Paper info

THE INTERCONNECTEDNESS OF 'BEST PRACTICES'- HOW SMALL AND MIDSIZE COMPANIES CAN GAIN FROM SELECTINGTHE LARGE COMPANIES' IT

Cecilia Erixon and Peter Ekman

The paper was published at the 25th IMP-conference in Marseille, France in 2009.

Today's companies can take advantage of state-of-the art information technology (IT) as enter­prise resource plan­ning (ERP) systems, business intelligence software and web-based services to facilitate their business. Many of these technologies are general in their design  i.e. they are of-the-shelf solutions available to a wider customer group. With­in the information sys­tems (IS) discip­line this has lead to the managerial advice that companies should evalu­ate the IT-vendors prevail­ing market position and the prospect of their future (taking in consideration e.g. the vendors solven­cy). This paper is empirically focusing ERP systems  company wide information systems that comes with a standard set of pre-defined procedures called 'best practices'  and it presents two cases that illustrates how these ERP systems inherent the best practices that the IT-provider has developed in cooperation with its prevailing customers. Following the Euro­pean theory on markets as network, i.e. an approach developed within the IMP Group, a alternative managerial advice would be to assess the vendor's business network. Thus, this paper puts forth the later approach and discusses how a company contri­butes respectively benefits from selecting an IT-provider that develops enter­prise systems for their respectively industrial sector. The paper puts forth two cases where one illustrates how a company is involved in the deve­lop­ment of a IT-vendors best practices and the other case illustrates how a company gets best practices by looking at the IT-vendors customers.The two illustrating case studies are carried out at Kanthal AB, a company within the Sandvik Group, and at CH Industry AB, a small supplier to Volvo Construction Equipment. Whilst the larger company Kanthal had to go through a process of software custo­mization to get the adequate functions in their ERP system CH Industry has instead gone with the standard package. The customization that Kanthal required has later become one of the IT provider's features, i.e. a new best practice, some­thing that other customers can benefit from. CH Industry has also selected the same complex and compre­hen­sive ERP system as Kanthal even if their need, as a rather small company, should be of another nature. CH Industry has though selected a competitive standard package and they motivate their choice of ERP system by relating to the IT-pro­vider's customer base. Implicit CH Industry understands that the IT-provider's customer network will mean that their ERP system will be offered continuous improvements and upgrades, and they will thereby getting state-of-the-art best practices even in the future. The paper concludes with discussing the interconnectedness of best practices  whilst Kanthal are an active partner in the deve­lop­ment of a set of best practices, CH Industry is a company that benefits from prevailing best practices. The implica­tion of the cases is that a company benefits from an awareness of its IT-vendor's wider business network. Comp­anies needs to  as well as considering the IT provider's solvency, market position, and evaluations of the technology as advised by managerial infor­ma­tion system theories  evaluate the IT-provider's prevailing customers and their business proce­dures and preferences.