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When managers and stockholders consider making an investment in information technology (IT), as with any other investment, a major concern is whether this investment will add to the performance of their organization. However, it is difficult to identify the nature of the linkage between an investment in IT in general, and Enterprise Resource Planning (ERP), in particular, to an organization's performance. In this study we extend the work of Barua et al., Lerch and Mangal, and Tallon et al. We develop a model to identify the value ERP applications add to Porter’s organizational primary activities and the information systems (IS) applications related to ERP that help deliver added value through organizational characteristics. This new model should help in assessing the potential value of an ERP investment. We examine the relationship of ERP applications and organizational characteristics to an organization’s primary activities by a path analysis of more than 200 medium and large sized manufacturing firms. The results of this investigation indicate that organizational characteristics mediate the relationship between IS applications and the value ERP can add to the organizational primary activities. Consequently, organizations with different characteristics may add different value to their primary activities by using ERP applications. We found that each primary activity was supported by some, though not necessarily all, IS applications included in most ERP packages. We conclude that an organization's characteristics are related to the return that may be gained from the use of ERP systems. We offer recommendations on how organizations can use ERP to add value to their primary activities, based on their organizational characteristics.
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... The most famous and typical type of IS for integration is ERP. The inclusion of multiple systems and software into seamless systems, e.g., integration into ERP, is said to contribute to the smooth running of factories (Gozlu & Bilmedik, 2004;Garcia et al., 2000;Ragowsky & Adams, 2005). ERP integrates various functional areas in organizations and further extends them to business partners to form supply chain management (SCM) with integrated data and interfaces (Turban et al., 1999;Bose et al., 2008). ...
... The link between design tools (CAD, CAE) and ERP is normal. Ragowsky & Adams (2005) wrote: "We found that this application (i.e. CAD/CAM) is linked to ERP and provided data related to the Bill of Materials and Bill of Process." ...
... We found more differences in ERP than in other IS types, which may be due to the fact that the former is more industryspecific than the latter. Ragowsky and Adams (2005) explain that "adding value to each primary activity requires different individual ERP applications." These four hypotheses have some similarities, but foci are different as shown in Figure 1. ...
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Implementation of functions and their integration with information systems (IS) is important for successful factory operation, and many IS (ERP and other IS) are used in such facilities. Implementation and combinatorial pattern of functions have certain similarities and differences. Levels of implementation and functional combination differ both among IS (ERP and other IS types), and among industries. But there have been few empirical studies and findings regarding similarities and differences in the implementation and combinatorial pattern of a variety of IS types (ERP and other IS) in factories. Based on this observation, four hypotheses are set. The points of view are both software functionality and industrial difference. Accordingly, a set of empirical studies to investigate the matter was implemented, and this paper reports on the results.
... In addition, development of IS in general, and e-health systems in particular, is costly and requires big investments (Ben-Assuli and Leshno, 2012;Safdari et al., 2014). Therefore, the major concerns of managers and stockholders revolve about whether investment in IS improves the performance of their organizations (Ragowsky et al., 2005). Organizations need to understand the different dimensions leading to IS success to secure return on investment through improved levels of efficiency, effectiveness, and performance (Aggelidis and Chatzoglou, 2012). ...
... In this regard, D&M (DeLone andMcLean, 1992, 2003) model plays a key role. DeLone and McLean reviewed the existing definitions of IS success and suggested that IS success is measured through several interacting factors comprising service quality; information quality; the way information in the system is used; the degree of system users' satisfaction, and the overall effect of those systems on users and organizations (DeLone and McLean, 2003;Hossain, 2016;Ragowsky et al., 2005). D&M model has been recognized as a comprehensive framework that quickly became one of the dominant frameworks in IS research. ...
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... The theoretical underpinning of this study is derived from the value theory (Ragowsky, Somers, & Adams, 2005) and the demand and supply theory (Klein, 1983). The value theory specifies the need for recognising what is important for individuals (Ragowsky et al., 2005). ...
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Conference Paper
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... According to Deloitte Consulting, Enterprise Resource Planning (ERP) systems are packaged business application software suites that permit an organization to automate and integrate the majority of its business functions, share common data and practices across the entire enterprise, and produce and access information in a real-time environment. The scope of an ERP solution includes financials, human resources, operations logistics and supply chain, customer relationship management, sales and marketing modules [2]. ...
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... In 2005s study points out importance of ERP and value engineering relation. They reported that information systems applications commonly found in ERP systems add value to an organization's activities when that organization's particular operational characteristics are taken into account ( Ragowsky et al., 2005:395). Besides Ragowsky et al., in 2014 antecedent factors to explain how they interact with ERP and competitive advantage and their results showed that an assessment and understanding of system quality, organizational readiness, business environment and an assessment of the strategic value of adopting ERP can be crucial for generating the desired competitive advantage after ERP adoption ( Ram et al., 2014:130). ...
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Chapter
When business managers are considering whether to invest in an enterprise resource planning (ERP) system, they ask the question: “What are the returns on investment?” When the ERP system is implemented and in operation, business managers ask another question: “How successful is the system?” To answer these questions, clues can be found by examining organizational effectiveness improvements as a result of ERP system implementation. This paper suggests that being able to identify the dimensions of organizational effectiveness is enabled by ERP systems. Together with positive organizational effectiveness improvements, the business value of ERP systems can be demonstrated. To provide the evidence needed to support the notion, a confirmatory factor analysis (CFA) was conducted. Analyses reveal that the construct of IS-enabled organizational effectiveness can be modeled, at a higher-order abstraction level, as a third-order construct manifested by three second-order constructs and ten first-order constructs.
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