Business Cases for Erp Implementations

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BUSINESS CASES FOR ERP IMPLEMENTATIONS
NORA AL-TWAIRESH, ABDULLAH S. AL-MUDIMIGH Department of Computer Sciences, College of Computer & Information Sciences King Saud University, Riyadh Department of Information Systems, College of Computer and Information Sciences King Saud University, Riyadh E-mail: twairesh@ksu.edu.sa mudimigh@ksu.edu.sa

ABSTRACT The rising expenses of information systems and their growing importance to organizations have made the justification of projects increasingly critical. The justification is usually done through a business case that is an initial step for organizations approaching an ERP implementation. The issue of developing a business case and using it during ERP implementations successfully is challenging and under-researched. This paper is a literature review on business cases in ERP, we try to identify the research issues that need to be addressed in this area and give some guidelines to developing a business case for ERP implementation. Keywords:- Business Case, ERP, Organization, integrity. As a growing number of companies adopt ERP systems, ERP systems implementation and upgrades are identified as one of the top five IT priorities among global CIOs according to independent surveys conducted by Morgan Stanley[27] and Deloitte & Touche/IDG Research Services Group[6]. A successful ERP can be the backbone of business intelligence for an organization, giving management a unified view of its processes [21]. Murphy et al. [19] argue that the escalating expense of information systems and their growing importance to organizations have made the justification of projects increasingly critical. The justification is usually done through a business case that is an initial step for organizations approaching an ERP implementation. This paper is a literature review on business cases in ERP, we try to identify the research issues that need to be addressed in this area and give some guidelines to developing a business case for ERP implementation. The remaining of this paper is organized as follows: section 2 gives a review of the literature on business cases for ERP particularly addressing the definition of a business case and the rationale for a business case. Section 3 presents several guidelines that should be followed when developing a business case for ERPs. In section 4 we conclude our research and in section 5 we present future work.

1.

INTRODUCTION

With a history that spans almost three decades, ERP has truly become a mature business application. Businesses of all sizes are looking to information technology to better integrate with business partners, reduce costs, and provide competitive advantage. According to Davenport [5], the business world’s embrace of enterprise systems may in fact be the most important development in the corporate use of information technology in the 1990s. A recent industry report by Hamerman [12] reveals that ‘‘The ERP applications market, currently about $38 billion in total revenue, is growing at an annual rate of 6.9% and will reach $50 billion by 2012.” ERP can be described as an enterprise-wide set of management tools that balances demand and supply, containing the ability to link customers and suppliers into a complete supply chain, employing proven business processes for decision-making, and providing high degrees of cross-functional integration among sales, marketing, manufacturing, operations, logistics, purchasing, finance, new product development, and human resources, thereby enabling people to run their business with high levels of customer service and productivity, and simultaneously lower costs and inventories; and providing the foundation for effective e-commerce[28].

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2.

BACKGROUND STUDY

Developing business cases prior to approving IT projects is a commonplace practice in today’s business. Yet, research indicates that many companies (65% of a studied sample) are not satisfied with their business cases [29]. However,...
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