Global Versus Local Focus Of Enterprise Information Systems: A Framework Based On Dimensions Of Commonality/Differentiation, Single Vendor/Mulitple Vendors, And Vanilla/Customization

Abstract

Business Information Systems, especially the Enterprise Resource Planning (ERP) products have increasingly played an important role in the business world. They have raised the values of products and services to a new height by enabling companies to capture, store, process, and manipulate large amount of data from all parts of the companies in a distinctively better, faster, and less expensive manner compared to doing them manually. However, the low price for such great value come with a cost: inflexibility. Most ERP vendors choose to design their products to fit a large number of businesses so that they can sell to more while having to incur the very high cost of software development only once. Unfortunately, this also means that in order to use these systems, companies have to do business according to the way the systems are designed to support, risking losing their uniqueness and potential competitive advantages. This problem is even greater for mid to large sized companies that have multiple different business practices maintained by different internal units. They are forced to make a difficult but critical decision: choose the most reasonable middle point between a highly-compatible low-cost global system (all internal units use the same ERP products) and a costly dynamic local system (each unit chooses its own system) that perfectly support the original business practice of each company unit. This research synthesizes the relevant knowledge from prior work done by other researchers in the information systems field into an easy-to-follow and executable decision tree framework. This framework is aimed to help mid-sized companies with limited Information Technology resources to better decide the recommended level of global and local focus of their systems.