7: Discussion: Relationships between Evolution of ERP Systems and IS Integration or Disintegration – ERP and Information Systems

7
Discussion: Relationships between Evolution of ERP Systems and IS Integration or Disintegration

In this chapter, we discuss the meaning of the relationships between the research factors, evolution of enterprise resource planning (ERP) systems and information system (IS) integration or disintegration. Our analysis, interpretation, deduction and results are based on the case studies and the literature review. Depending on the combinations of the research factors, the impact of the evolution of ERP systems on IS integration or disintegration could be as follows.

7.1. TDEV and ECCO

Although ERP systems (by virtue of process integration) should logically help to improve the competitiveness of firms, an expensive total cost of ownership (TCO) of these packages could considerably reduce this competitiveness. As a result, the positive correlation between total dependency on the ERP vendor– (TDEV–) and economic crisis and competitiveness+ (ECCO+) (the more independent the firm is from an ERP system vendor, the more the firm’s competitiveness would increase due to an ERP system: a positive arbitration of ROI) could not help to implement a total integration of IS (TIIS) (when a TCO of an ERP system is very expensive, the return on investment (ROI) could be positive in cases where the firm is not obliged to buy or keep the whole package and can choose only some modules due to the possibility of independence from one vendor. As a result, the IS would consist of more than one ERP system).

However, the identified positive correlation between TDEV+ and ECCO– (the more dependent the firm is on an ERP vendor, the more the firm’s competitiveness could not increase due to an ERP system: a negative arbitration of ROI) could also fail to lead to a TIIS. (When a TCO of an ERP system is very expensive, the ROI could be negative in cases where the firm is obliged to buy or keep the whole package and cannot choose only some modules because of the obligation of dependence on their one vendor. As a result, the firm avoids buying or keeping the whole package, and thus the IS then would not consist of only one ERP system). However, we think that total dependency on the ERP system vendor could improve the firm’s competitiveness provided that the TCO is inexpensive in a manner that could improve the ROI’s arbitration. In this case, a firm could buy or keep the whole package, and thus, a TIIS could result.

7.2. TDEV and INTE

The positive correlation between TDEV– and interoperability of the ERP+ (INTE+) (the more independent the firm is from the ERP system vendor, the more reliable the interoperability of the ERP system should be) could help to implement an hybrid integration of IS (HIIS) according to Table 1.1 (with different vendors, the architecture would consist of many subsystems whose reliable interconnections could lead to a hybrid integration). The identified positive correlation between TDEV+ and INTE– (the more dependent the firm is on the ERP system vendor, the more unreliable the interoperability of the ERP system could be) could contribute to a TIIS according to Table 1.1 (with only one vendor, the whole architecture would consist of one ERP system, which does not need to be integrated with any other subsystem. For example, the interoperability of an ERP 2nd G becomes unimportant when the architecture is composed only of this one ERP system).

The explored negative correlation between TDEV– and INTE– (the more independent the firm is from the ERP system vendor, the less unreliable the interoperability of the ERP system could be) could encourage a kind of disintegration and lead to a disintegrated information system (DIS), especially when the unreliability of the ERP system’s interoperability is important (with different vendors, the architecture would consist of many subsystems whose unreliable interconnections could provoke IS disintegration).

7.3. PMER and ESES

The positive correlation between project management ERP+ (PMER+) and evolution strategy of existing systems – or + (ESES– or +) (the more reliable the project management of the ERP system is, the more urbanization or total overhaul could be performed with success) could improve integration. For example, a TIIS could result if reliable project management of the ERP system, within the framework of a total overhaul or urbanization, leads to an ERP 2nd G developed by an ERP system vendor according to an internal development; or an HIIS could result if reliable project management of the ERP system, within the framework of urbanization, leads to an ERP 1st G that interfaces well with other subsystems within the whole IS.

On the contrary, the negative correlation between PMER– and ESES– or + (the more unreliable the project management of the ERP system is, the less urbanization or total overhaul could be performed with success) could lead to a kind of disintegration: e.g. a DIS could result if unreliable project management of the ERP system, within the framework of urbanization, leads to an ERP 1st G that is not well interfaced with other subsystems within the whole IS.

7.4. COER and PMER

The positive correlation between complexity of ERP+ (COER+) and PMER+ (the simpler the ERP system is, the more reliable the project management of the ERP system could be) could improve IS integration: e.g. a TIIS or an HIIS could be deployed if reliable project management is utilized to implement a simple ERP 2nd G developed by an ERP system vendor according to an internal development or an external acquisition. The positive correlation between COER– and PMER– (the more complex the ERP system is, the more unreliable the project management of the ERP system could be) could generally lead to a kind of disintegration: e.g. a DIS could result if unreliable project management is utilized to implement a complex ERP system that cannot be integrated with other subsystems easily.

The negative correlation between COER– and PMER+ (the more complex the ERP system is, the less reliable project management could be) could lead to integration as well as to disintegration: e.g. an HIIS could result if the reliability of the project management could offset the complexity of the ERP system; or maybe a DIS would result if the complexity of the ERP system could not be offset by the reliability of the project management. The negative correlation between COER+ and PMER– (the simpler the ERP system is, the less unreliable project management could be) could also lead to integration as well as to disintegration: e.g. an HIIS could result if the simplicity of the ERP system could offset the unreliability of the project management; or a DIS would result if the simplicity of the ERP system could not offset the unreliability of the project management.

7.5. INTE and ESES

The positive correlation between INTE+ and ESES– or + (the more reliable the interoperability of the ERP system is, the more urbanization or total overhaul could be performed with success) could improve integration: e.g. an HIIS could result if the reliable interoperability of a selected ERP 1st G allows for good integration with other subsystems within the framework of urbanization or a total overhaul.

The negative correlation between INTE– and ESES– or + (the more unreliable the interoperability of the ERP system is, the less urbanization or total overhaul could be performed with success) could lead to a kind of disintegration: e.g. a DIS would result if the unreliable interoperability of a selected ERP 1st G does not allow for good integration with other subsystems within the framework of urbanization or a total overhaul.

7.6. COER and INTE

The combination between COER and INTE could also affect IS integration or disintegration. The positive relationship between COER+ and INTE+ (the simpler the ERP system is, the more reliable the interoperability with this ERP system could be) could improve IS integration: e.g. an HIIS could result if the simplicity of an ERP 1st G helps to establish reliable interoperability with the other subsystems within the whole IS.

On the contrary, the positive correlation between COER– and INTE– (the more complex the ERP system is, the more unreliable the interoperability with this ERP system could be) could lead to a kind of IS disintegration: e.g. a DIS could result if the complexity of an ERP 1st G leads to unreliable interoperability with other subsystems within the whole IS.

7.7. ESEV and INTE

The combination between evolution strategy of ERP vendors (ESEV) and INTE could affect IS integration or disintegration. The positive correlation between ESEV– or + and INTE+ (the more an ERP 1st G is kept without any expansion toward a 2nd G or the more an ERP 2nd G is developed by a vendor according to an internal development or an external acquisition, the more reliable the interoperability of the ERP system should be) could improve IS integration. Consequently, regardless of the expansion strategy of vendors (ESEV – or +), the interoperability of the ERP (1st or 2nd G) should be reliable. In fact, even the interoperability of an ERP 2nd G must be reliable, especially in cases where all modules are not selected by the client. The reliable interoperability allows for the integration of certain modules (ERP 2nd G) within the framework of the whole IS.

Examples:

  1. – An HIIS could be obtained if the evolution strategy of the ERP vendor (ESEV–) aims to improve the ERP system’s interoperability in a manner that easily allows for good integration between an ERP 1st G and the rest of the IS.
  2. – An HIIS could also be obtained if the evolution strategy of the ERP vendor (ESEV+) aims to improve the ERP system’s interoperability in a manner that easily allows for good communication between some modules of an ERP 2nd G and some legacy systems.

On the contrary, the negative correlation between ESEV– or + and INTE– (the more an ERP 1st G is kept without any expansion toward a 2nd G or the more an ERP 2nd G is developed by a vendor according to an internal development or an external acquisition, the less unreliable the interoperability of this ERP system could be) could lead to a kind of IS disintegration. In fact, if the ERP system’s interoperability is not reliable, the IS integration would be compromised and a kind of disintegration could affect the whole architecture.

Examples:

  1. – A DIS could result if the evolution strategy of the ERP vendor (ESEV–) does not aim to improve the ERP system’s interoperability in a manner that does not allow for the establishment of an integration between an ERP 1st G with other subsystems within the whole IS.
  2. A DIS could also result if the interoperability of an ERP 2nd G that is developed by a vendor according to an external acquisition (ESEV+) is unreliable in a manner that does not permit good communication between the different modules within this ERP 2nd G or between some modules of this ERP 2nd G and some legacy systems.

Nevertheless, the relationship between ESEV+ and INTE– could, in one special case, lead to a kind of total IS integration. For example, a TIIS could be achieved when an ERP 2nd G that is developed by an ERP system vendor according to an internal development is implemented as the only component of the whole IS. In this special case, the ERP system’s interoperability is not important.

7.8. COER and ESEV

The positive correlation between COER+ and ESEV+ (the simpler the ERP system is, the easier an evolution strategy of ERP vendors toward an ERP 2nd G by an internal development or an external acquisition is, and thus the simpler it is for clients to update the system) could improve IS integration.

Examples:

  1. – A TIIS could be obtained if a simple ERP 2nd G that is developed by a vendor according to an internal development is implemented as the only component of the whole IS.
  2. – An HIIS could be obtained if a simple ERP 2nd G that is developed by a vendor according to an external acquisition is implemented as a part of the whole IS, which becomes easy to use by employees.

On the contrary, the negative correlation between COER– and ESEV+ (the more complex an ERP system is, the less easy an evolution strategy of ERP vendors toward an ERP 2nd G by an internal development or an external acquisition is, and thus the less simple it is for clients to update the system) could lead to a kind of IS disintegration: e.g. a DIS could result if some modules of a complex ERP 2nd G that is developed by a vendor according to an external acquisition are implemented as a part of the whole IS, which becomes very difficult to manage by users.

As we notice from our analysis (including the correlations between research factors, case studies and discussion), the correlation is not only binary between a couple of factors. In fact, each factor is, more or less, correlated to other factors. Therefore, most of these factors are intercorrelated. Generally, we can propose a typology that underlines the role of the combination of research factors affecting the relationships between the evolution of ERP systems and IS integration or disintegration. In this typology, some examples are provided to illustrate our findings.

Legend: kind of IS evolution – “IS Integration (I)”; – “IS Disintegration (D)”.

Table 7.1. Typology of combination of research factors affecting the relationships between the evolution of ERP systems and IS integration or disintegration

Combination between research factors in 2014 IS evolution (Examples in relationship with Table 1.2)
1998 2014 IS integration or disintegration
E.g. 1.1: ECCO+ & TDEV+ & PMER+& INTE= 0 & ESES– & COER+ & ESEV+ = internal development ERP 1st G (IS No.2) ERP 2nd G (IS No. 1) TIIS to TIIS (I)
E.g. 1.2: ECCO+ & TDEV– & PMER– & INTE– & ESES– & COER– & ESEV – or + = external acquisition ERP 1st G (IS No. 2) IS No. 5, 8 or 9 TIIS to HIIS (D)
E.g. 2.1: ECCO+ & TDEV– & PMER+ & INTE+ & ESES– = simple existing & COER+ & ESEV+ IS No. 4 (DIS) IS No. 7 or 8 DIS to HIIS (I)
E.g. 2.2: ECCO+ & TDEV– & PMER– & INTE– & ESES– = complex existing & COER– & ESEV+ IS No. 4 (HIIS) IS No. 7 or 8 HIIS to DIS (D)
E.g. 3.1: ECCO+ & TDEV– & PMER+ & INTE+ & ESES– = simple existing & COER+ = simple ERP & ESEV+ IS No. 4 (DIS) IS No. 9 DIS to HIIS (I)
E.g. 3.2: ECCO+ & TDEV– & PMER– & INTE– & ESES– = complex existing & COER– = complex ERP & ESEV+ IS No. 4 (HIIS) IS No. 9 HIIS to DIS (D)
E.g. 4: ECCO + & TDEV– & PMER– & INTE+ or – & ESES– = complex existing & COER– & ESEV– = keeping an ERP 1st G without any expansion towards a 2nd G or by going out of business ERP 1st G (IS No.2) IS No. 9 TIIS to HIIS or to DIS (D)
E.g. 5: ECCO+ & TDEV+ & PMER+ & ESES– or + & COER+ & ESEV+ = internal development IS No. 3, 4, 5, 6, 7, 8 or 9 ERP 2nd G (IS No. 1) DIS or HIIS to TIIS (I)

Example 1: an IS that evolves from ERP 1st to 2nd G and that is sold by the same vendor (Example 1.1) is defined by the combination (ECCO+ & TDEV+ & PMER+ & INTE=0 & ESES– & COER+ & ESEV+ = internal development) as values of the research factors promoting IS integration by keeping a kind of TIIS (the IS evolution, to fit with clients’ needs, allows maintenance of the same initial integration rate (see Table 1.3). However, an IS evolution that combines an ERP system with third-party software: Best of Breed or other (Example 1.2) sets the combination (ECCO+ & TDEV– & PMER– & INTE– & ESES– & COER– & ESEV– or + = external acquisition) as values of the research factors promoting IS disintegration (return from a TIIS to an HIIS). The difference between these two IS evolutions (Examples 1.1 and 1.2) can be explained by the changing of the values of the following factors: TDEV, PMER, INTE, COER and ESEV.

Example 2: the nature of the legacy systems (simple or complex) on which urbanization has been conducted can also impact the relationship between the evolution of ERP systems and IS integration or disintegration. The integration from a DIS to an HIIS (Example 2.1) could be the result of the following combination in 2014: (ECCO+ & TDEV– & PMER+ & INTE+ & ESES– = simple existing & COER+ & ESEV+); while the disintegration from an HIIS to a DIS (Example 2.2) could be the product of the following combination: (ECCO+ & TDEV– & PMER– & INTE– & ESES– = complex existing & COER– & ESEV+). The difference between these two IS evolutions (Examples 2.1 and 2.2) can be explained by the changing of the values of the following factors: PMER, INTE, ESES and COER.

Example 3: the ERP system complexity or simplicity can also guide the orientation of IS integration or disintegration. The integration from a DIS to an HIIS (Example 3.1) can be the result of the following combination: (ECCO+ & TDEV– & PMER+ & INTE+ & ESES– = simple existing system & COER+ = simple ERP & ESEV+); while the disintegration from an HIIS to a DIS (Example 3.2) could be the product of the following combination: (ECCO + & TDEV– & PMER– & INTE– & ESES– = complex existing system & COER– = complex ERP & ESEV+). The difference between these two IS evolutions (Examples 3.1 and 3.2) can be explained by the changing of the values of the following factors: PMER, INTE, ESES and COER.

Example 4: a company whose IS was composed of PeopleSoft or J.D. Edwards (which were bought by Oracle) does not desire to evolve its legacy system in cooperation with Oracle. The IS can undergo a disintegration by evolving from a TIIS (IS No. 2) to an HIIS or to DIS (IS No. 9). The disintegration can be the result of the combination of the following factors: (ECCO + & TDEV– & PMER– & INTE + or – & ESES– = complex existing & COER– & ESEV– = keeping an ERP 1st G without any expansion toward a 2nd G or by the vendor going out of business).

Example 5: the integration from a DIS or an HIIS (IS No. 3, 4, 5, 6, 7, 8 or 9) to a TIIS (IS No. 1) could be the result of the following combination: (ECCO+ & TDEV+ & PMER+ & ESES– or + & COER+ & ESEV+ = internal development). Other examples can also be given. We let the readers deduce other possible combinations.