1.2 Problem statement
«Many organisations and businesses have declared ERP
system a waste or a burden; there is a mixture of suspicion, scepticism,
disappointment and confusion in recent years, flagging ERP projects have
snarled internal processes in big companies like Hershey's and Whirlpool.
Complaints targeted at ERP software makers and even lawsuits against
implementation consultants are not uncommon» (Wah, 2000:20). Regarding the
above statement, it is clear that ERP systems account for some problems, which
could be associated with misuse, the lack of proper evaluation in the selection
processes and the limitations of the system to perform effectively. Some
experts comment that the system is not dead, but has a long way to go in
bringing bottom-line benefits to corporations. This clearly indicates that ERP
systems have not been seen as a strategic tool for the management within MNEs
to integrate and strengthen the value chain system and thus act efficiently.
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Some MNEs see ERP systems as an opportunity to integrate their
disparate systems in the value chain due to:
· The inefficiency of their operating system (data conflict
and duplication, etc.);
· International competitive pressure (globalisation and the
opening of the world trade market);
· The need for company system improvement to meet the
organisation's growth; and
· The challenge of this implementation due to the system's
complexity and attributes.
Evaluation processes by means of a technical strategic
planning model framework before adoption and/or during the implementation have
become important factors in order to analyse an ERP system's fit,
compatibility, performance and utilisation.
The main problem with ERP systems falls under MNEs' value
chain systems, where the different applications are not well integrated. In
addition, there is a lack of proper evaluation processes of ERP system software
by means of a technical, strategic planning model.
1.3 Purpose of the research
1.3.1 Primary objective
To determine the extent to which ERP software could facilitate
integration in the MNE value chain process.
1.3.2 Secondary objectives
1. To establish the value of ERP system
software alignment with the organisation's strategy and to determine the extent
to which it can be seen as a strategic IT tool in order to strengthen the
organisation's value chain system.
2. To determine the suitability of ERP, i.e.
Axapta Microsoft software among others, through a theoretical study by using a
strategic planning tool such as the value chain approach.
3. To obtain the view of SAP software users in
MNEs surveyed of strategic management through the value chain approach, ERP
awareness and usage, and training.
4. To evaluate how the theory of the value
chains approach links to strategy and ERP theory.
5. To compile a methodical approach model that
will help MNEs to assess ERP software
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requirements relating to the value chain approach during the
selection and evaluation process.
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