ERP and Functional Fit: How Integrated Systems Fail to Provide Improved Control

Companies have been investing in integrated enterprise applications (such as ERP) for over a decade, without firm evidence of a return from these investments. Much research has centred on the factors which will lead to a successful implementation project (eg: Holland and Light, 1999; Shanks and Seddon, 2000), but to date there appears to be little research on the longer term impact of ERP systems on the organisation (Heili and Vinck, 2008). Although the greater level of system integration brought on by ERP has meant that there is more operational information available to managers than ever before, the information stored in ERP applications requires much off-line manipulation in order to be meaningful to managers. The data held in ERP databases originate in physical processes that evolve over time, and thus inevitably a gap opens between the ERP system, and the reality it is designed to capture (Lee and Lee, 2000). Taking the evaluation of management performance against organisational objectives as research domain, and focusing on a case study in the pharmaceutical sector, this paper looks at the footprint of a global ERP system in the day to day decision making of managers both at a manufacturing site level and at Headquarters level. Although the ERP implementation resulted in major improvements in data integrity at an operational level, resulting in improved visibility of costs and traceability of transactions for head office, many of the benefits associated with exploiting the information thus collected have been compromised by the need to rely on non-integrated tools for certain specific functions. Thus, for decision making purposes, managers must still download data to spreadsheets, where they are manipulated and combined with data from other, non-integrated systems. Thus, this paper examines the role of ERP systems in supporting management activity in a manufacturing environment, highlighting the gap between management performance and the informational and decisional support provided by the ERP.