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Aalborg University – Department of Civil EngineeringManagement in the Building Industry1 IntroductionIntroduction of new technologies and information systems (IS) are often occurrences in organizations. Theycreate change movements inside the organizations on different plans and different organizational levels.Even though the motivations for such implementations are diverse, they must always be derived from astrategic intent guiding the enterprise, where the need for adequate strategic planning is essentialthroughout all life cycle phases of the new IS, in order to ensure its success. Large enterprises havetechnological needs which are proportional to their size and which need to be satisfied for the enterprise toreach its maximum capacity and not experience production or even administrative bottlenecks. As businessesgrows larger, organizations have increasing needs for optimization, standardization and better integration oftheir departments and business units. This is achieved through the processes which links them.The advent of enterprise resource planning (ERP) software in the manufacturing sector in the 1990s, followedby its successful and wide adoption in this sector, has popularized this enterprise system to other markets aswell, triggering implementation attempts by many companies fascinated by its capabilities. However, the ERPimplementations are filled with pitfalls, and many such attempts have led to total failures, with the lowsuccessful implementation rate continuing up to date. The construction sector has been lagging other sectorsin many regards, including technology. This creates the opportunity to investigate the ERP topic in theconstruction sector. This study chooses to focus on large1 construction contractor companies in Denmark,with which the student has experience with on both theoretical and practical level.Elements such as organizational structure, communication, top management support and commitment, userbehavior, system selection criteria, process mapping and business process reengineering, just to name a few,each contribute to some degree to the successful implementation of ERP systems. These elements areinvestigated in chapter 2, which consists of a broader literature review. The literature review is opened byintroductory chapter about ERP – a brief ERP history, ERP critical success factors (CSF) and ERP life cyclephases introduction. The remaining part of literature study is divided into sections based the ERP life cycledimensions as follows: Change management, People, Process and Product. Each of these sections discussesERP from a different point of view, covering the topic from all perspectives. Chapter 3 consists of the study’sproblem identification and statement. This chapter refines the broader literature review by identifying a topicrelevant to both the student and from a research point of view. It establishes the fact that the processdimension is a major topic in ERP research and that business process reengineering (BPR) will be investigatedcloser in the study. This leads to the definition of a research question (RQ) and three working questions (WQ),which support this research question. The research question to be is answered is:RQ1. What is the link between business process formalization and ERP implementation readiness?The three research questions that will help answering the main research question are:WQ1. Are companies required to undertake AS-IS and TO-BE process mapping in order to achieve ERPimplementation readiness?WQ2. How does the process maturity level corelate with the companies’ ERP implementation readiness?WQ3. Can ERP implementation readiness be achieved through varying degrees of BPR?1Based on European Comission SME classification environment/sme-definition en1

Aalborg University – Department of Civil EngineeringManagement in the Building IndustryLack of process formalization results in unpredictable and unstandardized processes, which are notsupported by a clear strategy, making companies embark on an unsure journey through their business life.Operating in such way also makes ERP implementation readiness uncertain. These are the topics which areinvestigated in this study. The practical process of moving from research topic identification to problemstatement is described in Figure 1. Chapter 4 covers the study’s research methodology, where the researchprocess is explained through the research framework and the reasoning for the different research decisionsis motivated for.Chapter 5 reports and analyzes the study’s primary data results – the interviews which were performed withthe four case companies and the third-party consulting company, all in Denmark. Individual narrative of eachcase company is performed, supplied with cross case comparisons of similarities and dissimilarities. Chapter6, the discussion chapter, reflects on the previous chapter and compares the qualitative data with theliterature review, aiming to answer the problem statement. Lastly, chapter 7 sums up the study, whilechapter 8 presents further study topics and areas.Stepno.Step actionTopic name(1)Identify main researchtopicEnterprise resourceplanning (ERP)(2)Refine main researchtopicProcess dimension(3)Identify critical topicwithin research subtopicBusiness processreengineering (BPR)(4)Identify focus points inthe problem statement(5)Formulate mainresearch question(6)Formulating workingquestionsProcess formalizationand mappingProcess maturityImplementationapproachResearch questionWorking questionWorking questionWorking questionFigure 1 – Research problem identification procedure2

Aalborg University – Department of Civil EngineeringManagement in the Building Industry2 Literature reviewIntroduction to enterprise resource planningEnterprise resource planning history and developmentThe development of enterprise resource planning (ERP) started in the 1960s, initially as inventory controlpackages, a tool used to aid the increasing automation in the manufacturing industry and followed by thesubsequent development of material requirements planning (MRP) and manufacturing requirementsplanning (MRP II) in 1970s and 1980s respectively, which represent the real technological foundations forcurrent ERP software (Rashid, et al., 2002). In 1990, ERP was introduced, being much broader and extensivein scope than MRP and MRP II, which only focused on production related processes, whereas ERP focuses onan organization’s core business processes, connecting and integrating the processes across the departments,while sharing a common set of data (Elragal & Haddar, 2012).ERP systems are business applications, desktop- or web-based, which support the informational needs of anorganization and deliver benefits linked to: reduction in cycle time, faster information transactions, improvefinancial management and interdepartmental collaboration, e-commerce enhancement, making processknowledge explicit (Davenport, 2000). ERP systems deliver a wide variety of integrated business applicationsaddressed to, virtually, all business functions in an organization and promising to integrate these businessfunctions (Al-Nafjan & Al-Mudimigh, 2011). These business functions are traditionally are not linked to eachother and the free flow of information is possible between each function only with the aid of middlemanagers (Davenport, 2000).ERP challengesMost literature focuses on the implementation phase, while a lesser amount of studies investigates the otherlife cycle phases. There are good reasons for the literature to focus on the implementation phase – around90% of ERP implementations deviate from time and cost targets, while 70% of the ERP implementations fallbehind the expected benefits (Lee & Kim, 2016). However, this is not to say that ERP issues are solelyimplementation phase related. Many critical decisions are taken prior to actual implementation, in theadoption decision phase and acquisition phase. It is also on these phases this study focuses on. The ERPphases are discussed in section 2.1.3 – ERP life cycle phases.Computer Economics (2019) performed an analysis in 2019, where 249 IT organizations were interviewed,and where it was found for the second year in a row that ERP ranks last in terms of both return on investment(ROI) and total cost of ownership, as well as customer satisfaction, ERP being the only technology classifiedas High Risk/Low Reward (Figure 2). However, ERP represents a vital tool for doing business for mostcompanies and can be regarded as such as a necessary evil – an indispensable technology for managing thebusiness. In spite of these setbacks, companies have still continued to massively invest in ERP, with only ITsecurity technology, business and data analytics and Software as a Service (SaaS) ranking higher in terms ofrates of investment (Computer Economics, 2019). However, ERP software, just like building informationmodelling (BIM) are large complex sociotechnical ISs that consist of both technical and social parts (Mondrup,et al., 2012), and where the social part is just as important as the technical part in ensuring ERP success.Social part includes elements such as processes, organizational structure, change management etc.3

Aalborg University – Department of Civil EngineeringManagement in the Building IndustryFigure 2 – Technology Risk-Reward Analysis (Computer Economics, 2019)ERP life cycle phasesThe typical life cycle of an ERP system consists of six phases, starting with (1) adoption decision and followedby (2) acquisition, (3) implementation, (4) use & maintenance, (5) evolution and ending with (6) retirement(see Figure 3). In the adoption decision phase, top management decides to investigate the need of adoptingan ERP system which can enhance the company’s business and organizational performance. Systemrequirements, goals and benefits are also included. The acquisition phase consists of selecting the ERP systemthat fits best to the needs of the organization, selection of a consulting team which will assist the companyin the implementation phase, as well as the other phases. The implementation phase involves customizationof the ERP to meet the needs of the organization, as well as actual ERP roll-out. The use & maintenance phaseinvolve maintenance of the ERP system, as well as optimization and improvement work. The evolution phaseconsists of enhancement of the ERP system’s capabilities, addition of new modules (like customerrelationship management or project management), as well as integration with other unlinked systems. Theretirement phase involves the stage when the current ERP system becomes obsolete and requiresreplacement with a new IS (ERP or non-ERP) that better fits the business and organizational requirements ofthe organization (Esteves & Pastor, 1999).Esteves & Pastor’s (1999) define four ERP dimensions which can be researched – Change management,People, Process and Product (Figure 4). This study describes each of these dimensions but chooses to mergetogether the Change management and People dimension, due to their interrelatedness, as well as adding theStrategy with the Process dimension, due to their interrelatedness.4

Aalborg University – Department of Civil EngineeringManagement in the Building IndustryFigure 3 – ERP life cycle phases, based on (Esteves & Pastor, 1999)Change ma

introductory chapter about ERP - a brief ERP history, ERP critical success factors (CSF) and ERP life cycle . Aalborg University - Department of Civil Engineering Enterprise resource planning (ERP) Implementation Business process