38

CHAPTER 2

LITERATURE REVIEW

This chapter surveys the existing literature with a view to highlight the
basic research issue for this study. It investigates the relevant research literatures
around one hundred and fifty from the years early 2000 to 2013. Following fifteen
areas of ERP studies were reviewed during this period. These areas of studies are
grouped based on the objectives as per the details given below. In each area few
important references are quoted in this chapter.

1. Objective 1: “to prove that the people related factors are the key
critical success factors for the ERP implementation; ”

x People involved in ERP implementations,

x Critical Success Factors ( CSF) for ERP implementation

x ERP and Knowledge management

2. Objective 2: “ to develop an ERP system success model based on

people related success factors; “

x Information systems success models,

x ERP systems success models,

x ERP systems success measurements,

3. Objective 3: “to propose a framework for the estimation of

implementation delays & time frame of the implementation based on
people related success factors”.

x ERP system success forecasting,

x ERP implementation methodology


 39


4. General areas:

x ERP failures

x ERP market,

x ERP in SME segments,

x ERP in developing countries,

x ERP implementation costs

x ERP & TQM

x ERP & BPR

2.1 AREAS REVIEWED

2.1.1 People Involved in the ERP Implementations

Somers and Nelson35 (2001) study proposes steps for successful

implementation , this would include securing commitment and cooperation from
everyone involved that the work effort will be put forth as it is needed as well as
ensuring that adequate knowledge exists to understand the options available (project
team competence). Likewise getting people educated/trained and keeping them
informed throughout the implementation process must be addressed to achieve the
benefits of an ERP system. To accomplish these CFSs, significant effort is required
that must be supported by top management involvement to ensure that the
implementation receives the resources, time and priority that is necessary. In
addition, although vendor partnership was viewed as important in the initiation
phase of the implementation, it should be noted that responsibility for key aspects of
the project should not be delegated to software vendors or consultants. These
external parties should be viewed as auxiliary resources, not as drivers.

Sherry Finney and Martin Corbett44 (2007) reports that the most
significant finding of their study is the lack of research that has focused on the
identification of CSFs from the perspectives of key stakeholders. Additionally, there
appears to be much variance with respect to what exactly is encompassed by change


 40


management, one of the most widely cited CSFs, and little detail of specific
implementation tactics

Hee-Woong Kim45 ( 2011) The results of this study indicate that

uncertainty costs and sunk costs directly increase user resistance, while transition
costs and loss costs indirectly increase user resistance by reducing the perceived
value of switching. The results of this study advance the theoretical understanding of
Enterprise Systems implementation and user resistance to change.

Adel M. Aladwani46 ( 2001) describe an integrated, process oriented

approach for facing the complex social problem of workers’ resistance to ERP.
When implementing an enterprise resource planning (ERP) system, top management
commonly faces an unwanted attitude from potential users for one reason or another,
they resist the implementation process. Top management should, therefore,
proactively deal with this problem instead of reactively confronting it..

Inka Vilpola and Kaisa Väänänen-Vainio-Mattila47 (2006) study reports

that: ERP implementation is affected by human factors in addition to technical and
operational factors. Contextual analysis reveals the company’s entireness; users,
tasks, physical environment, culture and communication. Key players may represent
personnel from company’s ERP vendor or third party consultancy. Roles of the key
players vary according to the implementation stage so that those who make plans
and decisions for the implementation are key players in the early stages, and those
who put the implementation in practice and support the usage are the key players in
last stages in implementation. Usability activities are a way to take human factors
into consideration in ERP implementation.

Kim and Keith48 ( 2008) study reports that : Many software projects fail,
whether failure is measured in terms of budget, schedule, or some other requirement.
The causes of such failures are many, but are not always easily recognized. This is
not the least due to the human dimension of corporate activities, as spurious or
misdiagnosed issues in Enterprise Resource Planning (ERP) projects can take on a
life of their own and become a magnet for company politics. This paper reports an


 41


industrial case in which the senior management attempted to deal with a troubled
ERP implementation (SAP R/3) in an international fast moving consumer goods
(FMCG) company during 2001 and 2002. This paper reflects this dimension as it
uses original emails and PowerPoint slides to recount a number of representative
episodes in a troubled but ultimately successful project. At the heart of this success
is the realization that whereas it can be difficult and time-consuming to do root-
cause analyses, it is relatively simple to identify problem owners. In this case, the
senior management without IT backgrounds turned around a failing project by
reorganizing the team structure according to process areas so that issues in each
process area had one problem owner. It summarize the management’s actions into a
troubleshooting framework, and in addition, suggest three actions for rescuing
troubled projects: keep the project manager but narrow down the manager’s scope of
responsibility to one or two process areas; assign the right people to be responsible
for other process areas; and have the General Manager chair the ERP meetings.

Paul Hawking and Andrew Stein49 ( 2004), The purpose of this research
was to explore the benefits and barriers in ERP implementations as they move into
”second wave” value propositions. The results indicate that such implementations do
not live up to their expectations and do not provide the expected range of benefits.
IT cost and personnel reductions were two issues that had the greatest disparity
between expected and actual benefits. People-related issues dominated the barriers
to attaining expected benefits with change management issues ranking very high.
Software, hardware or integration issues were not ranked highly. Lack of discipline,
lack of training, lack of change management and poor project teams all point to
organisations who do not understand the importance of change management
practices

2.1.2 Critical Success Factors (CSF) for ERP Implementation

Many researchers worked on to identify areas where things must be go

right for the implementation to be successful. These key areas are called Critical
Success Factor (CSF); these techniques were applied in many studies published by


 42


several authors. A consolidation of 88 Critical Success Factors was made from 42

studies during 2000 to 2012 & shown in Appendix – B, some examples given below

Shahin Dezdar50 (2012). The outcomes of this research indicated that

younger ERP users tend to be more satisfied with ERP systems. Moreover, this
study found no satisfaction differences between men and women users. Furthermore,
the findings of this research specified that more educated users have more
satisfaction with ERP software. Finally, the results of this study showed that the
ERP users with more experiences in IT have more satisfaction with ERP systems.

David L. Olson et al.51 (2005) This paper uses case studies and other
reports of multinational ERP implementation to identify implementation factors of
importance. Four technical factors were identified (business process reengineering,
federalism and customisation, supply chain features and outsourcing). Additionally,
more general issues were compared (culture/language, management style, political
factors and labour skills). Multinational ERP implementations radically change
organisational information systems. Careful planning of how to implement ERP
systems is needed in multinational environments in order to identify the best ERP
design and the best redesign of business processes.

2.1.3 ERP and Knowledge Management

Haines et al.52 (2003), Sedera et al.53 (2004), studies reports that: The
difficulties in transferring knowledge efficiently between the different actors in an
ERP implementation have spurred an increasing interest in how knowledge
management (KM) may support this process

Theekshana S et al.54 (2008) study reports that: Prior research on

knowledge transfer during the ERP implementation categorizes two types of
knowledge sharing. They are the transfer of business process knowledge already
available in the organization to the ERP implementation process, and the transfer of
new knowledge associated with the ERP system to the business organization


 43


McAdam and Reid55 (2001) study reports that : Case studies have
revealed that brain storming sessions and interviewing department managers have
been used to capture tacit knowledge in certain organisations. Mostly sharing was
people related and facilitated by workshops, discussion forums, training and
mentoring, but there is a difference between KM initiatives in large companies and
SMEs .

Andreas Riege56 (2005) study reports that SMEs tend to provide an

environment that is conducive to generate knowledge, mainly due to their size, often
single site location, and closer social relationships of employees, resulting in good
communication flows and knowledge sharing.

Levy et al.57 (2003) study reports that many SMEs appear to lack
strategic focus due to their pre-occupation with the day-to-day viability in the
developing economy. Also, they lack absorptive capacity as they tend to be less
effective in recognising the value of their explicit knowledge and are short of
adequate resources, infrastructures, and technology to disseminate and apply
existing and new knowledge

Chan et al.39 (2003) says that the lack of efficient interaction between the
involved knowledge owners may lead to the failure of ERP implementation

Kostas et al. 40 (2010) says that the ERP implementation is so knowledge

–intensive that the fate of the whole project is in the hands of a group of
knowledgeable employees within the organisation and the success of the project
relies heavily upon the effective management of knowledge into, within, and out of
this team during ERP life cycle.

Although causal links between effective knowledge transfer and

successful ERP implementations have yet to be empirically verified, it is assumed
that knowledge transfer leaves the client organization better positioned to maintain,
evolve and generate returns from the ES investment Timbrell et al.58 ( 2001)


 44


Thapliyal et al.59 ( 2011), An effectively deployed ERP tool provides not

only valuable information processing capability to better control costs but it can also
help identify ways to be more effective in dealing with its supply chain partners as
well as improve its internal cost management reporting and decision making. This
improvement in communication and decision making can improve the quality of its
knowledge assets. The pilot study results, based upon the experience of the leading
HK construction company using an ERP, demonstrate the potential effectiveness of
an ERP from a cost management business unit’s perspective as well as a KM tool.

60
Shuojia Guo et al. (2006) ERP system has the capability of managing
physical assets within an enterprise. However, ERP do not manage the knowledge in
an enterprise. Due to the differences between ERP and KM, it is not easy to take
advantage of integrating KM and ERP by simply adding a KM module into an ERP
system. It is obvious that KM has its own purpose compared with that of ERP; to
some extent such purposes may be conflicting to each other. For example, KM
emphasizes the flexibility in business routine, whereas ERP focuses on the
standardization of business routines.

In integrating KM into ERP, changes are needed in ERP to facilitate KM

implementation. Such changes include knowledge base management, knowledge
presentation, etc. As a module in an ERP system, KM in general can support ERP
for better decision making function. KM can capture knowledge, transfer tacit
knowledge to explicit knowledge, and help use or reuse knowledge for ERP
purpose. The future generation ERP may include a KM module through achieving
trade-off between their contradictions based on two managerial philosophies

Jessica Keyes61 (2008), this study investigated possible causes of

resistance or support by knowledge workers to the sharing of knowledge within a
project team and organization. The problem addressed was that existing knowledge
was not being effectively disseminated throughout the organization, resulting in lost
productivity and opportunity as a result of failure to exploit available knowledge.
This study demonstrated that there were a myriad of barriers to knowledge sharing.
These included organizational as well as cultural barriers .


 45


The study also uncovered a relationship between willingness to share

knowledge and effective knowledge sharing, distributing the discovered barriers
between each of these factors.

62
Sedera and Gable ( 2010) This study conceptualizes, operationalizes
and validates the concept of Knowledge Management Competence as a four-phase.
The study results demonstrate a large, significant, positive relationship between
Knowledge Management Competence and Enterprise Systems Success (ES-success)
, as conceived by Gable et al.63 (2008)); suggesting important implications for
practice.

2.1.4 Information Systems Success Models

Peter S et al. 64 (2008) The D&M information systems (IS) success model
is a useful framework for understanding the key success dimensions and their
interrelationships. However, researchers must take a step further and apply rigorous
success measurement methods to create comprehensive, replicable, and informative
measures of IS success. The D&M IS success model applied equally well at both the
individual and organizational levels of analysis in those cases where there were
sufficient data to analyze the relationship.

65
Edward (2008) The D&M IS success model was well suited to design
an a priori ERP success model. The model was analysed and revised by testing for
construct and dimension validity. A new dimension (‘‘net benefits’’) was introduced
to account for the financial consequences of ERP. The model was empirically tested
for dimension validity.

The general success dimensions were consistent and, when combined,

seemed to yield a single valid measure of ERP success. Although a tested
measurement model was presented here, the causal explanatory or predictive nature
of the model was not elaborated. Overall, the results support the fact that the
application of IT governance key practices is positively related to ERP value
delivery.


 46


2.1.5 ERP Systems Success Models

42
BooYoung Chung et al. (2009) reports that most ERP-related research
in the other sectors has tried to identify the factors and formulate models without
using the theoretically validated models such as TAM and D&M IS success model.
This research was the first study attempting to identify the factors affecting ERP
success with strong background theories in construction industry and IT/IS
implementation-related research. The proposed research considers this study as the
reference model. The success of ERP systems can be classified into two categories:
the success of ERP adoption and the success of ERP systems implementation. For
the successful ERP adoption, this research used already proven user acceptance
models for IS such as TAM and D&M IS success model as the starting point.

The model developed the rationale for the causal relationship based on
these combined theoretical backgrounds and incorporated three main dimensions for
identifying the truth about the success of ERP systems: success factors, intermediate
constructs, and success indicators. The model also considered the success of ERP
implementation based on the reviews on the project management fundamentals. The
success factors suggested by Ferratt et al.66 (2006) are used in the model because
these were already validated in previous research and confirmed by several experts
interviewed. This research hypothesized that these factors directly affect perceived
usefulness, and finally lead to ERP success or failure. Furthermore, “project
success” is included as an additional success indicator to clarify its impact on the
other success indicators.

Young Hoon Kwak et al 67 (2012) study aims at providing an alternative

view of users’ enterprise resource planning (ERP) acceptance. Despite the large
body of literature, there are still empirical inquiries to investigate the ERP system
implementation from end-users’ perspectives as well as from different
organizational contexts. To address these issues, we set a project-based sector as our
population of interest and seek to understand how project management practices are
interrelated with end-users’ cognitive perception, and in the end, with their
behavioural intention of using the ERP system. In doing so, this study incorporates
the best practices of ERP system implementation projects, internal support, external


 47


(consultant) support, and functionality selection, into the extended technology

acceptance model (TAM) that includes belief constructs and socio environmental
construct (subjective norm).

2.1.6 ERP Systems Success Measurements

Lu Zhang et al. 68 (2012) study reports that Information Technology (IT)

investments, especially Enterprise Resource Planning (ERP) systems, are critical for
the survival and development of companies. Therefore, understanding the impact of
ERP investment is of great importance to managers and researchers. As a corporate
performance indicator, Tobin’s Q has some inherent advantages compared to other
accounting indicators, and it can better reflect the contribution of ERP investment to
company performance. This study employs multiple regression models to examine
the impact of ERP investment on Tobin’s Q. The sample consists of 126
manufacturing companies listed on the Shanghai and Shenzhen Stock Exchanges
from 1999 to 2007. Empirical results show that in the first three years after ERP
implementation, there is no significant change in Tobin’s Q; however, in the fourth
year, Tobin’s Q increases significantly. The results indicate that, as a strategic long-
term investment accompanied by large-scale business process reengineering and
organizational learning, ERP implementation has time-lagged effects; nonetheless, it
eventually produces significant benefits. In our empirical analysis of the impact of
ERP implementation on company performance, a market indicator (Tobin’s Q) is
employed as a measure of company performance, and both firm-level and industry-
level control variables based on previous research are utilized to maximize
reliability. Tobin’s Q, proposed by James Tobin in 1969, is defined as the ratio of a
firms’ market value to its capital replacement costs

Yuanfang Song et al. 69 (2007) study reports that the implementation of

enterprise resource planning (ERP) system had been the focus of many researches
for a long time, but which factors will influence the adoption of ERP systems is still
unclear. In this research, the authors develop a framework that links some critical
success factors (CSFs) with the adoption of ERP systems based on the theory of
technology acceptance model (TAM) .The present structural equation model deals


 48


with these relationships on the basis of a survey of 320 managers and end-users. The
paper highlights two main results. First, user perceived fit, compatibility of an ERP
system and change management of an organization will influence user adoption.
Second, top management support was critical to change management, business
process and interdepartmental communication. These findings imply that user’s
needs and organizational compatibility should be considered in the construction and
implementation of an ERP system

70
Stacia Petter et al. (2008) Practitioners consistently acknowledge the
importance of measuring the value of their IS investments. However, practitioner IS-
effectiveness measurement methods suffer the same deficiency as academic success
models; that is, they are often one-dimensional and over-simplified. Practitioners
tend to focus on net impacts or benefits but fail to consider system, information, and
service quality as well as the nature and intensity of system use. The science of
measuring information success or performance in empirical studies has seen little
improvement over the past decade. Researchers and practitioners still tend to focus
on single dimensions of IS success and therefore do not get a clear picture of the
impacts of their systems and methods. Progress in measuring the individual success
dimensions has also been slow.

Lu Liu et al. 71 (2008). This paper provide insight for the Chinese firm that
wants to invest on ERP, it says that ERP does not necessarily help them gain
superior financial performance especially in the years shortly after implementation.
Due to the high cost of ERP implementations, firm’s performance may decline in the
years shortly after ERP implementations. Hence the firm should set rational
implementation goal before ERP implementations and put more emphasis on
managing the implementations

2.1.7 ERP System Success Forecasting

72
Magnusson et al. (2004) study reports that the notion of “ERP
implementation success” is defined as the success of the implementation project, and
“probability of ERP implementation success” is measured by to what extent an


 49


organization fulfils a number of factors. The conceptual framework is as previously

stated a framework comprised of a number of un-weighed factors with the ERP
implementation project as a focus. This highlights the link between fulfilment of the
factors and a positive outcome of the project, and for the framework to as usable as
possible we have based the total level of factor fulfilment on how many of the final
16 factors were fulfilled. For instance; if the responding organization fulfils 12 out
of the 16 factors (simply yes or no based on 5 questions per factor), this will result in
the forecasting of a 75% probability of success, and in the tool a text describing
what the organizations strengths and weaknesses are related to the different factors
will be presented along with a quick-list of possible future managerial actions to
strengthen the identified weaknesses. The 16 factors are Top management factors
like strategy, Leadership, Support, competencies, Project related factors like Team,
Management, Plan, External, Organisation factors like culture, Change, process,
communication and System related factors like technology, training, User,
empowerment.

Shu-Chen Hsu et al.73 (2009) This study applies an analytic hierarchical

prediction model based on Multi-Criteria Decision Making with Incomplete
Linguistic Preference Relations(InLinPreRa) to help the organizations become
aware of the essential factors affecting the Enterprise Resource Planning(ERP), as
well as identify the actions necessary before implementing ERP. The subjectivity
and vagueness in the prediction procedures are dealt with using linguistic terms
quantified in an interval scale [-t,t] . Then predicted success/failure values are
obtained to enable organizations to decide whether to initiate ERP, inhibit adoption
or take remedial actions to increase the possibility of successful ERP. The empirical
results not only demonstrate the senior manager support degree, organizational and
coordination are the three most important influential factors in the ERP initiative
process, but also reveal the applicability and feasibility of reciprocal Incomplete
Linguistic Preference Relation(InLinPreRa) for solving complicated hierarchical
multiple attribute prediction problems

Chengaleth Venugopal et al.74 (2010) ERP projects’ failing to meet user

expectations is a serious problem. This research develops an Adaptive Neuro Fuzzy


 50


Inference System (ANFIS) model, to predict the key ERP outcome “User
Satisfaction” using causal factors present during an implementation as predictors.
Data for training and testing the models was from a cross section of firms that had
implemented ERPs. ANFIS is compared with other prediction techniques, ANN and
MLRA. The results establish that ANFIS is able to predict outcome well with an
error (RMSE) of 0.277 and outperforms ANN and MLRA with errors of 0.85 and
0.86 respectively. This study is expected to provide guidelines to managers and
academia to predict ERP outcomes ex ante, and thereby en-able corrective actions to
redirect ailing projects.

Wison Rosa75 (2012) Enterprise Resource Planning (ERP) projects are

considered commercial-off-the-shelf (COTS) solutions where one substantial COTS
product (e.g. Oracle, SAP) is tailored to provide automated business functions. This
paper presents effort and schedule estimating models for predicting ERP
implementation. The first two models use product size to predict software
development effort. Product size is measured in terms of the number of report,
interface, conversion, and extension (RICE) objects that are tailored or modified in
the COTS product suite. The third model predicts the duration of software
development phase as a function of RICE objects and full time equivalent staff.
These statistical models are based on empirical data collected from 22 programs
implemented within the federal government over the course of ten years beginning
in 2001. Result shows that number of RICE objects is a good predictor of ERP
software development effort and duration

Se Hun Lim76 (2006) Case-based reasoning (CBR) is widely used in the

business and industrial forecasting. CBR is powerful tool in forecasting. It is suitable
to complex and unstructured problem. Recently, CBR is applied many variety of
business decision making, such as Enterprise Resource Planning (ERP) pre-planning
control, bankrupt, Information System (IS) development control, prediction of
customer churning. This study applies the novel model to forecast a successful
implementation of ERP systems. Experimental results show that the CBR approach
is a promising method for forecasting of successful ERP implementation


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2.1.8 ERP Implementation Methodology

Aisha Momoh et al.77 (2008) study reports that: A good project

methodology known as ASAP, which is used in SAP implementations, was studied.
However, in order to ensure that all aspects of an ERP implementation are
addressed, it is advisable to extend ASAP and other methodologies into a WBS. The
WBS will be used to define the ERP project activities so that the lowest level of
activity is accounted for. This will guide organizations in preparing realistic budgets
for their ERP implementations

2.1.9 ERP Failures

Glenn Parry 78 (2005) ERP implementations that cost twice as much as

planned and are delivered late with far less functionality than promised are costing
jobs in UK manufacturing according to research into the aerospace Industry by the
University of Warwick

72
Magnusson et al. ( 2004) study reports that the continuing soar in
popularity when it comes to standardized information systems sold en masse under
the labelling of Enterprise Resource Planning (ERP) Systems is somewhat kept
under control by the ever flowing stream of reports from the industry of
implementations gone bad. According to some researchers it is possible to assume
that as many as 90% of all initiated ERP implementation projects can be regarded as
failures as a result of changes in scope, prolongation of the project time or simply
budget overruns.

Bhawarker RM et al.3 (2012) study reports that not all ERP

implementations are successful

2.1.10 ERP Market

Panorama consulting solutions 7 (2012) , study reports that it is clear to

anyone in the ERP market that SAP, Oracle and Microsoft Dynamics have built
strong reputations as the powerhouses of Tier I enterprise software. The report


 52


compares the market coverage of this product as given below. But the market is
shifting; enterprise solutions are being commoditized, cloud and SaaS.

Table 2.1 Comparison of SAP, Oracle & Microsoft dynamics

SAP ORACLE MICROSOFT

DYNAMICS
Largest share of the Highest selection rate when Smallest share of the market
market short-listed Lowest short-listing rate
Highest short-listing rate Longest implementation Shortest implementation
Lowest selection rate duration duration
when short-listed Largest delta between Highest percentage of users
Longest payback period planned and actual who realized between 81-
implementation duration and 100-percent of benefits
Lowest percent of users
who realized between 81-
and 100-percent of benefits

2.1.11 ERP in SME Segments

Parijat Upadhyay et al.79 (2010) paper attempts to explore and identify

issues affecting Enterprise Resource Planning (ERP) implementation in context to
Indian Small and Medium Enterprises (SMEs) and large enterprises. Issues which
are considered more important for large scale enterprises may not be of equal
importance for a small and medium scale enterprise and hence replicating the
implementation experience which holds for large organizations will not a wise
approach on the part of the implementation vendors targeting small scale enterprises.
Also by doing comparative analysis between the identified issues for Indian large
enterprises and SMEs four issues are proved to be crucial for SMEs in India but not
for large enterprises such as proper system implementation strategy, clearly defined
scope of implementation procedure, proper project planning and minimal
customization of the system selected for implementation, because of some
limitations faced by the Indian SMEs compared to large enterprises.

Pedro Ruivo et al.80 ( 2013) study reports that it is consensual that

Enterprise Resource Planning (ERP) after a successful implementation has


 53


significant effects on the productivity of firm as well small and medium-sized

enterprises (SMEs) recognized as fundamentally different environments compared
to large enterprises. There are few reviews in the literature about the post-adoption
phase and even fewer at SME level. Furthermore, to the best of our knowledge there
is none with focus in ERP value stage. The main focus of this paper is to shed the
light on the areas that lack sufficient research within the ERP in SME domain, in
particular in ERP business value stage, suggest future research avenues, as well as,
present the current research findings that could support researchers and practitioners
when embarking on ERP projects. However the majority of the articles found have a
single country perspective, we found all studies were grounded in America, Europe
or Asia, but none in African, Middle Eastern or Latin American SMEs. Moreover,
use of theories in ERP literature in SMEs is very limited, as shown in only 45.5% of
the papers have adopted a theoretical lens.

Veena Bansal 81 (2013) study identify critical success factors like Project
Management, Support of Top Mgmt, Vendor Support, implementation Strategy,
Education and Training , Package Selection, Organizational Characteristics , Data
management, Change Management, Competence of Project Team, ERP system User
Involvement, Project Monitoring Environment and Software Development for SME
implementations. The CSFs that contributed to the failure turned out to be- poor
project management, lack of management support, ineffective external consultant,
ineffective vendor’s team and wrong package selection

2.1.12 ERP in Developing Countries

2.1.12.1 Pakistan

82
Muhammad Aamir Obaid Khattaka et al. ( 2012) research concludes
that: Firstly, selection of a right full time project manager, quality(adequacy) &
quantity of training, role and effectiveness of management in reducing the users’
resistance, top management support/ involvement, change management culture and
programs, clearly specified goals/objectives/scope of ERP project, business process
re-engineering / minimal customization, involvement of organizational
members/users in adoption and implementation of ERP, ease of system’s use &


 54


users’ acceptance, effective communication among the organizational members and

a balanced team for ERP implementation are practically used and considered by the
successful enterprises while planning and going for the implementation of the ERP
system as compared to the unsuccessful ones in which lower consideration is given
to the same. Secondly, some of the factors considered imperative for success in the
past scholarly work like reporting level of the project manager, use of steering
committee for control purpose, competency in use of IT and IT infrastructure,
vendor’s support, project management, ERP strategy & implementation
methodology although necessary but solely relying on those may not favourably or
unfavourably leads and thus not sufficiently guarantee the ERP project
implementation success. Thirdly, some managerial based issues that were supported
in the past literature like level of integration of business planning with ERP
planning, presence/existence of a champion and role of consultant are not supported
in the case studies in this research.

It is finally suggested that the specialized training for the world renowned
standard ERP application packages is needed to be started at the mass level on low
cost basis by educational institutions/universities by establishing ERP centres in
collaboration with leading ERP providers in a developing country like Pakistan as
the ERP application systems give more efficiency and competitive advantages to the
organizations and has numerous benefits if implemented successfully and tactfully.
The government should also support these training initiatives and give more grants
to those educational institutions that want to establish ERP canters for improvement
and effective management of the enterprises.

2.1.12.2 Iran

83
Maryam Mahdavia et al. (2012) research reports that: It seemed
imperative for researchers to identify the most important factors of individuals'
resistance to ERP implementation in Iranian organizations and evaluate these
organizations by measuring attention degree of them to such factors. According to
data analysis, the most important resistance factors among 38 potential factors are as
below respectively: unclear vision; weak project management; not perceiving


 55


change, lack of clarity of change nature and reasons; habit and nonexistence of
culture of change and innovation, lack of risk taking and being competitive; fear of
information transparency; fear of losing autonomy, independence and control; lack
of confidence in proper performance of system and believing in that the new system
doesn't have advantages; fear of complexity, difficulty and length of duties and
works; fear of losing status; and Self-interest threat. Then data analysis revealed the
six out of these top 10 factors haven't been considered sufficiently by organizations
under study and organizations haven't conducted necessary actions to decrease effect
of these factors on creating resistance in individuals. These six factors are: unclear
vision; not perceiving change, lack of clarity of change nature and reasons; habit and
nonexistence of culture of change and innovation, lack of risk taking and being
competitive; fear of information transparency; fear of losing autonomy,
independence and control; self-interest threat. As it is observed some of these factors
endanger personal situation of the individuals (fear of information transparency, fear
of losing autonomy, independence and control, Self interest threat).

2.1.12.3 Mozambique

84
Olga Fulane et al. ( 2012) paper seeks to identify the critical factors
for implementing ERP systems and the difficulties of implementation in two banks
in Mozambique. For this purpose a qualitative study was conducted in two banks,
using semi structured interviews. As motivators for the implementation were
identified external factors (such as regulatory changes) and internal factors (such as
problems of integration of internal systems and inflexible reporting). The main
difficulties mentioned were lack of coordination at the level of information
technology, lack of resources and skills and lack of understanding by users.

2.1.12.4 China

Khadija Elmeziane et al. 85 (2011) paper reports that : It is discussed that

the top management support has always proved to be one of the key factors, which
seems to be one of the essential issues to ensure the ERP projects to be successful.
However, the results of this study showed that the Chinese “traditional”


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management has a positive impact on the ERP implementation. Strong teamwork

mentality and composition has a positive impact on ERP implementation in China.
The ERP team should be balanced, or cross functional and comprise a mix of
external consultants and internal staff so that the internal staff can develop the
necessary technical skills for design and ERP implementation. Sufficient education
and training has positive impact on ERP implementation in China. The findings
show that business process reengineering and software modification factors exist
simultaneously, which seem to be a positively suitable solution for the Companies.
The Chinese business society welcomes new, advanced conceptions or solutions;
however they also have to be suitable for the Chinese context. Involving user has a
positive impact on ERP implementation success. System implementation represents
a threat to users’ perceptions of control over their work and a period of transition
during which users must cope with differences between old and new work systems.
User involvement is effective because it restores or enhances perceived control
through participating in the whole project plan. Effective project management has a
positive impact on ERP implementation success.

86
Yong Dai et al. (2011) study reports that : The model checking results
indicates that the organization support, BPR, the construction of the professional
team, the IT support and the continuous innovation are the key aspects of affecting
ERP implementation success, which has provided the effective data confirmation to
the theoretical analysis. Furthermore, such the essential factors as the organization
support and the leadership support are first essential factors of affecting ERP
implementation success in the former research results. According to the research’s
confirmation conclusion, the BPR factor becomes first essential factors of affecting
ERP implementation success and the coefficient value is 0.743 different from the
old conclusions. Therefore, the changes have reflected new characteristics in
Chinese enterprise ERP implementation. Finally, the continuous innovation is a new
excavation and the summary to the ERP implementation quality factor. The
complicated management strategies characterized by BPR and kinds of applied
technology innovation have played the vital role in the present ERP implementation
in Chinese enterprises.


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2.1.12.5 Sri lanka

Dharmarathne 87 (2004) study reports that in the developing economy like

Sri Lanka, the internal experts accumulate vast array of knowledge of the business
process through years of experience. Most of such knowledge might be tacit
knowledge

88
Kiriwandeniya et al. (2013) study reports that When many large Sri
Lankan organizations have adopted ERP systems in order to improve their existing
performance measurements, most of the organizations have failed to acquire the true
benefits expected mainly due to poor post implementation practices. The study
identified that ERP post implementation failure was not just caused by technical
issues of the system, but more importantly was also attributed to critical problems
related to top management, change management and effective user training.

2.1.13 ERP Implementation Costs

89
Xue Chengmeng (2012) study reports that: In general, the
implementation of ERP system can be divided into the initial investment cost and
operation and maintenance costs. With the system being run for test and gradually
used, the cost is gradually reduced and is not stable, which is mainly embodied in
the transfer of data and the education and training cost for members. After the
system is in normal operation, the cost becomes stable, which is fully presented as
the operation maintenance cost of the system. Studies show that supporting platform
cost accounts for about a quarter of the initial investment, and this part is very rigid;
Human and data transfer cost accounts for about half of the initial investment, which
can be regulated or compressed through the management decision, thus the cost
should be highly concerned in the implementation of ERP system by the enterprise,
as its influence on implementation cost is very sensitive. In a confident situation, the
planning, installation, construction and data transfer for the implementation of ERP
system by enterprise account for about two-thirds of the implementation cost, and if
this kind of cost is not well controlled, the implementation of the ERP system will
fail. Therefore, it should put such cost in the first place, manage and control it as


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sensitive cost. Studies of foreign scholars show that human planning cost and cost of
installation, construction and data migration will generally reach to three or four
times of the original cost of ERP software package. Therefore, in the
implementation of ERP system, the enterprise must deal well the human cost during
initial investment, and when the ERP system is loaded, it should control and manage
well the system maintenance cost and consulting cost, making ERP bring dramatic
changes to the enterprise business process, so as to enable the enterprise get higher
direct or indirect benefits in the implementation of the ERP system

2.1.14 ERP and TQM

16
Alexis Leon (2008) reports that it is the culture of the organisation ,
which is committed to total customer satisfaction through continuous improvements
as per total quality management (TQM) principles delivers much higher quality
implementations that function properly upon first use, on-time, with less cost and
more overall value. Continuous improvements have an inherent consequence in an
organisation where ERP is in use. It is the process of better learning how to use the
ERP system for long-term competitive advantage in the market place without
making un-necessary software modifications. Overall customer satisfaction in an
ERP system correlates strongly with end –user ownership. Organisations where the
ownership is shifted from end users of the system to the Information System
function suffer a barrage of mistakes & ownership. Customer focus ranks first
among the basic principles of TQM as well as in ERP.

2.1.15 ERP & BPR

The implementation of Enterprise Resource Planning (ERP) software is a

major challenge that companies face in terms of cost, complexity and business
impact. One of the reasons for this fact is the need to change a company’s business
processes prior to the implementation of the ERP software, by performing a
Business Process Reengineering (BPR) project. In addition, a common objective of
ERP and BPR is the introduction of efficient and effective business processes as a
means to realize corporate strategy. ERP and BPR should be considered as means to


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break down strategic objectives into daily business, linking strategy into business
processes and ERP software. Alexis Leon 16 (2008)

Markus Reiter et al.90 (2013) study reports that introduction of ERP

systems require organisations to re-think and redesign their processes to fit in with
the ERP system. In this case, BPR is driven by IT and seeks to radically alter
existing business practices. This IT-driven BPR view and other similar techno
centric views of IT call for discarding existing practices and reconstituting an
organisation on the basis of completely fresh ideas. This view omits the role of
human agents and the existing organisational and social contexts in the introduction
of new technologies, assuming that organisations can be fully redesigned through
new technology. There are two possible problems with this view. First, the
redesigned process may be less than optimal in terms of process efficiency. Second,
strategic misalignment may occur, as the new process may not contribute to the
achievement of strategic business objectives. This in turn can lead to a full or partial
“failure” of the BPR effort. Better results can be realised if ERP is used as a BPR-
enabler, and also as proactive tool for BPR. For organisations to use ERP as BPR-
enabler the organisation IT strategy needs to be aligned with the business strategy so
that there is no “technology gap”.

2.2 RESEARCH GAPS

The above review of literature proves beneficial in identifying the

research issues and the research gaps, which are mainly edifies on which the
objective of the present study are based on.

Very few studies on people involvement cover the comprehensive list of

people involved in the projects; generally it takes into account top management,
user, vendor, project team and consultants. The most important knowledge users are
not taken in to consideration by any of the earlier studies on stakeholder analysis
research. In fact there are three groups of people involved in these projects. User
Group, Internal support group and External support group


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ERP implementation is a change-process; it is the process of making

‘business transformation. There are number of barriers that can slow down the
progress of this change process or even stop it altogether. One of the barriers that is
most difficult to overcome centers on the attitude and behavior of the people who
are affected by the change. Change management is a very important activity in the
ERP implementation process. The user group is the one of the influencing groups,
which will be affected more in the ERP implementation change management
process. There are three types of users viz, (i). Transaction-users, (ii). Knowledge-
power-users, (iii). Positional-power-users.

The attitude and behavior of these users depend on the power they are
authorized and their perception on the effect of change on them. Power is the ability
to control all types of resources, such as information, people, expertise, assets, etc.
Power does not rest with position alone. There is positional-power and knowledge-
power. The positional-power comes from official authority while the knowledge-
power is accrued over a period of time by an individual through the acquirement of
critical knowledge related to organizational product and processes. As ERP focus on
process integrations, this knowledge-power-user plays a dominant role in the
implementation stages such as business analysis; ‘to be’ process design, conference
room pilot testing, data migration and post implementation. The transaction-users
are those who handle data entry or using the system for day to day transactions. The
expectation from these three users from the ERP system is different and the amount
of stake in the ERP success by each user type also different. Therefore, including
each user group as separate entity, we arrive at seven types of people involved in the
ERP implementation process as shown in Table 2.2.

Table 2.2 Seven type of people involved in ERP implementation

User Group Internal support group External support group

1. Positional power user 4. Top management 6. Vendor
2. Knowledge power user 5. Project team ( including 7. Consultant
3. Transaction users project manager & IT team)


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Chan et al. 39 (2003) says that the lack of efficient interaction between the
involved knowledge owners may lead to the failure of ERP implementation. Kostas
and Kostas 40, (2010) says that the ERP implementation is so knowledge –intensive
that the fate of the whole project is in the hands of a group of knowledgeable
employees within the organisation and the success of the project relies heavily upon
the effective management of knowledge into, within, and out of this team during
ERP life cycle. Above studies confirm the importance of knowledge owners but
there is a significant shortage of empirical research on this aspect. Hence there is a
need to conduct an empirical research in this area.

There are multiple studies Somer and Nelson 35 (2004) ; Hein 41 (2008) ;
Boo Young Chung et al.42 (2009) ; Stephen et al.43 (2010) which focused in
developing ERP implementation-models. These studies outlined comprehensive list
of people involved in the project, it takes into account top management, user,
vendor, project team and consultants. These knowledge owners were not considered
in any of these studies.

Further, there are studies which measure the importance (preference) of

players and activities across the enterprise system life cycle, but there is a little
effort made so far to quantify the overall contribution by each player. Most of the
studies concur that majority of these players are from the internal side of the
organization. Hence a study of these players will help to understand the
organizational readiness for ERP implementation.

The present study differs from earlier studies in that it focus on bringing
out an ERP success model based on key players associated with the projects and
develop a framework for the estimation of delays contributed by each players.