Meeting global business information requirements with ERP systems for improved business performance

This thesis explores global business performance outcomes as a result of aligning ERP systems capabilities to global business information requirements. Global business is a network of interconnected organizations that have multinational operations and exchange finished goods, raw materials, services, information, knowledge, skills and capital across national boundaries. It is a new business trend in which organisations from all industry sectors capitalize on cheap labour, low cost capital, unique resources and new market opportunities in the global economy. Global business management entails unique information requirements from strategic business units (SBSs) operating in different parts of the world. Global business information requirements include: 1) multi-level and multi-purpose information from global SBUs; 2) accurate and timely information; 3) consolidated information; 4) global business process information; 5) global supply chain information; and 6) secure information. The first three information requirements are important for supporting management decisions while the other three are important for supporting global businesses’ operating decisions. Enterprise Resource Planning (ERP) systems have been increasingly adopted to meet global business information requirements. ERP systems capabilities that support global business information management include multi-level and multi-purpose information management; delivering accurate, timely and consolidated information; integrating global business process information; managing global supply chain information and transmitting secure information. Using structural equation modelling (SEM) technique this research established that if two variables (global business information requirements and ERP systems capabilities) co-align, this resulted in improved business performance. The co-alignment in this research is adopted from Venkatraman’s explanation of “fit as co-variation/co-alignment” perspective. Performance outcomes of global business as a result of co-aligning ERP systems capabilities and global business information requirements are measured using four perspectives: financial performance; customer performance; learning and growth performance; and internal business process performance. Findings of this research supported the conceptualisation of fit from the co-alignment/co-variation perspective, confirming that the co-alignment of global business information requirements and ERP systems capabilities leads to better business performance of global organizations. The findings also confirmed that global organisations have unique information requirements that are somewhat different to local businesses. ERP systems are able to support global business information requirements. Findings also confirmed that the financial, customer, learning and growth and internal business process performance of global organizations are moderated by the organization size and the globalization history. Not only does this research fill the void in global business literature by investigating the important role information plays in global business management, but it extends the ERP literature and IT/IS alignment theories to the co-alignment of IS capabilities with global business information requirements for improved performance outcomes. The major contribution to knowledge this research makes is the development and validation of a co-alignment model, extending theories of IT/IS alignment to the alignment of a specific information system (ERP system) to a specific type of business (global business)