Understanding Enterprise Systems’ Impact(s) on Business Relationships

Abstract

Enterprise systems (ESs), i.e. standardized applications supplied from software vendors such as SAP or Oracle, have been extensively employed by companies during the last decade. Today all Fortune 500 companies have, or are in the process of installing, this kind of information system. A wide-spread denotation for these applications is enterprise resource planning (ERP) systems. But the broad utilization use of these software packages in business is rendering this labelling too narrow (Davenport 2000).A central aspect of ESs is their multi-dimensional characteristics. Based upon a (virtual) common database, ESs allow all business activities to be observed throughout the company (i.e. an operation performed by marketing may be displayed in finance; purchasing; supply functions, and so forth, in real-time). But with this high visibility and extensive information processing capacity comes the drawback that the information system as a whole may be hard to grasp (Markus 2004, Davenport 1998).When implementing an ES package, the company can select from different industry-adapted modules providing core functionalities (i.e. that support proc¬es¬ses such as production, supply chain management, and R&D), as well among complementary modules to be used in support processes (such as finance, HR, marketing, etc). In fact, along with Internet, ESs can be seen as the most important technology to have attained wide-spread use during the last decade (Seddon et al. 2003). For a company this means that the integration of an ES into its business operations by neces-sity will, to a greater or lesser extent, affect the business activities that are carried out. For companies, these business activities have been observed by researchers to take place within relatively stable, long-term oriented business relationships with specific well-known counterparts (Hakansson and Snehota 1995). This means that ESs, especially with the high level of usage in companies (Seddon et al. 2003), become an interesting research object not only from a company-focused perspective, but also from a broader perspective, allowing business relationships to unique suppliers and customers to be included.But how can ESs be captured and understood in this setting? This question will be discussed and elaborated on in the following sections, leading to some recommendations on relevant issues