Two research students at Carleton University are trying to determine the relationship between ERP implementation and process orientation among various North American companies.
The doctoral students, Kayvan Lavassani and Bahar Movahedi, are collecting data through a survey of roughly 3,000 companies in Canada and the United States.
The survey defines a process oriented business as departments – such as marketing, accounting, sales, manufacturing, assembling, new product development and R&D – aligned together towards satisfying customer needs. This is in contrast to a functional-based business model, which emphasis the division and isolation of departments from each other and the customer.
Lavassani said that through the survey, companies will be put into three categories: 1) companies who were process oriented before employing ERP, 2) companies who became process oriented during implantation of ERP, and 3) companies who became process oriented after implementation of ERP.
The researchers said that because of the novelty of process orientation, and to a lesser extent ERP, they found a large gap in the research literature of the subject.
“We want to know which of these companies are more successful in implementing ERP,” Lavassani said. “We are also curious to know if there is any difference between Canada and the U.S. or any kind of deviations among the industries.”
He believes the survey questions dealing specifically with ERP implementation outcomes will be crucial to determining the cost benefits of process orientation.
“Based on our knowledge, this is the first time that this measurement is being used in empirical studies,” Lavassani said. “Companies can measure themselves to see how process oriented they are and then we’ll be able to see how this affected the outcome of ERP, and ultimately, whether these companies saved more on costs of implementation.”
IBM was one company that Lavassani cited as being process oriented. He said Big Blue’s efforts, which started in the late 90s, to have their departments be more integrated and cooperative has saved the company billions of dollars.
Lavassani said that exploring the concept of process orientation is tricky because the term is uncommon to many businesses. He and his partner plan to get around this by asking indirect process orientation questions to determine a company’s implementation.
One example asks participants whether or not their company has reconfigured the workspace to facilitate process flow among departments. Another asks them whether their organizations carry out their processes depending on human discretion or judgment.
Interestingly, the students did not use the term ERP in the survey, and instead, use the term “enterprise systems” (ES). They define this as an integrated, customized and packaged software-based system that handles the requirements of the various functional departments of a company.
Lavassani said the reason they avoided using the term ERP was that that they felt many companies do not know how to properly define it.
“Companies may have some modules of ERP, whether it is accounting, project management, finance or marketing, but because they don’t have all of the modules, they don’t see themselves to be ERP equipped,” Lavassani said.
“ERP is no longer strategic,” Josh Greenbaum, principle at Enterprise Applications Consulting, said.
The survey is being conducted as the IT industry debates the place of ERP as tool to help businesses succeed.
Back in the early to mid-90s, ERP was all the rage and there was little choice or debate about how to spend millions of dollars to implement applications like SAP’s R3 ERP system. Today that kind of thinking is out of step with the market, which is all about the add-on applications companies are willing to deploy to augment ERP.
“ERP is no longer strategic,” said Josh Greenbaum, principle at Enterprise Applications Consulting.
Despite this debate, the researchers feel ERP and process orientation to be important and plan on submitting their eventual findings to conferences and academic journals.
— with files from IDG Newswire
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