Title: Enterprise Systems contracting: developing and testing a model of divergent approaches in the service and manufacturing sectors

Authors: Ned Kock, Jacques Verville

Addresses: Department of MIS and Decision Science, Texas A&M International University, 5201 University Boulevard, Laredo, TX 78041, USA. ' Department of MIS and Decision Science, Texas A&M International University, 5201 University Boulevard, Laredo, TX 78041, USA

Abstract: Virtually all Enterprise Systems (ES) implementation projects start with a purchase contract. Yet there has been little research on ES contracting approaches, and how those approaches relate to the previous literature on productivity gains from spending on those systems. Building on the IT productivity paradox notion, this paper proposes a model of divergent ES contracting approaches in the service and manufacturing sectors. Two main ES contracting approaches are defined – the revisionist-adversarial approach, associated with ES contracting elements geared at potentially short-term and change-oriented relationships with ES vendors; and the preservationist-cooperative approach, associated with ES contracting elements aimed at mutual cooperation over the long run with ES vendors. It is proposed that service sector organisations generally display a preference toward the revisionist-adversarial approach, whereas manufacturing sector organisations generally display a preference toward a preservationist-cooperative approach. These propositions, which are aligned with the IT productivity paradox phenomenon, are supported by a survey of 116 organisations.

Keywords: survey research; partial list squares; enterprise systems; information technology; IT contracting; service sector; manufacturing sector; IT productivity paradox; purchase contracts.

DOI: 10.1504/IJMP.2006.010151

International Journal of Management Practice, 2006 Vol.2 No.2, pp.127 - 143

Available online: 23 Jun 2006 *

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