D S V R e p o r t s e r i e s N o . D S V 1 1 - 0 1 2

Gustaf Juell-Skielse

Improving Organizational Effective-ness through Standard Application Packages and IT Services

Gustaf Juell-Skielse

©Gustaf Juell-Skielse, Kista 2011 ISSN 1101-8526 ISBN 978-91-7447-366-7 Printed in Sweden by US-AB, Stockholm 2011 Distributor: Department of Computer and Systems Sciences

To Malin

Abstract

Standard application packages are used to improve business processes and to reduce costs for information systems. Standard application packages in the form of ERP systems (Enterprise Resource Planning systems) are common among private sector organizations. Public sector organizations use standard application packages developed for specific areas of government operations.

Today, the design, use and distribution of standard application pack-ages are changing due to the emergence of service orientation. In the private sector, ERP systems are extended to include IT services. In the public sector, standard application packages are integrated with IT services which are often referred to as e-Government. E-Government can be extended with mobile technology to add mobility to public processes, so called m-Government.

The problem addressed in this thesis is how to improve organiza-tional effectiveness through the use of standard application packages and IT services. The objectives are to: ­ Develop a model for explaining the level of adoption of extended ERP

among small and medium sized companies. ­ Identify implications and design patterns of business models for service

oriented ERP. ­ Establish principles for the design of local government m-services. ­ Develop a method for benefits evaluation of information systems with

integrated services. The thesis contributes with theory for analyzing, explaining and predicting how the use of standard application packages as well as IT services affects organizational effectiveness. To practice, it provides new concepts that can change the perceptions and mental models that IS-professionals, such as management consultants, use in their professional lives. In particular, it pro-vides implications, design principles, a model and a method for the use of services in conjunction with standard application packages in public and private sector organizations.

For future research it is suggested to investigate how service orienta-tion affects implementation methods for standard application packages and to investigate the requirements of completely integrated e-Government on e-services, business models and back-office systems.

Sammanfattning

Standardsystem används för att förbättra affärsprocesser och för att minska kostnader för informationssystem. Standardsystem i form av affärssystem är vanliga bland privata organisationer. Offentliga organisationer använder standardsystem utvecklade för specifika förvaltningsområden eller så kallade verksamhetssystem.

Idag pågår en förändring av hur standardsystem utvecklas, används och distribueras på grund av en ökad tjänsteorientering. Inom den privata sektorn utvidgas affärssystem till att omfatta IT-tjänster. Inom den offentliga sektorn integreras verksamhetssystem med IT-tjänster vilket ofta kallas för e-förvaltning. E-förvaltning kan i sin tur vidareutvecklas med mobil teknik för att öka flexibiliteten i offentliga arbetsprocesser, så kallade m-tjänster. Problemet som behandlas i denna avhandling är hur man kan förbättra orga-nisatorisk effektivitet genom användning av standardsystem och IT-tjänster. Målen är att: ­ Utveckla en modell för att förklara användningsgraden av utökade af-

färssystem bland små och medelstora företag. ­ Identifiera konsekvenser av och mönster i affärsmodeller för tjänsteori-

enterade affärssystem. ­ Fastställa principer för utformning av kommunala m-tjänster. ­ Utveckla en metod för nyttoutvärdering av informationssystem med

integrerade tjänster. Avhandlingen bidrar med teori för att analysera, förklara och förutsäga hur användningen av standardsystem samt IT-tjänster påverkar effektiviteten i organisationer. Det specifika bidraget består av konsekvenser, designprinci-per, en modell och en metod för användning av standardsystem och IT-tjänster i offentliga och privata organisationer.

Inför framtiden föreslås fortsatt forskning för att dels undersöka hur tjänsteorientering påverkar införandemetoder för standardsystem och dels att identifiera krav som helt integrerad e-förvaltning ställer på e-tjänster, af-färsmodeller och verksamhetssystem.

Acknowledgements

First and foremost I want to thank Paul Johannesson for clarity and resi-lience in supervising this thesis. Lousie Yngström for supervising my licen-tiate and Mark Smith and Henrik Blomgren for inspiring discussions and valuable input. My parents Eva and Olaf for stimulating me to play, build and understand. The co-authors to several of the papers in this thesis: Håkan Enquist and Erik Perjons for getting the job done. Petia Wohed for success-ful cooperation at the ÖST project and support in formulating the goals of this thesis. Johannes and Annika Helfrich for giving me the opportunity to participate in the development of e-Government in Sweden. Bengt Nilsson for good friendship and recurrent reality checks. Students who have aided me in collecting data: Andreas Almberg, Metin Asqari, Sangar Bapir, Johan Ekblom, Philip Eklund, Sascha Goftari, Katarina Kopkin and Johan Kroon. Johan Magnusson and the team at the Centre for Business Solutions at the University of Gothenburg for great collaboration and inspiring competition. The team at the DSV Center for Service Science and Innovation: Carl-Mikael Lönn, Christer Magnusson, Andreas Nilsson, Elin Uppström and Eric Chou. Colleagues at DSV and the unit for Information Systems. Finally, Erland Svensson at FOA 59 who initially sparked my interest for doing research.

Contents Introduction ................................................................................................ 10

Problem ..................................................................................................................... 12 Objectives ................................................................................................................. 12 Relevance .................................................................................................................. 12

Publications ................................................................................................. 15 Related Publications ................................................................................................ 16

Previous Research ..................................................................................... 18 Key Concepts Defined ............................................................................................. 18 Standard Application Packages ............................................................................. 20 Service Orientation ................................................................................................. 23 ERP Adoption ............................................................................................................ 25 E-Government .......................................................................................................... 26 Business Models ....................................................................................................... 29 IT Value ..................................................................................................................... 30

Method ......................................................................................................... 34 Research Approaches in IS Research .................................................................. 36 Methodological Choices .......................................................................................... 40 Research objective 1............................................................................................... 41 Research objective 2............................................................................................... 41 Research objective 3............................................................................................... 42 Research objective 4............................................................................................... 43

Approach and Contribution ...................................................................... 45 Objective 1 - Develop a model for explaining the level of adoption of extended ERP among small and medium sized companies ............................. 45 Objective 2 - Identify implications and design patterns of business models for service oriented ERP ......................................................................................... 46 Objective 3 - Establish principles for the design of lo-cal government m-services ..................................................................................................................... 47 Objective 4 – Develop a method for benefits evaluation of information systems with integrated services ......................................................................... 48

Conclusion and Future Research ............................................................ 49 Future Research ....................................................................................................... 49

References .................................................................................................. 53

Included Articles ........................................................................................ 64

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Introduction

Standard application packages are used to improve business processes and to reduce costs for information systems. Since the 60’s, information systems development have shifted from being built and maintained directly by using organizations to being bought and installed in the form of standard applica-tion packages (Sawyer, 2001; Hedman and Lind, 2009). Standard application packages provide several advantages compared to users building their own systems. First, economy of scale where development costs can be distributed among several using organizations. Second, standard application packages provide means of transferring knowledge from one using organization to another. Third, organizations developing their own information systems face a high risk of failure with costly consequences.

Standard application packages in the form of ERP systems (Enter-prise Resource Planning systems) are common among private sector organi-zations. Enterprise Resource Planning (ERP) systems are standard software packages designed to provide support to coordinate the work along business processes and to monitor activities spanning large organizational and geo-graphical distance (Al-Mashari, 2002). ERP has evolved from a core of func-tions, to cover more or less all parts of a business (Sumner, 2004). ERP sys-tems include administrative functions for finance, human resources, produc-tion, logistics and sales and marketing. The various components or modules are integrated through a central database (Davenport, 1998). The life cycle of an ERP system can range from a few years up to 10-15 years and includes the selection, set-up, implementation, use and operation (including upgrades) and settlement (Sumner, 2004). Examples of tangible benefits realized by companies that have implemented ERP systems are inventory reductions, personnel reductions and productivity improvements (Shang and Seddon, 2000). Examples of intangible benefits are improved information availabili-ty, improved processes and increased customer responsiveness.

Public sector organizations use standard application packages devel-oped for specific areas of government operations. For example, there are standard application packages available for healthcare, social services and libraries. In addition there are administrative workflow or case handlings systems available for cross-functional processes, such as complaint man-agement and public decisions. ERP-packages tend not to be as popular in public organizations as in private organizations. This is due to the fact that public organizations, such as a municipality, often consist of several auto-nomous units with little or no interaction between them. In addition, gov-

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ernment operations have not been influenced as heavily by business process re-engineering as private organizations.

Recently, service orientation has emerged as an important change driver in private and public sector organizations. Service orientation offers both a new perspective on business logic (SD-logic) and a new architectural style for information systems (SOA).

In the private sector, ERP systems are extended (ERPII) to include IT services (Shanks et al. 2003). The introduction of a service-oriented archi-tecture opens up the possibility of replacing the traditional, monolithic archi-tecture with distributed services (Abels et al. 2006). The service-based busi-ness systems can more easily adapt to changing business demands and be-come less expensive for small-and medium-sized enterprises (Brehm and Marx Gomez, 2007). In a prototype solution, Brehm and Marx Gomez dem-onstrate what such a federated ERP system (FERP) can look like. The core of the system follows the definitions of Möller (2005) with a database and a workflow system for the management of business processes. Business logic is then added to the system in the form of web services that are bought real time and paid for based on usage.

In the public sector, standard application packages are integrated with IT services (e-services). This is often referred to as e-Government. To-day, the public sector in many countries seeks to improve citizen service and transform its operations to become leaner and more cost effective (United Nations, 2008). To accomplish this transformation, many governments apply information and communication technology to establish what is referred to as “e-government”. Important characteristics of e-government include the establishment of a secure government infrastructure and web-based service delivery (Moon, 2002). Citizens and organizations can interact with govern-ment agencies through the use of personal computers connected to the Inter-net. A natural extension to e-Government is mobile government, or m-government. M-government is an emergent area for mobile applications, where citizens and organizations can interact with government and munici-pal agencies through mobile devices. M-government supports mobility of citizens, organizations and internal operations of the governments. Mobile services will enable government agencies to be more proactive in citizen service and operations by offering citizens more choices of interaction and by providing real-time information to government officials on the move (Kushchu and Kuscu, 2003).

In the intersection between standard application packages and ser-vice orientation, new business models emerge. The traditional business mod-el for standard application packages comprises of three actors: software sup-plier, consultant and using organization. The software is installed on the premises of the using organization and paid for through licenses and service fees. The emerging service oriented business models emphasize customer value and pay per use and are distributed over the Internet.

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Problem In this thesis, the problem is stated accordingly: How can organizational effectiveness be improved through the use of stan-dard application packages as well as IT services?

Objectives Several objectives are formulated in order to contribute to improved organi-zational effectiveness through the use of standard application packages in light of emerging service orientation, see table 1. The objectives are to: 1. Develop a model for explaining the level of adoption of extended ERP

among small and medium sized companies. 2. Identify implications and design patterns of business models for service

oriented ERP. 3. Establish principles for the design of local government m-services. 4. Develop a method for benefits evaluation of information systems with

integrated services. The model (objective 1) increases the understanding of how small and me-dium sized organizations adopt ERP to enhance organizational effectiveness. It also increases the understanding for inhibitors, such as lack of consulting services, for ERP adoption among small and medium sized organizations. The implications and patterns (objective 2) increase the understanding of how service oriented business models affect organizational effectiveness. The principles (objective 3) supply knowledge for designing government services that utilize mobility to increase organizational effectiveness. The method (objective 4) provides a new approach to valuation of e-government initiatives. It supports measurement of changes in organizational effective-ness among value networks caused by the use of e-services and government information systems.

Relevance There is today an increasing interest in ERP among SMEs with a movement of ERP systems from an internal focus to a collaborative and extended en-terprise view with new functionality and new web based technology. These developments contribute to the need for models that explain the level of ERP adoption among SMEs. The current models for ERP adoption among SMEs focus on manufacturing firms (Mabert et al. 2000; Olhager and Selldin, 2003) and the level of ERP adoption among service firms is not well unders-tood. In addition, consultants are often referred to as "critical success fac-

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tors" for ERP implementation (Somers and Nelson, 2001; Sumner, 2004; Grabski and Leech, 2007). However, it is not well understood how consult-ing competence affects the level of adoption. Thus, there is a need for mod-els that explain the level of adoption among small and medium sized compa-nies, which is addressed by objective 1.

Enterprise resource planning systems (ERP-systems) are the infra-structural information backbone of most western companies of any size and industry (Bhattacharaya et al. 2003). ERP represent an important market for vendors and consultants. Lately, a new business model called Software as a service is gaining attention and increasing its share of the ERP market (Du-bey and Wagle, 2007). Software as a service challenges the traditional mo-nolithic design as well as the on-premise installations of ERP-systems by opening up for a new view on ERP-systems as being an orchestrated collec-tion of software services (Brehm et al. 2006; Möller, 2005). Few studies have been conducted on business models for ERP and due to the emerging service oriented approaches to ERP the need for service oriented business model types and their implications has become apparent. Consequently, there is a need for identifying implications and designing patterns of busi-ness models for service oriented ERP, which is addressed by objective 2.

Today, the public sector in many countries seeks to improve the quality of citizen service and on the same time transform its operations to become leaner and more cost effective (United Nations, 2008). To accom-plish this transformation, many governments apply information and commu-nication technology (ICT) to establish what is referred to as “e-government”. Important characteristics of e-government include the establishment of a secure government infrastructure and web-based service delivery (Moon, 2002). Sweden is ranked as a leading country in e-government readiness, i.e. how ready the country is to take advantage of the opportunity provided by advances in ICT for delivering e-government services (United Nations, 2008) and most Swedish municipalities are currently in the process of pub-lishing e-services and integrate these services with their case handling sys-tems. In addition, some municipalities are interested in adding mobility to their e-services. Therefore, it is relevant to establish principles for the design of e-services and m-services for local governments, which is addressed by objective 3.

Due to the extensive investments in e-Government there is a great need for appropriate evaluation approaches (Gupta and Jana, 2003). Swedish authorities are often using a model called Peng to evaluate their investments. Peng is a participative, bottom-up approach for identifying and valuating IT-enabled benefits (Dahlgren et al. 1997). However, due to the increasing number of actors involved in e-Government initiatives there is a need for an approach that also takes into account the complete network of actors in-volved in e-Government initiatives. Hence, it is relevant to develop a model for benefits evaluation of information systems with integrated services, which is addressed by objective 4.

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Benbasat and Zmud (1999) argue that for IS research to be relevant it should be conducted to serve IS-professionals. To increase the relevance of this thesis it has been written in view of management consultants. Man-agement consultants are IS-professionals in that sense that they use informa-tion systems to improve client performance (Kubr, 2002). Management con-sultants often partner with suppliers of standard application packages, such as ERP suppliers, and are critical success factors for buying and installing these systems (Somers and Nelson, 2001; Grabski and Leech, 2007). The use of information technology and information systems has a large effect on the work of management consultants. Not only is IS/IT consulting an important branch of management consulting but IS/IT is also used by management consultants in most branches, such as financial consulting and consulting in company transformation, to create new offerings for their customers (Kubr, 2002).

Management consulting firms utilize change methodologies (Werr et al. 1997) and knowledge management systems (Alavi and Leidner, 2001; Davenport and Prusak, 1998) to share experiences, beliefs and selected knowledge about client offerings. The objectives of this thesis are aimed at providing new concepts that can change the perceptions and mental models that IS-professionals use in their professional lives.

In addition, all articles have been written in conjunction with re-search projects stressing the importance of triple helix, which is a model for cooperation between government, universities and companies.

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Publications

Eight articles are included in the thesis. A summary of each article is pre-sented in the chapter Approach and Contribution.

1. Juell-Skielse, G. (2006) Adoption of Extended ERP among Small and Medium Sized Companies in Kista Science City. 3rd International Con-ference on Enterprise Systems and Accounting (ICESAcc’06) 26-27 June 2006, Santorini Island, Greece.

2. Juell-Skielse, G. (2007) Extended ERP Consulting Competence. 4th International Conference on Enterprise Systems, Accounting and Logis-tics (4th ICESAL ’07) 9-10 July 2007, Corfu Island, Greece

3. Enquist, H. and Juell-Skielse, G. (2010) Value Propositions in Service Oriented Business Models for ERP: Case Studies. 13th International Conference on Business Information Systems BIS 2010, Berlin, Germa-ny 3-5 May, 2010. Lecture Notes in Business Information Processing, Vol 46, pp. 268-279, Springer. Gustaf Juell-Skielse was responsible for 50% of the article.

4. Juell-Skielse, G. and Enquist, H. (2011) Implications of ERP as Service. 5th International Conference on Research and Practical Issues of Enter-prise Information Systems (CONFENIS 2011). IFIP Working Group on Enterprise Information Systems (WG 8.9). Proceedings to be published in Springer Lecture Notes in Business Information Processing. Gustaf Juell-Skielse was responsible for 75% of the article.

5. Juell-Skielse, G. (2010) Enhancing Complaint and Problem Manage-ment: Design and Evaluation of an M-Service Using Pictures and Posi-tioning. International Journal of E-Services and Mobile Applications, 2(2), 1-16, April-June 2010. IGI Global.

6. Juell-Skielse, G., Perjons, E. (2009) Improving E-Government through Benefit Analysis and Value Modeling. 33rd Annual IEEE International Computer Software and Applications Conference, pp. 332-339. IEEE Computer Society. Gustaf Juell-Skielse was responsible for 50% of the article.

7. Juell-Skielse, G., Perjons, E. (2010) New Challenges for e-Government: Value Realization among Independent Actors. 4th International Confe-rence on Research Challenges in Information Science, pp. 437-445.

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IEEE Computer Society. Gustaf Juell-Skielse was responsible for 50% of the article.

8. Juell-Skielse, G. Perjons, E. (2011) VAMEE: A Value Aware Method for Evaluating Inclusive E-Government Initiatives. In Johannesson, P., Krogstie, J., Opdahl, A. (Eds.), the Practice of Enterprise Modeling – PoEM 2011. Vol. 92 of Lecture Notes in Business Information Processing, pp. 97-111, Springer Berlin Heidelberg. Gustaf Juell-Skielse was responsible for 50% of the article.

The articles are related to the four objectives of this thesis according to table 1.

Nr Objective Article 1. Develop a model for explaining the level of adoption of ex-

tended ERP among small and medium sized companies. 1, 2

2. Identify implications and design patterns of business models for service oriented ERP.

3, 4

3. Establish principles for the design of local government m-services.

5

4. Develop a method for benefits evaluation of information sys-tems with integrated services.

6, 7, 8

Table 1. The relationships between research objectives and included articles.

Related Publications The following publications are related to the objectives of the thesis but have not been included: ­ Juell-Skielse, G., (2006) ERP Adoption in Small and Medium Sized

Enterprises. Licentiate Thesis in Computer and Systems Sciences, Roy-al Institute of Technology, Stockholm, Sweden. ISSN 1101-8526.

­ Juell-Skielse, G. (2008) Pictures and Positioning in Mobile Complaint and Problem Management. In the proceedings of mLife 2008, pp. 15-19 September, Antalya, Turkey.

­ Juell-Skielse, G. and Wohed, P. (2010) Design of an Open Social e-Service for Assisted Living. Presented at EGOV 2010, 29 August - 2 September, Lausanne, Schweiz. Published in Lecture Notes in Comput-er Science, 2010, Volume 6228/2010, pp. 289-300, Springer.

­ Wohed, P., Truffet, D. and Juell-Skielse, G. (2011) Business Process Management for Open E-services in Local Government - Experience Report. Presented at BPMDS 2011 Working Conference, 20-21 June 2011, London, UK. Published in Lecture Notes in Business Information Processing, 2011, Volume 81, Part 1, pp. 1-15, Springer.

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­ Juell-Skielse, G., Mattsson, T., Persson, V. and Uppström, E. (2011) Goal Model for Open Social e-Services. e-Challenges 2011, 26-28 Oc-tober 2011, Florens, Italy.

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Previous Research

The purpose of the thesis is to discuss the potential of service orientation in relation to the use of standard application packages in both private and pub-lic organizations. The research objectives contribute to several knowledge domains: ERP-adoption, Business Models, E-Government and IT Value. In this chapter, these knowledge domains are discussed together with standard application packages and service orientation. The key concepts and their relationships are presented in figure 1.

Figure 1. Key concepts used and their relationships. Contributions from the re-

search objectives (1-4) are indicated in the figure.

Key Concepts Defined Business model - A “… conceptual tool containing a set of objects, concepts and their relationships with the objective to express the business logic of a specific firm” (Osterwalder et al, 2005, p.5).

ERP

Standard Application Package

Service System

CriticalSuccessFactor

M-service

Value

Service SaaS

SOA

Type of

Affects

Architectural style of

IT service

E-Government

M-GovernmentInformation System

Type of

ERPII

Extension of

Type of

Resource in

Used to design

ERP AdoptionState of utilization

Business Model

Business logic ofCreates

Resource in

Resource in

Resource in

Enables

Type of

Type of

Type of, ICT-enabledfor Government

Mobileextension of

2. Patterns and implications of service oriented ERP

4. Benefit evaluation model

1. Model for ERP adoption

3. Design principles

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Critical success factor - A limited number of important areas, such as ac-tions, people and risks, for attaining success, for example when an ERP sys-tem is implemented into an organization (Rockhart, 1979; Loh and Koh, 2004; Grabski and Leech, 2007).

E-Government - E-Government is the use of information and communica-tion technologies in public administrations combined with organizational change and new skills in order to improve public services and democratic processes and strengthen support to public policies (European Commission, 2011).

ERP – ERP (Enterprise Resource Planning) are integrated and configurable standard application packages that are designed to support a number of di-verse company functions which are usually organized in separate modules. These functions, or modules, are closely integrated with each other through a central database and provide support for business processes (Davenport, 1998, Kumar and van Hillegersberg, 2000, Nilsson, 2000).

ERP Adoption - To take up ERP and deploy its features and functionality in various parts of the business (van Everdingen et al, 2000; Mabert et al, 2000; Olhager and Selldin, 2003).

ERPII – ERPII or extended ERP offers new functions and new ways of configuring systems, as well as web-based technology to establish the inte-grated, extended business enterprise (Shanks et al. 2003).

Information system - An information system (IS) “… is a work system whose processes and activities are devoted to processing information, that is, capturing, transmitting, storing, retrieving, manipulating, and displaying information. Thus, an IS is a system in which human participants and/or machines perform work (processes and activities) using information, tech-nology, and other resources to produce informational products and/or servic-es for internal or external customers” (Alter, 2008, p. 451).

IT Service - A digitally enabled service, also called e-service when used in conjunction with e-business or e-government. A service is a resource that is viewed as valuable by some agent and that can be exchanged between agents (Weigand et al. 2009). Web services have become a preferred form of IT services (W3C, 2004).

M-Government - Mobile government, or m-government, is an extension to e-government where mobile and wireless technology is used to improve government services (El-Kiki and Lawrence, 2006). M-government adds value to e-government by increasing citizens’ access to certain government information, for example citizens in any location can get immediate access to time-sensitive information about emergencies (Trimi and Sheng, 2008).

M-Service - An IT service is considered to be an m-service if it is: trans-portable through wireless networks; flexible in terms of composition with

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other m-services; adaptable according to the wireless devices’ computing characteristics; and executable on wireless devices (Maamar et al. 2002).

SaaS - Software as a service (SaaS) is a way of providing applications as services to customers across the Internet. Vendors moving to SaaS apply a different business model where the user organization has a subscription for software provided via Internet by SaaS-providers or third-party facilities (Dubey and Wagle, 2007).

Service System – A “… dynamic value co-creation configuration of re-sources, including people, organizations, shared information (language, laws, measures, methods), and technology, all connected internally and ex-ternally to other service systems by value propositions” (Spohrer et al. 2008, p. 5).

SOA - SOA (Service Oriented Architecture) is an architectural style for de-signing information systems where the goal is to achieve loose coupling among interacting software agents. The software agents or capabilities may be provided by different owners and decouples the supplier from the user (He, 2003).

Standard application package - A standard application package is “a more or less complete software package which can be used directly in a compa-ny’s business, as opposed to an in-house system which has to be built from scratch” (Andersson and Nilsson, 1996, p. III:2).

Value - A value is something that an actor interprets as beneficial and is caused by a transfer or a conversion of an economic resource, e.g. service or good (Gordijn et al, 2000). The value of changes in organizational effective-ness (Robbins, 1983) is often related to income increases or cost reductions enabled by changes in business processes (Davenport, 1993).

Standard Application Packages Software can be categorized into internally developed software, packaged software and embedded software (Carmel, 1997). Internally developed soft-ware is developed by an organization for its own purposes and it is normally not traded. Packaged software, on the other hand, is developed for several users with similar needs and traded on markets. Embedded software is inte-grated into products, such as digital cameras and mobile phones. An addi-tional area is software services, where IT-consultants provide services re-lated to software development. Examples of services provided by consultants are strategic advice, software development, project management, data migra-tion, change management and software maintenance.

Packaged software, usually referred to as standard application pack-ages, represent a shift in how software is developed, distributed and imple-

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mented. In the late 60’s, IBM was obliged to unbundle sales of software and services from sales of hardware through a decision taken by US Justice De-partment (Grad, 2002). Prior to this point, the common practice in industry was to include software and services in sales of hardware.

Standard application packages are provided by vendors as products ready to install while the traditional systems development process is under-taken by the using organization itself (Sawyer, 2001). Standard application packages are designed to meet requirements of several users and using or-ganizations (Andersson and Nilsson, 1996). Potentially, they provide econ-omy of scale due to the large number of users and embody tested experience and knowledge from earlier implementations. Large vendors of standard application packages may also be better positioned than using organizations to keep pace with advancements in information technology (Hedman and Lind, 2009). Today there are a huge number of standard application pack-ages available for a number of purposes in most industries, such as account-ing systems, warehouse systems and billing systems.

In the 90’s integrated and configurable standard application pack-ages emerged and became known as Enterprise Resource Planning systems (ERP systems). ERP originates back to re-order point systems (Mabert et al, 2000, Sumner, 2004) and are designed to support a number of diverse com-pany functions which are usually organized in separate modules. Mabert et al. as well as Olhager and Selldin use the following definitions for functions in ERP packages: Asset Management, Distribution and Logistics, Financial Accounting, Financial Control, Maintenance, Materials Management, Order Entry, Personnel/Human Resources, Production Planning. These functions, or modules, are closely integrated with each other through a central database and provide support for business processes (Davenport, 1998; Kumar and van Hillegersberg, 2000; Nilsson, 2000). Examples of ERP systems are SAP R/3, Baan, Microsoft Dynamics and Movex.

The second wave of ERP, ERPII or extended ERP, offers new func-tions and new ways of configuring systems, as well as web-based technology to establish the integrated, extended business enterprise (Shanks et al. 2003). Mabert et. al (2000) and Olhager and Selldin (2003) identify several areas for extending the ERP system. These include tying your customers to your ERP system, tying your suppliers to your ERP system, e-business or e-commerce, supply chain management, advanced planning and scheduling, customer relationship management and business intelligence capabilities, as well as data warehousing.

The systems development lifecycle (SDLC) of standard application packages differ from that of traditional systems development. It is market driven with a focus on customer needs. It includes phases for vision, proof-of-concept, realization, package and distribution and finally sales. Compared to the traditional SDLC it focuses more on a vision of what the market wants than a requirements specification. It is also concerned with the sales of the software and with packaging the software in a way that enables the customer

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to install it (Sawyer, 2001). Another characteristic of standard application packages is the implementation process (Parr and Shanks, 2000; Sumner, 2004).

Vendors of standard application packages may promote different implementation methods although they bear much in common (Hedman and Lind, 2009). They usually include the phases: analysis, configuration, final preparations, deployment and maintenance. The configuration phase is unique for standard application packages and includes the setting of parame-ters to adapt the software to the specific requirements of a certain using or-ganization. Several researchers have identified factors critical to successful implementation of enterprise resource planning (see for example: Buckhout et al, 1999; Bingi et al, 1999; Rosario 2000; Fui-Hoon Nah et al, 2001; So-mers and Nelson, 2001; Loh and Koh, 2004).

An ERP system has a profound impact on the organization that adopts it. Already Leavitt (1964) described how technology interacts with an organization that utilizes it. Leavitt depicts an organization as a system com-prising of several interacting subsystems: actors, tools, structure and task. An ERP-system is, apart from a technical artifact, a system of processes that includes tasks performed by actors. The package embodies assumptions about processes and division of labor that “can impose patterns of behavior” (Shanks et al, 2003) on the organization that utilizes it. When referring to this larger system Shanks et al. use the term Enterprise Systems (ES).

The Role of Consultants The role of consultants is a key aspect of the ERP market. The conventional business model of ERP involves not only using organizations and ERP ven-dors, but also consultants (Brockman and Gronau, 2009; Johansson and Newman, 2009). The market for ERP related services is larger than the mar-ket for ERP software licenses (Jacobson et al, 2008) and working relation-ships with consultants are also found to be critical for successful ERP im-plementations (Somers and Nelson, 2001; Loh and Koh, 2004). However, the development of knowledge that consultants use in their relationships with customers is found to be problematic (Heusinkveld and Benders, 2005). According to Wikström and Norman (1994) consultants develop knowledge in three processes: generative, productive and representative. In knowledge intensive organizations the three processes move from being sequential to become reciprocal and interrelated. There are several barriers for consultants to successfully disseminate generated knowledge among members of their organizations and to package this knowledge into organization concepts attractive to their clients (Heusinkveld and Benders, 2005). For example, lack of perceived fit with their existing business leads to criticism and disbe-lief among members of a consulting organization. By organization concepts is meant “prescriptive, more or less coherent views on management, which are known by a particular label” (Benders and Verlar, 2003, p. 758). The

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dissemination of generative knowledge among members of an organization is affected by its members’ mental models and political interests (Brown and Ennew, 1995). Benbasat and Zmud (1999) discuss academia’s role in these processes and the importance of publishing concepts that affect IT profes-sionals’ preconceptions and mental models. Examples of concepts supplied by academia to practice include critical success factors and business process re-engineering.

Service Orientation Historically, economics and marketing science have focused on the ex-change of tangible goods, especially manufactured goods (Vargo and Mor-gan, 2005). However, services represent the major share of the industrialized world's economies, e.g. in 2007 the services sector accounted for more than 70% of the EU gross domestic product, a portion which continues to increase (Central Intelligence Agency, 2011). The need for a new structural definition of services became apparent (Shostack, 1977) and in 2004 Vargo and Lusch presented the service dominant business logic (SD-logic) as a new concep-tual framework for services.

Service Dominant Business Logic The service dominant business logic (SD-logic) defined by Vargo and Lusch (2004) focuses on intangible resources, co-creation of value and relation-ships between agents. In the SD-logic, people exchange in order to get the benefits of specialized competences and services compared to the goods dominant business logic (GD-logic) where people exchange for goods and the purpose of economic activity is to produce and distribute goods that add value to customers. There are two aspects of the SD-logic to consider: the customer logic and the provider logic (Grönroos, 2008). The using organiza-tion utilizes services according to customer logic to orchestrate business processes. Business processes serve as media for the using organization to coordinate activities between different professional realms for creating cus-tomer value (Beretta, 2002). The service providers follow provider logic and create interactive contacts with the using organization in order to co-create value with them and for them (Grönroos, 2008). In the SD-logic, goods are viewed as representations of embedded knowledge and intermediate prod-ucts that are used in the customer logic (Vargo and Lusch, 2004). For exam-ple, ERP-systems provide embedded knowledge, often referred to as best practices (Kumar and van Hillegersberg, 2000), that supports using organiza-tions to enhance their business processes (Sumner, 2004). Spohrer et al. (2008) expand the discussion by replacing actor with the concept of service system. “…we define a service system as a dynamic value co-creation confi-guration of resources, including people, organizations, shared information

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(language, laws, measures, methods), and technology, all connected internal-ly and externally to other service systems by value propositions” (Spohrer et al. 2008, p. 5). Spohrer et al. advocates the establishment of service science to study service systems (Spohrer et al, 2007).

IT Outsourcing Traditionally, standard application packages are installed on person-

al computers and servers located at the premises of the using organizations (Vassiliadis et al, 2006). The using organization buys software licenses from the supplier and engages internal IT staff or external IT consultants to im-plement the application package. However, this draws attention from the using organizations core business and incurs large investments in terms of cost and time. The intention with service oriented computing, more com-monly known as IT outsourcing, is therefore to reduce initial costs by pro-viding Software as a service (SaaS). SaaS is a way of providing applications as services to customers across the Internet and is increasing its share of the market of standard application packages (Dubey and Wagle, 2007). Vendors moving to SaaS apply a different business model where the user organization has a subscription for software provided via Internet by Saas-providers or third-party facilities. Renewal and improvements in the software are imple-mented continuously rather than at occasional release dates. Choudhary (2007) claims this to be a more sustainable model due to larger incentives for Saas-suppliers to invest in software development. Also, total cost of owner-ship is estimated to decrease. An example provided by Dubey and Wagle (2007) indicates total cost savings of approximately 20% compared to the dominating business model. In the Saas business model subscription fees are high compared to the annual service fees in the traditional business model while costs for implementation, hardware, down time and unused licenses are low.

ERP-as-a-service is ERP delivered through a SaaS model (Papazog-lou, 2003). The main characteristics that distinguish ERP-as-a-service from other types of SaaS models are related to the content of the service. In ERP-as-a-service, the service includes elementary offerings for enterprise-wide, integrated and standardized business functions and support for business processes which are characteristic to ERP. Essentially it is an ERP applica-tion delivered as a service (Hoch et al, 2001) accessed through a web brows-er (Mäkilä et al, 2010). In addition to business functionality, the technical infrastructure, the right to use the service, hosting, maintenance and support services are bundled into a single service (Sun et al, 2007).

Service Oriented Architecture Service oriented architecture (SOA) is SOA is a technical architec-

tural style for designing information systems with the objective to achieve

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loose coupling among interacting and distributed software agents (He, 2003). The software agents or capabilities may be provided by different owners (OASIS, 2009) and decouples the provider from the consumer. The purpose of SOA is to establish more effective and flexible information systems (Erl, 2007), partly because it becomes easier to find alternative providers for IT services. Web services have become a preferred form of IT services for rea-lizing SOA (W3C, 2004). SOA challenges the monolithic design of standard application packages.

The introduction of service-oriented architectures opens up the pos-sibility of replacing traditional, monolithic ERP architectures with distri-buted services (Abels et al., 2006). The service-based business systems can more easily adapt to changing business demands and become less expensive for small-and medium-sized enterprises (Brehm and Marx Gómez, 2007). In a prototype solution, Brehm and Marx Gómez demonstrate what such a fede-rated ERP system (FERP) can look like. The core of the system follows the definitions of Möller (2005) with a database and a workflow system for the management of business processes. Business logic is then added to the sys-tem in the form of web services that are bought real time and paid for based on usage. Process models that are used to orchestrate business processes based on the web services can also be distributed as IT services.

As described above, service orientation provides several perspec-tives on information systems. The SD logic represents the movement to a service economy. IT outsourcing focus on service-orientation of information systems and businesses in the IT sector. Finally, SOA is a design principle for development of software, i.e. service orientation of the parts making up information systems. These perspectives are primarily hierarchically related to each other.

ERP Adoption In the late 1990’s the market for ERP in large organizations became more and more saturated and ERP suppliers increased their interest in small and medium sized organizations (van Everdingen et al, 2000). The large amount of SMEs in Europe only represented a significant market. Therefore adop-tion of ERP in small and medium sized organizations became an important issue. Van Everdingen et al. (2000) found differences in adoption between countries and industry types, e.g. the Scandinavian countries and the Nether-lands were ahead in adopting ERP compared to other EU countries due to cultural differences where Scandinavia and the Netherlands are characterized by innovation and a strong desire for novelty and variety. They also found differences between industries which they believed was due to the historical roots of ERP in manufacturing and material requirements planning (MRP). Van Everdingen also found support for the main strength of ERP, namely integration of several functional areas. In their study a majority of companies

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used three or more of the modules available in ERP packages. On the other hand, Olhager and Selldin (2003) found that companies seldom use all avail-able modules included in ERP packages and tended to prefer “core” ERP functionality including purchasing, order entry and materials management. They also found that extensions to ERP, such as e-commerce and customer relationship management, were not significantly adopted although it was included in most ERP packages (Möller, 2005). The extension of ERP, from an internal focus to a collaborative and extended enterprise view, ought to be very useful for companies operating in an international and collaborative business environment like small and medium sized companies active on the global market.

E-Government Public demands on governments to improve citizen service and transform its operations to become leaner and more cost effective are constantly rising (United Nations, 2008; European Union, 2009). By being more open and responsive in their service delivery, governments can overcome serious eco-nomic, social and environmental challenges (OECD, 2005). To accomplish this transformation, many governments apply information and communica-tion technology to establish what is referred to as “e-government”. Important characteristics of e-government include the establishment of a secure gov-ernment infrastructure and web-based service delivery (Moon, 2002) which makes it possible for citizens and organizations to interact with government agencies through the use of personal computers connected to the Internet. However, policy documents alone will not be sufficient; architecting work, information exchange and common guidelines for modeling of user needs are examples of work that has to be added to the policy documentation in order for governments to utilize e-government effectively (Lind et al, 2009).

In their often cited work, Layne and Lee (2001) present a maturity model for e-government that describes four stages of e-government, see fig-ure 2.

At the first level (catalogue) the government agency is present on-line to provide government information and downloadable forms. At the second level (transaction) the government agency provide interfaces for citi-zens to interact with back-end systems. These interfaces are often referred to as e-services, which is a synonym for “IT services”. At the third and fourth level (integration) local systems are integrated with higher level systems (vertical integration) and with other functions (horizontal integration) to provide a “one stop shop” for citizens. Alternative maturity models include Australian National Auditing Office’s model (1999) as well as Hiller and Bélanger’s model (2001).

The Layne and Lee model takes an internal view on e-Government development where the focus is on technological and organizational aspects.

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However, there could be other important aspects to consider such as im-provement, policy development and democracy. For example, EU views e-government as means to improve public services and democratic processes (European Commission, 2011).

Figure 2. Four stages of e-government based on Layne and Lee (2001).

Parallel to the technological development of e-government there is an orga-nizational change, from street-level bureaucracy (Lipsky, 1980) to system-level bureaucracy (Boven and Zouridis, 2002). Through the use of predeter-mined decision criteria it is possible to automate decisions and remove street-level discretion. This means that system-level bureaucrats take over the decisions making responsibility from street-level bureaucrats by convert-ing legal frameworks into algorithms and decision criteria implemented in information systems (Reddick, 2005). Through this change, citizens can get immediate response from authorities anywhere and anytime. Decisions be-come more transparent and just and can be monitored more easily.

Governments that introduce e-government face several challenges and can use different strategies to cope with these challenges (Gil-Garcia and Pardo, 2005). Gil-Garcia and Pardo present five categories of challenges and corresponding success strategies: information and data; information technol-ogy; organizational and managerial; legal and regulatory as well as institu-tional and environmental.

M-Government Mobile government, or m-government, is an extension to e-government where mobile and wireless technology is used to improve government ser-vices (El-Kiki and Lawrence, 2006). M-government supports mobility of

Catalogue

Transaction

VerticalIntegration

HorizontalIntegration

IntegrationCompleteSparse

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nolo

gica

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ani-

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nalC

ompl

exity

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plex

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citizens, organizations and internal operations of the governments. It can be defined as “a strategy and its implementation involving the utilization of all kinds of wireless and mobile technology, services, applications and devices for improving benefits to the parties involved in e-government including citizens, businesses and all government units” (Kushchu and Kuscu 2004, p.2). M-government adds value to e-government by increasing citizens’ access to certain government information, for example citizens in any loca-tion can get immediate access to time-sensitive information about emergen-cies (Trimi and Sheng, 2008). M-government also adds value to e-government through new means of improving efficiency and effectiveness of government employees. Government employees can use m-technology to access information and register data in real-time irrespective of location. Early application reports on m-government include emergency notification, mobile maps, and remote database access for field inspectors (Trimi and Sheng, 2008). Cao and Luee (2007) report on the changes mobile technolo-gies have enabled in the monitoring and repairing of municipal assets in Beijing.

An important domain of m-government is m-services (El-Kiki and Lawrence, 2006). M-Services provide new communication channels between government, citizens and organizations. An application component is consi-dered to be an m-service if it is: transportable through wireless networks; flexible in terms of composition with other m-services; adaptable according to the wireless devices’ computing characteristics; and executable on wire-less devices (Maamar et al. 2002). Another important domain of m-government is m-administration (El-Kiki and Lawrence, 2006). M-administration refers to mobile technology applications used to improve government operations. Field Force Automation (FFA) is one area where governments begin to redesign workflows and work processes by equipping field crews with mobile technologies and applications (Scholl et al. 2007).

In order to further relate m-government to e-government, researchers are modifying e-government maturity models to include mobile technology. In order to include m-government in a maturity model for e-government, El Kiki and Lawrence (2006) as well as Fasanghari and Samimi (2009) add a maturity level called “Ubiquity” on top of the preceding maturity levels. El Kiki and Lawrence (2006) suggest that “Ubiquity” is a natural result from implementing mobile technologies which allow for real-time access to gov-ernment services at all levels of government. Fasanghari and Samimi (2009) view “Ubiquity” as a phase where public services are delivered in ad hoc situations, in for example disaster situations.

Challenges related to the introduction of m-government are similar to e-government challenges; however some challenges are specific for m-government. For example, there are technological challenges related to the limited user interface (Cook and Helbig, 2008) and the low interoperability of handheld devices (Trimi and Sheng, 2008). In addition, there are particu-lar security issues since wireless transmission is vulnerable to interception

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and hacking and that handheld devices are more often subject to theft and losses (El-Kiki and Lawrence, 2006).

Business Models The interest in business models (also referred to as e-business models) has grown since the advent of internet enabled business (e-business). A reason for this is the short development time from idea to realization in e-business (Gordijn and Akkerman, 2003). Short development time requires clarity in communicating value proposition and provider logic. Another reason is the need for identifying requirements on information systems used to enable the e-business (Eriksson and Penker, 2000; Gordijn and Akkerman, 2003).

There are multiple objectives for studying business models: under-standing core elements and their relationships in particular industry domains; communicating to share understanding of a business model among stake-holders; specifying valid requirements for information systems to support business models, changing and improving an existing business model to support change; and experimenting with innovative business concepts (Pateli and Giaglis, 2003).

Focusing on business models of individual firms, Osterwalder et al. (2005) found three different categories of business models: constructs, types and instances. These three categories are organized hierarchically. At the top of the hierarchy there is the business model concept. It includes definitions of constructs and models for how the constructs are interrelated. On the second level there are types of business models. Types represent generaliza-tion of business models which share some common characteristics. Different types can for example represent similarities in how companies operate in different industries. At the third level there are modeled instances of real world companies. At the bottom of the hierarchy, there are real world com-panies. Osterwalder’s (2004) Business Model Ontology (BMO) includes taxonomies for business model elements and relationships between elements. A business model is decomposed into four areas or “pillars”: value proposi-tion, customer interface, infrastructure management and financial aspects. For each pillar there are one or more building blocks, i.e. financial aspects consists of two building blocks: cost structure and revenue model.

The business model ontology has inherited much from the balanced scorecard which was first presented in 1992 by Kaplan and Norton (Kaplan and Norton, 1992). The balanced scorecard was intended for performance measurement and the core message was to add more perspectives to perfor-mance measurement than just finance. It included, not only finance, but also customer, internal processes and learning and growth into a single report. These four perspectives on performance measurement represent major stakeholders (Mooraj et al, 1999), shareholders, customers and employees. In later generations of the balanced scorecard (Kaplan and Norton, 1996a,

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1996b, 2000a, 2000b, 2004a, 2004b), Kaplan and Norton have shifted em-phasis from measurement to management (Cobbold and Lawrie, 2002). The cause and effect relationships between the four perspectives have been clari-fied and strategic linkage models are now used to describe relationships be-tween strategic objectives. The balanced scorecard has been criticized for its classification of intangible assets. The current division of learning and growth into human, organizational and informational capital is thought to not take into account literature on intangible assets and represent an incomplete classification of intangible assets (Marr and Adams, 2004).

Taking a holistic view on business models, E3-value (Gordijn and Akkermans, 2003) provides constructs and graphical notation for describing complete value networks consisting of several actors. E3-value focuses on value and provides means to analyze the value creation within and between actors in a value network. Weill and Vitale (2001) present a number of atom-ic e-business models for actors which can be aggregated to specific e-business models including full value networks. Examples of atomic business models are content provider, intermediary and community.

Recent research in the area of business models includes the devel-opment of service oriented business model concepts, such as the Cloud Business Ontology Model (Weinhardt et al, 2009) and viable business mod-els for mobile services (De Reuver and Haaker, 2009). The concept of busi-ness model is also starting to be used in e-Government to describe the rela-tionship between service offerings and public service networks (Janssen and Kuk, 2007).

IT Value In this thesis, the view on information systems is as tools. Some authors refer to information systems as enablers for process improvements (Davenport, 1993) when they take on the tool view. Several technical innovations over the last centuries have altered the way businesses are performed. The (steam) engine provided power and could replace man and animals in power genera-tion. The railroad made transportation faster and cheaper. The telephone made communication faster and the computer speed up many work activi-ties, such as calculations. Today, computers and telephones are integrated into information and communication technology (ICT) that provides the basis for information systems. In parallel, there is a shift towards more spe-cialized service oriented industries and less production oriented industries (Giertz, 1999).

The relationship between IT investments and productivity has been challenged. Despite the large investments in IT during the 80’s, especially in the service sector, the productivity data of companies did not show the cor-responding gains (Roach, 1988). This is often referred to as the productivity paradox. However, during the 90’s new productivity measures were dis-

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cussed and Brynjolfsson and Hitt (1996) argued that the productivity para-dox had disappeared.

Several authors (Davenport, 1993; Soh and Markus, 1995; Hender-son and Venkatraman, 1993) claim that information systems have no direct effect on organizational effectiveness. In order for investments in informa-tion systems to have an effect on organizational effectiveness, they have to alter processes in an organization. A process could be described as a “me-dium to coordinate a set of activities that consume resources between differ-ent professional realms to create an output relevant to a customer or to the company” (Beretta, 2002). This means that information systems can be used as tools to alter processes in favorable ways so that the economic outcome of the organization is improved. This relationship is depicted in figure 3.

Figure 3. The IT-Process-Productivity relationship based on Davenport (1993).

Davenport (1993) identifies nine different ways in which information and communication technology can be used to improve processes. In turn, these process improvements can generate quality improvements, time reductions and economic benefits. Mansar and Reijers (2005) categorize successful process redesign heuristics, such as control relocation, contact reduction, control addition, case types, exception, task elimination, task automation and integrative technology.

Soh and Markus (1995) present a process theory for the value of IT investments, see Figure 4.

Figure 4. A process theory for how IT creates value, based on Soh and Markus

(1995).

A major message in the theory is the causal relationship between IT-investment and organizational performance. Soh and Markus (1995) argue that a process theory is more likely to explain the relationship than a va-riance theory. In a variance theory the relationship between the independent

InformationTechnologyInitiatives

ProcessChange

EconomicOutcome

IT Assets

IT Impacts

OrganizationalPerformance

IT Expenditure

”The IT ConversionProcess”

”The IT UseProcess”

”The CompetitiveProcess”

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AppropriateInappropriate Use

Competitive PositionCompetitiveDynamics

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variable (IT-investment) and the dependent variable (organizational perfor-mance) could be described as when independent variable then dependent variable. If more independent variable then more dependent variable, irres-pective of in which order necessary and sufficient conditions occur. In process theory the causal relationship is of another kind. The dependent va-riable may not occur even if the independent variable is present. The inde-pendent variable is a necessary but not sufficient condition for the dependent variable. In addition the recipe and order of necessary conditions to occur is also important. Soh and Markus found this causal relationship in a number of models and developed a synthesis model. According to the synthesized mod-el organizational performance depends on effective processes and the com-petitive environment. If IT-assets are used properly the processes could be more effective which in turn is dependent on the IT-conversion process from IT expenditure to IT-assets. This means that IT-expenditure has to pass through a number of successful conversion processes in order to increase organizational performance. IT expenditure is a necessary but not sufficient condition.

The process theory presented by Soh and Markus consists of three sub processes: IT conversion process, IT use process and Competitive process, see figure 4. This means that IT impacts organizational effective-ness through intermediary business processes (Melville et al. 2004). In addi-tion to the three sub-processes, Melville et al. (2004) includes the consump-tion of resources in the form of both business services and IT services pro-vided by trading partners of the firm. Hence Melville et al. combines Soh’s and Markus’ process theory with a resource based view of firms (Dovev, 2002) and could serve as a foundation for studying service systems.

In the first sub process IT conversion, IT expenditure is converted into IT assets or IT resources. IT resources could be further decomposed into technical IT resources and human IT resources as well as complementary organizational resources (Melville et al. 2004). The conversion of IT ex-penditure into technical IT resources is perhaps the best described in various software engineering methods and life cycle models for standard application software (see for example Sawyer, 2001). Human IT resources refer to tech-nical and managerial skills used to design and operate information systems as well as skills necessary to collaborate with other business units and organ-izations. Complementary organizational resources refer to other resources such as work practices, culture, policies, and organizational structure.

In the second sub process IT use, IT resources are consumed by business processes in order to create customer value. Business process effi-ciency depends on how the business processes are designed, to what degree the organization adopts these designs and how well these designs utilize the IT resources. Enterprise resource planning systems include business process models which represent knowledge about how business processes could or should be designed in certain business domains (Kumar and van Hillegers-berg, 2000). The intermediate output of the IT use sub process is called IT

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impacts. It does not only refer to altered business process designs but also to new or improved products and services as well as improved decision making and more flexible organizational structures.

In the third sub process Competitive process, the organizational per-formance is improved through the use of IT impacts. However, the organiza-tional performance also depends on the competition in the market in which the firm operates. IT impacts are necessary but not sufficient conditions for improving organizational performance and the final outcome also depends on what the competitors do. If the firm is late in adopting new process in relation to its competitors, the impact on the organizational performance will be low or nonexistent.

Organizational Effectiveness The dependent variable in Soh’s and Markus’ model is called organizational performance. A similar concept is organizational effectiveness and they are sometimes merged in the concept organizational effectiveness and perfor-mance (OEP). OEP is often used to define the ultimate variable of empirical studies (Baruch and Ramalho, 2006). However, the criteria used by scholars for defining OEP vary, from productivity and financial success to customer orientation and public image. To some extent this variation can be explained by different views on organizations such as an economic-rational view or a social view. Therefore several scholars have proposed multi-dimensional models of OEP such as the balanced scorecard (Kaplan and Norton, 1992) and the performance pyramid (McNair, Lynch and Cross, 1990). For exam-ple, the balanced scorecard includes four perspectives of OEP: finance, cus-tomer, internal processes and learning and growth (Kaplan and Norton, 2004b).

In this thesis, I take a multidimensional view on organizational ef-fectiveness, similar to the concept of balanced scorecard. It is a view suitable for analyzing the impact of standard application packages on organizations. For example, common criteria used by organizations to report how ERP affects OEP are stock reductions, productivity improvements, personnel reductions, order cycle improvements, customer responsiveness and im-proved financial close cycle (Sumner, 2004).

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Method

Standard application packages and IT services can be viewed as sub-domains to information systems. Information systems science concerns the use of IT-artifacts in socio-technical systems (Morgan, 1985), such as organ-izations, and the phenomena that occur when the two interact (Orlikowski and Baroudi, 1991). IT-artifacts can be viewed and conceptualized in several ways (Orlikowski and Iacono, 2001), e.g. tool, proxy and computational. In this thesis IT-artifacts are primarily viewed as productivity tools. In this view, organizational performance advance by exchange of established work processes with better IT-enabled work processes. The interaction between IT-artifacts and organization can be described as a regulative cycle (Wierin-ga, 2009). The regulative cycle, figure 5, is sometimes referred to as the engineering cycle when the focus is on technical artifacts. The regulative cycle starts with evaluating established work processes and investigating problems then solution designs are specified and validated against stake-holders’ goals and a selected design is implemented. The outcome of the implementation can serve as a starting point for a new regulative cycle.

Figure 5. The regulative cycle based on Wieringa (2009).

The regulative cycle provides a logical structure for solving practical prob-lems and a foundation for discussing ontological and epistemological issues of information systems when viewed as productivity tools. The four phases of the regulative cycle present different types of questions to the researcher. In the first phase, implementation evaluation, the researcher intends to build knowledge about the world as it is. In the second phase, solution design, the researcher intends to solve problems through designing new organizational

RegulativeCycle

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Solution Implementation

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states, or modes of operation, that satisfy stakeholders’ goals. In the third phase, design validation, the researcher intends to build knowledge about what would happen in the future if the design is implemented in a certain context. In the fourth phase, the researcher intends to solve the problem of putting the design into operation in a certain context. Hence, a review of the regulative cycle shows that information systems as productivity tools present a combination of knowledge problems and practical problems to the re-searcher.

Based on observations of these problems, researchers can develop theories about the world and what will happen in the future. One example of theory within information systems is Technology Acceptance Model (TAM) (Davis 1986). TAM is a testable proposition about the relationships among user beliefs and user behaviors in terms of acceptance of using computers. Another example of theory in information systems is statements on how information systems should be developed. One example is the waterfall model (Royce, 1970). The waterfall model provides prescriptions for how to successfully build an information system.

Gregor (2006) presents a taxonomy of theory types in IS research. It is based on the primary goals of the theory. According to Gregor, the four primary goals of theory are analysis and description, explanation, prediction and prescription. Based on these four primary goals, Gregor identifies five theory types, see table 2.

Theory type Distinguishing attributes Common research approaches I. Analysis Says “what is”.

The theory does not extend beyond analysis and description. No causal relationships among phenomena are specified and no predictions are made.

Case studies, interpretive field studies

II. Explanation Says “what is”, “how”, “why”, “when”, “where”. The theory provides explanations but does not aim to predict with any precision. There are no testable propositions.

Case studies, surveys, ethno-graphic, phenomenological and hermeneutic approaches, and interpretive field studies

III. Prediction Says “what is” and “what will be”. The theory provides predictions and has testable propositions but does not have well-developed justificatory causal explanations.

Statistical techniques such as correlation and regression analy-sis and data mining

IV. Explanation and prediction (EP)

Says “what is”, “how”, “why”, “when”, “where” and “what will be”. Provides predic-tions and has both testable propositions and causal explanations.

Case studies, surveys, experi-ments, the grounded theory approach, quasi experiments, statistical analysis and field studies

V. Design and action

Says “how to do something”. The theory gives explicit prescriptions (e.g., methods, techniques, principles of form and function) for constructing an artifact.

Action research, case studies, systems engineering

Table 2. A taxonomy of theory types in information systems research combined with common research approaches (Gregor, 2006).

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Theories are abstract representations including constructs and relationships among these constructs (Doty and Glick, 1994). Means for representing the theory could be for example words, mathematical terms and diagrams. The constructs could be of different types, such as observational (real) or theoret-ical (nominal). Common to all types of theories are also statements about relationships among the constructs such as associative, compositional and causal as well as the scope specifying the degree of generality of the state-ments, such as some, many and never. Some theory types also include state-ments about causal explanations, testable propositions and prescriptive statements.

Research Approaches in IS Research In this thesis, multiple research perspectives and research approaches are used to develop theory. When studying different phases of the regulative cycle, different research perspectives are appropriate. During the solution design and solution implementation design research is most appropriate, while during the knowledge building phases, implementation evaluation and design evaluation, a positivist or interpretive research perspective is most appropriate. The differences between these three perspectives are summa-rized in table 3. Research Perspective Basic Belief Positivist Interpretive Design Ontology A single reality.

Knowable, probalis-tic

Multiple realities, social-ly constructed

Multiple, contextually situated alternative world-states. Socio-technologically enabled

Epistemology Objective, dispas-sionate. Detached observer of truth

Subjective, i.e. values and knowledge emerge from the researcher-participant interaction

Knowing through making: objectively constrained con-struction within a context. Iterative circumscription reveals meaning

Methodology Observation, quan-titative, statistical

Participation, qualitative. Hermeneutical, dialec-tical

Developmental. Measure arti-factual impacts on the compo-site system

Axiology: what is of value

Truth: universal and beautiful; prediction

Understanding: situated and description

Control; creation; progress (i.e. improvement); understanding

Table 3. Comparison of different research perspectives common in information systems science (Vaishnavi and Kuechler, 2004).

In this thesis, research is conducted from all three perspectives. This is moti-vated by the study of phenomena in all four phases of the regulative cycle, figure 5.

Positivist Approach to IS Research According to the positivist research view, the world is an objective reality that a researcher can formulate testable theories about. In quantitative posi-

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tivist research, theories are usually tested using statistical methods. In gener-al there are four choices to be made regarding quantitative positivist re-search: type of research, general research approach, data collection technique and data analysis technique. There are two types of research: exploratory and confirmatory. In the first type the researcher wants to find out something about the real world and in the second type he or she wants to confirm some-thing about the real world, e.g. the relationship between two constructs. There are several types of general research approaches to choose from, e.g. field studies, field experiments and lab experiments. Data collection tech-niques could be for example survey, objective measurement and interview. Finally, data analysis techniques could be for example regression analysis and factor analysis.

The positivist perspective has long been the main research paradigm in physics and life sciences. When researchers began to pay attention to so-cial phenomenon, such as organizations and how individuals function within these, they were greatly inspired by this perspective. Auguste Comte (1798-1857) was one of the first to use this approach in social science and his ulti-mate goal was to establish a society based on scientific principles (Babbie and Mouton, 2001).

Positivism was critiqued and adjusted by Karl Popper (1959) in what is often referred to as postpositivism. Postpositivism is a stance where hu-man knowledge is based on conjectures or hypotheses which can be refuted through further investigation and that theory should be tested on the basis of its predictions. If the test falls out in favor of the theory then it corroborates the theory, i.e. it strengthens the theory. If the results of the test contradict the prediction then the theory is refuted. Therefore it is important that theo-ries are testable. According to Popper (1963) theories should also include risky predictions. In addition not all tests count. Tests need to be genuine attempts to falsify the theory. According to Popper, Einstein’s theory of rela-tivity is an example of “true” science, while for example astrology is consi-dered a pseudo-science.

Positivism is the main perspective used in IS-research (Orlikowski and Baroudi, 1991) which is probably caused by IS as a field of study grew out of the more technical discipline of computer science (Baskerville et al, 2002). A second reason is that researchers in IS often have technical back-grounds in for example engineering, physics and mathematics (Pather and Remenyi, 2004).

Interpretive Approach to IS Research From the interpretive perspective, the world is not necessarily one objective reality but multiple, socially constructed realities. Knowledge about these realities is developed through interpretation of the meanings participants assign to them (Orlikowski and Baroudi, 1991). The researcher attempts not to impose his or her a-priori understanding of the phenomenon studied but to

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understand the deeper structures of the phenomenon given by participants in a certain setting. However, the interpretive perspective acknowledges that the researcher is part of the investigation and will affect the end results. Therefore, the researcher’s reflections on the research process could be part of the results. The researcher does not attempt to generalize the results from one setting onto a population, rather he or she uses the results to inform other settings.

The methodology used in interpretive research is often qualitative and includes interviews and field studies (Lillis and Mundy, 2005).

The quality of research in this perspective depends on how data is collected and how the analysis of collected data is conducted. To judge the quality of research Lincoln and Guba (1985) propose the following criteria: credibility, dependability, transferability and confirmability. Credibility re-fers to that the results of the inquiry are believable and understandable from the eyes of the participants. Dependability means that the researcher shows that the process of research is logical and clearly documented. Transferabili-ty refers to which degree results can be generalized and transferred to other contexts. Confirmability relates to how well the results can be confirmed by others.

Design Science in IS Research Design research is an area within the IS-field that intervenes to create alter-native futures instead of studying the past to discover truth (Purao, 2002). Design research differs from positivist and interpretive research in terms of ontology and epistemology which affect the methodology used for conduct-ing research. The ontology of design research is evolutionary and comple-mentary compared to the single reality of positivist research (Purao, 2002). Through the design of artifacts multiple world states could be created. The epistemology of design research is “knowing through making” (Vaishnavi and Kuechler, 2004, p. 6). Meaning is revealed through design and circum-scription. However, during the design process the research perspective of the researcher shifts towards positivist (Vaishnavi and Kuechler, 2004). When the artifact design becomes more stable, after a number of iterations, the researcher becomes an observer that compares it to the predictions made in the abductive phase of the research process (see figure 4). The observations could then, through circumscription, form the basis for a new design cycle. Feyerabend (1963) claimed that a good empiricist should encourage specula-tion and invent alternatives, but when the theory in question has received sufficient confirmation it must forget its metaphysical past and become ob-ject to empirical argument.

The validity of design research relies on the researcher’s ability to demonstrate its contribution beyond market relevance (Purao, 2002). Vaish-navi and Kuechler, 2004 propose that design research is distinguished from design by the production of interesting (to a community) new knowledge.

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According to Hevner et al. (2004) and their guideline for research contribu-tion, effective design-science research must provide clear and verifiable con-tributions in the areas of the design artifact, design foundations, and/or de-sign methodologies.

Figure 6. A process model for design research, based on Vaishnavi and Kuechler

(2004).

According to Takeda et al. (1990), the process for design research includes five steps as shown in figure 6. Design research is problem centered and the research process is a learning cycle where solutions to a problem is tested and refined after evaluation. Through circumscription, knowledge built dur-ing the design and evaluation of an artifact is fed back to the process to pro-mote better designs. In the first step, Awareness of problem, the problem is identified. The problem could be identified in a number of ways. In the second step, Suggestion, a solution to the problem is suggested. The sugges-tion is based on abduction of the knowledge base of the problem area. Dur-ing development artifacts are built. The artifacts can be constructs, models, methods and instantiations and better theories (March and Smith, 1995; Ros-si and Sein, 2003; Purao, 2002). Artifacts are then evaluated and finally con-clusions are made. Throughout the entire process knowledge could be gener-ated and circumscribed.

Awareness ofProblem

Suggestion

Development

Evaluation

Conclusion

Abduction

Deduction

LogicalFormalism

ProcessSteps

KnowledgeFlows

Operation andGoal Knowledge

Circum-scription

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DSRM – Design Science Research Methodology In a recent effort, Peffers et al. (2007) synthesize a process model called DSRM, see figure 7, for design research based on earlier models including Takeda’s model in figure 6 (Takeda et al., 1990).

Figure 7. A process model for design research based on Peffers et al. (2007).

Peffers’ model includes some new process elements compared to Takeda’s model. In Peffers’ model the objectives of the solution is made explicit. It also separates demonstration as single acts from more formal evaluations. In addition it advocates the needs for communication to diffuse the new know-ledge. Maybe this last element is the greatest difference between Peffers’ and Takeda’s models. Takeda’s model was presented in 1990 while Peffers’ almost 20 years later. During that period, the IS discipline has strived to balance rigor in research with relevance to IS practitioners. Benbasat and Zmud (1999) argue that IS research should be conducted to serve IS-professionals. Through their research findings, academicians provide new concepts that can change the perceptions and mental models that practition-ers use in their professional lives. Therefore communication and scholarly publications become essential instruments. In addition to scholarly publica-tions, as pointed out by Peffers et al. (2007), professional publications are important instruments for communication.

Methodological Choices In this thesis, positivist, interpretive and design approaches are used and a number of methodological choices have been made, see table 4. A positivist approach is used for research objective 1 and 2, while for research objective 3 and 4 a design approach is used. In addition, an interpretive approach is used for objective 2. The reason for applying different approaches is that for objectives 1 and 2 the aim is to discover truth, while for research objective 3 and 4 the aim is to develop artifacts to improve current states of reality. In the following, the choices made in regards to data collection are presented for each research objective. The choices vary somewhat in character between

IdentifyProblem

and Motivate

DefineObject-ives of a Solution

Design and

Develop-ment

Demon-stration

Evalu-ation

Commu-nication

Problem CenteredInitiation

ObjectiveCenteredSolution

Client/ ContextInitiated

Design and Development

CenteredInitiation

Possible Research Entry Points

Process Iteration

Nominal Process Sequence

Infe

renc

e

Theo

ry

How

to K

nowl

edge

Met

rics,

Ana

lysi

sKno

wle

dge

Disc

iplin

ary

Know

ledge

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positivist and design approaches. For positivist approaches the choices focus on data collection while for design approaches the choices regard design objectives, design choices and technology selection. Research objective Research Ap-

proach Research Strategy Data Collection and

Analysis 1. Develop a model for

explaining the level of adoption of extended ERP among small and medium sized compa-nies.

Positivist Survey Enquiries, Statistical

2. Identify patterns and implications of business models for service oriented ERP.

Positivist , Inter-pretive

Comparative field study

Enquiries (open), Interviews, Quantitative, Qualitative

3. Establish principles for the design of local gov-ernment m-services.

Design Case study, Survey Interviews, Enquiries, Observations, Qualita-tive, Quantitative

4. Develop a method for benefits evaluation of in-formation systems with integrated services.

Design Case study Interviews, Group Discussions, Qualitative, Quantitative

Table 4. Summary of choices made in regards to research approach, research strat-egy, data collection and analysis.

Research objective 1 The first objective was to develop a model for ERP adoption. The model was developed in two steps. In the first step, the level of adoption was measured and in the second step a model for explaining the level of adoption was de-veloped. A positivist approach was taken since the objective was to measure, compare and explain the level of adoption. The research strategy chosen was survey to provide a large enough sample to draw reliable conclusions regard-ing the level of adoption. An enquiry form used in two earlier studies was chosen to provide comparable results for the first step of the investigation. A total of 150 companies were contacted which resulted in 53 usable res-ponses. The level of adoption was calculated using statistical analysis me-thods and compared to the two earlier studies. The results showed that the level of adoption among small and medium sized enterprises were compara-bly low. Several explanations were suggested of which consulting compe-tence was one possible explanation. In the second step, the level of consult-ing competence was measured. An enquiry form was developed to measure the level of extended ERP competence among consulting firms. 100 consult-ing firms were contacted which resulted in 38 usable responses. Statistical methods were used to measure and analyze the level of competence.

Research objective 2 The second objective was to identify implications and design of service oriented business models of enterprise systems. The approaches taken were

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positivist and interpretive. We assumed there is a market for enterprise sys-tems representing economic value for suppliers, consultants and using organ-izations. These actors apply business models to provide value to their cus-tomers and organize their own operations effectively enough to be profitable. It is also assumed that these business models can be described and compared between actors. Based on the descriptions, analytic theory about business models for enterprise systems could be developed. The reason for taking this approach was to provide simple means for organizations to position them-selves on the market for enterprise systems and to evaluate the implications of this position in terms of opportunities and challenges.

It was decided to use comparative field study methodology for data collection and analysis. 22 cases of business models were studied, including more than 40 users and suppliers of service oriented business models. Cases were selected based on the following criteria: ­ Service content similar to parts of or full functionality of a conventional

ERP system. ­ User organizations of different size since smaller organizations are

thought to adopt ERP-as-a-service more easily than large organizations. ­ User organizations from different industries since ERP adoption vary

between industries. ­ Supplier organizations with different backgrounds: suppliers new to the

ERP market; established ERP suppliers and established consulting firms which offer ERP-as-a-service complementary to consulting services.

An open enquiry form was developed to collect data about the business models used in each of the 22 cases. In addition, interviews were used as a complementary method of data collection. To design patterns of service oriented business models, attributes of the business models were compared and clustered. Furthermore, implications were identified by interpreting statements about opportunities and challenges with service oriented business models for ERP found in the cases.

Research objective 3 The third research objective is to establish principles for the design of local government m-services. This research objective was addressed through a case study in which a novel m-service was designed. The main reason for choosing a design oriented case study as primary research strategy was the lack of local government m-services. For example, at the time for the study there were no m-services offered by any of the Swedish municipalities, de-spite the high level of e-Government readiness and the high level of mobile penetration in Sweden. It would have been possible to theoretically establish principles for the design of such services using literature review alone, but m-Government is an emerging phenomenon and the lack of empirical data made this difficult.

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The choices made during each step of the design process are summa-rized below following the Design science research model (Peffers et al, 2007). ­ Identify problem and motivate. Problem identification and motivation

was derived through interviews with leading Swedish e-Government specialists.

­ Define objectives of a solution. The objectives of the solution were defined based on a municipal case study of a process for complaint and problem reporting. Complaint and problem reporting was selected since it is a widely used, uncomplicated municipal e-service (IT service) where both citizens and employees would benefit from increased mobil-ity. In addition, complaint and problem reporting is one of the most common e-services offered by Swedish municipalities.

­ Design and develop. The principles include design principles and prin-ciples for action (challenges). They were developed through a combina-tion of literature review and case study including the development of an m-service for a process of municipal complaint and problem reporting.

­ Demonstration. The principles were demonstrated through the imple-mentation of the m-service, first in a prototype environment and then in the operational environment of Upplands-Väsby municipality. The pro-totype environment was designed to imitate the IT environment of a municipality. Upplands-Väsby was selected based on an established re-lationship with Stockholm University.

­ Evaluation. The principles were evaluated using an enquiry, group dis-cussions, interviews, observations and measurement of service utiliza-tion.

Research objective 4 The fourth research objective is to develop a model for benefits evaluation of information systems with integrated services. The approach used for this objective is design science. The reason is that we intend to design a new method for benefits evaluation by combining two established approaches.

By designing the method the objective is to improve management of investments in e-government initiatives. The design objectives were selected due to a lack of benefit analysis models that take the whole network of actors into account when evaluating e-government initiatives.

The choices made during each step of the design process are summa-rized below following the Design science research model (Peffers et al, 2007). ­ Identify problem and motivate. The problem was identified through

review of literature that identified the problem and suggested possible solutions.

­ Define objectives of a solution. The objectives of the solution were defined based on a municipal case study of child care administration.

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Child care administration was selected since it is a complex municipal process involving several internal and external actors.

­ Design and develop. The method was designed by combining two available models: Peng and Value modeling. These two models were selected as they are well established and offer different views on how to identify and valuate benefits and costs.

­ Demonstration. The municipality of Järfälla was selected as a case for demonstrating the method. The reason was that Järfälla represented an opportunity to evaluate an ongoing e-government initiative. The estab-lished working relationship between the researchers and the municipali-ty made it also convenient to test the method. Interviews, group discus-sions and measurement of costs and benefits of child care administra-tion were used to collect data about the case.

­ Evaluation. The method has not yet been empirically evaluated but in-formed arguments have been used to show its viability.

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Approach and Contribution

In this section, each of the four research objectives is discussed in relation to the regulative cycle and the type of theory developed, see table 5. Research objective Phase in Regulative Cycle Theory Type 1. Develop a model for explaining the

level of adoption of extended ERP among small and medium sized companies.

Phase 1 Analysis, Explanation

2. Identify implications and design patterns of business models for service oriented ERP.

Phase 1, 3 Analysis, Explanation and Prediction

3. Establish principles for the design of local government m-services.

Phase 1, 2, 3, 4 Design and action

4. Develop a method for benefits evaluation of information systems with integrated services.

Phase 1, 2, 3 Design and action

Table 5. A summary of research objectives, theory type and research approach.

Objective 1 - Develop a model for explaining the level of adoption of extended ERP among small and medium sized companies Implementations of the artifact “Extended ERP” is evaluated in a number of companies. Hence, the study refers to the first phase of the regulative cycle where the researcher intends to build knowledge about the world as it is. Two types of theory are developed in two separate steps: Analysis and Ex-planation.

In the first step an analysis of the level of adoption of extended ERP among small and medium sized companies was carried out. It was found that the use of extended ERP is low among SMEs. Most companies have started to use ERP to integrate functional areas, but few companies have adopted extended ERP. The situation can be described as SMEs are using ERP sys-tems as advanced accounting systems. A few hypotheses are made to explain the low level of adoption.

In the second step, the hypothesis that the low level of adoption is caused by a low level of consulting competence is investigated. The results give some support for the hypothesis. ERP consultants tend to have a tech-

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nical focus on ERP and rely heavily on the support and maintenance of old installations. Hence, they are caught in a negative spiral where extended ERP knowledge is developed rather slowly.

Two articles were written to communicate the results from the first research objective. The first article covers the first step and the second article the second step.

This research was conducted in conjunction with the research project Unity. Unity was a “node for cooperation” (Swedish: samverkansnod) to increase the adoption of extended ERP among small and medium sized com-panies in the Stockholm region. Unity was active between 2003 and 2005 and was financed by Teknikbrostiftelsen, a foundation established by the Swedish Ministry of Enterprise, Energy and Communications, with the pur-pose to encourage cooperation between universities and regional SMEs. Unity was a joint effort of KTH and the Swedish Computer Association.

Objective 2 - Identify implications and design patterns of business models for service oriented ERP A number of instances of the artifact “Service oriented business model of enterprise systems” are studied, either as designs or as implementations. Hence the study refers to both the first and the third phase of the regulative cycle where the researcher intends to build knowledge about the worlds as it is. The results include descriptions of 22 business models, two business model patterns and a framework for implications of ERP-as-a-service. The type of theory is analysis, explanation and prediction. It increases the under-standing of what service oriented business models for enterprise systems are and their implications for users and suppliers of service oriented ERP.

Two articles were written to communicate the results from the second research objective. In the first article six of the field studies (cases) are described and analyzed and in the second article implications of ERP-as-a-service are identified and given casual explanations.

Service oriented business models for enterprise systems was a re-search project aimed at identifying emerging business models for ERP. The project was funded by Vinnova and 15 project partners. The project partners consisted of user organizations, ERP suppliers and ERP consultants. The project was active between 2008 and 2011.

The project was part of Vinnova’s program "Sustainable business models for e-services”. The purpose of the program was to offer companies and public organizations tools to modernize and streamline their service delivery by e-services. A further aim was to develop models that both pro-vide greater standardization in order to obtain productivity gains and the possibility of renewal of e-service design.

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Objective 3 - Establish principles for the design of lo-cal government m-services Two versions of an artifact for local government m-services were designed. The study refers to all four phases of the regulative cycle where the starting point is an implementation evaluation of an e-service for complaint and problem management. Based on this evaluation, the following design objec-tives of a corresponding m-service were formulated: ­ Shorten lead-time from detection to report ­ Simplify reporting ­ Decrease redundancy in reporting Initially a prototype was designed, demonstrated and evaluated. Based on this design evaluation, the first version of the m-service was designed for a municipality. Some limitations regarding the use of positioning information were made for the first design. The design was implemented and several implementation evaluations were made regarding functionality, usability, technology and benefits. In a second version of the m-service, positioning was included in the design. The second version was demonstrated and eva-luated but not implemented in the municipality.

Theory of the type design and action was developed with design principles for municipal m-services. The principles include a minimum of information, transactions and graphics. In the process of transforming an e-service for complaint and problem management into an m-service several challenges were faced: slow m-service technology, available e-government infrastructure inadequate for m-services, non-uniform graphical representa-tion, insufficient XML form used in e-service, lack of formal addresses and unsatisfactory level of user acceptance.

Three articles were written to communicate the results from the third research objective: an IS-professional article, a conference article and a jour-nal article. The journal article, which is the most comprehensive article of the three, is included in this thesis.

The m-service was developed in a research project for stimulating the development of local government e-services, called ESAM (E-Society and business communication). ESAM was active between 2006 and 2008 and was financed by the Swedish Governmental Agency for Innovation Sys-tems (Vinnova). Two Swedish municipalities were involved in the project, Upplands-Väsby and Orust. A number of e-services was developed and eva-luated in terms of usability, benefits and technical architecture.

ESAM was a project within Vinnova’s program “E-services in pub-lic administration”. The purpose of the program was to achieve an innova-tive development of public e-services for companies.

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Objective 4 – Develop a method for benefits evaluation of information systems with integrated services A method was designed to improve benefits evaluation of information sys-tems with integrated services. The study refers to the first, second and third phase of the regulative cycle. Design and action type of theory is developed.

The growing use of ICT solutions for improving the public sector has created a need for valuating e-government initiatives. A number of me-thods for this purpose have been developed, but they are typically restricted to analyzing the benefits and costs of only one single actor. In contrast, the proposed method takes a broader view and takes into account entire net-works of actors. The purpose of the method is to produce a well-grounded and easily understandable valuation of an e-government initiative that takes into consideration the benefits, costs, and interrelationships of all actors con-cerned. The basis of the method is a combination of enterprise modeling techniques, in particular goal modeling and value modeling, with an estab-lished method for cost benefit analysis. The method is designed to be inclu-sive, easily understandable, and visual. These properties will support accu-rate and unbiased valuations as well as improved innovation in the develop-ment of e-government initiatives.

Three articles were written to communicate the results from the fourth research objective. The first article includes a description of the me-thod and a demonstration of it through a case study of one administrative sub-process and one e-service in a municipality. In the second article the method is also described but the case study includes a complete administra-tive process and four e-services. In the third article, the method is further developed including the definition of phases, activities and output.

Open social e-services (ÖST) is a research project with a goal to de-velop more open, accessible, service oriented and professional social servic-es in local government. Local government social services comprise of care for elderly and disabled citizens. The objectives are to establish new e-services, to define “open social e-service” and to promote integrated admin-istrative processes. The project is funded by Vinnova and is active between 2009 and 2011.

Open social e-services is part of Vinnova’s program ”Innovativa an-vändare i en samverkande e-förvaltning”. The purpose of the program is to promote user-centric development of new and successful business models, organizational solutions and digital services in public administration.

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Conclusion and Future Research

In this thesis, we set forth to analyze how organizational effectiveness is improved through the use of standard application packages as well as IT services. The contribution includes theory for analysis, explanation and pre-diction, or more specifically: ­ A model for explaining the low level of adoption of Extended ERP

among small and medium sized companies. ­ Patterns and implications of business models for service oriented ERP. ­ Principles for the design of local government m-services. ­ A method for benefits evaluation of information systems with integrated

services. To practice, the thesis provides new concepts that can change the percep-tions and mental models that IS-professionals, such as management consul-tants, use in their professional lives. In particular, it provides implications, design principles, a model and a method for the use of services in conjunc-tion with standard applications packages in public and private sector organi-zations. The model increases the understanding for how small and medium sized organizations adopt extended ERP and the important role consultants have in the process of adoption. The patterns of service oriented business models for enterprise resource planning increase the understanding of how service suppliers can take different stances on the ERP market and develop competitive offerings. The implications provide practice with a framework for evaluating sourcing alternatives to installing ERP on premises and a guide to risk management when implementing ERP-as-a-service. The design principles may help both government officials and IS suppliers to further develop government services and use mobility to improve service design as well as government operations. The proposed method for benefit evaluation increases the understanding for how benefits and costs are distributed among different actors during e-government initiatives. The method provides a structured approach to evaluating and controlling e-government initiatives.

Future Research Future research based on the work of this thesis could take many directions. It is based on the development of information systems using standard appli-

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cation packages and IT services in private sector organizations as well public sector organizations. We are beginning to see how the combination of stan-dard applications and IT services change how information systems are being built and delivered. Functional content and systems architecture are chang-ing as well as development methods and ecosystems of users and suppliers. All these areas are candidates for future research and pose several interesting questions to researchers. ­ How is ERP adoption affected by service orientation? ­ How does service orientation affect implementation methods for stan-

dard application packages? ­ How does service orientation affect enterprise architecture? ­ How will service orientation affect the role of consultants in the ERP

market? ­ How should a fully developed e-Government look like, e.g. an “e-

municipality”, in terms of requirements on e-services, business models and back-office systems?

­ What is the value of a fully developed e-Government? ­ What are the requirements on an m-Government platform?

How is ERP adoption affected by service orientation? The opportunities provided by ERP-as-a-service suggest that service orienta-tion could lead to increased adoption of ERP among small and medium sized enterprises. Therefore it would be interesting to investigate the level of ERP adoption in light of service orientation and if there are any changes in what functionality is being used compared to previous studies. To contribute with new theory it is suggested that analytic and explanatory theory is developed through a survey to small and medium sized enterprises in different indus-tries and countries.

How does service orientation affect implementation methods for standard application packages? Contemporary implementation methods for standard application packages, such as ERP, center on the life cycle of a locally installed software package. Through service orientation, the lifecycle may include several generations of services from different suppliers that will change over time. The activities necessary for integrating and orchestrating services to extend the capabilities of the ERP is not reflected in today’s implementation models. The manage-ment of the transition period when the using organization switches between service providers is also a life cycle phase currently not reflected in available lifecycle models. To contribute with new theory in the area of implementa-tion it is suggested that design and action theory is developed through the design of an implementation method for ERP-as-a-service. In order to build

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a foundation for design objectives of such an implementation method an interpretive study of requirements from user organizations, consultants and suppliers is also suggested.

How does service orientation affect enterprise architecture? So far, it is not well understood how enterprise architectures of using organi-zations are affected by service orientation. Few organizations will have the capabilities and financial resources to quickly establish service oriented ar-chitectures. For most organizations, the transformation will take place grad-ually which means that on-premise standard applications will exist alongside with IT services. How does this affect user organizations’ enterprise archi-tectures? What should good enterprise architectures look like providing they should be suitable foundations for integrating services from different suppli-ers and on the same time maintain a core of standard applications? It would therefore be very interesting to compare the views and requirements from leading ERP suppliers. To contribute with new theory in the area it is sug-gested that explanatory and prescriptive theory is developed through a com-parison of the requirements of leading ERP suppliers and ERP-as-a-service suppliers. The inquiry could include both an interpretive and a positivist approach.

How will service orientation affect the role of consultants in the ERP market? Today, consulting services make up two thirds of the ERP market. Consult-ing services include services related to selecting, configuring, implementing and maintaining ERP systems. Due to the impact ERP-as-a-service has on the implementation lead time and the maintenance of ERP, the role of con-sultants will change. It would be very interesting to investigate how large these changes will be and ultimately the effects on consulting revenues. To contribute with new theory it is suggested that explanatory and prescriptive theory is developed through an assessment of the changes in implementation methods above. Implementation methods explain the interaction between actors on the ERP market and could serve as a foundation for reasoning about changes in roles.

How should a completely integrated e-Government look like? Today, the development of e-Government is advancing rather slowly and there are large differences in direction, adoption, scope and technical capa-bilities between different authorities and municipalities, despite similarities in responsibilities and operations. It would therefore be very interesting to investigate how a completely integrated e-Government should look like.

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Such a vision would be very valuable as high level requirements for the de-velopment of the necessary information systems. To contribute with new theory it is suggested that design and action theory is developed by establish-ing, evaluating and communicating such a vision.

What is the value of a completely integrated e-Government? Due to the organic development of e-Government, there is no clear picture of the value of a completely integrated e-Government. It would therefore be interesting to conduct such an investigation. To contribute with new theory it is suggested that a model is developed based on the vision above.

What are the requirements on an m-Government platform? Several governments stimulate the development of e-government by offering e-government platforms. For example, Swedish municipalities have used the Infraservice agreement to call off standard solutions from selected vendors. However, there is no equivalent for promoting the development of m-Government. Therefore, it would be valuable to investigate the requirements and potential value of an m-Government platform. It is suggested to develop design and action theory to construct and evaluate such a platform.

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