Analysis of the decision process for selecting ERP software: the case of Keller Manufacturing Jacques Verville Department of Accounting and Information Systems, College of Business Administration, Texas A&M International University, Laredo, Texas, USA Alannah Halingten Department of Accounting and Information Systems, College of Business Administration, Texas A&M International University, Laredo, Texas, USA Introduction As a suite of integrated software application modules that can link back-office operations to front-office operations as well as internal and external supply chains, enterprise resource planning ERP) software conjoins functional areas and business processes in an integrated environment that provides a broad scope of applicability for organizations. While considered a viable althernative to in-house development Verville and Halingten, 2001; Verville, 2000; Eckhouse, 1999; McNurlin and Sprague, 1998), the purchase of ERP software is not without its challenges. At a cost of several thousands, hundreds of thousands or even millions of dollars, the purchase of ERP software is a high-expenditure activity that consumes a significant portion of their capital budgets. It is also an activity that is fraught with a high level of risk and uncertainty. Why? Because, first of all, if a wrong purchase is made, it can adversely affect the organization as a whole, in several different areas and on several different levels, even to the point of jeopardizing the very existence of the organization. This highlights the obvious need for making the right choice of software. It also brings to light the need for finding the best means for acquiring this type of software so that the right choice can be made. Second, because of the implementation and the risk of it going awry. ERP implementations are said to be the single business initiative most likely to go wrong Verville and Halingten, 2001; Verville, 2000; Hill, 1999). In light of these concerns, a research project was undertaken to determine the best way to acquire ERP software. However, with little or no prior research found on the topic of ERP acquisitions, it became necessary, in the first order, to find out what indeed the process is that organizations go through to buy ERP software. As such, the research questions for the study were: ``How do organizations acquire packaged software? What are the processes that are involved for packaged software acquisitions?'' The focus of this paper, then, is on the acquisition process that a medium-size midwest furniture manufacturing company, Keller Manufacturing, went through in 1996 for a manufacturing execution system MES). The paper will begin with a literature review of the management information systems MIS) field and be followed by the research methodology that was used for the study. The latter section will include a review of the methods used for data collection, data analysis and ensuring the validity of the study, as well as present the limits of the study. Immediately following this section will be Keller's corporate profile and a description of the circumstances that led to the decision to buy a packaged ERP software solution. Subsequent to that, an overview of the activities that Keller went through to purchase ERP software will be presented. An analysis of Keller's ERP acquisition process will follow, along with the lessons that Keller learned from this buying experience. Literature review A review of the literature in the field of MIS shows that research conducted in the area of ERPs has concentrated on implementation and post-implementation issues Esteves and Pastor, 2001; Verville, 2000). The type of problems and issues that arise from the implementation of ERP systems range from specific issues and problems that can come up during the installation of an ERP, to behavioral, procedural, political, and The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0957-6061.htm [ 423 ] Integrated Manufacturing Systems 14/5 [2003] 423-432 # MCB UP Limited [ISSN 0957-6061] [DOI 10.1108/09576060310477825] Keywords Software use, Enterprise resource planning, Systems integration Abstract Keller Manufacturing, a mid-sized furniture manufacturer, completed the purchase of an enterprise resource planning ERP) software solution in August of 1996 at a cost of US$1 million. From 12 individuals who participated on Keller's acquisition team, the four principals were interviewed for this case. The structure of the acquisition process that emerged from the data revealed six distinctive iterative, recursive and inter-related processes that, together, form a complex web of activity and tasks for the acquisition of ERP software. These activities and tasks are described and analyzed as a function of the six processes. The ERP acquisition process developed by Keller for this purchase was atypical of their normal purchasing practices and proved to be a significant learning experience for the entire organization. This case provides a useful illustration of ``good practice'' and sets forth the framework for the ERP acquisition process. Received May 2001 Revised December 2001 Accepted January 2002
![Emerald [ENG]](https://img.dokumen.tips/doc/110x75/55549da0b4c90502618b486d/emerald-eng.jpg)
