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«Abstract This paper proposes an alternate perspective to current research in terms of understanding the dynamics of an ERP software selection ...»

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Investigating Non-Decision Making during an ERP Software Selection

Process

David Sammon

David McAvinue

Business Information Systems

University College Cork

Cork, Ireland

Email: dsammon@afis.ucc.ie

Abstract

This paper proposes an alternate perspective to current research in terms of understanding the dynamics of an

ERP software selection decision-making process, in that this paper builds on the theoretical framework

proposed by Sammon and Adam (2002). We use the proposed model of the ERP Community (Sammon and Adam 2002) and attempt to understand how the substantive, institutional, and political factors, proposed by Caldas and Wood (1998) and Wood and Caldas (2000, 2001), impact an ERP software selection decisionmaking process. As a result, we highlight the existence of Non-Decision Making (NDM) within the ERP Community under study and identify various forms of Category Manipulation, in the context of relationships and interactions observed between the ERP Community actors. Furthermore, we present the actual outcomes of the ERP software selection decision making processes within the ERP Community under study, highlighting the impact of NDM. In conclusion, this research paper goes someway to validating the model proposed by Sammon and Adam (2002) and extends our thinking in terms of understanding the complexities of an ERP software selection process.

Keywords ERP, Software Selection Process, Non-Decision Making, ERP Community, Category Manipulation

1. INTRODUCTION “Given the cost and the permanent nature of ERP investments, an understanding of the way decisions are taken concerning the adoption, evaluation and selection of ERP software can be very useful for both academic research and practice” (Stafyla and Stefanou 2000). Over the past number of years, research has been conducted to help gain a better understanding of the ERP decision-making process (Shakir 2000) and assist managers considering an ERP project, by highlighting the critical issues involved in the software selection process (Stefanou 2000). From a review of research on the subject of ERP software selection and the decision making process associated, researchers have commented on the confusing nature of many recorded instances of ERP decision making (Sammon and Adam 2000, Sammon and Lawlor 2004) and the presence of political decision making (Shakir 2000, Sammon and Lawlor 2004). In addition, the preferences of managers are often vague and contradictory and it is not certain whether this is a result of poor ERP literacy on the part of the organisations decision makers or as a direct result of the influential directions of both the ERP vendor and ERP consultant (Sammon and Adam 2002).

This paper documents our initial observations of one case in an on-going study proposing to reframe current research on decision making processes in the area of ERP software selection. In this novel perspective, the core contribution of this research is to introduce and apply the concept of Non-Decision Making (NDM) to the area of ERP. The researchers’ overall objective is to structure their ideas in the shape of a model of ERP decision making, incorporating both the ERP Community dimension (Sammon and Adam 2002) of ERP decision making and the ideas borrowed from the Non-Decision Making (NDM) literature. In proposing a framework to explain the key factors that frame managerial decision making on the ERP market, it can be observed that decision making in this domain is often characterised by weak rationales, limited understanding of key concepts and a high failure rate. Therefore, the researchers believe that the concepts that form the phenomenon described under the general heading of Non-Decision Making (NDM) will durably influence the investigation of the ERP movement. In particular, the researchers feel that analysing the ERP market as a network of actors with different interests, different techniques and different modes of interaction will foster novel ideas for improved pre-ERP preparation and analysis, improved ERP selection processes and, improved success in the implementation of ERP packages.

Investigating Non-Decision Making during an ERP Software Selection Process

2. PROPOSED RESEARCH GAP 'Ignore history - condemned to repeat it' (Judge 1997, Webster 2000) seems to be an adequate statement when it comes to describing the mixed fortunes of organisations deploying Information Systems (IS) and researchers approaches to studying these IS evolutions. This may be due to the fragmentation of research in IS as described by Blanville and Landry (1989) and Adam and Fitzgerald (2000). Indeed, Lucas (1991) suggested that, as a field, we need to think about interesting problems and look for underlying issues rather than focus on today’s ‘hot topic’ to keep up with the latest IS fashion. Therefore, addressing the suggestions of Kraemer and Dutton (1991) and Land (1995), the objective of this paper is to build upon existing research carried out in the area of Enterprise Resource Planning (ERP), therefore, emphasising a ‘continuity of ideas’ and constructing a ‘cumulative’ body of research.

It has been argued that the stage of theory development in the area under investigation is a benchmark upon which the broad objectives of a research study may be set. Esteves and Pastor (2001) have categorised the available ERP literature in terms of the phases in an ERP implementation lifecycle, from adoption to retirement, and have highlighted opportunities for further research in each phase. However, the amount of academic research relating to ERP is small, relative to the rate of ERP adoption by organisations, the scale and complexity of ERP project implementation, the sophistication of an ERP package, and the size of the ERP market. Most of the available literature is recent and originates from a small number of sources and the majority is concerned with the ERP implementation phase, while focusing little attention on the ERP software selection decision making process. The level of understanding presented in the literature, of the issues surrounding ERP, is in the early stages of the management fashion lifecycle (Abrahamson 1991, 1996) and remains, to a large extent, based on the rhetoric disseminated by institutional agents (Caldas and Wood 1998, Kieser 1997).





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Table 1: Proposed Research Gaps Research within the ERP and Non-Decision Making area has reached a point where the pheonmena has been identified and key issues have been highlighted. Marshall and Rossman (1989) have identifed four underlying purposes to research and an appropriate research methodology should reflect this underlying purpose. The issues outlined in Table 1 would suggest that elements exist in this research and provide a basis for aspects of both exploratory and explanatory research. Marshall and Rossman (1989) have identified exploratory research as being “employed to investigate little understood phenomena and to identify/discover important variables that might generate hypothesis for further research”. Furthermore, Marshall and Rossman (1989) have described explanatory research as being an approach by which it is attempted “to explain the forces causing the phenomena in question” and to “identify plausible causal networks shaping the phenomena”. Therefore, in an effort to embrace the exploratory and explanatory nature of this research study we use a case study to better understand the phenomenon under study. The data gathering techniques used included participant observation, interviews, and document analysis.

3. IRISH LOCAL GOVERNMENT Irish Local Government has existed in its current form since 1898 when the Local Government (Ireland) Act was passed. Local Government consists of a number of local authorities in the Republic of Ireland (29 County Councils, 10 City Councils/Corporations, 75 Town Councils). The purpose of local government is to enable Decision Support in an Uncertain and Complex World: The IFIP TC8/WG8.3 International Conference 2004 people at local level to provide services for themselves and to make decisions through the democratic process and local residents elect individuals to represent them. Local authorities operate under the auspices of the Department of the Environment and Local Government (DOELG) and are subject to the legislative directives of Central Government.

Funding for local authorities is derived from revenues generated in the course of:

• The provision of services

• Grants allocated through the DOELG

• Internal capital receipts (sale of houses, land, etc.)

• Borrowing Local authorities carry out a broad range of activities that make a significant contribution to the physical, cultural, social and environmental development of their communities. However, a movement towards providing a higher level of service at an appropriate cost to the end-user has recently been underway within local authorities. Within this research study we focus on two separate local authorities, namely: Cork City Council and Cork County Council, referred to as City and County in this paper. The ERP software selection process studied is based on our research conducted in City and County to-date, the DOELG and the LGCSB are not involved at this stage in the research process.

3.1 Cork City Council and Cork County Council These local authorities exist in the largest county and second largest city in the Republic of Ireland. The City Council is headed up by 31 democratically elected representatives and consists of 1,500 staff. The County Council has 48 elected representatives with 2,500 multidisciplinary staff, carrying out many of the same functions as the City Council but throughout a much larger geographical area. Numerous strategic policy committees and functional committees exist within the City and County and are responsible for reviewing and planning their use of resources, strategic direction and operational practices. Historically, due to their close proximity, forums for cooperation exist between City and County. For example, Cork County Council started an IT department in the mid 1970’s and successfully developed in-house financial systems which were also implemented in Cork City Council. Furthermore, the IT department of Cork County Council managed the IT function for both entities until the Cork City Council IT department was established in 1998. In addition, within City and County, it was normal for the Finance department to maintain a passive role in its relationship with the IT department. The IT department has traditionally dominated all finance systems and the Finance department has always been the junior partner. For example, if system related financial information was required, the IT department was consulted and constraints dictated regarding provision. Also, City and County retained a high level of autonomy in designing and maintaining its own applications and as a result maintained a certain distance from the Local Government Computer Services Board (LGCSB). The LGCSB defines its role as being able to assist all local authorities develop appropriate strategies to underpin business needs and implement appropriate solutios which are managed and supported centrally.

3.2 Restructuring within the Finance Function of Irish Local Authorities The financial systems that existed within Irish local authorities were based on legislation that was published in 1946, and the only change to this legislation was introduced in 1977. Therefore, prior to 2001, local authorities reported financially in accordance with the

Abstract

of Accounts set out in the 1946 Public Bodies Order (PBO). The PBO provided a framework for the financial systems and the formats of accounts and reports. The Abstract of Accounts depicted the cash situation at a period end and all local authorities operated cash-based accounting systems. However, a process of reform has been underway within Irish local government that has driven change in the structure, policies and culture of local authorities. This change was the result of advances in the fields of Information Technology, Human Resource Management, Accounting and Public Administration, and reflected the fact that policies and procedures within the public sector in Ireland existed largely in their current form for over a century. The catalyst for the subsequent legislative and procedural changes that were to take place was an initiative entitled ‘Better Local Government - A Programme for Change (1996)’.

The Better Local Government (BLG) initiative introduced measures to improve efficiency and reporting capabilities of the Finance function. The Prompt Payment of Accounts Act passed in 1997, highlighted the fact that the existing (legacy) financial systems were inadequate for requirements. Furthermore, the Local Government Act passed in 2001, provided a statutory framework for the new structures, functions and operations of local authorities, and local authorities are obliged to meet these requirements, for example, move

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to accruals-based accounting. However, in early 1997, although there was no formal enactment of the BLG recommendations, a need for a new financial management system was understood.

3.3 ERP Software Selection Processes NOT Process In 1997, the LGCSB attempted to resolve the problem through the development of an in-house system that would meet the requirements, for all local authorities, laid out in the BLG. Initially, City and County approached the LGCSB with the intention of ‘seeing if they could piggy back along’ with what the LGCSB was doing. However, the finance officers of City and County believed that “what the LGCSB was doing at that stage, trying to re-invent the wheel, was not feasible”. Therefore, in 1997, City and County made the decision to introduce a consultant, with a view to purchasing an Off-The-Shelf (OTS) solution. The chosen consultant was a close acquaintance of the finance officer and had worked in the IT department for several years previous.



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