and vision, business processes, effective project management, user involvement and education and training, organizations cannot embrace the full benefits of such complex system and the risk of failure might be at a high level (Al-Fawaz, Zahran, & Tillal, 2008). Due to the complexities of most ERP vendor systems and the negative consequences of a failed ERP vendor implementation, most ERP vendors have included ‘best practice’ into their software. These are what the ERP vendor deems as best practice to carry out a particular business process in an integrated enterprise-wide system (Monk, & Wagner, 2009) – that is, from the ERP vendors point of view.

An ERP study conducted by Lugwigshafen University of Applied Science (2004) surveyed 192 companies. It concluded that companies which implemented SAP’s industry best practices decreased mission-critical project tasks such as configuration, documentation, testing and training – but how objective was such research? There is but limited, recent, rigorous, objective literature on ERP. Much of the literature is sourced from and based upon evidence provided by the ERP vendors themselves, their data, their perspectives and their advice. ERP vendors have designed their systems around standard business processes, based upon their perceptions of best business practices. Different ERP vendors have different types of processes but all are of a standard, modular nature. Some of these may well be suited to many organizations, but which one suits which organization best?

Firms that want to implement ERP vendor systems may be consequently forced to adapt their organizations to the ERP vendor’s standardized processes or adapt the ERP vendor’s package to the organization’s existing structure, systems and processes (Turban, 2008). Neglecting to map current business processes prior to starting ERP implementation is a main reason for failure of ERP projects (Brown, & Vessey, 2003).

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