Abstra ct Business Software as a Facilitator for Business...

A b s t r a c tSoftware vendors claim in their marketing

brochures that business processes and

interoperability can be optimised through

the use of business software. Business

literature emphasizes the various benefits

companies can gain from the targeted use

of IT systems. Academic literature has,

however, paid scant attention to the

relationship between business process

excellence and the use of ERP systems.

Interoperability and business process excel-

lence resulting from it are in the foreground

of the following analysis of fourteen busi-

ness software projects, examined within the

eXperience framework in 2006. Hardly

surprising was the insight that, in all the

selected companies, central performance

processes were identified as ‘Excellence

Processes’. Interoperability was, in this

context, often crucial to the company’s

success. In some companies hybrid solutions

were implemented, in which the relation-

ship between human being and machine

was optimized and a one-hundred-percent

technology support was not necessarily

pursued as an ideal.

A u t h o r s

Petra Schubert([email protected]) isProfessor for Business Software at theDepartment of Computer Science of theUniversity of Koblenz-Landau. Herresearch interests include enterpriseinformation systems especiallycollaborative business and the use of ICTin SMEs. She has co-edited eight bookscontaining articles and case studies onsuccessful business software projects witha focus on business processes, strategy,e-fulfillment, e-procurement, ande-business integration.

Business Software as a Facilitator for

Business Process Excellence: Experiences

from Case Studies

PETRA SCHUBERT

GETTING STARTED: INTRODUCTIONAND RESEARCH METHODOLOGY

The following article presents find-ings from a long-term researchproject on business software basedon case studies. Since 2000, eachyear case studies were selected anddocumented on current e-businesstopics under the supervision of theauthor of this article and herresearch colleagues. In a public ‘callfor cases’ companies were soughtwho were willing to share theirknowledge with researchers fromdifferent universities. In the follow-ing selection process, those projectswere identified which appeared to bemost suitable for knowledge transferin the defined primary topic.

In 2006, the focus topic was‘process excellence’. The researchobjective of the author was to usethe basic set of case studies writtenin 2006 and to draw a comparativestudy among these case studies. Themain goal was to identify ‘factors’ or‘features’ that enable companies tobuild up competitive (‘excellent’)business processes with the use ofbusiness software. The paper con-tributes to the current discussion on‘does IT matter?’ (Carr 2004). Itdescribes and analyses primary pro-cesses in companies and derives

factors that enable companies todifferentiate themselves against theircompetitors.

Claims are made by software ven-dors in their product brochuresabout the success of business soft-ware for the support of businessprocesses and interoperability. It isdifficult to judge whether theseclaims are justified or not. For thisreason we decided to perform fieldstudies asking the users of businesssoftware directly about their experi-ences in the use of business software.This idea is methodologically sup-ported by leading case studyresearchers such as Zikmund (1997)and Gillham (2000) who argue thatthe qualitative case study approach issuitable for the exploration of aproblem situation where little isknown about the situation.

There are several types of businesssoftware, but for the purposes ofillustration the author decided tolimit the discussion to ERP systemswhich are known to be useful forsupporting critical business pro-cesses. The term ERP stands forEnterprise Resource Planning anddescribes a class of informationsystems which support primary andsecondary processes in a company.The paper discusses different typesof processes which are defined as

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FOCUS THEME SECTION: ‘BUSINESS INTEROPERABILITY’

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follows: primary and secondary processes are used inaccordance with the Porter taxonomy. Porter (1985)uses the term ‘primary’ for activities connected to valuecreation (e.g. procurement, production, sales) whereassupporting (or secondary) processes refer to activitieswhich support the operation of a company (e.g.accounting, finance, knowledge management). The term‘main process’ in this paper is used for the description ofmeta-processes, i.e. a set of primary and secondaryprocesses which are carried out by one or moredepartments (e.g. ‘customer order’ or ‘inbound logis-tics’).

Case studies are particularly suitable for understandingphenomena within their organisational context (Yin2003). According to a recent study by Capgemini,managers in Germany, Austria and Switzerland arecurrently concerned with the consolidation and harmo-nisation of ERP systems (Capgemini 2006) whichshould further stimulate interoperability. In an evermore demanding business environment where custo-mers expect fast and just-in-time delivery, businessprocesses need to be electronically supported. Settingup electronic connections between information systemsis part of the business model for emerging forms ofcompanies called ‘networked’ or ‘virtual’ organisations.For these companies who are jointly producing andoffering products or services, a common electronicinfrastructure where business processes are smoothlysupported among the partners, is imperative to thegeneration of business value. Whereas virtual organisa-tions show how far an electronic integration amongcompanies can go, traditional companies are alsoconfronted with the same requirements: faster andcheaper processes combined with higher data quality.In this article the author examines traditional companiesand the importance of ICT in the support of inter-subsidiary and inter-company business processes.

Business interoperability is not only about theexchange of electronic documents but it goes furtherlooking at the support of transactions and businessprocesses between companies. There are many defini-tions for ‘interoperability’. Many of them reflect thetechnical aspects of the integration of informationsystems, e.g. the European Interoperability Framework(EIF) (IDABC 2004). This article uses a broaddefinition where interoperability refers to the capabilityof one company to electronically connect to othercompanies. ERP systems are usually the core systemswhich need to be connected through (standardisedtechnical and business) interfaces. This working defini-tion is close to the definition used by Legner andWende: ‘(…) we define business interoperability as theorganisational and operational ability of an enterprise tocooperate with its business partners and to efficientlyestablish, conduct and develop IT-supported businessrelationships with the objective to create value’ (Legnerand Wende 2006). The two definitions build on the

concept of networkability as described by Wigand et al.(1997, p. 11) and Osterle et al. (2001, p. 5).

In this article the author examines companies whoproduce goods and services not in a network of othercompanies (virtual organization) but as ‘normal’ singleplayers who act independently within the value chain oftheir specific industry. The conclusions offered in thisarticle should thus be applicable to any company that hasbusiness relations with customers or suppliers. For adetailed discussion on different frameworks for inter-operability, see Peristeras et al. (2006).

There has been much discussion in recent years as towhether or not case studies are a valid instrument for thegeneration of research findings. Klein and Myers (1999)performed a study and concluded that ‘case studyresearch is now accepted as a valid research strategywithin the IS research community’. Case studies havelong been used as a teaching method, especially in thearea of managerial sciences (Bonoma 1985, Eisenhardt1989, Huff et al. 2002). Bonoma (1985) pointed outthat case studies in social sciences have been used forboth (1) validating existing theories and thus deducingempirical consequences and (2) building theory by usinginductive principles. This paper follows the secondapproach in trying to identify new and previouslyunknown effects of the use of business processes whichare supported by ICT. Eisenhardt identifies eight stepsof building theory from case studies: (1) Getting Started,(2) Selecting Cases, (3) Crafting Instruments andProtocols, (4) Entering the Field, (5) Analyzing Data,(6) Shaping Hypotheses, (7) Enfolding Literature, and(8) Reaching Closure.

The Eisenhardt framework shows the entire process ofbuilding theory by means of case studies right fromgetting started to the actual derivation of new theory.This paper uses an adapted version of the framework.The individual steps are followed with the exception of‘Enfolding Literature’. Following every single step of theEisenhardt framework is beyond the scope of this paper.Nevertheless, the following sections are strongly linkedto her methodology.

Miles and Huberman (1984) propose a methodologyfor qualitative research that includes advisable steps forthe analysis of intra-case and cross-case study analysis.Their four basic steps are data collection, data reduction,data display, and drawing/verifying conclusions. Milesand Huberman point to the fact that the major challengein practical qualitative research is data reduction. In thephase of data reduction the researcher decides which ofthe collected information is relevant for analysis andwhich should be dropped. In this paper data reductionwas performed on the basis of the eXperience metho-dology which has proved itself useful for more thanseven years. More than 100 case studies where writtenwith a uniform ‘grid’ (template). The interview ques-tions of the template are listed in the annex of this

188 Petra Schubert & Business Process Excellence


article. For a detailed explanation of the eXperiencemethodology see Schubert and Wolfle (2007).

This paper does not follow the classical research paperapproach of presenting the literature, building hypoth-eses, and deriving findings. Instead, it follows anexplanatory research approach where little is known inadvance and new findings are ‘explored’. The special ideaof the Eisenhardt approach of building theory from casestudies is that a researcher has certain experiences anduses a well-defined step-by-step approach to gain insightfrom these experiences. In the end, the researchermanages to propose new ‘theory’ which can then betested against findings from other researchers (the‘classical’ research approach).

There are four well-established building blocks whichare used and combined in this paper: (1) the Eisenhardtapproach of building theory from case studies(Eisenhardt 1989), (2) the Miles and Huberman(1984) recommendations for data reduction, (3) theeXperience methodology for writing case studies(Schubert and Wolfle 2007) and the (4) Porter frame-work for business processes (Porter 1985). The follow-ing section illustrates how these four approaches areused to derive the desired research results.

SELECTING CASES

At the beginning of the projects, a search for companieswas carried out that were prepared to report theirexperiences with ERP systems projects in several inter-views carried out by representatives from differentuniversities. A public appeal was made, what is knownas a ‘Call for Cases’, followed by an evaluation carriedout by the research team who conducted this study.

Parallel to the Call for Cases, authors were asked toapply to write case studies. The selected authors wereinvited to an ‘authors’ training day’ where the‘eXperience method of writing case studies’ waspresented by the people in charge of this research. TheeXperience method has been successfully used for morethan seven years and has been discussed previously(Sigrist et al. 2004; Schubert and Wolfle 2007). Anoverview of the research steps is given in Figure 1.

CRAFTING INSTRUMENTS

The identification of excellent business processes throughERP support was in the foreground of the analysis of thecase studies, examined within the framework of thisresearch project (Wolfle and Schubert 2006). The term‘excellent business process’ is used in accordance withWolfle (2006). In his article on excellence in businessprocesses Wolfle defines such processes as basic activitieswhich use the core competences of a company. Excellenceprocesses are characterised by ‘differentiating factors’

which make the performance (product or service of acompany) unique in comparison to a competitor’sperformance and help achieve long-term competitiveadvantages. The analysis of these differentiating factors isthe aim of this paper.

In a one-year research project, fourteen companieswere documented using a standard taxonomy (seeFigure 2) and lastly comparatively analysed. The inter-view questions which were used by the authors are listedin the annex of this article.

ENTERING THE FIELD

The interviews were made with the project managerswho were in charge of the introduction and maintenanceof the business software (ERP system). The authorsvisited the selected companies and gained insights fromproject managers and users, as well as the responsible ITpartners. These interviewees were also granted access tonon-sensitive internal documents relating to the projectmanagement, including investment plans, introductionperiod, statistics, and so forth. In addition, informationwas also collected from later e-mail correspondenceregarding feedback to the texts written, archival records,and publicly available web pages. These in turn helpedthe researchers to validate and elaborate on theinformation gathered from the interviews. Each inter-view lasted for about two hours. Some authors used atape recorder, others took notes. The transcription tookplace at a later point in time when all material wascompiled. The first versions of the case studies were thensent to the editorial team (see Figure 1). Feedbackregarding violations of the default template (seeFigure 2), mistakes in the methodology of graphics,and missing or more detailed information was given andthe authors were asked to correct the transcripts.

After the first feedback round, the cases studies weresent to the interviewees for review and were revisedbased on their responses. After that, another round ofcomments from the editorial team followed. Theinterviewees (company representatives) were asked togive their consent to the final (proof) version of the case

Figure 1. Research steps

Electronic Markets Vol. 17 No 3 189


study (‘good for print’). This allows the authors toexplicitly use the company names in their publications.

Once all case study transcripts had been completed,they were analysed using the basic structure in which allcase studies had been written. The cross-case examina-tion revealed certain common patterns. In the next step,groups of case studies were formed that showedcharacterizing similar differentiating factors (excellencefactors) in their processes. These factors leading toexcellent business processes are discussed in detail in thefollowing sections.

ANALYSING DATA

The ‘Netreport 2006’ study on small and medium-sizedenterprises (SMEs) (Schubert et al. 2006) shows that

ERP systems are primarily used for supporting activities(Porter 1985) in the questioned companies. The mostintensive use is found in the classical areas of Finance andAccounting (94.9%), followed by Human Resources(80.5%) and Company Leadership/ Management(77.7%). This impression is also confirmed by the resultsof the ‘Netreport’5’ (Dettling et al. 2004), in which themodules Finance and Human Resource Managementand Controlling were used most intensively.

Business processes which characterize the underlyingbusiness model in such a way that they constitute acompetitive advantage naturally tend to be primary(Porter 1985). These are directly achieved from thefulfilment of customer needs. Figure 3 shows a taxon-omy of processes which was developed for the analysis ofthe cases studies. The taxonomy follows Wolfle’sproposed generic process architecture (Wolfle 2006)

Figure 2. Case study structure that all authors adhered to

Figure 3. Taxonomy of Processes



and the eXperience taxonomy to business software(Wolfle and Schubert 2006). The process model showsa specific company in the middle of the figure (dottedline). The primary processes start with the customercontact (customer order), followed by internal processessuch as order processing and procurement and end withthe delivery of the products/services to the customer.The taxonomy was used to classify excellent processesand to derive differentiating factors (differences inperformance between the companies).

Table 1 applies the taxonomy of processes to the casestudies analysed in this paper. It shows how the casestudies are matched to the processes. The table providesthe basic structure for the following section in which theresearch findings are discussed in detail.

SHAPING HYPOTHESES: DIFFERENTIATING FEATURESIN COMPARISON

The following sections describe the analysis of the‘differentiating factors’ in the main processes shown inFigure 3. The chapters contain the findings from the casestudies as listed in Table 1. Each chapter concludes witha list of differentiating factors (in italics) which werederived from the case studies.

In his report on process excellence with BusinessSoftware, Wolfle (2006) emphasises that a companywhich wishes to offer excellent performance must drawappropriate business processes from its core compe-tences. These business processes should be organised insuch a way that the desired differentiating factors, whenmeasured against the competitor’s performance, can beachieved. Table 2 shows the distinctive features that the

authors identified for the described case studies. Thefeatures will be discussed in the following sections.

CUSTOMER ORDERS (FOCUS: SALES PROCESS)

At the customer interface, the individual orientationtowards the needs of the customer is clearly shown as themost important criterion. Here, Lyreco offers a B2Bintegration solution, which will offer the customer acontinuous, transparent and adapted process fromprocurement to invoice testing. e + h are also focusingon those ordering and offer three different, customeroriented options for the input of orders (webshop,electronic marketplace, barcode registration). The smallcompany Felix Martin has also brought IT into actionfor its sales support and obtains its software from an ASPprovider. This focus on core competences provides thecompany with higher turnover and increasing profit.Serto supplies a customer in a Kanban process with CArticles for production and takes the burden off thecustomer therein in the area of procurement manage-ment.

The IT responsible at Lyreco stated that, for thesekinds of individual electronic connections, it is alwaysthe first implementation project which is relativelycostly. From the second installation on, one can goback to the modules already developed and a furthercustomer connection can be carried out on a made-to-measure basis. Felix Martin’s IT partner, who offersarea-specific solutions with its ‘smart tools’, willexperience a similar learning curve and will also incur ahigher cost with its initial customers than with furtherprojects. Lyreco combines the role of an office materials

Table 1. Classification of the case studies into the taxonomy of processes

Main Process Described case studies processes in detail

Customer order (Sales Process) Lyreco: customer order processing (article search, shopping basket, orders)

felix martin: order processing (advisory and sales process)e+h: customer order processing

(commissioning, dispatch, invoicing)

Serto: customer-side procurement and warehouse management (logistics, Kanban)

Supplier Orders and Inbound Logistics

(Procurement)

MGM: order processing (procurement for 3rd party deals and stock sales)

Trisa: own procurement and warehouse management (logistics, Kanban)

Order processing (incl. Planning/Disposition) Wyser: order processing (service orders)

MTF Micomp: order processing (import article master data, customer-side order process)

Aebi: customer service und error management

Production (inc. Planning, Manufacture,

Warehouse Logistics)

Neoperl: order processing with assembly (Built-to-Order)

Hero: central sales planning (for decentral sales volume)

MIFA: goods storage processing with mobile appliances and production processes (supply/

logistics)

Outbound Logistics (Commissioning, Dispatch) Otto Fischer: order processing (paper-free commissioning)

Lagerhauser Aarau: transport logistics for foodstuffs as service provision (order

management und commissioning/ handling of supplies)



supplier with that of an IT service provider, and solvescustomer problems, as a one-stop service.

e+h manages, with their orientation towards customerbenefit (the customers choose the optimum channel forthemselves) to achieve competitive advantage. Similarlyto Lyreco, e + h see themselves not only as a commercialenterprise, but also as a solution provider.

In the Serto case study, the extremely efficient SupplyManagement and Procurement of a customer through aSerto-executed Kanban process is described. The solu-tion consists of a pragmatic approach which is effective,simple and both clear and user-friendly. The establish-ment of a differentiating factor only required a smallinvestment in infrastructure and will allow the companythe flexibility to adapt to changing circumstances also inthe future.

In addition, the interviews with the company repre-sentatives in all four companies showed that thedevelopment of standard modules and the standardisa-tion of internal processes is an essential factor in theoptimisation of the customer interface.

Differentiating factors:

(1) optimisation of customer processes through electronic1:1 connection;

(2) orientation towards customer benefit for optimal ITconnection; and

(3) focus on core competence through IT outsourcing;service orientation and readiness to adapt.

Supplier orders and inbound logistics (procurement)

The procurement side of a company also holds potentialfor process optimisation. At MGM, the focus on

procurement results from, firstly, the particular natureof the product traded (foodstuffs) and second, thespecific situation in Switzerland (customs regulations,food laws). The food industry is highly regulated andthere are certain legal requirements, e.g. the main-tenance of best-before dates or regulations about thecontents of product labels. Since MGM’s suppliers aremostly based abroad, their products have to passthrough Swiss customs. The specific customs legislationsuch as the payment of duty depending on weightcreates additional demands on the process supportthrough the ERP system.

The IT solution from MGM provides an optimisedprocess for warehousing business and the wholesaler-to-client sale (at the retailer’s request) in the trading offood, which complies with the requirements for trans-parency and traceability. Process excellence shows itselfhere in the mastery of logistic processes and theirdocumentation. Within the ERP software itself, stan-dardised business processes which draw upon themanufacturer’s extensive process expertise have alreadybeen implemented.

At Trisa, ERP software, in combination with mobiledata collection, has brought significantly more efficiencyto the warehouse management area. This takes the formof staff savings in the warehouse and a reduction inliquid assets. In addition, Trisa, like MGM andLagerhauser Aarau have batch management at theirdisposal which allows for focused and fast problemsolving. Finally, the supplier relationship has improveddue to the introduction of the ERP system, which, onthe basis of the introduced Kanban principle, hasallowed for more precisely controlled procurement.

The optimised processes in the area of procurementand logistics of goods received lead, in both companies,to cost savings and to an improved competitiveness.

Table 2. Success factors of excellence-based business processes in the case studies

Case Study Differentiating Factor

Lyreco: Optimisation of customer processes through electronic 1:1-connection

Felix Martin: Focus(ing) on core competence through IT outsourcing

e+h: Orientation to customer benefit for optimum IT connection

Serto: Service orientation and readiness to adapt

MGM: Focus(ing) on core competence through IT outsourcing

Trisa: Optimised warehouse management through batch management and mobile data

collection

Wyser: Efficient order commissioning through connection to networks

MTF Micomp: High degree of automation through IT support

Aebi: Outstanding customer service and ongoing quality improvement

Neoperl: Optimisation of central corporate management and local customer orientation

Hero: Optimised sales-driven production for decentral sales

MIFA: Optimised warehouse management through unambiguous material numbers

Otto Fischer: Optimisation of person-machine-interaction in commissioning

Lagerhauser Aarau: Outsourcing of distribution logistics



Differentiating factors:

(1) focus on core competence through IT outsourcing;(2) optimised warehouse management through batch

management; and(3) mobile data collection.

Order processing (including planning/disposition)

In his report on order processing, Ruile points out thatthe term ‘order’ is used with varying meaning andspecification in almost all case studies (Ruile 2006). Theterm ‘order processing’, is used in the following sectionto describe processes which are triggered by externalbusiness transactions such as customer inquiry, orders orconsumer demand.

In the cases of Wyser and MTF Micomp, excellence liesin a method of cross-company order processing throughe-business networks. By this means, it is possible tointegrate different ERP systems from different parties,without having to set up an individual point-to-pointinterface (as for example at Lyreco). In this way, Wyserachieves an efficient order processing which is leading tolong term competitive advantage. The solution fromMTF Micomp consists of an extremely high level ofautomation and also the possibility of completelyintegrating the system all the way from the company’scustomer right up to the distributor. As a consequence,several activities which were previously manually dealtwith have now been taken over by the system.

Positive economies of scale for those who have takenpart up to now, result mainly over a period of time, whenfurther suppliers and customers connect to the networkand therefore the cost for the one-off connection paysfor itself against the setting up of individual interfaces.

The Aebi case study shows particularly well thatexcellence can emerge from the combination of parti-cular characteristics of the products and the comple-mentary services of a company. Because of the veryspecific business sector with its long-lasting agriculturalmulti-purpose machines, an outstanding customer ser-vice and ongoing quality improvement was identified asa differentiating factor. A machine failure at the endcustomer must immediately be dealt with by the Aebiservice. The speed and precision of the processesconnected to this, not only internally but also inconnection with retailers are fundamentally based onfunctions which were only made possible by a knowl-edge data base and a complementary CRM tool. Here,the differentiating factor only becomes possible throughthe use of IT.

Differentiating factor

(1) order processing through the connection to networks;(2) high level of automation through IT support; and

(3) outstanding customer service and ongoing qualityimprovement.

Production (including planning, manufacturing,warehouse logistics)

In the original core area of goods and services, the areaof production (including production planning, manufac-turing, assembly, logistics) three particular examples arefound for optimised processes.

The Neoperl and Hero companies show how centralapplications can direct decentral activities in a concern. Inboth companies the ERP system in the parent branch hasoptimised the planning of production and marketing/sales and achieved a strong, local customer orientation.

At Neoperl the basic processes in sales/marketing andlogistics are standardised across the group. Processdetails can be adapted to the specific location. Therelease and control of sales/marketing and logisticprocesses can, according to demand, take place centrally(from the headquarters) or decentrally (in nationalbranches). The business activity of the national branchesis co-ordinated and supervised from Neoperl head-quarters. In this way, further national branches can beset up with little risk and low costs. The differentiatingfactor in this solution consists of a strong standardisationof the decentral processes.

The excellence of the Hero solution is shown in that ithas succeeded in distributing a fresh product from asingle production location to several countries inEurope. Thanks to a needs-based logistics with onlyone storage stage between production and retail, thecompeting dimensions of production capacity, goodsavailability and breakdown costs are optimally balancedout. This has a direct effect on the profitability of theproduct.

MIFA optimised its inbound logistics and warehousemanagement with the introduction of unambiguousmaterial numbers. Clear identification of every materialin the warehouse means that shelf life can be bettercontrolled.


(1) optimisation of central corporate management andlocal customisation;

(2) optimised sales-driven production for decentralisedsale; and

(3) optimised warehouse management through unambig-uous material numbers.

Outbound logistics (commissioning, dispatch)

Under the heading ‘Outbound Logistics’ come orderswhich are concerned with what Ruile calls internal



activities (as here e.g. transport orders, set up orders orcommissioning orders) (Wolfle and Schubert 2006).

In the case of both Otto Fischer and LagerhauserAarau it is a matter of commercial enterprises, who havereached a process excellence in the logistics undcommissioning areas.

Otto Fischer now has an optimised, paper-free processin order processing. The commissioning process is soeffectively developed in a hybrid way (not completely ITsupported), in an interaction between person andmachine which, according to the participants, wouldnot be possible with a fully automated storage system. Ina highly competitive sector the company achieves, in thisway, with effective supply to their customers, decisivecompetitive advantages.

The business model of Lagerhauser Aarau is based onthe flexible integration of sub-processes from itscustomer logistics. In order to optimise the businessprocesses, the ERP system was designed so that thecompany’s particular capacities could be added or evenbuilt relatively easily into the system and processarchitecture of the customer. This is attractive for thecustomer in cases where the performance of the logisticsservice provision of the Lagerhauser Aarau is greaterthan their own. The differentiating factors here arereliability, speed and transparency as well as knowledgeof the Swiss market.

The case studies show that, through the use of anoptimised and automatised supply chain, process costscan be saved and processing time can be reduced. Thisraises the competitiveness of the participating companieswith sustainable effect.

To summarise, it can be said that the ability to use thesame solution for further customers can be cited as ageneral criterion for success in several case studies.Hybrid solutions are often employed, in which manualprocesses as well as IT supported measures are inter-spersed, if the cost-benefit-flexibility relationship isidentified as the best solution.


(1) optimisation of person-machine-interaction in com-missioning; and

(2) outsourcing of distribution logistics

REACHING CLOSURE: THEMATIC SUMMARY OFINSIGHTS

Table 3 summarises the findings. It shows the selectedmain processes with the differentiating factors that wereidentified in the cross-analysis of the case studies. Apartfrom the differentiating factors discussed above, theanalysis of the case studies revealed general patterns ofcompany behaviour in the use of ERP systems that arediscussed in the following paragraph.

Under the headword B2B-Integration, companiesshow how they have connected their system to theircustomers, in order to execute their orders electronically(e.g. over AbaNet, VIAM, io-network, nexMart). Withinthis closed cycle, the data is utilised by the partnerswithout media-break. It can be seen that, above all, it iselectronic invoices that will be the driving force in comingyears for electronic data exchange between companies.

Table 3. Summary of main processes with differentiating factors

Main Process Differentiating Factor Case

Customer order

(Sales Process)

(1) optimisation of customer processes through electronic 1:1 connection Lyreco

e + h

felix martin Serto

(2) orientation towards customer benefit for optimal IT connection

(3) focus on core competence through IT outsourcing; service orientation

and readiness to adapt

Supplier Orders and Inbound

Logistics (Procurement)

(1) focus on core competence through IT outsourcing MGM

Trisa(2) optimised warehouse management through batch management

(3) mobile data collection

Order processing (incl.

Planning/Disposition)

(1) order processing through the connection to networks Wyser

MTF

Micomp

Aebi

(2) high level of automation through IT support

(3) outstanding customer service and ongoing quality improvement.

Production (inc. Planning,

Manufacture, Warehouse

Logistics)

(1) optimisation of central corporate management and local customisation Neoperl

Hero

MIFA

(2) optimised sales-driven production for decentralised sale

(3) optimised warehouse management through unambiguous material numbers

Outbound Logistics

(Commissioning, Dispatch)

(1) optimisation of person-machine-interaction in commissioning Otto Fischer

Lagerhauser Aarau(2) outsourcing of distribution logistics



Customer-retaining is a central theme in almost all casestudies. In over half of the cases it is described howcompanies strive, on top of their own products or theircore performance, to offer their customers a larger oradditional benefit. In doing this, various strategies areutilised and business software is applied in very differentroles. The theme Order Processing primarily coverslogistic processes, which have been subjugated toincreasing demands for optimisation within the contextof international competition. It is clear that logisticprocesses hold particular potential for process excellence.The food industry is one of the most active sectors in thedevelopment of universal IT supported business pro-cesses. The most pressing concern is that trade wants toorder at ever shorter notice. The responsibility for theavailability of products should be, as far as possible, takenover by the manufacturer – including the associated risksof stock keeping. Excellence in logistics means reachingtop performance from seemingly unimportant singleactivities through an optimum coordination of the partialperformances.

THE ERP SYSTEM AS COMMODITY? RESPONSESFROM THE CASE STUDIES

The analysis of the case studies showed that softwaresystems can help companies to effectively support theircore processes and thus help sustain competitiveadvantage. ‘Differentiating factors’ (listed in Table 2and 3) could be identified and were discussed against thebackground of the experiences of the companies. Theyare the most important result of this article.

The question of how much value IT has in companiesis often not easy to answer. There are frequently twodiametrically opposed opinions. One faction believes,following Porter and Millar’s theories of more than 20years ago (Porter and Millar 1985, Porter 2001), that IThas a particular potential in the achievement ofcompetitive advantage. The other faction takes the viewthat the diffusion process of IT is now so advanced thatit has already become a so-called ‘Commodity’ or‘Utility’ (therefore a basic commodity available to all).It has lost therein, according to this view, its effective-ness as a strategic instrument of differentiation.

Nicholas Carr says in ‘IT doesn’t matter’ (Carr 2003),that IT in companies will soon come like electricity fromthe plug socket – meaning it will be produced byexternal suppliers and consumed by companies. ITwould then become inappropriate for use as a strategiccompetitive advantage. The case studies analysed in thisresearch project make clear that the introduction ofbusiness software solutions does not yet mean that an‘Electricity Project’ is in sight. Two case studies showASP solutions as the first step of the ‘Utility Concept’, inwhich small companies profit through a rental solutionfrom a significantly more powerful system than they

could afford if they had to purchase comparablesoftware. In all other case studies, the path to highlyindividualised solutions is chosen, in order to differenti-ate themselves from competing companies.

In an interview with the magazine io new management(Kisseloff 2006), Carr says that it only makes sense to beinnovative ‘if it is extremely difficult for the competitorto copy this innovation’. It will be interesting to observe,how the balance between individual software, individu-ally adapted standard software as well as purchasablesoftware and rental software will develop in the comingyears. As it turns out, the examined companies aredistinguishing themselves through such different pro-cesses that it is in no one’s interest to copy the ITsolution 1:1. At most, one could gain stimuli or a basisfor one’s own benchmarking. Most of those responsiblestill believe that they require individually adapted soft-ware to support their own differentiating core processes.

The analysis shows that it is difficult to agree on generalrules for the achievement of process excellence. Certainlynot surprising is the insight that what matters, in all cases,are central performance processes in companies (and notsupporting or secondary processes). Frequently, hybridsolutions have therefore been introduced, where therelationship between human being and machine has beenoptimised and a one-hundred-percent technology sup-port has not been pursued as an ideal.

A single well-mastered business process can be acommodity and does not necessarily constitute a compe-titive advantage. From a process which claims excellence,something more is expected. The authors of the casestudies were instructed to show in which aspect theoperating company judges its solution as excellent, ‘bestin class’ or superior to the customary solution in otherways. The case studies show, therefore, how it is possible,with the support of IT to implement business conceptswhich are superior in an important aspect to the businessconcepts of the competition (for example, in the Neoperlcase study with its difficult-to-describe franchising busi-ness). This superiority leads to an improved profit (as, forexample, illustrated by the pipe connection manufacturerSerto in high-salary Switzerland).

It is interesting to see which driving forces standbehind a decision for business software. In three of thecase studies, the responsible parties have made aconscious decision to choose a solution from one ofthe ‘big’ suppliers, in order to protect their investment.Others, however, have sought a software supplier whowas ready and able to adapt the solution to the individualobjective of the customer.

Tracking down models of success or rather clusters inthe profiles of the presented companies was almostimpossible as the ‘excellent processes’ identified by theauthors show little common ground – and this is the case,interestingly, although all of them are involved in orderprocessing. Actually, this result could have been expectedif the discussion about core competence (Prahalad and



Hamel 1991) is recalled, in which the unimitable qualityof a process is dealt with as a fundamental factor for theachievement of competitive advantage. The excellence-based business processes are components of the businessmodels and are based on the core competences of theexamined companies. Hence they cannot, by definition,be easily copied.

CONCLUSIONS AND IMPLICATIONS

The article uses a framework for exploratory research. Itdraws from four different approaches: the (1) Eisenhardtframework for deriving theory from case studies, (2) theMiles and Huberman (1984) recommendations for datareduction, (3) the eXperience methodology for writingcase studies, and the Porter framework for businessprocesses. The resulting research methodology shouldencourage other researchers to follow the same stepstowards gaining real-world experiences.

As common to most research projects based on casestudies, the paper has certain limitations in that it derivesfindings from a small sample size of only fourteencompanies. The opinions stem from a small group ofcompany representatives and are thus not representativefor the large number of Swiss companies. Nevertheless,the author hopes that the described methodology willencourage other authors to use case studies for thegeneration of knowledge from practice. It would beinteresting to challenge the ‘differentiating factors’described in this paper using a different and maybe evenlarger set of case studies. The author intends to continueanalysing case studies over the next years. A growingsample of companies contributing to the knowledge basewill improve the picture of differentiating features forthe use of business software. Also, the author expects tosee future studies from other countries where similarpatterns could be examined.

All statements in this article were approved by theoriginating companies. The text is completely based onprimary material (i.e. interviews with company repre-sentatives). The author believes that calling companiesby their real names makes the results easier to scrutinizeand might be a valuable anchor for future researcherse.g. if they want to perform a long-term analysis or acomparison over time.

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APPENDIX

The following uniform template was used for the interviews:

The following details were asked for in the interviews:

1 The Company

N Background of the Company: history, structure,number of employees, turnover, company culture.Who is concerned and what are the internal conditions.

N Industrial Sector: special facts of the sector, situa-tion related to the competition, development of

market potential, type of product, assortment,specific features, history, target group, B2B orB2C.

N Vision of the Enterprise: the special position of theenterprise (unique selling proposition) against thecompetition.

N Meaning of IT and e-business: importance of ICTand/or e-business for the success of the enterprise.

Figure 4. Case study structure that all authors adhered to



2 Trigger for the Project

N 2.1 Starting point and trigger for the project: processof decision making that has lead to the provision ofthe respective resources and the start of the project.Alternatives that have been considered for the solu-tion.

N 2.2 Presentation of business partners: issues related tothe partners who have helped considerably for thepreparation and/or setting into motion of theproposed solution. Background of the businessrelations. Evaluation process. Partners may include:IT Partner, ERP vendor, Internet agency, businesspartners.

3. Description of the Individual Solution (four views)

N 3.1 Business View and Objectives: introduction tothe proposed business scenario. Participants, theirroles, products and services. Business model/businessconcept. Has the described solution led to a changein the concept for business activity? Comparison ofthe situation before and after. Business scenarioproviding an overall survey of the circumstances, costand value distribution among the partners.Participants in their roles, the most importantprocesses in the context, as well as the relations ofexchange between these processes. Market scheme,supply chain, co-operation in joint venture or onlyco-operation in a certain field or enterprise. Operativeand strategic objectives of the contractor afterintroduction of the solution and expenses/benefitsfrom the project.

N 3.2 Process View: selected processes in detail.Selection of one or two excellent processes andillustration in an extended event-driven process chain(EPC). Co-ordination of processes and decisionssupported by the IT solution. Additional aspects,e.g. how process quality is measured.

N 3.3 Application View: information systems which takepart in the solution and their distribution with regardto the roles presented in the business scenario.Distribution of most important functions and data,areas of responsibility, dependence and related riskswith respect to the solution. The three layers data,business logic, and user interface show level ofintegration.

N 3.4 Technical View: distribution of applications overthe hardware systems, networks, system integration,as well as specifications of software systems.

4. Project and Operation

N 4.1 Project Management/Change Management: howthe project has been initiated, who has taken part,project organization. Project phases and key achieve-ments. How agreement with the needs of the targetgroup has been achieved, how processes have beenchanged and how new processes have been intro-duced. Aspects of motivation, training, resistance toexerted counteractions.

N 4.2 Programming and Roll-out the Software: history ofthe application, test phases, establishment of produc-tivity of the organizational units. Standard software orindividual software, software development, customiz-ing, integration with the internal systems, roll-out.

N 4.3 Regular Maintenance: service providing, aspectsof operation and accessibility, content management.

5. Experiences

N 5.1 User Acceptance: do experiences match expecta-tions? Changes, extensions, reprogramming?

N 5.2 Achievement of Objectives and Changes: plannedand non-planned benefits and successes, back sidesand problems. Insights and learnings for futureprojects. Differences after the introduction of thesoftware. Subjective factors and satisfaction of thepeople involved.

N Investments, Profitability and Financial Ratios: inter-nal and external expenses, investments and produc-tion costs. Quantitative and qualitative aspects(effectiveness). Opinion on profitability of invest-ments. Key performance indicators. Number of users,number of licenses. Investment per user.

6. Success Factors (assessment of the author)

N 6.1 Specialities of the Solution: factors which makethe solution exceptional. Reasons why partners(clients) use the platform.

N 6.2 Reflection of ‘Process Excellence’: the aspects thatmake a process ‘superior’.

N 6.3 Lessons Learned: what can be learned from thecase, mistakes, things that have been made exception-ally good. Brief conclusion.



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