(Erp) Business Practices Solbjerg Plads 3 Dk-2000 Frederiksberg Danmark

COPENHAGEN BUSINESS SCHOOL A MULTI-CASE ANALYSIS OF THE DEVELOPMENT ENTERPRISE RESOURCE PLANNING SYSTEMS (ERP) BUSINESS PRACTICES SOLBJERG PLADS 3 DK-2000 FREDERIKSBERG DANMARK WWW.CBS.DK ISSN 0906-6934 Print ISBN: 978-87-93155-94-7 Online ISBN: 978-87-93155-95-4 Michelle Carol Antero A MULTI-CASE ANALYSIS OF THE DEVELOPMENT OF ENTERPRISE RESOURCE PLANNING SYSTEMS (ERP) BUSINESS PRACTICES The PhD School of LIMAC PhD Series 06.2015 PhD Series 06-2015 A Multi-case Analysis of the Development of Enterprise Resource Planning Systems (ERP) Business Practices Michelle Carol Antero Supervisors: Niels Bjørn-Andersen Suprateek Sarker Ph.D. School LIMAC Copenhagen Business School Michelle Carol Antero A Multi-case Analysis of the Development of Enterprise Resource Planning Systems (ERP) Business Practices 1st edition 2015 PhD Series 06.2015 © The Author ISSN 0906-6934 Print ISBN: 978-87-93155-94-7 Online ISBN:978-87-93155-95-4 LIMAC PhD School is a cross disciplinary PhD School connected to research communities within the areas of Languages, Law, Informatics, Operations Management, Accounting, Communication and Cultural Studies. All rights reserved. No parts of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system, without permission in writing from the publisher. 3 Foreword This project would not be possible without the grants I received from the Danish National Advanced Technology Foundation, Microsoft Development Center Copenhagen (MDCC), Copenhagen Business School (CBS) and Scandinavian Consortium for Organizational Research (SCANCOR). This thesis is developed as part of the 3gERP project, a research project funded by the Danish National Advanced Technology Foundation and Microsoft. 3gERP is a consortium comprised of Copenhagen Business School (CBS), Microsoft Development Center Copenhagen (MDCC) and Datalogisk Institut Københavns Universitat (DIKU) started in 2006 and gradually winding down with the last PhD students completing their theses. The project aims to develop a standardized, flexible and configurable ERP system for small- and medium-scale Enterprises (SME). The shortcomings and errors of this work are mine and mine alone. To the extent that it advances the literature on ERP, much of that is due to the people who greatly supported me in my PhD journey. Foremost, I would like to express my sincerest gratitude to my primary supervisor, Prof. Niels Bjørn-Andersen, for his guidance, wisdom and obvious genuine concern for my intellectual growth and personal 4 advancement. Without a doubt, I could not have finished this work without his invaluable support. He is the quintessential professor: he is avuncular but very professional; gentle but firm; sharp of mind but not edgy; extremely knowledgeable but never impatient and condescending. I will forever treasure his insights and advice on matters concerning the academic world and life in general. Secondly, Prof. Suprateek Sarker, my secondary supervisor, also deserves much of my thanks as he was instrumental in convincing me to make the jump and pursue an academic career. Known by everyone as a tireless and awe-inspiring “publishing powerhouse,” he pushed me and challenged me to set higher goals. I also wish to acknowledge the help I received from Prof. Carsten Sørensen, my M.Sc. supervisor at the London School of Economics for his recommendations and advice; from Prof. Karlheinz Kautz, Prof. Ravi Vatrapu, and Prof. Michel Avital, who, as Ph.D. coordinators during my three years at CBS, provided me with guidance on the coursework and seminars; from Prof. Jonas Hedman, Prof. Stefan Henningsson and Dr. Philip Holst-Riis, my co-authors who patiently worked with me during the process of revising and resubmitting articles; and from Prof. Jan Damsgaard and the faculty and staff of the Department of Information Technology Management for all the administrative assistance. 5 I am also truly grateful to Prof. Pernille Kræmmergaard Jensen, Prof. Petra Schubert and Prof. Jacob Nørbjerg for their feedback during the work-in-progress seminars; to the faculty at the ECIS 2013 Doctoral Consortium, especially Prof. Jannis Kallinikos and Prof. Margunn Aanestad, for their comments, additional references and advice to narrow down the scope of this thesis; to Prof. Mitchell Stevens, the Director of SCANCOR for his support and guidance during my visiting scholarship at Stanford University and his crucial assistance in getting the Institutional Review Board (IRB) approval; to Prof. James March, Prof. Stephen Barley, Prof. William Barnett and Prof. Woody Powell for the conversations and critical remarks on some of the work-in-progress papers that I discussed with them while at Stanford. I would be an ingrate if I do not give a shout-out to Dr. Greg Gimpel, Dr. Heidi Tscherning, Dr. Morten Hjelholt, and Femi Adisa, who were the more senior PhD students when I started and made my transition into the PhD program easier, and to the other PhD students Rina Hansen, Thorhildur Jetjek, Ather Nawaz, Gitte Skou Pedersen for their friendship and companionship. The collegial, almost familial, atmosphere at the Department made the journey pleasant and enjoyable for me. I cannot name them but I also want to thank all the directors and managers of the companies who have taken an interest in my project and 6 participated in the interviews; the research assistants who transcribed the interviews; and the reviewers and editors of the journals (e.g., EJIS, JAIS, JMIS, IRMJ, IJEIS) and conference papers (i.e., CENTERIS, AMCIS, ECIS, ICIS) whose critical comments allowed me to revisit some contentions and in the process strengthen my arguments. Last but definitely not least, my gratitude is eternal to my family. Without the constant support and love of my husband, Felix, and my children, Joshua and Chelsea, I would not have even pursued my PhD. I dedicate this to them because they were a big and indispensable part of this project. Having earlier pursued his Juris Doctorate, Felix understood the demands on a doctoral student and picked up my parental slack whenever and wherever needed. Joshua and Chelsea superbly put up with so many changes – without exaggeration, I confess that their flexibility, optimism and sense of adventure inspire me. 7 Abstract The potential of Enterprise Resource Planning (ERP) systems to integrate the business functions of any organization has led to its proliferation since the 1990s. Arguably, ERP systems potentially enable an organization to become competitive, and their impact has since been extensively researched and debated. This thesis seeks to understand how ERP vendors have innovated and developed their business practices to ensure their own competitive advantage. The thesis consists of an overview wrapper and five articles. This work is based on a research methodology using case studies to understand the development of business practices in the ERP industry since the 1950s. As such, the thesis explores the journey of different ERP vendors that (1) were influenced by their environment, (2) participate in different structuring processes to develop their business practice; (3) adapt their business practices to produce product/service offerings potentially matching or exceeding the actions of their rivals; and (4) encounter challenges as they shift their business models. The thesis reveals that in order to continue to outlast the competition in a hypercompetitive environment, ERP vendors (1) refine their business practices, over time, through incremental and evolutionary changes impacting the ERP industry; (2) obtain a competitive advantage through 8 the exploitation of core resources; (3) co-create with a partner network to maximize their resources and increase their ability to compete; and (4) realize the value proposition in terms of the business model. Keywords: Enterprise Systems, ERP, Business Practices, Evolution, and Business Models 9 Abstrakt ERP systemers muligheder for at integrere forretningsfunktioner har ført til en omfattende udbredelse af disse i 90’erne. Der er heller ingen tvivl om, at ERP-systemer har gjort organisationer mere konkurrencedygtige, og disse systemers indflydelse er gjort til genstand for en omfattende forskning og debat. Denne afhandling forsøger at belyse hvorledes ERP leverandører har innoveret og udviklet deres forretnings praksis for at sikre deres egne konkurrencemæssige fordele. Afhandlingen består af en overordnet sammenfatning samt fem artikler. Der er anvendt en forskningsmetode baseret på case studier for at forstå udviklingen i forretningspraksis i ERP industrien siden 50’erne. Afhandlingen er en udforskning af, hvorledes forskellige ERP leverandører (1) var påvirket af deres omgivelser, (2) deltog i forskellige strukturerings processer for at udvikle deres forretningspraksisser, (3) tilpassede deres forretningspraksisser til at producere produkter/service tilbud som potentielt matchede eller oversteg tilsvarende tiltag fra deres konkurrenter, og (4) løb ind i udfordringer efterhånden som de skiftede deres forretningsmodeller. 10 Afhandlingen belyser endvidere, at for at kunne klare konkurrencen i hyper konkurrencemæssige omgivelser, er det nødvendigt for ERP leverandører at kunne (1) redefinere deres forretningspraksisser over tid som svar på inkrementale og evolutionære påvirkninger af ERP industrien, (2) opnå en konkurrencemæssig fordel gennem udnyttelse af deres nøgle ressourcer, (3) samarbejde med et partner netværk

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