Enterprise resource planning: the role of the CIO and it function in ERP

Abstract

y early 2000 the ERP revolution 1 generated over $20 billion in revenues annually for suppliers and an additional $20 billion for consulting firms.However, for many organizations ERP represents the return of the old IT catch-22 with a vengeance: competitively and technically it's a must-do, but economically there is conflicting evidence, suggesting it is difficult to justify the associated costs, and difficult to implement to achieve a lasting business advantage.Critical success factors, and reasons for failure in ERP implementations, have now been widely researched [4][5][6][7][8].However, what is more noticeable is how the difficulties experienced in ERP implementations and with their business value are not atypical of most IT projects, especially when they are large and complex, expensive, take over a year or more to install, use new technology, and impact significantly on the organizational culture and existing business processes [5,6,10,11].Our own work on ERP success and failure factors differs in one essential respect from all previous studies.We have identified serious neglect in ERP implementations in securing the most effective roles for the CIO and IT function.2 Moreover, in case studies we have found failures in this area to be correlated strongly to subsequent difficulties in achieving delivery and business value.This article spells out the several ways in which we have found the CIO and IT function (and relatedly it must be said, often senior business executives), asleep at the wheel on ERP.We then detail the more effective capabilities and organizational and cultural practices that explain ERP, and indeed wider IT, success.In practice, irrespective of the differing technologies being implemented, we have indeed found that there are still consistent IT management principles to be applied to ERP, and many lessons to be had from history.