Examining the Factors Affecting Project and Business Success of ERP Implementation

Examining the Factors Affecting Project and Business Success of ERP Implementation

Emad M. Kamhawi (Zagazig University, Egypt)
DOI: 10.4018/978-1-60566-146-9.ch001
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Abstract

Responding to the need for a better understanding of the factors that explain ERP systems implementation success, this chapter used a field study to collect data from managers working in Bahraini enterprises that use ERP systems to examine the influence of some selected factors on two perspectives: project and business success of such systems. Results support previous research findings in this area concerning the impact of factors such as project planning, organizational resistance, and ease of use on ERP project success metrics. Also the study results show that project planning; business process reengineering; and organizational fit have significant influence on business success metrics. However, no significant impact was found for some classical success factors such as top management support, technical fit, training, competitive pressure, and strategic fit on both project and business success. The chapter ends with implications for these findings and possible extensions for the study.
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Introduction

ERP systems have drawn much attention of many researchers and practitioners in the last two decades (Wagner et al., 2006; Ehie & Madsen, 2005; Beheshti, 2006). They have been considered as a shift in corporate computing (Sandoe et al., 2001; Davenport, 2000; Turban et al., 2005). The essence of this shift is twofold. Firstly, it helped replacing the firm’s many standalone applications that could not communicate with each other within the organization or externally with customers and suppliers, with large systems that facilitate enterprise-wide integration. Secondly, it stimulated organizations’ IT strategies to rely more on purchasing large applications software such as ERP systems, instead of in-house-built information systems. These packages offer general or universally applicable solutions that claim to embody “best practices” of business integration.

ERP systems could be defined as comprehensive software packages that seek to integrate the complete range of business processes and functions in order to present a holistic view of the business from a single information and information technology architecture (Gable, 1998). Among the most important attributes of ERP systems are their abilities to: automate and integrate an organization’s business processes; share common data and practices across the entire enterprise; and produce and access information in a real-time environment.

Having made substantial progress toward putting these packages in place, organizations began to work on realizing and extending the benefits from these systems. In a field study by Market Data Group, it was found that main perceived benefits of implementing ERP systems are: standardizing or improving business processes; lowering costs; solving Y2K problem of the legacy systems; and accommodating corporate growth or market demand (Connolly, 1999). Tangible benefits included reduction in staff, operational efficiencies, reduction in training, and better inventory management. Also sources of intangible benefits included better compliance with the customer requirements, improved systems reliability, higher data quality, and greater agility in implementing new businesses.

On the other side, the scale and complexity of these systems have proved a challenge to both IS specialists in terms of implementation, and business management in terms of managing business changes essential to gaining benefits from these very expensive investments. In fact, the use of ERP systems has not always led to significant organizational improvements. In many cases, problems in implementing these systems have led to failures. For example a survey of ERP implementers reported that 51% of the ERP systems implementation projects were judged to be unsuccessful by the ERP implementing firms (Aiken, 2002). However as investments in ERP systems continue to increase, implementations problems suggest that causes of these problems or failures need to be understood and solutions leading to success need to be found (Calisir and Calisir, 2004).

Responding to this need, various streams of research have appeared recently. The first and probably the most famous is the one concentrating on identifying ERP systems’ critical success factors (Holland et al., 1999 and Bingi et al., 1999). This line of research has its roots in IS success studies in the past two decades (Delone and Mclean, 1992). Somers and Nelson (2004) see that better description of IS implementation success come from understanding the key players and activities associated with ERP implementation. Diffusion of Innovation (DOI) is another important trend used for studying ERP implementation success (Bradford and Florin, 2003). DOI research has evolved from a focus on the organization’s innovation, its organizational characteristics, and also its environment as the main groups of variables that affect the diffusion of IT in organizations.

Complete Chapter List

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Table of Contents
Preface
Angappa Gunasekaran
Chapter 1
Emad M. Kamhawi
Responding to the need for a better understanding of the factors that explain ERP systems implementation success, this chapter used a field study to... Sample PDF
Examining the Factors Affecting Project and Business Success of ERP Implementation
$37.50
Chapter 2
Ronald E. McGaughey, Angappa Gunasekaran
Business needs have driven the design, development, and use of the enterprise-wide information systems we call Enterprise Resource Planning (ERP)... Sample PDF
Evolution of Enterprise Resource Planning
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Chapter 3
Purnendu Mandal, Mohan P. Rao
The build-up of export-oriented companies since 1990s on the Mexico-USA boarder, and their recent decline, is no surprise to many policy analysts.... Sample PDF
Information Technology Usage in Maquila Enterprises
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Chapter 4
Henk Jonkers, Maria-Eugenia Iacob
In this chapter the authors address the integration of functional models with non-functional models in the context of service-oriented... Sample PDF
Performance and Cost Analysis of Service-Oriented Enterprise Architectures
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Chapter 5
S. Parthasarathy
Enterprise Resource Planning (ERP) system is an integrated software system reflecting the business processes of an enterprise. Enterprise Resource... Sample PDF
Significance of Analytical Hierarchy Process (AHP) and Nominal Group Technique (NGT) in ERP Implementation
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Chapter 6
Manuel Kolp, Yves Wautelet, Stéphane Faulkner
Organizational Modeling is concerned with analyzing and understanding the organizational context within which a software system will eventually... Sample PDF
Specifying Software Models with Organizational Styles
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Chapter 7
Piotr Soja
Enterprise resource planning (ERP) systems have been implemented in various and diverse organizations. The size of companies, their industry, the... Sample PDF
Towards Identifying the Most Important Attributes of ERP Implementations
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Chapter 8
Shuchih Ernest Chang
Other than providing Web services through popular Web browser interfaces, pervasive computing may offer new ways of accessing Internet applications... Sample PDF
A Voice-Enabled Pervasive Web System with Self-Optimization Capability for Supporting Enterprise Applications
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Chapter 9
Hafid Agourram
Research has showed that social and socio-technical concepts are influenced by culture. The objective of this chapter is to explore how the... Sample PDF
The Impact of Culture on the Perception of Information System Success
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Chapter 10
John Krogstie, Csaba Veres, Guttorm Sindre
Much of the early focus in the area of Semantic Web has been on the development of representation languages for static conceptual information; while... Sample PDF
Achieving System and Business Interoperability by Semantic Web Services
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Chapter 11
Chen-Yang Cheng
The success of implementing Enterprise Information System (EIS) depends on exploring and improving the EIS software, and EIS software training.... Sample PDF
Integrated Research and Training in Enterprise Information Systems
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Chapter 12
Lea Kutvonen
Participation in electronic business networks has become necessary for the success of enterprises. The strategic business needs for participating in... Sample PDF
Service-Oriented Middleware for Managing Inter-Enterprise Collaborations
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Chapter 13
Joseph Bradley, C. Christopher Lee
Training is still a neglected part of most ERP implementation projects. This case study investigates the relation between training satisfaction and... Sample PDF
Training and User Acceptance in a University ERP Implementation: Applying the Technology Acceptance Model
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Chapter 14
Diego Milano
Data quality is a complex concept defined by various dimensions such as accuracy, currency, completeness, and consistency (Wang & Strong, 1996).... Sample PDF
Measuring and Diffusing Data Quality in a Peer-to-Peer Architecture
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Chapter 15
Vipul Jain
The key part of dynamic supply chain management is negotiating with suppliers and with buyers. Designing efficient business processes throughout the... Sample PDF
Modeling Buyer-Supplier Relationships in Dynamic Supply Chains
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Chapter 16
Ioannis Ignatiadis, Joe Nandhakumar
Enterprise Systems are widespread in current organizations and seen as integrating organizational procedures across functional divisions. An... Sample PDF
Enterprise Systems, Control and Drift
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About the Contributors