A Case on ERP Custom Add-On in Taiwan

Abstract

Enterprise Resource Planning (ERP) systems are complete and complex information systems that consist of firms’ business best practices. This study examines an ERP custom-made add-on/bolt-on system of a medium-sized computer memory producer with global business units around the world, and investigates implications of the customized system from the perspectives of system fit, user attitude and acceptance, and subsequent maintenance and upgrade costs. The authors adopted a rich descriptive case study method and conduct a cost and benefit analysis prediction of subsequent maintenance and upgrade costs on the system. The empirical data indicates that although developing an add-on may create integration problems and/or compatibility problems with the ERP system, in overall, the system users accept the system better as the add-on helps in improving their job performance. Also, even though having a custom development does create additional costs in this case study, this does not necessarily cost more than not having it. Instead, having an idiosyncratic system may actually transfer a lot of benefits to the company. This is the first empirical study showing why custom development is favored by SMEs. These results and implications can be valuable to IT managers and top management when making ERP customization decisions.