Profitability risks in Enterprise Resource Planning projects from the vendor perspective

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This research proposal aims at advancing our understanding of how various risks affect the profitability of Enterprise Resource Planning (ERP) projects. ERP projects are particularly risky as they restructure core business processes of an organization. Hence, organizations typically contract specialized vendors to transfer the risks of conducting the ERP project. Specialized vendors exhibit greater experience and competencies that ensure the success and in turn the profitability of an ERP project. However, spectacularly failing ERP projects show that both practice and research lack a thorough understanding of the transfer of risks to the vendor. For the first time, this research proposal offers the unique opportunity to investigate the transfer of risks from the vendor perspective. The proposed research project has access to a unique data set that consists of longitudinal risk assessments, project reports, and profitability data of 1,188 ERP projects from a leading ERP vendor between 2004 and 2011.The research proposal focuses on developing a longitudinal model hat explains how risks affect the profitability of an ERP project from the vendor perspective. We complement a quantitative investigation by qualitative analyses. Research results will be continuously reflected with experts from the ERP vendor who have provided the data set. This approach facilitates to establish a richer understanding of how risks affect project profitability. We further complement this approach with a survey-based study of European ERP service providers to avoid any bias from studying a single provider only.The research proposal seeks to advance our understanding of risky projects such as ERP project by (1) studying risks in such projects for the first time from the perspective of a vendor, (2) triangulating quantitative and qualitative data on risks and profitability of ERP projects, and (3) adding a longitudinal dynamic perspective on the risk transfer between clients and vendors of ERP projects.