Enterprise Resource Planning Systems for Project-Based Firms: Benefits, Costs & Implementation Challenges

Enterprise Resource Planning (ERP) systems are configurable enterprise-wide
information system packages that integrate information and information-based processes
within and across functional areas in an organization. They have been widely adopted in
many organizations and accepted as a de facto industry standard for the replacement of
legacy systems. This paper analyzes and presents the costs and benefits of ERP systems
for project-based industries, which have lagged behind other major industries in adopting
ERP systems due to their project-centric nature and the high stakes involved in ERP
implementation. The challenges during the process of ERP implementations are also
identified as part of the effort to understand the implied costs of an ERP system. The
evidence of the costs and benefits are drawn from previous studies and the analysis of the
prevailing working practices in project-based firms. The classification of the costs and
benefits constitutes a cost and benefit taxonomy which can be used to enable executives
in project-based firms to make informed decisions on their ERP system investments.

Keywords: Enterprise Resource Planning (ERP) System, Cost-Benefit Analysis, Projectbased
Organizations, System Implementation.