A balanced scorecard based framework for assessing the strategic impacts of ERP systems

Authors:
Donald Chand;George Hachey;James Hunton;Vincent Owhoso;Sri Vasudevan
Affiliations:
Bentley College, Waltham, MA;Bentley College, Waltham, MA;Bentley College, Waltham, MA;Bentley College, Waltham, MA;Bentley College, Waltham, MA
Venue:
Computers in Industry - Special issue: Current trends in ERP implementations and utilisation
Year:
2005

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Abstract

Although there is no analytical framework for assessing the organizational benefits of ERP systems, several researchers have indicated that the balanced scorecard (BSC) approach may be an appropriate technique for evaluating the performance of ERP systems. This paper fills this gap in the literature by providing a balanced-scorecard based framework for valuing the strategic contributions of an ERP system. Using a successful SAP implementation by a major international aircraft engine manufacturing and service organization as a case study, this paper illustrates that an ERP system does indeed impacts the business objectives of the firm and derives a new innovative ERP framework for valuing the strategic impacts of ERP systems. The ERP valuation framework, called here an ERP scorecard, integrates the four Kaplan and Norton's balanced scorecard dimensions with Zuboff's automate, informate and transformate goals of information systems to provide a practical approach for measuring the contributions and impacts of ERP systems on the strategic goals of the company.