A Comprehensive Framework for Classifying the Benefits of Erp Systems
A Comprehensive Framework for Classifying the Benefits of ERP Systems
Shari Shang, Department of Information Systems, The University of Melbourne, sshang@jeack.com.au
Peter B. Seddon, Department of Information Systems, The University of Melbourne, p.seddon@dis.unimelb.edu.au
Abstract
This paper presents a framework for assessing the business benefits of Enterprise Resource Planning (ERP) systems. After analyzing the features of ERP systems, the literature on IT benefits, data from 233 ERP-vendor success stories published on the web, and interviews with 34 ERP cases, we have produced a consolidated framework of five benefit dimensions. This framework tries to classify the types of benefit that organizations can achieve by using ERP systems and provide a comprehensive foundation for planning, justifying, and managing the system. The framework focuses on benefits only, from the point of view of management as stakeholders; it does not consider costs.
Introduction
According to AMR Research, total revenue in the Enterprise Resource Planning (ERP) software and services market in 1999 was US$18.3 B (Gilbert, 2000). ERP system implementation costs are often reported to be five to ten times the cost of software licenses (Davenport, 2000). If so, organizations world-wide spent something like US$90-180 billion on ERP systems in 1999. Most organizations that have implemented ERP systems expect to continue using them for many years.
ERP systems are integrated, enterprise-wide, packaged software applications that impound deep knowledge of business practices accumulated from vendor implementations in many organizations. ERP systems are evolving to incorporate new technologies, such as E-commerce, data warehousing, and customer relationship management. ERP software is a semi-finished product with tables and parameters that user organizations and their implementation partners configure to their business needs. Implementation of ERP systems therefore
Shari Shang, Department of Information Systems, The University of Melbourne, sshang@jeack.com.au
Peter B. Seddon, Department of Information Systems, The University of Melbourne, p.seddon@dis.unimelb.edu.au
Abstract
This paper presents a framework for assessing the business benefits of Enterprise Resource Planning (ERP) systems. After analyzing the features of ERP systems, the literature on IT benefits, data from 233 ERP-vendor success stories published on the web, and interviews with 34 ERP cases, we have produced a consolidated framework of five benefit dimensions. This framework tries to classify the types of benefit that organizations can achieve by using ERP systems and provide a comprehensive foundation for planning, justifying, and managing the system. The framework focuses on benefits only, from the point of view of management as stakeholders; it does not consider costs.
Introduction
According to AMR Research, total revenue in the Enterprise Resource Planning (ERP) software and services market in 1999 was US$18.3 B (Gilbert, 2000). ERP system implementation costs are often reported to be five to ten times the cost of software licenses (Davenport, 2000). If so, organizations world-wide spent something like US$90-180 billion on ERP systems in 1999. Most organizations that have implemented ERP systems expect to continue using them for many years.
ERP systems are integrated, enterprise-wide, packaged software applications that impound deep knowledge of business practices accumulated from vendor implementations in many organizations. ERP systems are evolving to incorporate new technologies, such as E-commerce, data warehousing, and customer relationship management. ERP software is a semi-finished product with tables and parameters that user organizations and their implementation partners configure to their business needs. Implementation of ERP systems therefore
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