Implementation of Discrete and Integrated IT: The Role of Organisational Structure and Culture

Implementation of Discrete and Integrated IT: The Role of Organisational Structure and Culture

Colm Burns (Queen’s University Belfast, UK) and Nola Hewitt-Dundas (Queen’s University Belfast, UK)
Copyright: © 2012 |Pages: 16
DOI: 10.4018/978-1-4666-1556-4.ch011
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Abstract

Integrated organisational IT systems, such as enterprise resource planning (ERP), supply chain management (SCM) and digital manufacturing (DM), have promised and delivered substantial performance benefits to many adopting firms. However, implementations of such systems have tended to be problematic. ERP projects, in particular, are prone to cost and time overruns, not delivering anticipated benefits and often being abandoned before completion. While research has developed around IT implementation, this has focused mainly on standalone (or discrete), as opposed to integrated, IT systems. Within this literature, organisational (i.e., structural and cultural) characteristics have been found to influence implementation success. The key aims of this research are (a) to investigate the role of organisational characteristics in determining IT implementation success; (b) to determine whether their influence differs for integrated IT and discrete IT projects; and (c) to develop specific guidelines for managers of integrated IT implementations. An in-depth comparative case study of two IT projects was conducted within a major aerospace manufacturing company.
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Introduction

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 Planning1970sOptimises production by coordinating production planning with both inventory and customer demand levels
MRPII – Manufacturing Resource Planning1980sAs MRP, but integrates all functions involved in manufacturing, including finance, marketing, personnel, etc.
SCM – Supply Chain Management1980sIntegrates upstream with suppliers so that all processes in supply chain are linked, from raw materials to end product
CRM – Customer Relationship Management1990sStandardises and integrates customer data across organisation for consistent, profitable customer relationships
ERP – Enterprise Resource Planning1990sFully 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.

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