Understanding the business benefits of ERP system use

© 2006 Dr. Lorraine Jean StaehrERP systems are large, complex, integrated software packages used for business transaction processing by thousands of major organizations worldwide. Yet outcomes from ERP system implementation and use can be very different, and current understanding of how and why such variation exists is limited. Since most studies of ERP systems to date have focused on ERP implementation, this research focused on the post-implementation period. The aim was to better understand the 'what', 'how' and 'why' of achieving business benefits from ERP systems during ERP use. Achieving business benefits from ERP systems was considered as a process of organizational change occurring over time within various societal and organizational contexts. A retrospective, interpretive case study approach was used to study this process. The post-implementation periods of four Australian manufacturing organizations that had implemented ERP systems were studied. This study makes three important contributions to the information systems research literature. First, a new framework was developed to explain 'how' and 'why' business benefits were achieved from ERP systems. This explanatory framework is theoretically based and is firmly grounded in the empirical data. Three types of themes, along with the interrelationships between them, were identified as influencing the business benefits achieved from ERP systems. The first group of themes, the process themes, are 'Education, training and support', 'Technochange management' and 'People resources'. The second group of themes, the outcome themes, are 'Efficient and effective use of the ERP system', 'Business process improvement' and 'New projects to leverage off the ERP system'. The third group of themes, the contextual themes, are the 'External context', the 'Internal context' and the 'ERP planning and implementation phases'. This new framework makes a significant contribution to understanding how and why some organizations achieve more business benefits from ERP systems than others. Second, the case studies provide a rich description of four manufacturing organizations that have implemented and used ERP systems. Examining the 'what' of business benefits from ERP systems in these four manufacturing organizations resulted in a confirmed, amended and improved Shang and Seddon (2000) ERP business benefits framework. This replication and extension of previous research is the third contribution of this study. The results of this research are of interest not only to information systems researchers, but also to information systems practitioners and senior management in organizations that either plan to, or have implemented ERP systems. Overall this research provides an improved understanding of business benefits from ERP systems and a sound foundation for future studies of ERP system use