Determinant factors in international Enterprise Resource Planning (ERP) integration project

Abstract

The purpose of this study is to identify the factors that determine the degree to which a single ERP-solution should be integrated between a parent company and a subsidiary. The interest was to look at the situation before the actual integration project is started. The main focus was on the business-side, but relevant IT -aspects were addressed to provide more comprehensive understanding of the subject. Challenges, advantages, and disadvantages were looked and evaluated from the group perspective as well as from a subsidiary perspective. The goal was to see how the interests of two stakeholder groups differ and how a single ERP-system can satisfy the needs of the both groups.

Enterprise resource planning is a widely studied area in Information Systems Science (ISS), but most of the researches focus on addressing the issues during the implementation process. Fewer researches are written that examine the conditions before the implementation project. Literature that directly or indirectly took standing on the issues relevant to those preconditions was used as a base for the theoretical framework developed for this paper. The research was conducted as a single case study concentrating on a multinational group and a subsidiary. The main data collection was done through semi-structured interviews both with the group’s representatives and with their counterparts in the subsidiary. A small-scale data mapping was also conducted in order to provide general understanding of the data structure at the moment between the two companies.

The key findings of this study include the description of the determinant factors in the real life affecting to the integration degree. If was found out that, at least in this case, support process for the enterprise wide IT-systems plays an extremely important role. Based on the findings, in this case, the affecting factors are relatively similar between the two companies that make the single ERP-solution more likely to be successful. However, it is important to remember, and stated over and over again by the academic authors, that ERP-integration contains always high risks and such integrations should not be conducted lightly and without proper and extensive preparations in both companies.