ISRC Topic Brief Realizing Value from Investments in ERP

College of Business Administration University of Houston, Houston, Texas, 77204-6283 Phone: 713-743-4691 Fax: 713-743-4693 E-mail: [email protected] Executive Summary Organizations have invested in IT to improve their business processes and adapt to rapidly changing conditions in the competitive environment. However, identifying the value obtained from these investments has not been easy. Lack of consistent measures, changes in technology and the environment, and the resulting changes within the organization made it difficult to link investments in information technology with firm performance. Further, many of the benefits obtained from information technology are intangible and hence difficult to define in dollar amounts. However, recent studies have shown positive relationships between investments in information technology and firm performance. Firms are increasingly investing in Enterprise Resource Planning (ERP) systems. Appropriate use of these systems can result in improved data accessibility and process efficiency. However, implementing these systems have proven to be very expensive and the benefits from implementation are not easily achieved. Lessons from previous research may help realize value from investments in ERP. Customer focus, redesigning of business processes to leverage the technology, empowerment of the workers and management of the risks are some of the recommendations from these articles. A vital message is that management of organizational change needs to be considered an integral part of the systems implementation process.