This study presents the results of an exploratory study of Fortune 1000 firms and their enterprise resource planning (ERP) usage, as well as benefits and changes they have realized from ERP. The study empirically examines ERP in these organizations to provide insight into various aspects that firms can use to evaluate how they are managing their ERP systems. Findings provide information about functionality implemented, extent to which benefits are realized, extent of ERP-related organizational changes firms have realized, and the way firms measure ERP success. The study also addresses the extent to which various types of ERP software have been implemented and whether there is a relationship between type of software and benefits. Finally, it examines ERP-enabled change in light of organizational configuration.
TopIntroduction
Enterprise resource planning (ERP) is a tool that enables organizations to streamline operations, leverage common business processes, and manage multiple operations, and is implemented through an integrated suite of software modules and a centralized database (Jacoby & Bendoly, 2003; Scott & Kaindl, 2000). Although the term ERP may be used to represent a variety of concepts, in this article, the term is used to constitute the seamless integration of processes across functional areas with the standardization and integration of various business practices in order to manage operations more effectively and to gain an overall view of the business (Boudreau & Robey, 1999; Jacobs & Bendoly, 2003; Mabert et al., 2000).
The transition to an enterprise resource planning framework is often a long, difficult, and costly process due to the nature and complexity of ERP systems. Many firms are grappling with the tradeoff between the costs of implementing an ERP system and not having one (Stedman, 1999). For example, some have come to believe that “competitively and technically it’s a must-do, but economically there is conflicting evidence, suggesting it is difficult to justify the associated costs, and difficult to implement to achieve a lasting business advantage” (Willcocks & Sykes, 2000, p. 32). However, in spite of many failures reported (Davenport, 1998; Kransner, 2000), there are many success stories, suggesting that if properly managed, organizations can and do realize significant benefits from ERP (Davenport, Harris, DeLong & Jacobson, 2001).