COMPLEXITY IMPACT FACTORS ON THE INTEGRATION

PROCESS OF ERP AND NON ERP SYSTEMS

A Basis for an Evaluation Instrument

Guy Janssens

, Marinus Hoeijenbos

and Rob Kusters

1, 3

Open Universiteit Nederland, School of Management, P.O. Box 2960, 6401 DL, Heerlen, The Netherlands

Nedstaal b.v., P.O. Box 210, 2950 AE, Alblasserdam, The Netherlands

Eindhoven University of Technology, Department of Technology Management

P.O. Box 513, 5600 MB, Eindhoven, The Netherlands

Keywords: Complexity factor, ERP, Enterprise resource planning, Integration process, Interfaces.

Abstract: This study shows an expert confirmed initial list of factors which influence the complexity of the integration

process of ERP systems and non ERP systems. After a thorough search for complexity factors in scientific

literature, a survey amongst 8 experts in a leading European long special steel products company, which

was recently composed out of independent international companies, was conducted. The participants

confirmed the retrieved list from literature, consisting of 5 quantitative and 21 qualitative factors. The

participants added one extra qualitative factor and scored the importance of all factors. Three quantitative

factors, i.e. a technology, a business and a project factor, scored highest. When dealing with integration

issues, this initial list of factors can provide awareness for organizations to support activities such as

planning, control and risk management.

1 INTRODUCTION

Most organizations own a portfolio of many

different systems of software modules from different

suppliers (Lemahieu et al., 2003, Themistocleous et

al., 2004, Light et al., 2001), often based on different

standards, programming languages and operating

systems and unfortunately often insufficiently

documented (Themistocleous et al., 2004). In many

organizations integration of Enterprise Resource

Planning (ERP) systems with other systems has been

shown to be complex (Sammon and Adam 2005;

Sharif et al., 2005). There are several reasons for this

complexity: ERP systems have a monolithic

character and initially were not designed to work

with other information systems (Klaus et al., 2000).

Also ERP systems have limited flexibility because

ERP systems force organizations into adapting their

business processes according to the ERP system

designers view on these business processes (Gibson

et al., 1999; Esteves et al., 2002; Koch, 2001).

However unique business processes can provide

competitive benefits, which forces the organization

to use custom build information systems and

integrate them with their ERP system. Besides that,

there is a growing need for integration between

supply chain partners for reasons of cost reduction

and coping with the worldwide competition. What's

more, instead of using one ERP system for every

business process in an organization, there is a

tendency for using the best modules of different

ERP suppliers. This Best of Breed (B.o.b.) solution

prevents insufficient support of the business

processes or costly customization (Alshawi et al.,

2004; Light et al., 2001), but causes additional effort

for integration of the separate modules. From this we

may infer that integrating an ERP system with other

systems is an important and complex process in an

ERP implementation project.

Understanding factors that influence this

complexity should support integration activities.

Therefore this paper discusses the results of an

initial survey based study into the most important

factors which influence the complexity of the

implementation process when integrating non ERP

systems with ERP systems. First the research goal

and approach is described. Second the concept of

integration in this research is explained. Third, the

complexity factors that influence complexity

retrieved from literature are shown. After that, the

Janssens G., Hoeijenbos M. and Kusters R..

COMPLEXITY IMPACT FACTORS ON THE INTEGRATION PROCESS OF ERP AND NON ERP SYSTEMS - A Basis for an Evaluation Instrument.

DOI: 10.5220/0003413800170022

In Proceedings of the 6th International Conference on Software and Database Technologies (ICSOFT-2011), pages 17-22

ISBN: 978-989-8425-76-8

 2011 SCITEPRESS (Science and Technology Publications, Lda.)

survey method is discussed, the results from the

survey are shown and finally the results, conclusions

and further research are discussed.

2 RESEARCH GOAL

AND APPROACH

Every information system in an organization has its

own basic assumptions and technical basis. Also

every system will support different business

processes and therefore have a different purpose.

Therefore integration of information systems within

an organization, with each having their own specific

characteristics, will be a complex issue. Because the

organizational information systems differ in many

areas but nevertheless need to be integrated, it is

reasonable to assume that many factors will

influence the complexity of this integration process.

In the last decades ERP systems have become

important information systems which in many cases

act as the core or spine of the information systems

architecture in an organization (Sharif et al., 2005).

In most cases this core is surrounded by non ERP

systems that play a vital role within the organization.

These non ERP systems often support organizations

in providing extra value of services in relation to

their competitors or are specific to an organization,

and therefore cannot be replaced by an ERP module.

Since integration of ERP systems with other systems

is important, this research aims at obtaining the

factors which influence the complexity of the

integration process between ERP systems and non

ERP systems.

This was achieved by first performing an

extensive literature search for verified factors that

influence the complexity of the integration process

of ERP systems with non ERP systems. Although

several papers mention factors of influence, no

research has been found which shows a

comprehensive and confirmed list of such factors,

and equally important, shows which factors

influence most the complexity of the integration

process. Therefore a novel list of factors was

constructed from research literature in relevant

related areas. To be of value for further research and

use in ERP projects, such a list must be confirmed

by empirical research. In this research a first

investigation into the relevancy and completeness of

this novel list has been performed by retrieving the

opinion of a small group of experts. Experts seemed

a pragmatic empirical source for a first confirmation

of the retrieved factors, as came clear from literature

that there are many views on the subject and a

respectable number of factors should to be taken into

account.

The purpose of this empirical research was to

retrieve answers to the next questions:

1. Is the list retrieved from literature complete?

2. If not, what factors should be added to the list?

3. What is the relative importance of the factors on

this (appended) list?

3 INTEGRATION

In general, integration within the IT community is

the creation of links between information systems.

Because of existing different interpretations of the

word integration, this section will briefly discuss the

concept of integration as it is used in this research.

Integration is indicated by different expressions

(Themistocleous et al., 2001b, Themistocleous and

Irani, 2002): Enterprise Application Integration

(EAI), System Integration (SI), Value Chain

Integration (VCI), Supply Chain Integration (SCI),

Extended Business Integration (EBI), E-Business

Integration.

All these expressions point to integration within

an organization or integration across the borders of

an organization. The purposes of integration for an

organization are (Bhatt, 2000): reduce cost, improve

services and improve synergy effects. Reducing cost

is possible by efficiency improvement by integration

of processes and also by reducing the maintenance

cost of information systems. The improvement of

services results from a faster responsiveness to

changes on the market.

Gulledge (Gulledge, 2006) states that the term

integration is commonly used when discussing

enterprise applications. There are several definitions

of the term integration such as: ‘the interfacing of

systems together so they can pass information across

a complex technology landscape’ (Gulledge, 2006)

or ‘the extent to which data and application through

different communication networks can be shared and

accessed for organizational use’ (Bhatt, 2000).

Unfortunately these definitions are purely oriented

towards the technical aspects of integration and

leave business processes out of context.

Therefore a more comprehensive paradigm of

integration is: The integration of data resources,

the integration of application functions, and the

integration of business processes (Fan et al., 1999).

Because in the authors opinion,integration during

an ERP project is never just a technical matter,this

paper will employ the concept of integration as

proposed by Fan et al. (Fan et al.,1999)

ICSOFT 2011 - 6th International Conference on Software and Data Technologies

4 COMPLEXITY FACTORS

IN LITERATURE

4.1 Approach

In existing literature no acknowledged list of factors

was found that influences the complexity of the

integration concept as defined by Fan (Fan et al.,

1999). For that reason a search in ERP literature and

non ERP literature was performed into factors that

influence this complexity. By this search 45 relevant

papers were retrieved. Only 15 discussed the

research topic according to the integration concept

by Fan (Fan et al., 1999). Systematic evaluation led

to the identification of 8 main areas of influence

concerning the complexity of integration as shown

in table 1. These areas of influence are of a too high

level of abstraction to be able to be useful as

variables for indicating the level of complexity of an

integration process. Therefore also factors within

these areas of influence have been retrieved from

literature, which are more concrete and if possible

can be measured objectively. These factors are also

shown in table 1.

The definitions, sources of retrieval, motivation

why a factor influences the complexity of integration

of these main areas and the list of factors with their

relative importance are available from the authors.

4.2 Results

Although literature on the subject of integration is

often focused on technical solutions of integration

problems and on EAI, this technology focus covers

only a part of the integration problem (Sharif et al.,

2004). More and more suppliers of EAI technology

therefore focus on products that make integration of

business processes possible (Cakular and

Wijngaarden, 2002). EAI not only supports

automating activities, but also the improvement and

change of business processes (Bhatt, 2000).

Business process redesign is an important part of

integration.

The quality of the implementation project itself

also influences the ease of integration (Davenport,

1998; Lam, 2005; Fui-Hoon Nah et al., 2001;

Sammon and Adam, 2005).

Therefore to be able to indicate complexity

factors of integration, this paper discusses them

using three logical viewpoints (Klesse et al., 2005,

Lam, 2005, Sharif et al., 2004, Themistocleous et al.,

2001a, Themistocleous et al., 2001b): Technology,

Business and Project.

As described before, for every influence area

factors have been retrieved, see table 1. In the

current stage of this research it seems more

important to retrieve all factors and score them

according to their importance, than to do extensive

research into defining variables for every factor by

which a factor can be measured.

5 EMPIRICAL VALIDATION OF

THE COMPLEXITY FACTORS

5.1 Introduction

In order to determine the completeness of the list

and the relative importance of the factors expert

judgement was sought, as this seemed a suitable

source of information for this purpose.

The experts had to meet the following profile:

- Knowledge of the management of the integration

process of information systems in general ;

- Knowledge of integration of ERP solutions and

complementary IT solutions on at least one but

preferable more of the views ‘technology’,

‘business’ and ‘project’;

- To avoid emphasis on the specific circumstanced

of a single organization, they should have

different organizational (at least) and national

(preferably) backgrounds .

Experts should add factors if required, rate the

relative importance of the factors and react on

additional factors and arguments from other experts.

A large-scale survey is not suitable whereas in

general the availability of experts in this area and

willingness to participate is limited. Therefore this

research aimed at a small group of experts with

sufficient knowledge willing to participate in several

rounds in a Delphi setting.

5.2 Research Environment

Inviting experts from various international

organizations would be the ideal research setting. On

the other hand, experts should be available and being

able to understand each other’s contribution, which

pleads for a selection from a single organization. As

a compromise we selected experts from an

organization that fairly recently was created by a

merger between a number of different companies.

The survey was performed amongst experts in a

leading European special steel products company.

This organization employs 4,300 people at 16

production sites and several sales companies in

Europe and the USA. The company is in its present

form a young organization, composed of different

COMPLEXITY IMPACT FACTORS ON THE INTEGRATION PROCESS OF ERP AND NON ERP SYSTEMS - A

Basis for an Evaluation Instrument

independent steel companies in various segments of

the steel market. Before consolidation the different

companies had their own ERP systems, business

processes and culture. In this organization there is a

major focus on the integration of the different

information systems caused by the consolidation of

the different units. Recently merged, still variations

in organization, business processes and nationality

exist. It is reasonable to assume that the outcomes of

the survey are of equal value as a survey amongst

experts from independent organizations.

5.3 Approach

A multi round survey approach through e-mail was

in this case a practical tool because of the

geographical different locations of the participants.

Also, the participants spoke different languages. The

survey format allowed them time to understand and

formulate their answers in a non-native language.

The survey used the following procedure:

1. A first individual rating of the factors and

identification of supplementing factors by the

participants.

2. Analyzing these additional factors and

construction of the final list of factors.

3. Rating of the final list of factors by the

participants by the Delphi technique in several

rounds until changes in rating per round were

minimal.

The survey consisted of predefined questions with

predefined answers and in round one an additional

open question about supplementary factors.

5.4 Participants

The group consisted of 5 IT Managers, 1 CFO, 1 IT

software developer and 1 Information analyst. Also

the group was composed of 3 persons from Finland,

1 person from Sweden and 4 from the Netherlands.

6 RESULTS

In the first round, all participants received a

questionnaire with the view points, areas of

influence and factors. Every factor contained a

definition and a reason for inclusion as derived from

literature. The participants were invited to ad and

motivate factors they missed and rate every factor on

a 5 points Likert scale (very small to very big

influence) along with a motivation. The respondents

added one additional factor, number 27 in table 1

In the second round, all participants again

Table 1: Factors, references and scores.

Viewpoin

Areas of influence

ID. Factor

Technolo

Application Portfolio

1. Number of applications

2. Number of different application types

Choosing the right integration technology

3. Extend to which functionality of EAI technologies

overlap

4. Quality of available integration technologies

5. Number of available and necessary (now and in the

future) pre-built adapters

6. Possibility to develop custom adapters

7. Availability, within the organization, of a tool to

select the necessary EAI technology

Information Management

8. Common layer with definitions of objects, relations

between objects and business rules

9. Strategy to handle data redundancy, replication and

inconsistence over applications

IT sophistication

10. Technical knowledge, within the organization,

concerning the current IT infrastructure

11. Technical knowledge, within the organization,

concerning the new EAI technology

Technical Goals to be met

12. Level of integration from a technical point of view

13. Quality of the new IT-infrastructure

27. Availability of new EAI technologies and/or ERP

solutions

Business

Business Goals

14. Level of integration, from a business point of view

15. Number of organizations that need to be integrated.

16. End-customer integration.

17. Business goals to be met

18. Level of external pressures that are forcing the

organization to adopt EAI

19. Stakeholders goals differ

Knowledge and skilfulness in changing the organization

20. Specific EAI knowledge and skills within the

organization.

21. Ability of an organization to adopt new technology.

22. Employee knowledge of processes

23. Willingness employees to share control & ownership

of processes

Project

Differences between EAI and traditional IT projects

24. Availability of proven EAI methods within the

organization

25. Integration of all existing applications within a

portfolio of applications rather than the selection of

development of one new application

26. Number of project owners and stakeholder groups

ICSOFT 2011 - 6th International Conference on Software and Data Technologies

received the questionnaire. Besides the views and

factors, it contained the summarized motivations

from the previous round as well as factor 27. Round

2 did not lead to a major change of opinions. For this

reason it was decided to stop the survey and use the

results retrieved so far, supported by the announced

unwillingness of the participants to participate in a

third round.

Table 2 shows the 5 top rated factors, while table

3 displays the 5 factors with the lowest scores, both

in descending order. The complete list of scores of

all factors after round 2 is available through the

authors.

Table 2: The 5 top rated factors.

Id Factor

15 Number of organizations that need to be integrated

1 Number of applications.

26 Number of project owners and stakeholder groups

6 Possibility to develop custom adapters.

23 Willingness of employees to share control & ownership

of processes.

Table 3: The 5 lowest rated factors.

Id Factor

7 Availability, within the organization, of a tool to select

the necessary EAI technology

24 Availability of proven EAI methods within the

organization

11 Technical knowledge, within the organization,

concerning the new EAI technology

9 Strategy to handle data redundancy, replication and

inconsistence over applications

20 Specific EAI knowledge and skills within the

organization

7 CONCLUSIONS

All complexity factors identified from literature are

confirmed by the participants in this survey.

Although not all are rated equally important, all

factors were scored at least a ‘small’ to ‘normal’

influence on complexity. However it is also

reasonable to assume that the rating will somewhat

be influenced by organization specific

characteristics. According to the participants of the

survey, clearly some factors have more influence on

complexity.

The list of the retrieved factors seems rather

comprehensive, given that only one factor was

added by the participants that was not in the original

list and that this factor was rated as having a normal

influence on complexity. This fact and that all

factors scored as relevant, suggest that the final list

is not heavily influenced by the specific

circumstances in this organization. If this would be

the case, the authors would expect an explicit

variation in the scores.

This survey confirms that integration should not

be viewed as a pure technical matter. Three out of

the five most important factors are non technical

factors. Two factors have an organizational view and

one factor a project view. The list in table 1 consists

of 5 quantitative factors (ID’s 1, 2, 5, 15 and 26) and

22 qualitative factors. This might suggest that

qualitative factors play an important role in the

complexity of integration. However the list of the 5

top rated factors shows 3 quantitative factors and 2

qualitative factors. The 2 most important factors are

quantitative factors. Also the list shows that the 3

quantitative factors belong to the 3 different

viewpoints.

The authors expect that the present list of

qualitative and quantitative factors is already a

useful instrument for organizations to determine and

value the relevant factors which influence the

complexity of their integration of ERP with non

ERP systems. It can be useful as an instrument for

recognition and structured discussion of the

important factors which influence the complexity of

integration. Usage should provide awareness of the

condition of a specific factor in a particular

organization in areas like planning, control and risk

management.

8 DISCUSSION

In this research only the relevant influence factors

have been retrieved. Relationships between factors

are not discussed although at a glance factors seem

related to each other. For instance the 3 top factors,

probably will have a high correlation. For example

the higher the number of organisations are, probably

the higher the number of applications will be. This

aspect should be addressed by further research

because this might lead to simplifying the model i.e.

reducing or condensing the number of relevant

factors.

Of course it would also be very useful for an

organization if they could match the factors to the

complexity of the integration and match this to the

integration effort. Research into finished projects

can relate their integration effort to the factors

retrieved in this research.

Finally, as the current list is a novel one

COMPLEXITY IMPACT FACTORS ON THE INTEGRATION PROCESS OF ERP AND NON ERP SYSTEMS - A

Basis for an Evaluation Instrument

confirmed by only 8 experts in 3 European

countries, more research should be undertaken into

the comprehensiveness the areas of interest, the

factors and the relative importance of these factors.

Nevertheless the present rated list of qualitative

factors can serve as starting point for further

research.

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