an investigation into the use of erp systems in the service sector

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doi:10.1016/j.ijp

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(V. Botta-Geno

Int. J. Production Economics 99 (2006) 202–221

www.elsevier.com/locate/ijpe

An investigation into the use of ERP systems in theservice sector

Valerie Botta-Genoulaza,�, Pierre-Alain Milletb

aPRISMa, INSA—GI, Bat Jules Verne, 19 avenue J. Capelle, 69621 Villeurbanne Cedex, FrancebPRISMa, INSA—IF, Bat Blaise Pascal, 7 avenue J. Capelle, 69621 Villeurbanne Cedex, France

Available online 5 February 2005

Abstract

Recently, service organizations have invested considerable resources in the implementation of Enterprise Resource

Planning (ERP) systems, even using solutions initially targeted for manufacturing companies. The aim of this paper is

to get an insight into how services approach ERP implementation. A review of ERP projects, especially in services,

completed by six case studies has been undertaken. We identify and discuss some characteristics of services, which are

discriminatory regarding manufacturing. Main characteristics identified deal with complete or partial integration,

product or customer orientation, importance of labour, human factor. In conclusion, trends to standardization and

integration seen in the industrial sector are also growing in services, but in different ways.

r 2005 Elsevier B.V. All rights reserved.

Keywords: ERP implementation; System integration; Services; Manufacturing; Healthcare

1. Introduction

During recent years, organizations have investedconsiderable resources in the implementation ofEnterprise Resource Planning (ERP) systems.ERP is a software package that attempts tointegrate all departments and functions of acompany onto a single computer system that canserve all different departments’ needs. Klaus et al.

e front matter r 2005 Elsevier B.V. All rights reserve

e.2004.12.015

ng author. Tel.: +334 72 43 60 74;

85 38.

ss: [email protected]

ulaz).

(2000) have performed an historical analysis and astate-of-the-art report on ERP phenomenon. Asfar as we know, service organizations were not inthe initial target zone of many ERP vendors,which instead developed products for manufactur-ing companies. However, ERP systems are in-creasingly being implemented in the service sector.By all accounts, services dominate most developedeconomies given that significantly more than halfof these countries’ gross domestic product is in theservice sector, and projected economic and jobgrowth through the 21st century is expectedto be dominated by services. Concurrent to thisgrowth, the globalization of services and rapid

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V. Botta-Genoulaz, P.-A. Millet / Int. J. Production Economics 99 (2006) 202–221 203

technological progress, afforded by informationand communication technology, are increasing thepressures for service firms to compete on newofferings (Menor et al., 2002). Since the study ofERP in the service sector is a new area, there islittle theoretical research on the topic. Now, theneed for such studies has become apparent.

In order to identify and discuss differencesbetween service and manufacturing companies inthe context of ERP implementation, one can firstlyinvestigate in ERP return on experiments fromservices companies. A study with cases in insur-ance, healthcare, software and telecom servicescompanies has been undertaken, and specificitiesof ERP projects in services activities have beenidentified.

Section 2 introduces ERP definition and market,presents motivations for implementation andstates problems, benefits and success factorsencountered in such projects. Section 3 introducesthe main characteristics of services in relation tothe industrial sector, like customer contact, pro-duct definition, characteristics of inputs andoutputs. Section 4 investigates the ERP implemen-tation process in service organizations and moreparticularly in hospital environments. Section 5presents six French case studies to complete theanalysis of previous research works. In Section 6,we attempt to explain the differences betweenservice and manufacturing firms regarding ERPimplementation. Finally, we conclude this investi-

ERP: integration +standardization

– Data (unique databasemodel)

– Flows (financial, physical,informational)

– Organization (entities, business units, marketsegments, roles…)

– Process (local/global, performance measurement)

– Software (interoperability)

F

HumResou

Mg

Di

Fig. 1. ERP d

gation work into the use of ERP systems in theservice sector in Section 7.

2. Characteristics of ERP implementation

2.1. ERP definition

As illustrated in Fig. 1, an ERP system is anintegrated software package composed by a set ofstandard functional modules (Production, Sales,Human Resources, Finance, etc.), developed orintegrated by the vendor, which can be adapted tothe specific needs of each customer. It attempts tointegrate all departments and functions across acompany onto a single computer system that canserve all those different departments’ particularneeds. Klaus et al. (2000) have performed anhistorical analysis and a state-of-the-art report onERP phenomenon.ERP systems do encompass the ‘‘enterprise’’

and focus on ‘‘resources’’. However, they alsofacilitate tasks beyond ‘‘planning’’. These includefinancial control, operational management, analy-sis and reporting, and routine decision support.Furthermore, although the term ‘‘financial’’ isnowhere represented in ERP, the general ledgermodule remains the foundation for most systems.ERP systems also empower the top, middle, andbottom of the organization hierarchy (Miranda,1999). ERP implementation requires a ‘‘process’’

inancial Controlling

anrcest

Material Mgt

ProductionPlanning

Sales &stribution

efinition.

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V. Botta-Genoulaz, P.-A. Millet / Int. J. Production Economics 99 (2006) 202–221204

view of the enterprise. The current generation ofERP systems provides reference models or processtemplates that claim to embody the current bestbusiness practices by supporting organizationalbusiness processes.

2.2. ERP market

Over the past 15 years, businesses have changedenormously with increasing client pressure forfaster service, wider choices, and even lower prices.The globalization of the economy has acceleratedand, as a result, many organizations have beenredrawn. A number of Information Systems havebeen developed in order to reply to the challengesof the modern economy. When ERP systems firstemerged in the early 1990s, manufacturers in awide variety of industries enthusiastically adoptedthem. Many of these companies were strugglingwith issues like globalization, acquisition consoli-dation, process standardization, and changes incustomer expectations. The ERP implementationswere often viewed as a component of a muchlarger business process reengineering and organi-zational transformation project. Indeed, the verystrong growth of this market from 1995 led to arate of ERP facilities often estimated at more than50% today.

According to AMR Research (Scott and Shep-herd, 2002), the ERP market is the largest segmentof the applications budget (34%) and will remainso through 2004. The 15% of companies that donot have ERP today plan to implement it in thenext 12 months, as long as the economy allows theinvestment. The 74% of manufacturers and 59%of services companies are either using or imple-

Table 1

Motivations for ERP program

Technology motivations

System not Y2K compliant

Disparate systems

Poor quality/visibility of information

Business process or systems not integrated

Difficult to integrate acquisitions

Obsolete systems

Inability to support growth

menting ERP. There is still room for growth in theERP market in Aerospace and Defence, Auto-motive, and Healthcare for new implementationsand across-the-board opportunities for upgradesand additional ‘‘users’’. Today, five ERP vendorsshare 60% of the ERP market: SAP, Oracle, JDEdwards, People Soft, and BAAN.

2.3. Strategic reasons for implementation

According to Davenport (1998), there are manyreasons why a company would implement enter-prise solutions: the provision of a single source ofdata, the potential cost reduction (maintaining oldcomputer systems can lead to enormous costs),and the potential gain in business integration whenreducing indirect costs, or more precisely, theeffect on customer responsiveness and manufac-turing productivity if the sales/ordering systemsare not linked to the production schedulingsystems. Indeed, if the sales and marketing systemshave no connection with the financial reportingsystems, management can only make decisions byinstinct or based on old information rather thanaccording to a detailed understanding of up-to-date product and customer profitability. Accord-ing to recent surveys in the United States (Mabertet al., 2000) and Europe (Labruyere et al., 2002),the motivations for the adoption of an ERPsystem can be summarized in Table 1. Overall,improving productivity, competitive advantage,and customer demands are the top three businessdrivers for companies with ERP (Scott andShepherd, 2002).

Operational motivations

Poor or uncompetitive business performance

Cost structure to high

Not responsive enough to customers or suppliers

Complex, ineffective business process

Inability to support new business strategies

Business becoming global

Inconsistent business processes

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2.4. Problems with ERP implementations

After a few years of high expectations due tomarket expansion, some ERP projects provedifficult and even fail. The expected results seemrarely reached and budgets and planning rarelyrespected. Furthermore, the needs of companiescontinue to evolve and lead to new demands,especially concerning the management of theglobal logistic chain. In spite of the functionalwealth of ERP systems, the standardization isoften difficult. Some ERP projects lead to almostparticular and specific programming blocking anyevolution of ERP version. Other ERP projects arethe cause of conflict and friction within theorganization because of the oppositions amongactors concerning the necessary organizationchanges and budgets of additional development.

A study of the Standish Group (Buckhout et al.,1999) estimates at 31% the rate of non-succeedingprojects; this alarming figure confirms the anxietyunderlined by numerous headlines in the computerpress. Donovan (2000) and Mabert et al. (2001)have undertaken studies that warn against therisks encountered; they often notice the weakness,even the absence of returns on investment.Davenport (1998) explained the failure occurrenceby two reasons: the technical complexity of thesolutions that requires a great deal of expertise,and the mismatch between technical specificationsof the system and the business requirements of thecompany. Buckhout et al. (1999) suggest that ERPdifficulties stem from two issues: the company hasnot made the strategic choices needed to configurethe systems and processes, and the implementationprocess is spinning out of control.

Some of the problems encountered with ERPimplementations are related to motivation for theiradoption: legacy systems (poor data quality,interfacing), understanding business processes,infrastructure requirements, customization ofnew system. However, the main problems arerelated to people: changing work practices, changemanagement, internal staff adequacy, training, topmanagement support, consultants. The misconcep-tion is that ERP is a computer subject, when inreality it is very much a people-related, businesssubject. The consequence of this misconception is

that many firms have failed to implement and useERP because of management presumptions that itis just the current software and that it should beimplemented just as other information systemshave been implemented.

2.5. Benefits and success factors of ERP

implementations

Lozinsky (1998) suggests that the rewards of asuccessful implementation are immense. He statesthat operating costs will be reduced (leading to animproved return on investment), improved accessto information will make possible more agiledecision making for better negotiating withcustomers and suppliers; with no need for rewrit-ing reports, reliable figures will be available toanalyze business performance. ERP systems areexpected to reduce costs by improving efficienciesthrough computerization, and enhance decision-making by providing accurate and timely enter-prise-wide information.Subsequently, many surveys (Boston Consulting

Group, 2000; Labruyere et al., 2002; Holland andLight, 1999; Mabert et al., 2000) have beenperformed to identify the actual benefits of anERP system. In synthesis, we can mention thefollowing tangible or intangible benefits: Informa-tion quality, single system/integration, real-timeaccessibility, inventory reduction, productivityimprovement, logistics/order management im-provement, cash flow and forecasts improvement.It has to be noticed that not all those benefits areattributed only to the new system (but in conjunc-tion with the changed business processes). Never-theless, all the goals are not achieved: fewcompanies reported that their initiatives hadachieved significant value; many companiesclaimed success, but few met their objectives orrealized significant financial impact; some compa-nies could have achieved similar value for lessmoney; good project execution did not guaranteeimproved business value. When analyzing thefinancial impacts of ERP implementations, Postonand Grabski (2001) conclude from their investiga-tion: ‘‘A significant improvement in firm perfor-mance resulting from a decrease in the ratio of costof goods sold to revenues was found 3 years after

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the ERP system implementation; further, therewas a significant reduction in the ratio of employ-ees to revenues for each of the 3 years examinedfollowing the ERP implementation’’.

Despite the benefits that can be achieved from asuccessful ERP implementation, project managersfocus on the technical and financial aspects of aproject and neglect to take into account the non-technical issues. To solve this problem, someresearchers (Esteves-Souza and Pastor-Collado,2000; Markus and Tannis, 2000) are using thecritical success factors approach to the study ofERP implementations. Saint Leger et al. (2002)propose to consider also the influence of char-acteristics of companies since the preliminaryphase of an ERP project.

3. Characteristics of services in relation to

manufacturing

In theory, the classification of the economy hasthe three following conventional subdivisions: Theprimary sector covers extraction of primaryresources and agricultural activities. The second-ary sector involves the transformation of primaryresources into manufactured products. The ter-tiary sector covers services and administrationactivities found in government, schools, hospitalsetc.

Verma and Young (2000) provide a review ofvarious service typologies and taxonomies. Theclassification approaches studied are based onunique attributes of services such as customercontact, customization, labour intensity, peopleversus equipment issues, etc. They provide atheoretical basis for analyzing different types ofservices: ‘‘For example, according to Schmenner(1986), all airlines, trucking, and hotels are servicefactories; all hospitals and repair services areservice shops; all retail businesses are mass service;whereas all doctors, lawyers, accountants andarchitects are professional service providers. Simi-larly, according to Kellogg and Nie (1995), all fast-food restaurants are classified as service factory,all health care clinics as service shop, and allconsulting as expert service.’’

The principal role of manufacturing is to turnphysical raw materials into tangible products. Atangible product is one that can be physicallytouched, visualized and valued in monetary terms.Service, on the other hand, generally implies anact. A service industry also provides a ‘‘product’’but one that is often intangible and cannot bedescribed in the same dimensional terms asmanufactured goods.Several differences between services and manu-

facturing industries have been identified in theliterature. Service operations involve a lack ofinventories, consumer contact, joint production,customer-specific inputs and intangibility in vary-ing degrees (Karmarkar and Pitbladdo, 1995).These authors reviewed the consequences of thesecharacteristics for markets, competition and con-tracting. Moreover, most service operations arehighly labour intensive, and efforts to improvesystem performance cannot ignore the attitudesand behaviors of workers. Verma and Young(2000) discussed customer contact models. Theyhighlight three characteristics of service deliverysystems: labour intensity, customer contact andservice customization. Another difference is thatmanufacturing is goods-orientated and service isact-orientated. Some of these differences aredetailed below.

3.1. Customer contact

By nature, service involves a much higher degreeof customer contact than manufacturing. In mostservice operations, the customer is not only presentbut also directly participates in the service deliveryprocess (Mersha, 1990). The performance of aservice often occurs at the point of consumption.On the other hand, manufacturing allows aseparation between back and front office opera-tions. In theory, product-orientated operationscan build up inventories of finished goods,enabling them to absorb some of the shockscaused by varying demand. Service operations,however, cannot build up inventories of time andare much more sensitive to demand variability.If one considers the differences, it is important

to emphasize the degree of customer contact.When there is little or no service contact, service

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design can be similar to product design. However,the greater the degree of customer contact (forexample, in a hospital environment), the morecomplex service operations become.

3.2. Product definition

In services, although the ‘‘product’’ is intangi-ble, it can be measurable depending on the serviceindustry. In many cases, one can devise measuresthat accurately reflect the quality of servicerendered.

Traditional product definition using bills ofmaterials (BOM) and routings used in manufac-turing industries is not convenient in the servicesector. To define outputs in service activities, oneuses terms like tasks, jobs, deliverables, andknowledge, etc. Roth and Van Dierdonck (1995)tried to build a service-oriented product definitionfor the hospital sector: They used diagnosticrelated groups defined in the 1960s as a means ofclassifying patients who consumed similar re-sources; it was then possible to extend the BOMconcept to bill of resources, which led to consider-ing health care as a ‘‘product’’. Hospitals areessentially capacity driven and not material driven,according to labour content of jobs.

3.3. Characteristics of input and output

Manufacturing operations often have the abilityto carefully control the amount of variability ofinputs and thus achieve low variability of outputs.For example, manufacturing-based productivitymodels assume that an altered configuration ofinput resources in the production process does notlead to quality changes in outputs. However, in aservice context, changes in the production re-sources and production systems do affect theperceived quality of services. Indeed, the produc-tivity of a process is related to the effectivetransformation of input resources into value forcustomers. For the needs of manufacturers ofphysical products, productivity concepts andmeasurement instruments are widely used. How-ever, in service processes, the underlying assump-tions of these concepts and models do not hold.

Given this statement and considering littleresearch have been made on service productivity,Gronroos and Ojasalo (2002) develop a conceptsuited for service operations, where service pro-ductivity depends on:

�
how effectively input resources into the serviceprocess are transformed to outputs in the formof services,
�
how well the quality of the service process andits outcome is perceived,
�
and how effectively the capacity of the serviceprocess is used.
Using this concept, they propose a tentativesolution to define instruments for measurment ofservice productivity.Karmarkar and Pitbladdo (1995) suggest that a

distinguishing feature of services is the absence offinished inventory, which is a consequence ofintangibility: most service outputs are intangibleand consequently hard to measure (for example,the delivered ‘‘quantity’’ of business consulting ormedical services is rather difficult to measure).This induces a short time lag between productionand consumption. Moreover, services often re-quire joint production by the supplier and thecustomer, which may involve the customer activelyin the service production or may only requirerather passive participation as an input to theprocess.

3.4. Conclusion

In fact, most real systems combine bothmanufacturing and service operations: additionof services to products (installation, training, after-sales services, etc.) or packaging of services intoproducts (documentations, e-learning tools,knowledge management issues, etc.). From theproduct development point of view, Bitran andPedrosa (1998) state that in a world of increasingcompetition, manufacturing companies are beingrequired to not only design better products butalso design the appropriate supporting services.Although products and services have tangible andintangible elements, most literature deals mainlywith tangible characteristics of both.

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4. Literature review of ERP in services

Due to the increasing needs for better directionand management of service organizations, opera-tions management researchers and practitionershave started to implement integrated informationsystems developed in manufacturing sectors.Although one would think that ERP is implemen-ted to improve the management of service delivery,it is often the case that project scope does notencompass the functions related to the service itself(Cigref, 1999). It is then necessary to define what ismeant by ERP implementations in the servicesector.

The main reasons for ERP implementations inservice companies, cited in the literature, are:

�
solve the Y2K problems (consequences of newmillennium on date format);
�
reduce administrative workload; � replace dispersed legacy systems; � replace unreliable finance and materials man-
agement systems;
� improve visibility across the entire system; � investment security — an important considera-
tion, in particular, among public sector serviceslimited by financial constraints;

�
The Euro migration: Consequence of thecurrency migration to Euro in European Union.Information system had to manage two curren-cies with specific legal rules of conversion androunding;
�
real-time data processing.
These reasons agree with those presented inTable 1 identified in other sectors. However,security aspects seem here to be more importantand business process approaches are not men-tioned.

According to Roth (1999), part of the processcost decrease for large service organizations is dueto the initial implementation of ERP systems. Acommon problem faced by service organizationswhen adopting the ERP package is the issue of‘‘misfit’’ that is, the gaps between the functionalityoffered by the package and that required by theadopting organization. As a result, companies

have to choose between adapting to the newfunctionality and customizing the package.Before presenting different return on experi-

ments, the following sections list the main char-acteristics of ERP solutions for services.

4.1. ERP vendor solutions for the service sector

As far as ERP is concerned, service organiza-tions were not initially targeted by many ERPvendors, which instead developed products formanufacturing companies. However, ERP systemsare increasingly being implemented in the servicesector. New actors arise proposing dedicatedsolutions like Professional Services Automation(PSA). All software investment of service compa-nies are not ERP, but 24% of the service industryapplication budget is allocated to ERP (Scott andShepherd, 2002). Of course, this is dependant ofERP definition. As explained in Section 2.1, in thisarticle, ERP means ‘‘standard and integratedpackage supporting several tactical or operationalfunctions of enterprise management on a centra-lized database’’. This point of view allowedcomparing ERP perimeter and specificities inmanufacturing and service companies, as one cancompare ERP in discrete and process industries, orin industry and distribution.By the way, many vendors are building ERP

functionality that meets the requirements of theservice industry. For example, SAP, PeopleSoft,J.D. Edwards or Oracle provide solutions forfinancial services (banks, insurance companies),utilities, healthcare, higher education, field orprofessional services, public sector, wholesaledistribution or retail, telecommunications, etc. Asindicated by a survey from AMR Research inUnited States (Scott and Shepherd, 2002), People-Soft, who began in services, remains leader in thissector, followed by SAP, and Oracle.According to Scott and Shepherd (2002), when

companies were asked what ERP functions theyhave operational or are implementing, 91%mentioned finance and revenue management (notsurprising, since these are applicable across allindustries). One functional area that serviceorganizations use more than their manufacturingcounterparts is human resources and workforce

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management (73% versus 67%, respectively).Healthcare and transportation led those numbers,with at least 82% either using or implementing thefunctionality. At present, many ERP vendors areexpanding their offers for the financial servicesmarket. On the other hand, many banks arehesitant about extending their current ERPsystems outside the limited functional areas.Dysart (2000), who states that most bankinginstitutions adopt only few modules, such asgeneral ledger, accounts payable, and humanresources, confirms those findings. Furthermore,analysts consider mergers and acquisitions asbeing the major force driving the adoption ofenterprise systems in the banking industry.

4.2. ERP implementation in hospitals

Health care service is a patient-oriented servicethat requires continuous interaction with custo-mers. It uses facilities and equipment, andconsumes a large volume of nursing care. There-fore, it becomes increasingly important to healthcare executives to understand what kind of facility,equipment, and workforce decisions are critical toachieve the commonly acknowledged goal ofproviding quality health service at a reasonablecost.

Soh et al. (2000) discussed the implementationof ERP systems in seven public hospitals inSingapore. In the mid-1990s, the companiesidentified the need to replace their mainframe-based financial, administrative and patient man-agement systems. The main reason was to resolvethe Y2K problem. The implementation concernedthe financial, materials management and inpatientmanagement systems. However, existing humanresources and outpatient management systemshave been retained. Misfits arose from public-sector specific or country-specific requirementsthat did not match the capabilities of the ERPpackage. Public-sector specific requirements re-volved around reporting requirements to regula-tory authorities, standard formulas, andgovernment dedicated processes (reimbursementto hospitals for services to patients). On the otherhand, there were more problems related to patientcare systems, where practices vary from country to

country. In addition, the research found thatpatient care modules were specialized industrymodules and were not well integrated withtraditional modules, such as finance and materialsmanagement. Despite all the difficulties, the over-all ERP experience was considered as a success.Besides being Y2K compliant, the system acceler-ated the transition to activity-based costing andincreased the level of data standardization withinthe hospitals. Furthermore, management wasprovided with information on resource usage thatpreviously was not available.A further research by the Dutch Government

(Bakker and Leguit, 1999) revealed that anintegrated approach to information technologyapplications in hospitals would bring more benefitsthan the traditional isolated systems. Therefore, aproject was initiated, aiming to gather knowledgeand experience with an integrated Hospital In-formation System (HIS). The funds available forthe project were distributed over several hospitalsin the Netherlands. The HIS was expected tocontribute to better quality of patient care, moreefficiency in resource utilization, support ofresearch, and support of education. According toBakker, ‘‘The goal of a hospital informationsystems is to use computers and communicationsequipment to collect, store, process, retrieve andcommunicate patient care and administrativeinformation for all hospital affiliated activities,and satisfy the functional requirements of allauthorized users’’. The definition matched themethodology of the project: to collect data onboth patient care and administrative processes inthe hospital, store those data in a central databaseand make this data available in a coherent way toall system users. The system was developed over along period. Although the initial aim was toexclude finance and administration, this domainis covered now, including a human resourcesapplication. In 1999, HIS, now called HISCOM,was acquired by BAAN. At present, the HISconsists of over 80 sub-modules, supporting al-most all the activities in the hospital, not onlymedical support departments, but also nursingcare, operating theatres, meal supply, finance andadministration, logistics, human resource manage-ment, medication, appointment scheduling, etc.

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Bakker and Leguit conclude that the introductionof IT in a service organization should not be donebecause ‘‘it is the fashion’’, but to achieve benefitslike:

�
improved quality of customer care (in terms ofcomplete, accurate and usable information,available in real-time);
�
improved efficiency (saving on labour costs andmaterials, better use of resources);
�
better access to large quantities of informationrecorded in a uniform way, offering newopportunities for research and education.
The development of an integrated enterprisesolution in the hospital environment is not onlylimited to the case of HISCOM. Enterprise-widesoftware that covers all aspect of management andoperations of a hospital was developed by Citadel.The ERP solution is modular, capable of phase-wide deployment and consists of the followingsubsystems: operations management, clinical sys-tems, hospital management system, support ser-vice system, finance and administration system,and system administration. An example is thedevelopment of ‘‘hospital resource planning’’(HRP) systems (Roth and Van Dierdonck, 1995).

It can be founded on vendor web sites that manyhospitals have introduced ERP solutions. Somehave implemented the software enterprise-wide(Baxter Cardiovascular Centre ‘‘Harvey Cabrera’’,California; Schwetzingen District Hospital, Ger-many; Wesley Hospital, Australia). Others haveimplemented only some modules (Vogtland Clinic,Germany; Hospital Saint-Joseph, France; HCL,France).

4.3. ERP implementation in other services

According to Ansel and Dyer (1999), thecommercial restaurant business has been slow toadopt the most current Information Technology.Technology has typically been viewed as anadditional cost of doing business, rather than aninvestment in future profitability. In general,increased costs are avoided in an industry char-acterized by small profit margins.

Restaurants initially focused on cutting costs (asdid other hospitality firms) by automating theirback-office functions, including payroll, account-ing and inventory systems. Part of the difficultythat restaurant firms face today regarding updat-ing their IT systems stems from this period,because each company typically installed its ownproprietary software, with little concern for pro-spective integration of those systems and nothought to how well the systems would performas the company expanded. According to the sameauthors, the implementation of ERP systems inrestaurant chains generate management reports oncritical performance indicators and provide datafor improved marketing in restaurant companies.The software tracks guest history, helps managehuman resources and finances, and assessescustomer satisfaction. According to Ansel andDyer, by tracking customers’ demographic char-acteristics, dining patterns, average meal duration,and typical amounts spent per hour, restaurantscan ‘‘do better’’ at booking the right customers atthe right time, serving them and practicingdifferential pricing strategies. It was found that,in fact, restaurants develop IT applications forareas such as guest history, human resourcemanagement, financial management, etc. How-ever, no company seemed to have a long-term perspective that takes into account theinterrelationships among various system compo-nents. Authors conclude that the opportunityfor the future is in function integration andthe development of a centralized system thatcould transmit and share data from allapplications.The demand for IT infrastructure capability will

vary amongst industries due to the different levelof information intensity, market place volatility,business unit synergies and strategy formationprocess. Broadbent et al. (1999) proposed toexplore the linkage of patterns of IT infrastructurecapability and firm strategic context, taking intoaccount different requirements for information.Finance, for instance, is defined to have more ITinfrastructure due to higher integration betweenbusiness units. In the finance industry, firmsdesire a picture of the entire relationship withthe customer. Concurrently, finance firms are

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experiencing rapid change due to ongoing inter-nationalization of the finance industry and theneed to build infrastructure to support clientswhose businesses are expanding globally. Broad-bent et al. further discuss the example of thebanking industry. Citibank Asia has centralizedand standardized back room processing across fiveAsian countries by adopting an ERP solution. Thetechnology enabled the ‘‘Citibanking Vision’’ intwo major ways: first, with a one-stop paperlessaccount opening, instant account availability,instant card and check issuance; second, with acustomer relationship database that supports thecreation of customized products.

On the other hand, according to Schneider(2000), banks would not move towards implement-ing entire ERP solutions. The motivation forbanks is not there as it would be for manufactur-ing companies. The author assumes that produc-tion companies implemented ERP systems as theywere lacking core IT applications.

Government organizations are increasing theadoption of ERP systems for various benefits suchas integrated real-time information, better admin-istration, and result-based management. Govern-ment organizations, due to their social obligations,higher legislative and public accountability, andunique culture face many specific challenges in thetransition to enterprise systems. Kumar et al.(2002) explore the key considerations and typicalactivities in government organizations adoptingERP systems in Canada.

5. Return on experiments from six case studies

In order to go deeper into the understanding ofERP project characteristics in services, we havecontacted companies from different industries, i.e.banks, insurance groups, hospitals, airlines, con-sultancy firms, etc. Six of them agreed to sharetheir ERP experience.

5.1. Context and methodology

A case study research method was used toinvestigate the implementation of ERP systems inservice organizations. The research was carried out

between 19 February and 30 April 2001 in theNational Institute of Applied Science of Lyon,France.The interviews of business and information

technology (IT) personnel were semi-structuredand the following questions were asked:

�
Which modules have been implemented andwhy?
�
Reasons for adopting an ERP system? � Was a cost–benefit analysis carried out prior to
implementation?
� How were business processes changed? � What were the difficulties during the implemen-
tation process?
� What are the benefits (both tangible and
intangible) from the ERP system and have theybeen measured?

�
Does ERP meet expectations?
The questions were open in order to enable abroader discussion on the implementation process.However, some of the requested information wasconfidential. For instance, it was not possible toobtain financial figures (budget, actual costs, andnumber of consulting days, etc.). Of course, thereare companies that encountered failures in ERPproject. We have identified some, but no detailedinformation was available. Such a failure in astrategic project should need a complete audit toevaluate the difficulties and the main failurereasons. The top management does generally notconduct this kind of audit after the project.

5.2. Presentation of the six cases

The companies are named A to F.

�
A is a private French hospital; � B is a private French non-profit making
company member of the public sectorhospitals;

�
C is one of the largest software companies in theworld;
�
D is one of the biggest banks in Europe; � E is among the world’s leading insurers and
financial service providers, which operates inboth domestic and international markets;

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�
F offers a complete portfolio of telecommunica-tions and Internet services for both individualsand industrial organizations.
The diversity and characteristics of these com-panies make this study significant, not for statis-tical analysis, but to identify critical factors ofERP implementation in services. The experiencesof those companies are presented in Table 2.

5.3. Preliminary analysis

In all cases, the scope of the information systemdoes not achieve complete integration; projects areoften limited to material management and ac-counting (except C). Additional standard orspecific software concerned legal or businessrequirements. Motivations cited concerned mainlyobsolete technology or legacy systems, but theneed of a ‘‘full integration’’ is also given (A, B, F).Other business targets are given such as ‘‘common,standardized multi-site integrated system to sup-port Group growth’’ (F).

Problems encountered are often human related(training, communication, change management); itseems also difficult to address legal constraintssuch as taxes or financial rules. Benefits includedgenerally better operational efficiency such asinformation tracing and accuracy (see A), softwarereliability (see B), transactions (see D), and dataintegration (see F). Some indirect consequencesconcern process organization (A, B, D), opera-tional management (stock, financial, operation)(B, F), human aspects (user satisfaction: A, work-ing environment: B), importance of a horizontalview (D).

For three of the six cases, the project wasconsidered as a success and one (F) states that theproject did not achieve the objectives. A and Bhave highlighted some changes in their businessprocesses. For four of the six cases, no ROI wasperformed (before or after). It is important to takeinto account the remark of E (whose project waslimited to finances): ‘‘Benefits would only occur incase of full integration’’. In four cases, thecompany created a competence centre with dedi-cated resources to support the post-implementa-tion and go-alive phases of the project. This

highlights the importance of human factors foroptimal exploitation and continuous improve-ment.This issue of integration and scope can be

explained with case A. The general feeling was thateven if new, specific, software were implemented, itwould not be beneficial to the organization.Therefore, a unanimous decision was taken toinstall an ERP system. But the modules imple-mented affect only the administrative part ofoperations; the healthcare units, on the otherhand, have their own software systems. However,nurses who work in the operating units and areresponsible for the ordering of medicines woulduse the ERP system. In this case, it emerges thatthere are not any particular difficulties with theERP as far as the back-office is concerned. Thepurchasing, finance and accounting departmentsin a hospital are approximately the same as thosein a manufacturing company. However, problemsappear in the operations departments and inparticular, when nurses need to use the system.The same issue can be discussed in case D.Before the project, each department had its own

operating system and therefore, users could notshare information. Furthermore, the analyticalreporting system was inefficient, and needed a lotof effort to execute the reporting. In fact,information had to pass through three separate(non-interfaced) information systems before it wasready to be sent to corporate level. However, theproject scope has been redefined during theproject. As an example, client accounting is finallymanaged by separate software. Furthermore, thissoftware has not been interfaced with SAP as itcontains confidential information about Bank’sclients. Although integration was the main objec-tive to solve difficulties in global reporting, thescope has been limited during the project, exclud-ing some operations (client transaction) directlylink to bank activity. The balance betweenstandardization with ERP solutions and businessspecificities with dedicated packages is one of themore important project decisions.These examples seem not to be unique. Integra-

tion of production and business specific opera-tional processes usual in manufacturing project isperhaps more difficult in services.

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Table 2

Case studies synthesis

Project characteristics Motivations Problems solved Benefits Discussion

A ERP Qualiac for purchasing,

maintenance, inventory

management, and finance.

� Replacement of old legacy

system.

� Y2K compatibility.

� Software ability to

integrate all functions in a

single system.

� Interface ergonomics

(web-based).

� Internal problems (in

operation departments).

� Insufficient training.

� Tax.

� Better organization of

processes.

� More rigorous software in

comparison with manual

information processing.

� More satisfied users.

� Ability to trace information in

the whole system.

� Responsibility became cross-

functional.

� Some processes were changed.

� No cost–benefit analysis

performed.

� Finding an ERP system that

was able to respond to all the

specifications was not easy.

In addition: a decision making

module (due to tax

specifications).

The project was not

categorized as capital

investment but as a necessity.

The system met initial

expectations and is considered as

a success.

After implementation, the

benefits have not been analyzed

or measured.

B ERP Qualiac for purchasing,

inventory management and

accounting.

� Part of a general

reorganization of the

HISs.

� Replacement of old legacy

system.

� Some minor and easily

solved problems.

� Time needed to implement

the system.

� Inventory reduction (not

directly attributed to ERP).

� Better working environment

and process organization,

better financial control, better

stock management.

� Integration of all

administrative functions into

a single system.

� Improved quality of

operations.

� Software reliability.

� Some processes were changed.

� Creation of a centre of

completion on the system.

� No Return on Investment

analysis performed.In addition: specific software for

the central warehouse operation

management.The company is satisfied with the

software and considers it being a

success.

C ERP SAP for material

management, sales &

distribution (essentially billing),

financial accounting,

workflow+CRM.

� Simplify existing

procedures.

� Improve corporate image.

� Eliminate software license

costs.

� Training and

communication problems.

� People management

problems.

The ERP project was considered

as a success.

� The first wave of ERP

software did not address the

needs of service

organizations.

� Public sector is difficult to

address due to social politics

and national legislations.


competence on the system.

In addition: specific software for

service delivery and software

development.

Further improvements could

definitely be done in the Sales

and Distribution module (system

users do not realise the

importance of data reliability

and cross-functional

responsibility).

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STable 2 (continued )

Project characteristics Motivations Problems solved Benefits Discussion

D ERP SAP � Visibility improvement

and better data

interchange within the

Group.

� System adaptability to the

particularities of the

countries.

� Single database.

� Time savings and

automation of laborious

operations (previously

done manually).

� Transactions security.

� Communication problems

between the company and

the corporate

implementation team

(different language).

� Too much self-confidence

from the corporate

implementation team.

� Resistance to change when

adopting new software.

� French tax system (VAT,

fixed assets).

� From a vertical to a more

horizontal approach.

� From individual operational

efficiency to a cross-

functional efficiency of the

entire organization.

� All transactions between

countries became totally

transparent.

� No cost–benefit analysis

performed prior neither after

to implementation.

� Creation of an internal

project team to support the

implementation.



Part of a corporate project:

Deployment of a core model in

several companies in France on a

restricted boundary: accounts

payable, general ledger, asset

management, controlling.

Separate software: Client

accounting

E ERP PeopleSoft for accounting

(the implementation process

concern the entire group, but on

an independent manner).

� Obsolete technology.

� No more control on the

legacy system.

� Change management

(difficult and time-

consuming).

� Cost increased due to use

of external consultants.

� Beneficial to companies facing

the Y2K and the EURO

problems.

Implementing an ERP system as

a basic accounting tool is an

unnecessary and costly

investment: Benefits would only

occur in case of full integration

(which consequently limit the

interfaces).

Separate software: industry-

specific software system in order

to support operations.Departments were

confronted to specific

internal problems and had

different expectations:

difficult to decide between

ERP/specific software.

F ERP SAP for material

management, financial

accounting, and controlling.

� Legacy system

(heterogeneity, inefficient,

unreliable).

� Need of a common,

standardized multi-site

integrated system which

could support the Group

growth.

� Visibility improvement

and corporate strategy

support.

� Difficulties for companies

which have already an

ERP before (re-training).

� Difficulties to get away

strict functional

boundaries.

� Enterprise-wide

integration not achieved.

� Internal communication

process not optimized.

� Better Inventory

Management.

� Faster reporting procedures.

� Data integration in the

accounting and purchasing

departments.

� No Return on Investment

analysis performed.

� No external consultant

because internal project

director had ERP experience.



In addition: billing, customer

care systems etc.

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5.4. Synthesis

After bank and insurance sectors, this studytends to illustrate the growth of ERP implementa-tion in healthcare organizations, software andtelecom companies. In the mid-term, computeriza-tion with standardization and integration willcertainly be generalized in services companies.

Although the essence of ERP philosophy is thefundamental premise that the whole is greater thanthe sum of its parts, one of the main topics isintegration, which is cited in the literature as abenefit of the ERP system. However, our currentinvestigation notes generally a non-completeintegration in service companies, with ERP sys-tems focused mainly on financial, human re-sources, customer relationship.

Non-profit or non-marketable service organiza-tions (like hospitals in most European countries)whose purpose is to ‘‘do well’’ rather than togenerate profits are also concerned. Even ifproductivity and consequently return on invest-ment are difficult to measure, those companieshave operations that need to be managed so thatresources are used effectively and end-users areserved at a reasonable cost.

The literature review of ERP in services and thepresent case study must be analyzed in relation toservice characteristics identified in Section 3. Basedon experiences and knowledge of ERP project inmanufacturing, we address in the next section thequestion ‘‘how can ERP be applied in servicesector organizations?’’

6. Impact of service characteristics on ERP

The reasons for implementing an integratedsolution in a service company and the problemsencountered, correspond mainly to those found inthe general ERP literature. However, the maindifference lies in the modules that have beenadopted and we suggest that differences betweenservice and logistic organizations can explain theERP configuration seen in service companies.

The most important is the difference in relativeweight of information and goods in the valuecreation of operational processes. For example,

organizations in the finance sector have numerousinternal and external legal partners and are subjectto compulsory legal reporting procedures.Furthermore, detailed information is necessarynot only to be able to manage the daily companyoperations, but also to accomplish strategic groupobjectives. That leads to differences in culture andworking method, developed mainly for productcost control in manufacturing organizations andfor customer relationship control in service ones.

6.1. Functional fulfilment and level of integration

Most ERP solutions enable organizations toimplement only the modules they choose. It wasfound that almost all companies adopt finance andaccounting modules, whereas human resourcemanagement, for instance, is adopted in fewercases. In addition, none of the service organiza-tions that have been interviewed use the produc-tion planning and control module, but well-knownmodules in others sectors such as distribution,procurement and storage are used in some servicecompanies (postal, hospital). According to Schnei-der (2000), banks have already achieved transac-tion efficiency. Therefore, they do not need toimplement back-office systems. On the contrary,professional services companies are working onback-office solutions for core processes such asresources allocation, cost control of missions. Bothare showing big interest in front-office applica-tions.Research findings suggested that some compa-

nies choose to implement the ‘‘best of breed’’modules instead of being locked into one supplier.One could argue that the overall risk of imple-mentation failure is lower and the overall func-tionality is better. However, in order to considerthe system as ‘‘fully’’ integrated, the company hasto adopt a solution that suits the organization as awhole (see Fig. 2).Service companies have often implemented an

ERP solution in order to replace old legacysystems in the administration, finance and materi-als management departments. None of the orga-nizations that have been interviewed uses an ERPsystem to manage service production and delivery.Yet, one should consider the opinion of an

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A best of breed approach… depending on service sector

FI-CO: Finance & Control, HR: Human Resources, MM: Material Management, OP: Operations, PL: Planning, SD: Sales and Distribution, CRM: Customer Relationship Management, PDM: Product Data Management

Hospitals

HR

MM

FI.CO

OP

PL

Professional Services

HR

MMSD

CRM

FI.CO

OP

Banks, Insurance

HR

MMSD

CRM

FI.CO

OP

PDM

Full ERP integration

HR

MMSD

CRM

FI.CO

OP

PL

PDMAfter Sales

Fig. 2. Functional fulfilment and level of integration.


insurance company Financial Director: ‘‘Benefitswould only occur if a company could implementall the modules in an integrated solution. Im-plementing an ERP system only in the financedepartment is an unnecessary and costly invest-ment’’.

While, in manufacturing companies, one couldoften consider the ERP system as an integratedsolution, research findings suggest that, in a servicecompany, enterprise-wide functional integrationdoes not exist (Cigref, 1999; Miranda, 1999;Schneider, 2000). However, there are other logis-tics modules, such as project management, after-sales services, that could be beneficial to the servicesector. For example, hospitals could optimize theirback-office operations by implementing an ERPsolution. However, the research findings suggestthat health care organizations are not willing toadopt the system in all their departments.

6.2. Importance of labour in services activities

It was found that inventory management, forinstance, could be an area of major improvementonce the new ERP organization is operational.This often makes inventory a key domain for ERPprojects in manufacturing. However, in the case ofservice organizations, especially public hospitals,inventory as a percentage of budgets is not usuallya key performance indicator. On the contrary, the

ratio labour/budget is always a performanceindicator in service organizations. Nevertheless,often, it is quite directly linked to level of activityand no direct benefits can be obtained bydecreasing it. In this case, one cannot look formajor improvement from this ratio and integra-tion of labour in service control is not a vitalquestion.As seen previously, service provides a product

that is often intangible as an act. Therefore, itis understandable why service organizationsdo not implement the production planning module(the notion of material requirements planning,for instance, simply does not occur in servicecompanies). Planning in services is essentiallybased on skills, and becomes a strategic linkbetween sales and human resources. This kind ofintegration is not often developed in existing ERPpackages.

6.3. Product definition and operation planning

Manufacturing processes have been deeplyanalyzed and modelled. Service organizationsoften have difficulty in defining preciselyhow their service is delivered. For example,manufacturing-based productivity models assumethat an altered configuration of input resourcesin the production process does not lead toquality changes in outputs (the constant quality

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assumption). However, in a service context,changes in the production resources and produc-tion systems do affect the perceived quality ofservices. Therefore, using manufacturing-orientedproductivity models in service contexts is likely togive managers wrong directions for action.

It is also important to emphasize that in serviceorganizations, one cannot fully separate the front-and back-office operations. Therefore, beforeaddressing the issue of resource utilization, sche-duling and optimization, it is necessary to under-stand the service delivery process itself. Forexample, many hospitals do not have an effectivestaff scheduling system. One cannot treat patientsas ‘‘products’’ for which production could beoptimized. They are not considered as a valuegenerating ‘‘inventory’’ and in addition, patientsare customers.

Thus, traditional Material Requirement Plan-ning systems (MRP) are not the answer, given thedominance of labour and capital resources inhospitals (see Fig. 3). As a consequence Roth andVan Dierdonck (1995) proposed a blue print of aHRP system assembling an engine which consistsof a central resource requirement planning systemusing bills of resources and four front-endcomponents (master admission schedule, aggre-gate admission planning, a demand mana-gement module and a rough-cut capacity planningsystem).

Manufacturing

Material Flow

Planning Planning

Knowledge Flow

Planning integration in manufacturing MM+OP+SD: Stock as a decoupling po

FI-CO: Finance & Control, HR: Human Resources, MM: MatSD: Sales and Distribution, CRM: Customer Relationship M

Services

Fig. 3. Importance of labou

6.4. Requirement fulfilment with standard/specific

For service companies, ERP solutions do notoffer as many benefits as for a manufacturingcompany. Some activities have already be takeninto account by ERP vendors like sales andmaintenance, project management, etc., but otherslack recognized standard systems. Therefore, anERP solution might not be the most suitableoption for service companies and by adopting astandard application, service companies might losesome of the functionality of the old system.Herewith a list of examples coming from

hospital case studies:

�

? int

eriaan

r in

Legislation on public market offers in Franceobliges all public organizations to archivemarket-related documentation and keep it for10 years. Potentially, this could cause anenormous problem when all the different docu-ments are kept separately in each department. Inaddition, many system users could place anorder. Therefore, one would need a unique,centralized system to keep all documentation.

�
Public organizations have to use public account-ing rules. Vendors, on the other hand, offerstandard solutions for the accounting depart-ment. Therefore, it is difficult to foresee howintegration could be achieved and how much itwould cost.
HR

MMSD

CRM

FI.CO

OPPL

PDM

Planning integration of services ?

HR+OP+CRM…

l Management, OP: Operations, PL: Planning, agement, PDM: Product Data Management

services activities.

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�
According to the healthcare organizations inter-viewed, ‘‘no system could integrate the needs ofthe administration, examination, treatment,clinics, pharmacy, and management depart-ments in a hospital’’.
�
In France, all public organizations have to invitebids for all purchases over 50Kh. The law statesthat one should define the specifications of thecontract, including detailed information aboutthe organization’s requirements. The suppliersthen have 52 working days to evaluate whetherthey are able to satisfy those needs. Thisduration depends on whether the bid is placedin France or at European level. The next step inthe procedure is to choose a supplier. Takinginto account these specificities, public organiza-tions need to conduct detailed analysis of theirprocesses.
�
Most ERP systems are generically designed forprivate sector and for profit organizations, anda number of respondents confirmed modifyingthe software as a strategy to meet theirgovernment specific requirements (Kumar etal., 2002).
Finally, one should analyze the impact of thenew software on system users. For example, a veryexpensive application was developed for thespecific needs of hospital pharmacists; the ERPproject team faced strong opposition from thedepartments using this system. We need to answerthe question: Is a standard ERP solution betterthan a system orientated towards the particularneeds of the service organization?

6.5. Process approaches

Process approaches in ERP project are generallyconsidered as key success factors for masteringintegration, change management and processefficiency. However, ERP projects in servicecompanies, as described in literature (Section 4)or in our detailed study (Section 5) seem to giveless importance to that approach. Even if benefitsof projects often include positive changes inprocess efficiency and integration, actors do notcite process modelling frequently among motiva-tions or key factors. Moreover, priority is often

given to security, quality of service, transactionperformance.An ERP project in a hospital used process

modelling as a main tool for evaluation, mappingand decision phase of the project. Nevertheless, theimplementation phase did not reuse the pre-established process model! Operational prioritieslimit the possibility of process reengineering, andthe technical dimension of the project gains thehigher priority. Regarding literature, it is not aparticular situation depending only on peopleinvolved. Process modelling tools and methodol-ogy have to take into account that reengineering aservice delivery process is a more difficult ‘‘live’’operation. Changing a logistic process is always achallenge, but goods have no opinions about theiruse! On the contrary, employees are key actorswhen you have to change a process involved incustomer relationships.

6.6. Implementation

When comparing service and manufacturingorganizations, it is important to mention thatmainly big international service companies haveadopted an ERP solution. One could argue thatERP systems are primarily suited to larger andmore complex organizations with more informa-tion management problems. Indeed, it is not oftenthat we find an integrated solution, in a smallservice provider. If we consider the manufacturingsector, on the other hand, there are many solutionsaimed at the small and medium size enterprises.Research in the literature suggested that many

companies concentrate on the technical dimensionof the ERP project. The general opinion is thatonce data is integrated, people will follow. How-ever, this is rarely the case. Furthermore, neglect-ing the organizational side of the project is themajor cause of ERP failures. This is even moreimportant in service organizations taking intoaccount the place of human resources as repre-sented in Fig. 4. For example, it has been reportedthat interface ergonomics caused a particulardifficulty during the ERP implementation in aHospital. There were people who used the systemonly once every two weeks. They did not have time

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HR

MM SD

FI.CO

OP

PL

PDM

Services

SDCRM

FI.CO

OP

Spec

Expert, customer contact, mobility…Human factor in ERP project even more important

FI-CO: Finance & Control, HR: Human Resources, MM: Material Management, OP: Operations, PL: Planning, SD: Sales and Distribution, CRM: Customer Relationship Management, PDM: Product Data Management

HR

MM

Manufacturing

Fig. 4. ERP implementation in services.


to familiarize themselves with the interface andoften forgot how to operate it.

A recent study of integrated standard packagesfor a small healthcare company (senior personnelservices, about a hundred users) suggests theadoption of a non-integrated solution with sepa-rate domains for finance and logistics, servicesmanagement, human resources.

7. Conclusions

Although the essence of ERP philosophy is thefundamental premise that the whole is greater thanthe sum of its parts, one of the main topics isfunctional integration, which is cited in theliterature as a benefit of the ERP system. In aproduction company it appears possible to inte-grate all departments and achieve better visibilityand control by eliminating interfaces; but humanresource management is rarely ‘‘fully integrated’’(for example: knowledge management, employeeportal, etc.). However, as described in Fig. 5, thedream of such a seamless integration does notseem to be possible in services, which generallylaunch projects including customer relationship

and human resources management, and less oftendesign and production of services.One main reason is the very different impor-

tance of material flows and labour acts inmanufacturing and service companies. The directrelation between financial flows and materialsflows is at the heart of ERP for manufacturingcompanies, which directly link inputs and outputs;this often leads to identifying ERP as an extensionof MRP II (Manufacturing Resource Planning).For services, materials can often be considered asan indirect cost, and is not linked directly toactivities. The need for direct tracking fromaccounting to activities management is lower,and in all the cases studied, it was not wanted.On the contrary, customer contact is core foractivity control and it can be said for services:‘‘ERP financial systems are customer relationshipmanagement-oriented systems.’’ The importanceof the human component in service operations andcompany culture has a dramatic influence onfunctionalities and on the project itself. Fig. 5portrays the two different approaches to integra-tion. Existing project scope depends on companyculture and aims and does not always correspondto these integration levels. However, organizationsand information systems are constantly pushed

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Manufacturing

HR

MM SD

FI.CO

OP

PL

PDM

Services

HR

MMSD

CRM

FI.CO

OPPL

Spec

FI-CO: Finance & Control, HR: Human Resources, MM: Material Management, OP: Operations, PL: Planning,SD: Sales and Distribution, CRM: Customer Relationship Management, PDM: Product Data Management

Fig. 5. Full integration?


towards integration. One question remains ‘‘Willthese two ‘‘alternatives’’ eventually be revealed asmerely different routes towards the ultimatetarget—Full Integration?’’

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an investigation into the use of erp systems in the service sector

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