Size Matters! Enterprise System Success in Medium and Large Organizations

Size Matters! Enterprise System Success in Medium and Large Organizations

Darshana Sedera (Queensland University of Technology, Australia)
Copyright: © 2009 |Pages: 14
DOI: 10.4018/978-1-59904-859-8.ch016
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Abstract

Organizations invest substantial resources in acquiring Enterprise Systems, presumably expecting positive impacts to the organization and its functions. Despite the optimistic motives, some Enterprise System projects have reported nil or detrimental impacts. This chapter explores the proposition that the size of the organization (e.g. medium, large) may contribute to the differences in benefits received. The alleged differences in organizational performance are empirically measured using a prior validated model, using four dimensions employing data gathered from 310 respondents representing 27 organizations.
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Introduction

Enterprise System (ES) is an ideology of planning and managing the resources of an entire organization in an efficient, productive, and profitable manner, and is manifested in the form of configurable information system packages (Laukkanen, Sarpola et al. 2007). The Enterprise System vendors promote a fully integrated core business processes through the organization where seamless integration of the information flowing from one functional area to the other. Amongst the myriad of benefits, Enterprise Systems said to deliver key benefits like: cost reduction, productivity improvement, quality improvement, customer service improvement, better resource management, improved decision-making and planning, and organizational empowerment (Shang and Seddon 2002).

Organizations devote substantial resources and time on acquiring an Enterprise System, presumably expecting positive impacts to the organization and its functions. These extensive ES implementations are typically measured in millions of dollars Pan et al (2001), and for many organizations they represent the largest single IT investment. The substantial resource requirements for Enterprise Systems have restricted Enterprise System market to the Medium-Large organizations with many suggesting that ES are best suited for Large Corporations (Hillegersberg and Kumar 2000). Recent changes in market place, wherein the demand for Enterprise Systems from large organizations has plateau, vendors are attempting to shift their emphasis into the Small-Medium Enterprises (SMEs) with scaled-down ES products (Piturro 1999; Everdingen, Hillegersberg et al. 2000).

Measuring the impacts of Enterprise Systems takes on special importance since the costs and risks of these large technology investments rival their potential payoffs. Often carefully rationalized in advance, ES investments are too seldom systematically evaluated post-implementation (Thatcher and Oliver 2001). Welsh and White (1981) differentiated the small and large organizations using such aspects like time, skills, and resources – where the medium organizations lacking all three compared to their counterparts. D’Amboise and Muldowney (1988) argue that the lack of resources has made smaller organizations more vulnerable to the environmental effects and misjudgments forcing them to allocate more time to adjusting to, rather than devoting time on predicting and controlling. The resource lack of constraints has been found to hinder IT adoption (Baker 1987; Cragg and Zinatelli 1995; Iacovou, Benbasat et al. 1995; Proudlock, Phelps et al. 1999), and to negatively affect IS implementation success (Thong 2001) and IT growth (Cragg and King 1993) in SMEs.

With the aforementioned background – where organizations devote huge resources acquiring ES and many not receiving anticipated benefits, where the traditional market leveling with ES vendors moving into the SME market segment – this chapter discusses whether the organization size has an influence over the benefits brought-to-bear by the Enterprise System. This study aims to contribute to the encyclopedia by investigating the relationship of organizational size with the performance of the system (commonly referred to as System Success). Although prior research (Raymond 1985; DeLone 1988; Raymond 1992; Lai 1994) has contributed to our understanding of IS and organization size, few have empirically assessed influence of organizational size for contemporary IS success. More importantly, instead of resorting to the customary approach of considering large and medium-sized organizations as one homogenous group receiving equal benefits, this study aims to bring forth the differences between these two groups using four system related dimensions. This study presented herein investigates the influence of organization size on ES performance. ES impacts are empirically measured using information received from 310 responses representing 27 organizations that had implemented a market leading Enterprise System solutions in the second half of 1990.

Key Terms in this Chapter

System-Quality: A measure of the performance of [the IS] from a technical and design perspective.

Individual-Impact: A measure of the extent to which [the IS] has influenced the capabilities and effectiveness, on behalf of the organization, of key-users.

Organizational-Impact: A measure of the extent to which [the IS] has promoted improvement in organizational results and capabilities.

SAP: SAP [used to denote SAP R/3 software] is a market leading Enterprise System software.

Information-Quality: A measure of the quality of [the IS] outputs: namely, the quality of the information the system produces in reports and on-screen.

Enterprise System: Customizable, standard software solutions that have the potential to link and automate all aspects of the business, incorporating core processes and main administrative functions into a single information and technology architecture.

Public Sector: The public sector is the part of economic, administrative and Governance process that deals with the delivery of goods and services by and for the government.

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Editorial Advisory Board
Table of Contents
Preface
Jatinder N. D. Gupta, Sushil Sharma, Mohammad A. Rashid
Acknowledgment
Jatinder N. D. Gupta, Sushil Sharma, Mohammad A. Rashid
Chapter 1
Nancy Alexopoulou, Panagiotis Kanellis, Mara Nikolaidou, Drakoulis Martakos
Efficient response to change, both upon expected and unpredicted contingencies, is a critical characteristic for modern enterprises. This chapter... Sample PDF
A Holistic Approach for Enterprise Agility
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Chapter 2
Hossana H. Aberra
SAP Business Blueprint is a vital part of SAP implementation exercise. A well-defined business blueprint may set the foundation for successful... Sample PDF
What is SAP Business Blueprint?
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Chapter 3
Rogerio Atem de Carvalho
This chapter introduces the key aspects of Free/Open Source Enterprise Resources Planning systems (FOS-ERP). Starting by related work carried out by... Sample PDF
Free and Open Source Enterprise Resources Planning
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Chapter 4
Brian H. Cameron
Business process modeling (BPM) is a topic that is generating much interest in the information technology (IT) industry today. Business analysts... Sample PDF
The Changing Nature of Business Process Modeling: Implications for Enterprise Systems Integration
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Chapter 5
Alok Mishra
In the age of globalization, organizations all over the world are giving more significance to strategy and planning to get an edge in the... Sample PDF
Enterprise Resource Planning Systems: Effects and Strategic Perspectives in Organizations
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Chapter 6
Gary P. Moynihan
An executive information system (EIS) is a software system designed to support the informational needs of senior management. The EIS is... Sample PDF
An Overview of Executive Information Systems
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Chapter 7
Joseph Bradley
Enterprise Resource Planning systems have proven difficult and costly to implement. Organizations must consider the risks and rewards of embarking... Sample PDF
Enterprise Resource Planning System Risks and Rewards
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Chapter 8
Andrea Masini
After observing that the pervasiveness of IT may soon render it strategically irrelevant, management scholars have recently questioned the value of... Sample PDF
ERP-Driven Performance Changes and Process Isomorphism
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Chapter 9
Ronda R. Henning
The application software life cycle considers the functionality of a given collection of components within the context of a consumer’s requirements... Sample PDF
Application Integration within the Enterprise Context
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Chapter 10
Sanjay Mathrani, Mohammad A. Rashid, Dennis Viehland
A significant investment in resources is required for implementation of integrated enterprise systems as technology solutions while the... Sample PDF
The Impact of Enterprise Systems on Business Value
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Chapter 11
Charlotte H. Mason, Aleda V. Roth
Growing competitive pressures and escalating customer demands have led businesses to sophisticated information technology to manage costs and... Sample PDF
The Right Path to SCM-CRM Integration
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Chapter 12
Euripidis Loukis, Ioakim Sapounas, Konstantinos Aivalis
This chapter is dealing with the alignment of enterprise systems with business strategy and its impact on the business value that enterprise systems... Sample PDF
Enterprise Systems Strategic Alignment and Business Value
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Chapter 13
Sanjay Mathrani, Mohammad A. Rashid, Dennis Viehland
The market for enterprise systems (ES), continues to grow in the post millennium era as businesses become increasingly global, highly competitive... Sample PDF
Enterprise Systems in Small and Medium-Sized Enterprises
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Chapter 14
Kerstin Fink, Christian Ploder
Small and medium-sized enterprises (SMEs) are a vital and growing part of any national economy. Like most large businesses, SMEs have recognized the... Sample PDF
Integration Concept for Knowledge Processes, Methods, and Software for SMEs
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Chapter 15
Tobias Schoenherr, Ditmar Hilpert, Ashok K. Soni, M.A. Venkataramanan, Vincent A. Mabert
Although the research on integrated enterprise systems (ES) is proliferating, the knowledge base about ES implementations, usage and experiences... Sample PDF
Enterprise System in the German Manufacturing Mittelstand
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Chapter 16
Darshana Sedera
Organizations invest substantial resources in acquiring Enterprise Systems, presumably expecting positive impacts to the organization and its... Sample PDF
Size Matters! Enterprise System Success in Medium and Large Organizations
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Chapter 17
Joseph Bradley
ERP implementation projects normally involve a single vendor providing the packaged software for the entire system. Although most companies follow... Sample PDF
Implementing Best of Breed ERP Systems
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Chapter 18
Ganesh Vaidyanathan
Enterprise resource planning systems are complex yet single, integrated software programs that runs off a single database so that the various... Sample PDF
Enterprise Resource Systems Software Implementation
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Chapter 19
Calin Gurau
This chapter considers the importance of business modelling for implementing e-CRM systems. The introduction of e-business models requires the... Sample PDF
Restructuring the Marketing Information System for eCRM: An Application of the Eriksson-Penker Method
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Chapter 20
Albert Boonstra
At the present moment, many hospitals are going through a process of change directed at the integrated delivery of health care. Enterprise Systems... Sample PDF
Analyzing an ES Implementation in a Health Care Environment
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Chapter 21
S. Padmanaban
ERP systems have become key enablers of businesses today. While many organizations wish to adopt ERP for competitive advantage, they find choosing... Sample PDF
Designing to Deploying Customisable ERP Cost Effectively
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Chapter 22
Mateja Podlogar, Katalin Ternai
This chapter introduces the ERP systems, their complexity, and especially their integration in higher education as a significant challenge for many... Sample PDF
ERP Systems in Higher Education from Regional Perspective
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Chapter 23
Valentin Nicolescu, Holger Wittges, Helmut Krcmar
This chapter provides an overview of past and present development in technical platforms of ERP systems and its use in enterprises. Taking into... Sample PDF
From ERP to Enterprise Service-Oriented Architecture
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Chapter 24
ERP and Beyond  (pages 329-345)
Suresh Subramoniam, Mohamed Tounsi, Shehzad Khalid Ghani, K. V. Krishnankutty
Enterprise-wide automation has already transformed the relations among suppliers, purchasers, producers, and customers. Conventional ERP helps only... Sample PDF
ERP and Beyond
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Chapter 25
Gita A. Kumta
The chapter introduces the essence of ERP in government as a tool for integration of government functions which provides the basis for citizen... Sample PDF
E-Government and ERP: Challenges and Strategies
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Chapter 26
Manish Gupta, Raj Sharman
A paradigm shift is occurring in identity management philosophy. User-focused identity management is one the emerging and most promising paradigms.... Sample PDF
Emerging Frameworks in User-Focused Identity Management
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Chapter 27
Ramón Brena, Gabriel Valerio, Jose-Luis Aguirre
From the Knowledge Management perspective, Knowledge distribution is a critical process in organizations. As many of the other Knowledge-related... Sample PDF
Next-Generation IT for Knowledge Distribution in Enterprises
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