Medical.docx

Medical.docx

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Medical

MedicalinformationimplementationandconstructionAbstract:

InrecentyearsareincreasinglyusingenterpriseresourceplanningERPsysteminabigpharmaceuticalcompaniesandthegovernmentsmaindevelopedcountriespharmaceuticalcompanies.WhilethereiswideadoptionofERPsystemsinWesterneconomiesdevelopingcountrieslagfarbehind.HoweverduetorecenteconomicgrowthdevelopingcountriessuchasKenyaareincreasinglybecomingmajortargetsofERPvendors.ThereisanurgentneedforunderstandingERPimplementationissuesindevelopingcountriesasERPsystemsarestillintheirearlystagesinthesecountries.Theyfaceadditionalchallengesrelatedtoeconomicculturalandbasicinfrastructureissues.ThisresearchinvestigatestheorganisationalandnationalcontextwithinwhichERPisadoptedandusedinKenyaandhowthecontextandERPinfluenceeachother.Ingeneralthisresearchisbasedontheneedtostudyorganisationsintheirsocietalcontextsandinformationsystemsintheirorganisationalsettings.TheresearchcontributestothecontroversialdebateontheconflictbetweenstandardisationimposedbyERPsystemsandlocalisationofbusinesspractices.ThisstudyprovidessomekeyinsightsintotheimplementationanduseofERPsystemsinthepublicandtheprivatesectorsinKenya.CasestudyfindingssuggestthatthecompanysectorplaysanimportantroleinERPimplementationsinseveralkeydimensions.ERPsystemswithin-builtbusinesspracticesexpressthetendencytowardstandardisation.InadditionthestudyinvestigatesthechallengesfacedbyorganisationsimplementingERPsystemsinKenyaandfactorsinfluencingERPupgradedecisions.FindingsofthisresearchsuggestthatERPimplementationandupgradeisinfluencedbybutnotnecessarilyboundbyexistingcontextualfactors–nationalandorganisational.TwomodelsnamelytheEmpiricalERPImplementationModelEEIMandtheUpgradeDecisionModelUDMaredevelopedtorepresentERPimplementationandupgradepractices.TheEEIMhelpstoidentifywhytherewillbeparticularlyhighvarianceinpotentialoutcomesandfurthervalidateswhichorganisationalcontextsandERPimplementationconfigurationscreateoptionsduringERPimplementationandusage.TheUDMmakesanovelcontributionbyshowinghowdifferentforcesinteracttobringanaggregateofinfluencestoathresholdlevelwhereanERPsystemupgradebecomesnecessary.ThefindingsofthisstudyalsoaidthemanagementoforganisationsthatareimplementingERPsystemstogainabetterunderstandingofthelikelychallengestheymayfaceandtoenablethemtoputinplaceappropriatemeasurestomitigatetheriskofimplementationfailures.ThisstudyalsoproposesanITstrategyframeworkwhichcanbeusedbyorganisationsplanningtoimplementERPtoaligntheirbusinessandITstrategy.Keywords:

EnterpriseresourceplanningERPsystempharmaceuticalindustryQuestionresearchbackground:

theyareattractedtoguaranteeistoimprovethebusinessproductivitystreamlinedoperationcostandincreasesavingsTilleySueofrights2007launchedinitiativewilltheworldERPsystemintotheirexistingbusinessenvironment.TherehasbeenagrowingincreasinguseofenterpriseresourceplanningERPsystemdevelopmentforexamplethroughtheSAPOracleBaaNEdwardsaspeoplesoftandcorrespondingbusinessinformationsystemplatformforlargeenterprisesandgovernmentcompanyindevelopedcountriesliketheUnitedStatesBritainCanadaandAustraliadavenport1998.KumarandHillegersberg2000statementsays:

UsingERPsystemandhasnowbeenmostofthefortune500companiesandasahigh-endmarketbecomessaturatedERPsystemissmallandmedium-sizedgroupsandfilteringdownoutsidethedistrictfirstpenetrationinEuropeandNorthAmerica.WhilethereiswideadoptionofERPsystemsinEuropeandNorthAmericadevelopingcountrieslagfarbehind.HoweverduetoeconomicgrowthdevelopingcountriessuchasKenyaarebecomingmajortargetsforERPvendors.InsomedevelopingcountriesforexampleKenyaanumberoflargeandmid-sizedorganisationshaveimplementedERPsolutionsandmoreareexpectedtofollowsuit.ThemajorityofadoptingorganisationsthatjoinedtheERPbandwagon’presumedthatwithrelativeeasetheycanbenefitfromtheallegedbestbusinesspractices’thatareembeddedwithinERPsystems.HoweverthetransferofinformationsystemslikeERP–typicallydevelopedindevelopedcountries–todevelopingcountriesisoftenmarredbyproblemsofmismatchwithlocalculturaleconomicandregulatoryrequirements.Forinstancestatethat:

MeanwhileERPisbeginningtoappearinmanyorganisationsofdevelopingcountries.LittleresearchhasbeenconductedtocomparetheimplementationpracticesofERPindevelopedvsdevelopingcountries...ERPtechnologyfacesadditionalchallengesindevelopingcountriesrelatedtoeconomicculturalandbasicinfrastructureissues.GargeyaampBradystatethatstudiesmostlyconductedindevelopedcountriesshowthatorganisationsoftenrunintocostlyandsometimesfataldifficultieswithimplementationandsubsequentmaintenanceofERPsystems.ForexampleAkkermansampvanHeldenandMonkampWagnerobservethatatypicalERPimplementationinitiativetakesanywherebetweenoneandthreeyearsandtypicalbudgetsareintenstohundredsofmillionsofdollars.Popularpressandtradejournalshavedocumentedbothsuccessesandfailuresbutwithverylittleexplanationontheunderlyingcauses.Poba-Nzaouetal.estimatethefailurerateofERPimplementationsindevelopedcountriestobebetween66and70.SincethetradepressisnowrepletewitharticlesonERPfailuresinEuropeandNorthAmericawheremostthesesystemsoriginatefromweagreewiththeHuangampPalviaargumentthatERPimplementationislikelytobemoreproblematicinlessdevelopedcountrieslikeKenyagiventhatERPtechnologyfacesadditionalchallengesindevelopingcountriesrelatedtoeconomicculturalandbasicinfrastructureissuesquot.InKenyathestate-ownedUchumisupermarketchaincloseddowninJune2006afteradmittingitwasinsolvent—throwingmorethan1000employeesoutofworkandleavingdebtsofhundredsofmillionsofKenyanshillingsTheover-ambitiousexpansionstrategyandthepoorinstallationoftheERPsystemwerecitedbyexpertsassomeofthereasonswhichcontributedtoinsolvencyespeciallysincetheywerefinancedoutofworkingcapitalwhichresultedintyingupthemuchneededfinancialresourcestopayoffsuppliersemployeesandothertradecreditors.AnalystsfurtherarguedthattheERPsystemwaspoorlyintegratedandimplementedstaffwerepoorlytrainedandcostswereunjustifiable.TheUchumisupermarketexperienceisanexamplethatthereisanurgentneedforunderstandingERPimplementationpracticesinlessdevelopedcountriesandinKenyainparticularbecausethesesystemsarestillintheirearlystagesinthesecountriesandfaceeconomicculturalandinfrastructurechallenges.TheadoptionanduseofERPinKenyaraisesauniquequestionforlessdevelopedcountrieswithinSub-SaharanAfricathathasnotbeenaddressedinpreviousstudiesi.e.thechallengesfacedbyuserandvendororganisationsduringERPimplementationandthecontextualfactorsnationalandorganisationalthatinfluenceERPadoptionimplementationanduse.ThisresearchwillthereforeexploreERPimplementationandupgradepracticesamongtheprivateandpublicsectororganisationsinKenya.ThedifficultyinERPimplementationindevelopedcountriesmaybeexacerbatedbytheclaimthatERPembodiesestablishedwaysofdoingbusinesstherebyrequiringorganisationsadoptingERPsystemstochangetheirbusinessprocessestoconformtobusinesspracticesinbuiltinERPpackages.Vendorsarguethattheadoptionofthesebestpracticesmakestheconfiguringofthesoftwarelesscostlyandbringsaboutimprovementintheorganisationsprocesses.Consequentlyorganisationsandtheirmembersoftenexperiencepressuretoadoptthesepractices.ERPsystemsaredevelopedbyvendorswhodrawontheirexistingsourcesofknowledgeresourcesandnorms.Thesewouldincludethedeveloperorganisationsownbusinessstrategyandprevailingnormsaboutwhatconstitutesbestpractice.Ingeneralthespirit’ofERPpackagesreflectsbeliefsaboutthevalueofhavingasingleenterprise-widesystemandhencetendtohavefeaturesthatarealignedwithcross-functionalprocessintegrationandenterprise-widedatasharing.SohampSiafurtherarguethatdeveloperswhilemodelinglikelyorganisationalrequirementsinordertodesignthesystemusuallydrawonthenetworkoforganisationstowhichtheyhaveaccess.Thesereferent’organisationsareusuallythosefromtheirhomemarketandothermarketsinwhichtheyhaveamajorpresence.Suchmarketsarelikelytobedefinedbynationalandindustryboundaries.Thestructuresembeddedintheresultantpackagewillthereforereflectthecontextofthegroupofcompaniesthatthedevelopersinteractedwithmostcloselyduringthedesignanddevelopmentofthesoftware.AsaresultorganisationsadoptingERPsystemsmayfindtheassumptionsembodiedbythesesystemsaboutthenatureoforganisationsandthewaysinwhichtheyoperateruncountertotheirownexistingstructuresandworkpractices.Sohetal.2000forinstanceobservedmisalignmentsbetweenERPpackagesandorganisationalstructuresexpressedinformalrulesproceduresandculturalnormsintheirstudywhichwasconductedinSingapore.Theystatedthat:

OurfindingssuggestthemisfitissuegapsbetweenthefunctionalityofferedbythepackageandthatrequiredbytheadoptingorganisationmaybeworseinAsiabecausethebusinessmodelsunderlyingmostERPpackagesreflectEuropeanorU.S.industrypract