An IT governance framework of ERP system implementation for Chinese enterprises

Abstract

Enterprise resource planning (ERP) system that can effectively reduce product cost, improve customer service experience, and increase enterprise competitiveness is one of the most significant information systems for Chinese enterprises. However, the successful implementation rate of ERP system is much lower than initially planned and many enterprises did not achieve their intended goals. There are a lot of factors (e.g., high implementation costs, technical complexity, lack of well-trained employees, lack of incentive mechanisms, etc.) resulting in this situation, but the key element is the separation of the relationship between ERP system and enterprise leadership, organizational structure and business processes. Aiming at the key issue, an IT governance framework of ERP system implementation is developed based on information technology governance methodology, which includes six components (i.e., enterprise strategy and organization, ERP-related organization and desirable behavior, ERP-related governance arrangements, ERP-related governance mechanisms, ERP-related business performance goal, ERP-related metrics and accountabilities.). The requirements of each component are described. Furthermore, a case of ERP system implementation is used to illustrate the proposed framework, which takes into account sufficiently the relationships among ERP system, business objectives, business processes, and business performances.