2001 Operational Research Society Ltd. All rights reserved 0960-085X/01 $15.00 www.palgrave-journals.com/ejis
A framework for the ex-ante evaluation of ERP software
Technological Educational Institution (TEI) of Thessaloniki, Sindos, Thessaloniki, Greece It has been widely reported that a large number of ERPimplementations fail to meet expectations. This is indicative, ﬁrstly, of the magnitude of the problems involved in ERP systems implementation and, secondly, of the importance of the ex-ante evaluation and selection process of ERP software. This paper argues that ERP evaluation should extend its scope beyond operational improvements arising from the ERP software/product per se to the strategic impact ofERP on the competitive position of the organisation. Due to the complexity of ERP software, the intangible nature of both costs and beneﬁts, which evolve over time, and the organisational, technological and behavioural impact of ERP, a broad perspective of the ERP systems evaluation process is needed. The evaluation has to be both quantitative and qualitative and requires an estimation of theperceived costs and beneﬁts throughout the life-cycle of ERP systems. The paper concludes by providing a framework of the key issues involved in the selection process of ERP software and the associated costs and beneﬁts. European Journal of Information Systems (2001) 10, 204–215.
The decade of 1990, as far as the business information systems are concerned, has been characterised bythe implementation of Enterprise Resource Planning (ERP) systems in a signiﬁcant number of enterprises worldwide. ERP systems are currently the prevailing form of business computing for many large organisations in the private and public sector (Gable, 1998). The reasons for adopting ERP can be technical, such as the desire to reduce mainframe system operating costs and/or business, such as thenecessity to acquire software, which can support a certain production mode (Markus & Tanis, 2000). Although a large number of papers have been recently published addressing ERP issues (see Esteves & Pastor, 2001), there is limited research concerning ERP software evaluation. An extensive part of the academic literature deals exclusively with ERP implementation issues ignoring the way decisions aretaken and their appropriateness regarding the acquisition of ERP systems. The purpose of this paper is to identify key issues involved in the ex-ante evaluation of ERP software and emphasize the importance of selecting the right ERP software for an organization. Software selection based on ease of use, usefulness and involvement of end users, as it has been suggested by Montazemi et al (1996), is nolonger enough for criti*Correspondence: CJ Stefanou, Technological Educational Institution (TEI) of Thessaloniki, PO Box 14561, 54101 Sindos, Thessaloniki, Greece E-mail: kstef acc.teithe.gr
cal systems such as ERP. Brown et al (2000) identiﬁed several business and IT related factors that inﬂuence the purchase of ERP systems. It has been also argued that software procurement is not a transparentprocess and mission-critical software is vital in achieving both operational and strategic goals and support decision-making (Rosenthal & Salzman, 1990). This paper argues that, given the strategic nature of ERP and the major organisational, technological and behavioural impact of ERP, a broad perspective of ERP systems adoption and evaluation is needed. Technological, business and organisationalcontexts should be studied in a uniﬁed way encouraging the examination of interrelated key acquisition, implementation and maintenance factors. Due to the complexity of ERP software, and the intangible nature of most costs and beneﬁts, the evaluation has to be both quantitative and qualitative and requires a multidimensional and a multiple perspective view of perceived costs and beneﬁts...