Enterprise System Implementations in Transition and Developed Economies: Differences in Project Contracting and Governance

Abstract

This research investigates and compares the process of Enterprise System implementation in transition economies and developed countries. It describes the practical aspects of the implementation of an Enterprise System based on the SAP applications suite. The propositions on the design of the contract and governance of the project are then derived from Transaction Cost Economy and Contract Theory. Based on a multiple case study in four projects, the similarities and differences in the contracting and governance of the Enterprise System projects in the transition economy and developed economies are examined, and the causes of those differences are explored. The results show that the projects in the developed countries tend to be performed in a more co-operative and benign way, while in a transition economy the approach is based more on a client-supplier, muscular way of managing the relationship, which causes additional problems during project execution, and higher transaction costs.

Keywords: ERP; SAP; project methodology; project contracting; consulting; long-term project relationship, project governance

JEL Classification: M15