A case study of strategic enterprise resource planning management in a global corporation: standardisation is the basis of competitive advantage
Faculty of Business and Law
School of Business/Centre for Innovative Practice
Purpose: Today enterprise resource planning (ERP) applications are a substantial proportion of many corporations' capital expenditure and the effective management of this pliable asset has significant consequence for business performance. The purpose of this paper is to examine the corporate strategy of a global corporation that, in pursuit of competitive advantage, deployed ERP applications. Design/methodology/approach: This inductive case study research examines the corporate processes utilised to strategically manage ERP in a global corporation. The approach is explorative and method qualitative. Semi-structured interviews were conducted over a period of a year with senior executives, IT directors, IT managers, financial controllers, country managers and end-users. Findings: The study found that devolving responsibility of ERP applications to subsidiary organisations increased cost and hindered corporate parenting. The considerable cost of centralising IS management and standardising ERP processes was found to be greatly exceeded by the numerous benefits. The primary benefits being reduced cycle time, the ability to benchmark subsidiary performance, improved customer satisfaction and increased market share. Research limitations/implications: The research is limited by the analysis being of a single corporation. The major implication for future research is the need to understand the manner of ongoing management and control of ERP applications in different types of organisations. Particularly, their relationship with strategic management, how ERP enable and inhibit strategy, and ongoing management of operational ERP systems. Practical implications: The dissemination of the management practices that have been employed to achieve a very successful ERP application-based business strategy is helpful to the many organisations that have or intend to implement ERP applications. It is particularly noteworthy that centralised corporate objectives, when mandated and focused upon, provide benefits that could not be achieved in the ad hocracy that existed prior to the ERP implementation. Originality/value: The dearth of theory about ongoing management of ERP and the plight of the many organisations that are having difficulty understanding how to strategically manage these ubiquitous systems in a rapidly changing business landscape makes the study significant to both theory and practice.