ERP Systems - Fully Integrated Solution or a Transactional Platform?

Abstract: This paper addresses the question of how to make use of Enterprise Resource Planning (ERP) systems in companies in the process industry were there is a pervasive need of process standardization. ERP systems have the potential to contribute with standardization and integration of organizational data through an of-the-shelf solution. In practice results of ERP systems implementation has varied greatly. Considering their implications on business processes and the complexity of the systems this should not come as a surprise. ERP systems do not only imply standardization of data but also standardization of key processes in the company. The consequences on the individual organization are therefore hard to predict. Making strategic choices between different degrees of in-house developed systems, integration of solutions from many different suppliers or to only rely on the ERP systems consultants and their proposed implementation of solutions, can be a troublesome balance act. This paper describes a case study of the Swedish diary company Norrmejerier and the implementation of the ERP system IFS analyzed from a perspective of complex system and standardization. The use of IFS at Norrmejerier can be characterized as a loosely coupled integration with the ERP system as a central integration facilitator. This solution allowed the company to make use of standardization benefits, filling the need of special functionality and at the same time limiting the negative unexpected consequences such as decreased activity support and increased complexity. The key contributions of this paper are that it shows how ERP´s can contribute to standardization and integration efforts in IT environments with peculiar demands on functionality. Secondly it demonstrates how negative side effects related to implementation of ERP systems can be managed and limited.