Study on Principal Agent Model and Organizational Mechanism Design for ERP Project
|School||Shanghai Jiaotong University|
|Keywords||Implementation of ERP Project Asymmetric Information Principal- Agency Organization structure|
Due to fast-growing competitions between enterprises, information technology has become an important tool in improving competitiveness. Thus, Enterprise Resource Planning (ERP) which is a combination of advanced management concepts, tools, technology, and a variety of integrated functions has been involved into a major application product of its information. However, for a long time, the implementation of ERP has not been very successful because of its technical difficulties, complicated procedures, large injection etc.In the implementation, the institutional mechanisms of project in the effective asymmetric information environment have a significant impact to resolve various types of risk and improve the success rate of implementation. The institutional mechanism of project needs in-depth study and make to solve both in theoretical and practical side.This thesis concludes the studies of history, and analyzes the actual situation of asymmetric information in China and the core risks of asymmetric information. This thesis uses Principal-agent model to analyze ERP project implementation. It points out that traditional project organization and ERP implementation process will lead to net loss and improper behavior from the consultant company due to the existence of asymmetric information, and analyzes the causes and forms of such net loss and improper behavior. It also suggests the creation a method of on-demand project organization structure and a new ERP implementation process to reduce risks and improve success rate, as well as provides example cases to demonstrate the effectiveness of the on-demand project organization.As shown above, this thesis suggests a new method of on-demand project organization definition based on the analysis of the characteristics of ERP implementation. It focuses on eliminating information asymmetry of ERP implementation in order to reduce its risks and improve the success rate.