LIMITS TO USING ERP SYSTEMS

Abstract

The paper examines limitations that restrict the potential benefits from the use of Enterprise Resource Planning (ERP) systems in business firms.In the first part we discuss a limitation that arises from the strategic decision of top managers for mergers, acquisitions and divestitures as well as outsourcing.Managers tend to treat their companies like component-based business units, which are to be arranged and re-arranged to yet higher market values.Outsourcing of in-house activities to suppliers means disintegrating processes and information.Such consequences of strategic business decisions impose severe restrictions on what business organizations can benefit from ERP systems.The second part of the paper reflects upon the possibility of imbedding best practice business processes in ERP systems.We critically review the process of capturing and transferring best practices with a particular focus on context-dependence and nature of IT innovations.