Role of It in an Organisation

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INFORMATION TECHNOLOGY IMPACTS ON ORGANIZATIONS: ERP PROJECT CASE STUDIES

BY: MAX ARO

MASTER OF SCIENCE THESIS IN ACCOUNTING SWEDISH SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION 2005

HANKEN - Swedish School of Economics and Business Administration Department: Accounting Author: Max Aro

Type of Work: Master of Science Thesis Date: 22.12.2005

Title of Thesis: INFORMATION TECHNOLOGY IMPACTS ON ORGANIZATIONS: ERP PROJECT CASE STUDIES Abstract: Recognizing information technology (IT) impacts on organizations has proven to be difficult to perform. Several researches have engaged in performing the task. Due to the complex nature of IT and business organizations, results have varied significantly. The topic requires further study as several organizations are currently implementing large scale IT systems for business performance support.

The research objective is to distinguish IT impacts on the business process level, which correlates to organizational performance. The focus is on the set objectives for an IT business project and its outcomes. Factors such as goal setting and other project enabling factors are paid special attention to. Measurement procedures and detail are attended to. The above mentioned factors determine IT business success. The research is conducted utilizing the multiple case study method. An in-depth study permits thorough recognition of the study focus.

The results distinguish automational, informational, and transformational IT impacts on organizations’ business processes. Important IT business success enabling factors include clear goal setting and change management. Business performance metrics are required to be utilized in the pre- and post-implementation phases for result comparisons in order to determine IT business success.

Keywords: information technology, enterprise resource planning systems, information technology impacts, objectives, enabling factors, measurement metrics, IT business success

TABLE OF CONTENTS

1 INTRODUCTION ...................................................................................................................1 1.1 Research Objective.............................................................................................................2 1.2 Structure .............................................................................................................................4 2 IMPACT OF INFORMATION TECHNOLOGY ON BUSINESS ....................................5 2.1 Productivity Paradox of Information Technology..............................................................5 2.2 Overview of the IT Field ....................................................................................................6 2.3 Overview of the ERP Field ..............................................................................................10 2.3.1 Reasons for ERP........................................................................................................11 2.3.2 Financial Impacts of ERP..........................................................................................14 2.3.3 ERP Benefits .............................................................................................................17 3 IT BUSINESS SUCCESS .....................................................................................................19 3.1 Measurement Metrics .......................................................................................................19 3.2 Success during the ERP Lifecycle....................................................................................21 3.2.1 Optimal Success ........................................................................................................22 3.3 Variables Enabling IT Implementation and Integration Success .....................................24 3.4 Business Process Reengineering ......................................................................................28 3.5...
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