Article

Effects of decision rationality on ERP adoption extensiveness and organizational performance

Authors:
If you want to read the PDF, try requesting it from the authors.

Abstract

Purpose – The purpose of this paper is to examine how decision rationality affects ERP adoption extensiveness and subsequently, organization performance. The mediating roles of system usage and user satisfaction on the relationship between adoption extensiveness and organizational performance are also examined. Design/methodology/approach – This study was based on a questionnaire survey of 976 public-listed companies and 200 unlisted manufacturing companies. Responses of 93 ERP adopters were analyzed. Findings – ERP adoption extensiveness is significantly affected by the overall measure of expected economic benefits, but not by any of the economic benefit type individually. On the other hand, mimetic pressure individually affects ERP adoption extensiveness, but not the overall measure of institutional pressures. ERP adoption extensiveness is significantly associated with organizational performance, and the mediating roles of system usage and user satisfaction are supported. Research limitations/implications – This study has the limitations associated with questionnaire-based research and its small sample size may also limit the generalizability of its findings. Practical implications – The high emphasis on operational benefits of ERP adoption and the significant effect of mimetic pressure on ERP adoption extensiveness imply that organizations in Malaysia are largely “followers” of the technological innovation and generally have yet to exploit the full potentials of their ERP systems. Government agencies may need to play a more active role to facilitate fuller utilization and adoption of the higher end ERP applications. Vendors of ERP systems may need to review their strategies to increase their sales of ERP systems to the smaller business enterprises. Originality/value – The paper addresses the relatively void in literature on the link between decision rationality and technology adoption extensiveness and the subsequent organizational performance in the context of an emerging economy.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... Given the many aspects of a firm's activities affected by an ERP system, many different types of studies can be performed. Several studies emphasize the non-financial effects of investing in ERP, such as its role as an enabler of improved organizational capabilities (Kharuddin, Foong, & Senik, 2015), labor productivity (Badescu & Garcés-Ayerbe, 2009) or the effect of bundling it with an SCM-system (Wieder, Booth, Matolcsy, & Ossimitz, 2006). Kocaaga, Ervural, Demirel, and Zaim (2019) analyze the effect on the performance of 9 critical success factors -ranging from the role of top management, compliance of the ERP system with business to data accuracy-in relation to both, ERP implementation and usage. ...
... That combining ERP implementation with various managerial techniques has a significant positive effect on ROA and ROI is supported by the findings of Galy and Sauceda (2014), who linked survey data to actual financial data of 55 companies that implemented ERP between 1993 and 2001. Kharuddin et al. (2015) exploring the relationship between the extensiveness of the modules implemented and organizational performance found a significant positive effect on both, financial and non-financial performance. However, the latter becomes stronger with ERP extensiveness. ...
... So the results of studies comparing before and after adoption performance data are positive, albeit limited. Kallunki et al. (2011), Galy and Sauceda (2014), Kharuddin et al. (2015) and Acar et al. (2017) used questionnaires -sometimes in combination with actual financial firm data-to gather information on the effects of ERP implementation on financial and nonfinancial performance. These analyses show positive effects on -sometimes perceived, not actual-profitability and costs. ...
Article
Full-text available
Adopting an ERP system is a challenge for any firm and the problems associated with it initially often negatively affect the adopting firm’s profitability as measured through a firm’s main financial indicators. Also for a longer period of time after implementation the empirical results on adoption are mixed, although more positive results have been reported in recent years. However, over the many years of implementing ERP systems much knowledge has been gained on how to improve the implementation process and speeding up the realization of the benefits. This research investigates whether Pakistani manufacturing firms profited from this by realizing the financial benefits early on. This is empirically tested by comparing ten financial performance indicators of firms that adopted an ERP system to that of non-adopters between 2002 and 2012. The results show that they benefitted from the start, but not in all areas.
... Dai & Vasarhelyi, 2017) and institutional theory more specifically on the isomorphic pressures being used in explaining adopting new structures/changes to organizations (e.g. Kharuddin et al., 2015;Ugrin, 2009;Yigitbasioglu, 2015) led to the selection of them to this study. ...
... Accordingly, lack of governmental regulations, lack of industry involvement in adopting blockchain technology, and lack of external stakeholder's involvement have been identified as critical barriers to adopting blockchain technology in the supply chain context, which, viewed from coercive, mimetic, and normative isomorphic lenses, could be identified as lack of isomorphic pressures to implement blockchain technology (Kouhizadeh et al., 2021). Similarly, empirical research has studied the importance of isomorphic factors at different levels for technology-related adoptions, such as mimetic pressures significantly influencing ERP adoption (Kharuddin et al., 2015;Ugrin, 2009) and isomorphic pressures influencing cloud computing (Yigitbasioglu, 2015). ...
... In general, prior literature discuss the influence of one or all of the isomorphic factors/pressures on the adoption of new technologies and structures (Kharuddin et al., 2015;Kouhizadeh et al., 2021;Ugrin, 2009;Yigitbasioglu, 2015). They discuss how these factors promote adoption. ...
Article
Full-text available
Regardless of the benefits blockchain provides to the accounting information systems, its adoption and application is limited. This study: (1) investigated the underlying reasons for this limited adoption of blockchain in a developing country context; (2) explored the potential benefits and challenges of adopting blockchain; and (3) proposed how accounting and auditing should be facilitated to adopt blockchain technology. The study utilized a qualitative general inquiry approach by conducting 13 in-depth interviews with professionals and practitioners involved in the adoption process in organizations that had adopted blockchain technology or are researching this technology and have plans to adopt this technology in the future. Findings revealed five reasons for the lack of blockchain adoption, contributing to Technology-Organization-Environment (TOE) framework and Institutional theory. In addition, the study identified the benefits and challenges of introducing blockchain into accounting and auditing while proposing a framework to facilitate blockchain adoption in these disciplines. Keywords: Blockchain Technology, Accounting, Auditing, TOE Framework, Institutional Theory
... The factors influencing the decision to adopt an ERP system are numerous. Global competition, the need for rapid decision-making processes, the management of high volumes of data, the incompatibility between information systems, the need for inter-and intraorganizational connections (Ehie and Madsen, 2005;Finney and Corbett, 2007;Hwang and Min, 2015;Kharuddin et al., 2015) are particularly important. The interest aroused in economic operators by ERPs and business intelligence (BI) systems is linked to the benefits brought by their introduction into the company, both from a strategic and operational point of view. ...
... On the economic side, the investment in integrated software has involved a huge effort for COSMOB. Although its implementation mainly involved internal resources, it was (Seethamraju, 2015) N o The need for rapid decision-making processes (Fui-Hoon and Delgado, 2016) Yes The management of high volumes of data (Finney and Corbett, 2007;Kharuddin et al., 2015) Yes The incompatibility between information systems (Finney and Corbett, 2007;Kharuddin et al., 2015) No The need for inter-and intra-organizational connection (Ehie and Madsen, 2005;Fui-Hoon and Delgado, 2016) Yes necessary to involve a software house both in the investment assessment phase and in that of adapting the infrastructure to the organizational configuration of the company. ...
... On the economic side, the investment in integrated software has involved a huge effort for COSMOB. Although its implementation mainly involved internal resources, it was (Seethamraju, 2015) N o The need for rapid decision-making processes (Fui-Hoon and Delgado, 2016) Yes The management of high volumes of data (Finney and Corbett, 2007;Kharuddin et al., 2015) Yes The incompatibility between information systems (Finney and Corbett, 2007;Kharuddin et al., 2015) No The need for inter-and intra-organizational connection (Ehie and Madsen, 2005;Fui-Hoon and Delgado, 2016) Yes necessary to involve a software house both in the investment assessment phase and in that of adapting the infrastructure to the organizational configuration of the company. ...
Article
Purpose This study aims to analyze the innovations introduced, with reference to enterprise resource planning, in the Italian wood–furniture sector, focusing attention on the COSMOB S.p.A. case study, identifying how this small company tried to exploit the advantages offered by the introduction of new digital technologies to remain competitive in the context of the accredited Test Laboratories in the furniture industry. Design/methodology/approach The research has been developed with a qualitative approach. The study is a conceptual development and it uses exploratory interviews to create a single case study of COSMOB. The case study was developed with the realization by the researcher of a long period of support to the company’s Quality Manager, and periodic bi-monthly interviews for an update of their perceptions on the development of the activity. Findings The need for rapid decision-making processes, the management of high volumes of data and the need for inter- and intra-organizational connection had a critical relief in company’s decision to adopt the integrated software. As for the main problems related to its adoption, these were the duration of the implementation of the operation, the complexity of the system and its limited adaptability. Originality/value The value of the paper relies on the development of an in-depth company case study, where the researcher supported the implementation of the system for the entire activity, obtaining therefore, a qualitative base of information that cannot be obtained through limited interviews.
... The ERP system has a positive relationship with the competitive advantage and has a positive impact on the firm's performance (Handoko, Aryanto, & So, 2015). In addition, the Kharuddin, Foong, and Senik (2015), found that ERP adoption extensiveness is highly correlated with organizational efficiency and supports the mediation role of system implementation and user satisfaction. The organization must understand how to use the system by considering from the user's perspective in order to prepare employees to face new challenges and learn how to leverage technology for tangible benefits. ...
... The results supported that ERP adoption exhibited an important role in enhancing technological context to achieve superior performance of the organization. The result of the research shows that the ERP adoption is the mediator between technological context and organizational performance; this supports previous studies that ERP adoption is highly correlated with organizational performance (Kharuddin et al., 2015). The results also confirm the work of Handoko et al. (2015) that the ERP system has a positive impact on the firm performance, and Gupta, Qian, Bhushan, and Luo (2018) indicated that ERP which is positively related to firm performance. ...
Article
The purpose of this study was to observe the mediating role of ERP adoption on the relationship between two latent variables, technological context, and organizational performance. The study compared the models with and without the presence of the mediator, emphasizing on the empirical data collected from 285 manufacturing industries in Thailand. The results suggested that ERP adoption had mediated the relationship between technological context and organizational performance with a positive impact on organizational performance. The research implied that ERP adoption had a crucial role in organizational performance.
... Enterprise resource planning (ERP) system is a system that allows a seamless flow of real time information in an organization through integration of its business processes to facilitate information sharing among its various operating units. With globalization and intense competitions, many SMEs in the developing countries, despite lacking the needed capabilities and resources, are pressured to replace their legacy systems with more sophisticated information systems, such as the ERP system (Kharuddin et al., 2015). Nicolaou and Reck (2004) found that firms adopting enterprise systems exhibit higher differential performance only after two years of continued use. ...
... Consultants will work closely with SMEs to understand business requirements and help explain and set up system to meet those requirements. Providing technical supports and trainings are identified as critical factors to the adoption of ICT solutions including ERP (Kharuddin et al., 2015). To provide further incentive, the cost of ICT usage and consulting and training for the first year will be free of charge to SMEs with no contractual obligations. ...
Conference Paper
Full-text available
As Small and Medium Enterprises (SMEs) continue to play a bigger role in Thailand's economic growth. Increasing SMEs productivity and competitiveness with the use of Information and Communication Technology (ICT) has become an important strategy of Thai government. Department of Industrial Promotion (DIP) has launched such program with objective to boost ICT adoptions of SMEs by providing necessary ICT solutions – Enterprise Resources Planning (ERP) and Business Intelligence (BI), consulting and training services, and subsidy of initial investment. This paper aims to investigate the effect of these strategies on SMEs' decisions to adopt ICT and examine what influence those decisions. The study uses a mixed method with questionnaire to understand business nature of SMEs participated in the program and semi-structure interview to gain insights of factors that affect their decisions. A number of external and internal factors are listed from literature review and are discussed with decision-maker of SMEs. The results show that almost every SMEs are willing to adopt ICT after participating the program with expected benefits of improved productivity and cost reduction. The analysis also reveals that factor that positively affects SMEs' decision is consulting and training. This paper argues that training and consulting actually increase SMEs' confidence that ICT benefits will be realized which lead to the decision to adopt ICT. Providing ICT solutions that are simple and cost effective is another important influence. Findings of this paper can be used as a guideline to refine ICT strategies. In addition, future research can examine the relationship between SMEs' confidence in ICT benefits realization and ICT adoption decision.
... Enterprise Resource Planning (ERP) is a system that allows a seamless flow of real time information in an organization through integration of its business processes to facilitate information sharing among its various operating units. With globalization and intense competition, many SMEs in developing countries, despite lacking the needed capabilities and resources, are pressured to replace their legacy systems with more sophisticated information systems, such as the ERP system (Kharuddin et al., 2015). Nicolaou and Reck (2004) found that firms adopting enterprise systems exhibit higher differential performance after only two years of continued use. ...
... Consultants will work closely with SMEs to understand business requirements and help explain and set up the systems to meet those requirements. Providing technical supports and trainings are identified as critical factors to the adoption of ICT solutions including ERP (Kharuddin et al., 2015). To provide further incentive, the cost of ICT usage and consultation and training for the first year will be free of charge to SMEs with no contractual obligations. ...
Article
Full-text available
As Small and Medium Enterprises (SMEs) continue to play a bigger role in Thailand's economic growth, increasing SMEs productivity and competitiveness with the use of Information and Communication Technology (ICT) has become an important strategy of the Thai government. Thailand's Department of Industrial Promotion (DIP) has launched a program which aimed to boost ICT adoptions by SMEs by providing necessary ICT solutions. The program consisted of cost-free provision of Enterprise Resources Planning (ERP) and Business Intelligence (BI) systems, consultation and training services, and subsidy of initial investment. This paper aims to investigate the effect of these strategies on SMEs' decision to adopt ICT and to examine that factors that influence their decision. The study used a mixed method of survey questionnaire and semi-structured interview to understand the business nature of participating SMEs, and to gain insights on the factors that affect their decisions respectively. A number of external and internal factors were listed from literature review and were discussed with the top level management of SMEs. The results showed that almost every SMEs were willing to adopt ICT after participating in the program due to expected benefits of improved productivity and cost reduction. The analysis also revealed that the factor that positively affected SMEs' decision to adopt ICT is the consultation and training services. This paper argued that training and consultation actually increased SMEs' confidence that ICT benefits will be realized which led to their decision to adopt ICT. Providing ICT solutions that are simple and cost effective is another important influence in the SMEs decision-making. Findings of this paper can be used as a guideline to refine ICT strategies. In addition, future research can examine the relationship between SMEs' confidence in ICT benefits realization and ICT adoption decision.
...  Absorver e processar informações (Simon, 1991)  Incertezas (Milburn & Billings, 1976)  Condições ambientais (Schwenk, 1984)  Percepção seletiva (Bunderson & Sutcliffe, 1995, Waller, Huber & Glick,1995)  Experiências profissionais, percepções de fatos, dimensão cognitiva e emocional Beyer, at al., 1997)  Benefícios econômicos (Kharuddin, Foong & Senik, 2015)  Comportamento oportunista (Silva & Brito, 2013)  Modelo mental restritivo (Macedo & Fontes, 2009)  Inovação com base no desenvolvimento de novos produtos (Chaharbaghi & Newman, 1996;Tidd, at al., 1997)  Otimização recursos internos. (Porter, 1989, Chaharbaghi & Newman, 1996, Whitley, 2000)  Aproveitar oportunidades de mercado, como parcerias (Porter, 1989;Whitley, 2000)  Regras, normas e procedimentos técnicos (Miller & Morris, 1998) O processo decisório do setor de P&D é afetado pela Racionalidade Limitada? ...
... Benefícios econômicos (Kharuddin, Foong & Senik, 2015). ...
... The successful implementation of ERP projects in retails in India is influenced by project risk management as measured by estimates of poor cost estimates, control and tracking of work activities on poor projects, relatively poor project planning, the inability of project managers and poor communication within the project (Garg and Khurana, 2017). ERP implementation can improve organizational capability in manufacturing companies (Aburub, 2015;Kharuddin et al., 2015;Hong et al., 2016). ...
... Company performance is a result or level of success achieved by the company as a whole in a certain period in carrying out the activities of the company's business activities. Company performance can be measured in the financial and non-financial categories (Kharuddin et al., 2015). The company's performance from the company's operations is measured from non-financial, among other things, on-time delivery, increased accuracy in forecasting, reducing lead time, increasing services provided after-sales, and reducing inventory levels (Acar et al., 2017). ...
Article
Full-text available
ERP implementation requires a substantial investment and typically built through project management, which needs a rigorous and in limited time management. ERP implementation requires enormous efforts to implement because it involves all business functions in the organization and partners (ERP vendors and consultants) This paper aims to examine the impact of implementing an enterprise resources planning project on firm performance and organizational citizenship behavior as a moderating variable. The study has surveyed 61 respondents representing 61 manufacturing companies domiciled in the region of East Java, Indonesia, which has adopted an ERP system for more than five years. Survey used questionnaire designed with a five-point Likert scale. The respondent is the key user who is responsible for the success of the ERP system in its business functions of the company. Data analysis used SPSS version 25 to assess the indicator validity and examine the hypothesis developed. The result showed that the implementation of the enterprise resources planning project directly affected firm performance. Second, organizational citizenship behavior directly influences firm performance. Third, the implementation of the ERP project influences firm performance with organizational citizenship behavior as a moderator vari-able. This research provides an insight to project manager in building employee relationship to complete the projects on time. This study also enriches the current research in the supply chain theory.
... Training and knowledge gap: The following authors (Ram, 2013), (Kharuddin et al., 2015), (Yang & Su, 2009), (Huang et al., 2021) and (Peng & Nunes, 2010) have extensively discussed the importance of the training and its impact on user satisfaction. Based on the feedback given below, the training influences better utilization of the XYZ Cloud ERP system and it helps to reduce the knowledge gap among the system users. ...
Article
Full-text available
Utilizing the right resources and adequate capabilities helps to bring competitive advantages and it assists to generate valuable positions for the business. Most importantly, utilizing the unique resources within the organization enhances the senior management’s decision-making capabilities. From Sri Lanka, one of the leading apparel manufacturing organizations was selected for this research study and a case-based qualitative method was adopted for it. XYZ Cloud ERP system was selected to implement at ABC (Pvt.) Ltd. by expecting to bring competitive advantages and a valuable position to the business. However, the preliminary study revealed that the organization has failed to bring expected outcomes and it is required to identify the causes and explore the reasons for the underutilization of the XYZ Cloud ERP system. This study has adopted thematic network analysis to identify the causes and explore reasons from the senior management who are responsible for taking strategic decisions. To understand the central phenomena of the above problem setting, semi-structured interviews were conducted to collect data. Nine (9) senior executives and one (1) director were selected representing different levels of industry experience, academic backgrounds, and decision-making authority. The study was aimed from the organizational, cultural, information system quality, information quality and service quality perspectives. Altogether thirteen (13) factors were identified and seven (7) of them were recognized as the most influencing causes and reasons for the underutilization of the XYZ Cloud ERP system. Findings explain that the XYZ Cloud ERP system has failed to provide different levels of analytical information and senior management has failed to understand the significance of the information system's data. Moreover, the merging of the ERP system’s data with the excel spreadsheet’s data helps to produce decision-making information and it negatively influences the use of the XYZ Cloud ERP system. The findings further reveal that the lack of support from the ERP vendor and top management promotes traditional practices and discourages to use of the XYZ Cloud ERP system maximum. Finally, recommendations are proposed to overcome the negatively influencing causes and reasons. Most significantly, it helps to bring people development, organizational transformation and organisational business processes improvements.
... ERP system can link different areas of an organisation, such as industrialized, order management, economic systems, human resources, suppliers and customers, into a tight incorporated system with shared data and visibility (Chen, 2001;Pishdad and Haider, 2013). For instance, ERP system present seamless incorporation of processes across functional areas with better workflow, standardisation of a variety of business practices and access to real-time up-to-date data (Ehie and Madsen, 2005;Kharuddin, Foong, and Senik, 2015). Implementing ERP system successfully however is not easy, costly and complex, and often shows high disappointment rates or even abandonment due to need of fit with the business or social culture. ...
Article
Full-text available
Purpose – Most small- and medium-sized enterprises (SMEs) use some business management software to manage their daily operations. Ultimately they consider transitioning to an enterprise resources planning (ERP) system. However, implementing ERP system successfully is costly and complex, and often shows high disappointment rates or even abandonment due to need of fit with the business or social culture. In Jordan, large businesses have been using the ERP system for a long time, but SMEs usage of the system is relatively new. The purpose of this paper is to study the effect of ERP implementation success antecedents which consists of training, supportive leadership and ease of use on ERP implementation success itself through a mediating effect of user satisfaction. Design/methodology/approach – Empirical data were collected using a survey questionnaire which was distributed to ERP users in Jordanian healthcare organizations. A total of 175 responses were collected and analyzed using structure equation modeling. Findings – A significant relationship was found between these antecedents and ERP implementation success. Furthermore, user satisfaction plays a significant mediating role between ease of use and ERP implementation success. Practical implications – The outcomes of this study are useful to ERP users as they would be able to strategize future ERP system implementation in different sectors such as education, manufacturing and insurance industry. Finally, the findings may be useful to ERP system adopters in different developing countries. Originality/value – This is one of the first studies which adequately covers the relationships between antecedents of user satisfaction and ERP implementation success which consists of training, supportive leadership and ease of use on ERP implementation success itself through a mediating effect of user satisfaction.
... Due to the fact that modern agriculture requires a complex administrative environment, it also requires information systems developed based on strict requirements (Verdouw et al., 2015). Kharuddin et al. (2015), found how the decisions based on reason can affect the ERP adoption and also how the organization performance is affected by the general measurement of the economics benefits. The success of ERP implementation is significantly related to the effects of its absorption Junior et al. ...
Article
Agriculture is a complex industry based on science. Agriculture relies on systems of climate-standard analysis: solar energy, heat, moist and systems for the area of field operation patterns: soil chemical composition, plant nutrition, genetic improvement, pest and disease control, harvesting. We believe that the new paradigm to increase efficiency in this segment goes through the adoption of enterprise resource planning (ERP) systems. Our empirical study is about the use and diffusion of ERP systems in a view of interoperability between different software packages with a view on business analysis functionality when taking a step further in farm management information system (FMIS). We hope this work can bring a theoretical and practical contribution for the agribusiness field and also increase debates about the platforms on cloud computer based on ERP, Enterprise 2.0 and Industry 4.0. The research presented in this study was carried out with 375 farmers in Brazil. The data gathering instrument used for the quantitative research was built based on the result of the qualitative (in-depth) study in combination with three theories: Diffusion of Innovation Theory (DOE), Technology-Organization-Environment Framework (TOE), and Inter-organizational Relations (IOR). The construct information sharing (IS) taken from IOR was applied to perform a moderator role on the measurement of ERP adoption stages. The results indicate the significant drivers for evaluation, adoption, and routinisation. Also, as a result, it was found that Information Sharing influence the relationship between evaluation and adoption positively. Moreover, the theoretical and managerial implications of the research results are also debated in the paper.
... ERP system can link different areas of an organization, such as industrialized, order management, economic systems, human resources, suppliers and customers, into a tight incorporated system with shared data and visibility (Chen, 2001;Pishdad and Haider, 2013). For instance, ERP system present seamless incorporation of processes across functional areas with better workflow, standardization of a variety of business practices and access to real-time up-todate data (Ehie and Madsen, 2005;Kharuddin et al., 2015). Implementing ERP system successfully however is not easy, costly and complex, and often shows high disappointment rates or even abandonment due to need of fit with the business or social culture. ...
Purpose Most small and medium sized enterprises (SMEs) use some business management software to manage their daily operations. Ultimately they consider transitioning to an enterprise resources planning (ERP) system. However, implementing ERP system successfully is costly and complex, and often shows high disappointment rates or even abandonment due to need of fit with the business or social culture. In Jordan, large businesses have been using the ERP system for a long time, but SMEs usage of the system is relatively new. The aim of this research is to study the effect of ERP implementation success antecedents which consists of training, supportive leadership and ease of use on ERP implementation success itself through a mediating effect of user satisfaction. Design/methodology/approach Empirical data was collected using a survey questionnaire which was distributed to ERP users in Jordanian healthcare organizations. A total of 175 responses were collected and analyzed using structure equation modelling. Findings A significant relationship was found between these antecedents and ERP implementation success. Furthermore, user satisfaction plays a significant mediating role between ease of use and ERP implementation success Practical implications The outcomes of this study are useful to ERP users as they would be able to strategize future ERP system implementation in different sectors such as education, manufacturing and insurance industry. Finally, the findings may be useful to ERP system adopters in different developing countries Originality/value This is one of the first studies which adequately covers the relationships between antecedents of user satisfaction and Enterprise Resource Planning (ERP) implementation success which consists of training, supportive leadership and ease of use on ERP implementation success itself through a mediating effect of user satisfaction.
... Past studies dedicated to evaluating the effect of IT/IS technologies on business performance [56,76,77] adopted the D&M Success model as the underpinning model. Their analysis showed the model's strength in providing insight into the relationships between the IT/IS technologies and enhanced organizational performance. ...
Article
Full-text available
The Accounting Information System (AIS) is generally employed for the automation of operational processes and the enhancement of company efficiencies, but more recently, AIS developments have had a great effect on the process of sustainable decision-making among organizations. However, previous research on the AIS and its capabilities attributed its success to critical success factors. Therefore, in the current work, De Lone and Mc Lean’s Information System (D&M IS) Success Model is evaluated in terms of AIS in Jordanian organizations. The current study primarily aimed to determine the influence of system quality, service quality, information quality, system use and user satisfaction on AIS use, which is argued to eventually enhance the quality and sustainability of decision-making. The study employed a quantitative approach using a self-administered questionnaire for data collection involving 101 decision-makers who are familiar with AIS usage. Following the collection of data, it was validated using Structural Equation Modeling (SEM)—PLS. Based on the obtained results, system quality and information quality significant affected system use, but service quality did not. In turn, AIS was found to have a significant effect on user satisfaction. Furthermore, system use and user satisfaction had positive effects on AIS, which eventually affected the sustainability of decision-making, representing the net AIS benefits. The study contributes to existing IS literature, particularly in the field of determining the factors that influence the AIS net benefits, with the proposed model validated in Jordanian organizations using AIS. The study can be used as a guide to shed light on the importance of AIS and it also provides implications, limitations and opportunities for future studies.
... Several studies have used this theory to explain an organization's ICT adoption decision. For example, Kharuddin, Foong, and Senik (2015) investigated ERP adoption by organizations and found that expected economic benefits, mimetic pressures, and organizational performance were significant factors. Karoui, Dudezert, and Leidner (2015) investigated the adoption of a SAP based social-networking system based on data obtained from 38 interviews across the two organizations. ...
Chapter
The chapter provided a comprehensive review of previous studies on the adoption of information and communication technology (ICT). The study further conducted a qualitative study on the adoption of "bring your own device" (BYOD). The study systematically reviewed technology acceptance theories and models such as TAM, TPB, and UTAUT at the individual level and technology adoption theories such as "innovation diffusion theory," "technology-organization-environment framework," and "institutional theory" at the organizational level. Thereby, key factors predicting the ICT adoption at the individual, organizational, institutional, and environmental level were identified. A theoretical framework that explains the ICT adoption and the consumerization process was proposed based on the theories. The qualitative data collected by semi-structured interviews with senior-level managers was analyzed using the content analysis. The findings suggested that perceived financial cost, compatibility, privacy, and security concerns were significant factors in predicting the enterprise's adoption of BYOD.
... Extant literature in new technology adoption has shown that many manufacturing firms consider adopting new manufacturing technologies because of their benefits and opportunities (e.g. Kharuddin et al., 2015). Benefits of implementing I4.0, such as productivity and efficiency, are the important driving factors to implement I4.0 (Horvath and Szavo, 2019). ...
Article
Full-text available
Purpose The digital transformation towards Industry 4.0 (I4.0) has become imperative for manufacturers, as it makes them more flexible, agile and responsive to customers. This study aims to identify the factors influencing the manufacturing firms’ decision to adopt I4.0 and develop a triadic conceptual model that explains this phenomenon. Design/methodology/approach This study used a qualitative exploratory study design based on multiple case studies ( n = 15) from the manufacturing industry in Malaysia by conducting face-to-face interviews. The data were analysed using NVivo. The conceptual model was developed based on grounded theory and deductive thematic analysis. Findings Results demonstrate that driving, facilitating and impeding factors play influential roles in a firms’ decision-making to adopt I4.0. The major driving factors identified are expected benefits, market opportunities, labour problem, customer requirements, competition and quality image. Furthermore, resources, skills and support are identified as facilitating factors and getting the right people, lack of funding, lack of knowledge, technical challenges, training the operators and changing the mindset of operators to accept new digital technologies are identified as impeding factors. Research limitations/implications Due to its qualitative design and limited sample size, the findings of this study need to be supplemented by quantitative studies for enhanced generalizability of the proposed model. Practical implications Knowledge of the I4.0 decision factors identified would help manufacturers in their decision to invest in I4.0, as they can be applied to balancing advantages and disadvantages, understanding benefits, identifying required skills and support and which challenges to expect. For policymakers, our findings identify important aspects of the ecosystem in need of improvement and how manufacturers can be motivated to adopt I4.0. Originality/value This study lays the theoretical groundwork for an alternative approach for conceptualizing I4.0 adoption beyond UTAUT (Unified Theory of Acceptance and Use of Technology). Integrating positive and negative factors enriches the understanding of decision-making factors for I4.0 adoption.
... Further, the construct "organizational impact" was taken out and replaced with the construct of net benefits. Grounded upon the task to be carried out, the revised D&M success model is applicable at multiple analytical levels, and as highlighted in various studies (e.g., Chou & Hong, 2013;Kharuddin et al., 2015;Wickramasinghe & Karunasekara, 2012), this model could function as a theoretical foundation in the evaluation of the effect of ERP systems on organizational performances. This model has been widely used in evaluating ERP success, but not at the organizational level (Almazan et al., 2017;Ifinedo et al., 2010). ...
Conference Paper
Enterprise Resource Planning (ERP) systems have significantly grown and evolved in the last decades. As a result, they have become highly important for operational data analysis and subsequently to create decision support and analytical applications. The majority of studies on ERP systems have aimed to evaluate their transactional and operational impacts, without taking into consideration their importance in the decision-making aspects. Based on a systematic literature review methodology, this article intended to analyze previous research works on the role of ERP in improving the decision-making. The research was conducted based on four scientific search engines: Emerald Insight, IEEE Xplore, ProQuest and ScienceDirect. After screening more than 386 articles, 27 of them were selected, categorized and then synthesized. The study provides useful information on the way these systems contribute to improving the decisional aspect in the enterprise.
Article
Full-text available
Successful Enterprise Resource Planning (ERP) implementations are a boon for organisations. However, there have been many instances of failed ERP implementations globally resulting in millions of wasted dollars. It is vital to learn from past ERP implementations so that such expensive mistakes are not recurrent. This qualitative exploratory case study aims to explore and document the lessons learned from ERP implementations in an Australian global natural resources company to mitigate such problems in the future. A single case study was conducted with the aim to understand experiences from different sites of the company that have already undergone proprietary ERP system implementation. Data was collected through interviews of key participants who were involved in the implementation. Analysis of the interviews has resulted in comprehensive lessons learned around the project focus areas. Finally, ten tips, divided in 4 categories i.e. People, Strategy, Technology and Management have been identified, to guide future ERP implementations and increase chances of success.
Conference Paper
Enterprise Resource Planning (ERP) systems have transformed the way of doing business in the modern environment. More specifically, they integrate all functions of an enterprise, allowing seamless information dissemination and facilitating the decision-making process. However, the implementation of ERP systems is not always a prerequisite of operational and business success. On the contrary, companies should thoroughly investigate the critical factors that have an impact on the implementation process. Under this context, the present study aims at developing and testing a three-dimensional conceptual framework, that investigates the antecedents of “ERP implementation success”, as well as the impact of the implementation itself on “organizational performance”. The proposed conceptual framework was tested, using a newly-developed structured questionnaire, in a sample of 204 Greek companies that have already implemented an ERP system. Results indicate that “end-users” constitute the most significant actor for ensuring ERP implementation success. Another important empirical finding is that, among the three dimensions used to measure “ERP implementation success” (information quality, system quality, service quality), “information quality” has the strongest impact on all the dimensions of “organizational performance” (internal efficiency, competitiveness, profitability).
Article
The failure of Enterprise Resource Planning (ERP) implementation in higher education institutions (HEIs) worldwide is much higher than other sectors, such as banking or manufacturing, yet limited research has been conducted on this field. To date, prior literature has identified some critical success factors (CSFs) mostly either in the domain of information system (IS) or in the industrial context. Hence, this paper identifies and categorises CSFs of ERP implementation in HEIs from multiple aspects. Semi-structured face-to-face interviews were conducted with technicians and managers from three Public Jordanian HEIs. The main finding of this study is the identification and characterisation of three new sector- and context-specific CSFs. This research contributes to identifying new CSFs with evidence of successful implementation of ERP systems in the public higher education sector, which has not been fully investigated in any documented literature in the sector. The research also brings out some insights for the need for sustainable ERP in the sector during crisis time.
Article
Full-text available
Purpose An enterprise resource planning (ERP) system is commonly used for automating operational processes and enhancing their efficiency inside a company. In the recent years, the increasing development of ERP technologies has increased their impacts on decision-making. Such impact can no longer be underestimated. The purpose of this study was to evaluate the impacts of ERP systems on the improvement of decision-making quality inside large Moroccan companies. Design/methodology/approach Based on the DeLone and McLean information systems success model and by adopting a quantitative approach, survey data were collected through questionnaires. The established questionnaires were distributed to 104 decision-makers who use ERP systems. To test the developed research model, structural equation modeling based on the partial least squares method was used. Findings The findings of the present investigation showed that information and system quality had a positive impact on the overall user’s experience with the ERP system, whereas service quality had a negative impact on it. This influenced the quality of decision-making. The results also showed that the model used has sufficient and adequate convergent and discriminant validities, as well as sufficient reliability. Originality/value To the best of authors’ knowledge, this is the first empirical study that evaluates the effect of ERP systems on improving the quality of decision-making in Morocco. The results provide interesting theoretical and managerial implications.
Article
Full-text available
The objective of this paper is to examine the relationship between the implementation of the Sarbanes-Oxley (SOX) legislation and Enterprise Resource Planning (ERP) systems, and to investigate the impact that the passage of this legislation has had on the decision for companies to adopt ERP technology. The legislation itself is discussed, along with an analysis of ERP systems, including their components, their advantages and disadvantages, and the critical factors and crucial components which must be present for the successful deployment of such systems. This paper explores the contributory effect of SOX on ERP adoption. The authors concluded that SOX merely accelerated an inevitable process. The best managers will always find and use the best tools to maximize benefits to their organizations. The requirements of Sarbanes-Oxley forced companies to rethink their processes and technology, and therefore may have provided the final incentive for companies to commit to ERP.
Article
Full-text available
This study is an investigation of the environmental, organizational and technological drivers of Internet commerce adoption and implementation in small businesses. To conduct the study, the Tornatsky and Fleischer model was adopted and tested in seven small businesses located in Southern Italy. The main contribution of the study lies in the fact that it shows that the environmental context has a key role in the adoption and implementation of e-commerce in SMEs. This is over and above factors related to technology characteristics (e.g. benefits and barriers) and organizational characteristics (e.g. slack resources) that have been extensively investigated elsewhere. Environmental factors of special importance are government intervention, public administration and external pressure from competitors, suppliers and buyers.
Article
Full-text available
Knowledge-based pharmaceutical industry in Jordan has adopted ERP system to sustain the competitiveness of the industry in the local and global market. This research examines the essential factors that enable or inhibit the success of ERP implementation. It uses a case study methodology to analyze these factors in terms of a firm's organizational performance and ERP capabilities and functions. As a result of using ERP system the capabilities of the system were either not well utilized or never utilized. Having a deep review at the functions available in the system and the functions used it can be easily concluded that a maximum of 10% of the functions were utilized, meaning that the company paid $450000 to invest only 10% of the cost which is only 31,500, and that a total of 283,500 JD is considered as a sunk cost that is not utilized.
Article
Full-text available
There is an increasing need to implement a total business solution which supports major functionalities of a business. Enterprise resource planning (ERP) software is designed to meet this need, and has been widely adopted by organizations in developed countries. Meanwhile, ERP is beginning to appear in many organizations of developing countries. Little research has been conducted to compare the implementation practices of ERP in developed vs developing countries. Our research shows that ERP technology faces additional challenges in developing countries related to economic, cultural, and basic infrastructure issues. This article identifies a range of issues concerning ERP implementation by making a comparison of advanced and developing countries.
Article
Full-text available
The need for an integrated enterprise-wide set of management information pronounced Data Warehousing the 'hot topic' of the early-to-mid 1990's, however, it became unfashionable through the mid-to-late 1990s, with the approach of Y2K and with it the widespread implementation of ERP systems. However, in recent times, the re-emergence of Data Warehousing, to address the limitations and unrealised benefits of ERP systems implementation, provides researchers with a new challenge in understanding the 'double learning curve' for an organisation, undertaking in quick succession both an ERP systems project and a Data Warehousing project, in an attempt to finally achieve the benefits expected but never realised.
Article
Full-text available
Small and Medium-sized Enterprise (SME) requires to tap the power of Information Technology (IT) and integrate information system in order to stay competitive and customer oriented. Thus, the Enterprise Resource Planning (ERP) is one solution to integrate information technology infrastructure to meet global competition. This research paper investigates the factors that prevent Malaysian SMEs from fully adopting the ERP system. Through various literatures, this paper will address the degree of factors that gave an impact and provide rating of impact to the SMEs. Quantitative surveys were done in 21 SMEs to understand the actual situation of ERP adoption. The research instrument use was the online survey system. Results from the survey concludes that the on-availability of suitable ERP system the meets the SME business needs is one of the five important factors that prevents the adoption of such system. ABSTRAK Enterprise Kecil dan Sederhana (EKS) perlu menggunakan kuasa Teknologi Maklumat (TM) dan mengintegrasikannya dengan sistem maklumat supaya kekal berdaya saing dan berorientasikan pelanggan. Justeru itu, Perancangan Sumber Enterprise (
Article
Full-text available
Enterprise resource planning (ERP) systems have emerged as the core of successful information management and the enterprise backbone of organizations. The difficulties of ERP implementations have been widely cited in the literature but research on the critical factors for initial and ongoing ERP implementation success is rare and fragmented. Through a comprehensive review of the literature, 11 factors were found to be critical to ERP implementation success – ERP teamwork and composition; change management program and culture; top management support; business plan and vision; business process reengineering with minimum customization; project management; monitoring and evaluation of performance; effective communication; software development, testing and troubleshooting; project champion; appropriate business and IT legacy systems. The classification of these factors into the respective phases (chartering, project, shakedown, onward and upward) in Markus and Tanis’ ERP life cycle model is presented and the importance of each factor is discussed.
Article
Full-text available
Purpose – The purpose of this paper is to provide a comprehensive literature review of enterprise content management (ECM) research, a conceptual framework of areas of concern regarding ECM, and an agenda for future ECM research, based on the review and conceptual framework. Design/methodology/approach – To gain an understanding of the ECM literature, a structured research approach is adopted, consisting of two phases. The first phase consists of identifying the relevant ECM research papers. In the second phase, the analysis phase, the current ECM research is categorized based on three structural pillars: system component dimensions, system lifecycle, and strategic managerial aspects. Findings – After a review and classification of 91 ECM publications, it is found that ECM involves several sophisticated and interacting technical, social, organizational, and business aspects. The current ECM literature can be grouped around three main pillars: the first pillar consists of the four ECM component dimensions (tools, strategy, process, and people). The second pillar is the enterprise system lifecycle (adoption, acquisition, evolution, and evaluation). The final pillar is the strategic managerial aspect (change management, and management commitment). Based on the review and a proposed conceptual framework, an agenda for future research around the aforementioned three pillars is suggested. Originality/value – There is a lack of ECM meta‐analysis research that explains the current state of the field. This paper contributes to information systems research by describing and classifying the published literature in ECM and by pointing out the gaps where further research is most needed. Furthermore, the paper provides a framework that may provide a conceptual structure for future studies.
Article
Full-text available
Although Enterprise Resource Planning (ERP) systems are being used widely all around the world, they bring along many problems as well as benefits. Most of these implementations are failures and inadequate adoption is just one of the failure factors. This study provides an extensive review of the literature resulting in a taxonomy that may be used for other researchers in the field. The study also defines a framework for organizational adoption of ERP systems. The model consists of core Technology Acceptance Model (TAM) variables (perceived ease of use of ERP system and perceived usefulness), satisfaction and common actors of an ERP project: technology, user, organization and project management.
Article
Full-text available
Enterprise Resource Planning (ERP) systems are currently in high demand among Malaysian companies especially those in manufacturing and service based industries because it provides an effective management system leading to significant improvements in productivity. In this paper, a comprehensive study was done to identify the critical success factors and key benefits of ERP implementations using the responses from 151 firms. The importance of these factors was investigated within Malaysian companies using questionnaire survey method. The results of this study provide a practical guidance for the company owners, senior management and ERP consultants to be more efficient in managing the implementation of ERP with their limited resources.
Article
Full-text available
There is widespread agreement among researchers that system usage, defined as the utilization of information technology (IT) by individuals, groups, or organizations, is the primary variable through which IT affects white collar performance. Despite the number of studies targeted at explaining system usage, there are crucial differences in the way the variable has been conceptualized and operationalized. This wide variation of system usage measures hinders the efforts of MIS researchers to compare findings across studies, thus impeding the accumulation of knowledge and theory in this area. The purpose of this paper is to address conceptual as well as methodological issues related to measuring system usage. First, via LISREL measurement modeling techniques, we compare subjective and objective measures of system usage, namely, self-reported versus computer-recorded measures. Next, using a modified form of Davis' Technology Acceptance Model (TAM) as a nomological net, we test the nomological validity of these system usage constructs and measures. Results of the LISREL measurement and nomological net analysis suggest that system usage should be factored into self-reported system usage and computer-recorded system usage. Contrary to expectations, these constructs do not appear to be strongly related to each other. Moreover, while self-reported measures of system usage are related to self-reported measures of TAM independent variables, objective, computer-recorded measures show distinctly weaker links. In the face of such counter-evidence, it is tempting to argue that research that has relied on subjective measures of system usage (for example, research confirming TAM) may be artifactual. There are several alternative explanations, though, that maintain the integrity of TAM and studies that measure system usage subjectively. These alternative explanations suggest directions for further research as well as new approaches to measurement.
Article
Full-text available
What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes--coercive, mimetic, and normative-leading to this outcome. We then specib hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.
Article
Full-text available
An enterprise resource planning (ERP) system is a new management technology that advocates an integrated approach to conduct business. While organizations are hoping to apply this technology to improve overall performance, they must understand what it takes for their employees to use it. Although the use of ERP systems may not be voluntary, the understanding of system adoption from the user's perspective is useful in helping the organizations prepare their employees to face new challenges and learn how to make good use of the technology. To analyze factors affecting the ERP system usage, we proposed a conceptual model derived from the Triandis framework. The use of the Triandis framework is based on the previous research that documents the importance of social factors on the adoption of a technology. An empirical study was conducted in Hong Kong to understand the adoption process. Our research results show that social factors are the most significant determinant affecting the ERP system usage. Other factors such as compatibility and near-term consequences are also significant. Based on our findings, we also propose some important managerial implications in connection to promoting the usage.
Article
Full-text available
The objective of this empirical study is to identify various profiles of technological deployment specific to various types of business strategy that best support organizational performance. Top managers from 223 organizations completed two questionnaizres analyzed using a Partial Least Squares tool (PLS graph). Profiles of technological deployment based on the strategic impact of the information system department, the technological architecture, the information system performance evaluation and technological scanning were identified. Using Miles and Snow's typology to characterize business strategy, an outward technological profile contributes directly to organizational performance for the analyzer strategic activities, while an inward profile of technological deployment contributes indirectly to organizational performance for the prospector strategic activities.
Article
Full-text available
This paper focuses on how and to what extent homogenization coincides with the deployment of ERP-systems. Using the work of DiMaggio and Powell on isomorphic pressures, we argue that the use of ERP-systems may in several ways lead to standardization within and between organizations. Competitive and institutional pressures play a role in ERP-adoption. We introduce a novel form of isomorphism, technical isomorphism. This plays a role in ERP-implementation and manifests itself in the enactment of blueprints for centralization and standard working procedures that are embedded in the ERP-software. A case study of a Dutch publishing company illustrates how coercive and technical isomorphism jointly lead to adaptation of the organization to the system, although the firm aimed to differentiate itself from its competitors.
The paper aims at explaining empirically timing and intensity of a firm's adoption of Information and Communication Technologies (ICT) using a large sample of firms. The analysis is based on the rank and the epidemic model of technology adoption. The explanatory variables include many dimensions of anticipated benefits from and costs of technology adoption, what allows to capture the impact of uncertainty and adjustment costs. The analysis yields results pertaining to the timing and the intensity of ICT adoption (inter-and intra-firm diffusion).
Purpose ‐ The purpose of this paper is to investigate the external and internal factors that contribute to assimilation of enterprise resource planning (ERP) system in the organization through the processes of adapting, routinizing and institutionalization of technology. Design/methodology/approach ‐ This research follows qualitative interpretive approach. The results produced in this paper are based on thematic analysis of responses from open-ended interviews with ERP stakeholders in large size Australian organizations. The research findings have been further triangulated with surveys and content analysis. Findings ‐ This research is still in progress; therefore, this paper presents the results of the field study conducted so far along with the instrument used to collect data. This instrument consists of a list of selected questions based on the thorough review of current information systems literature. However, the major finding of this study, thus far, is that the ERP implementation is a process of aligning technology with organizational, social, cultural, economic, technical, and other organizational environmental institutions. Research limitations/implications ‐ The major research limitation of this study is that it is still in progress, therefore, the results reported in this paper are emergent and not complete. Another limitation of this paper is that it is Australian specific; therefore, the generalizability of the results in other settings cannot be ascertained. Nevertheless, this research contributes to the ERP implementation literature by applying a stage-based model which takes into account the pre-implementation, implementation and post-implementation stages of ERP assimilation into an integrated structure. Practical implications ‐ This research concludes that ERP assimilation is characterized and shaped by mutual interactions of various organizational, social, cultural, environmental, and other institutional factors. The research framework developed in this study may be mastered as a decision-making tool by business manager to guide the organization through various stages of ERP institutionalization. Originality/value ‐ Institutionalization of ERP technologies is a recent phenomenon and this field is far for being matured. This research is based in Australian settings where they have been no previous study of institutionalization of technology.
Article
System performance measurement often is conducted using subjective method, such as self-reporting of utilization, or surrogate measures, such as user satisfaction. High system utilization or high user satisfaction provides no guarantee of high performance. This study reports initial research relating system utilization, measured as a continuous and independent variable, with an objective measure of system performance. The usage or participation rate of the New Orleans Vessel Traffic Service was correlated with its performance criterion of vessel safety, operationalized as the number of marine accidents. The evaluation model reported in this research employed utilization as an independent variable in the regression equation. This utilization measure was inversely correlated with vessel accidents-increases in DSS utilization were associated with reductions in marine casualties, assuming fixed levels of the other explanatory variables. This research has provided evidence that the system has been very effective in reducing vessel accidents-the objective performance criterion-on the lower Mississippi River. IS managers should consider this method of evaluation as a means of increasing information management credibility.
Article
Argues that the formal structure of many organizations in post-industrial society dramatically reflect the myths of their institutional environment instead of the demands of their work activities. The authors review prevailing theories of the origins of formal structures and the main problem which those theories confront -- namely, that their assumption that successful coordination and control of activity are responsible for the rise of modern formal organization is not substantiated by empirical evidence. Rather, there is a great gap between the formal structure and the informal practices that govern actual work activities. The authors present an alternative source for formal structures by suggesting that myths embedded in the institutional environment help to explain the adoption of formal structures. Earlier sources understood bureaucratization as emanating from the rationalization of the workplace. Nevertheless, the observation that some formal practices are not followed in favor of other unofficial ones indicates that not all formal structures advance efficiency as a rationalized system would require. Therefore another source of legitimacy is required. This is found in conforming the organization's structure to that of the powerful myths that institutionalized products, services, techniques, policies, and programs become. (CAR)
Article
Research indicates that successful adoption of information technology to support business strategy can help organizations gain superior financial performance. The recent wave of enterprise-wide resource planning systems adoptions is a significant commitment of resources and may affect almost ail business processes. This study examines the effect of adoption of enterprise systems on a firm's long-term financial performance. A large-scale data identification and collection method compared the fi- nancial data of 247 firms adopting enterprise wide systems with a matched control group of firms cross-sectionally and longitudinally before and after adoption. A number of implementation characteristics were also measured and their effects assessed. The results show that firms adopting enterprise systems exhibit higher differential perfor- mance only after two years of continued use. Furthermore, controlling for implementa- tion characteristics as vendor choice, implementation goal, modules implemented, and implementation time period, helped explain the financial performance effects of enter- prise resource planning system use. These results provide important insights that comple- ment extant research findings and also raise future research issues.
Article
We propose remedies to the dramatic reduction in the diversity of research topics within the academic accounting literature. As a basis for our recommendations, we apply institutional theory in the field of academic accounting research and propose that responses to identifiable institutional influences rather than competitive forces account for the current exclusion of nonfinancial accounting topics. All three processes of institutional isomorphism (mimetic, coercive, and normative) appear to shape the organizational field of accounting research. However, the field has reached a stage where it is primarily, but not exclusively, motivated by the normative isomorphism. As such, institutional pressures often eclipse theoretical relevance, individual research preferences, and practical applicability. These effects pervade aspects of the accounting academy beyond publishing. We outline programs and propose actions for enhancing diversity as prescriptions for countering the institutional forces acting within the field of academic accounting research.
Article
The concept of IT as a powerful competitive weapon has been strongly emphasized in the literature, yet the sustainability of the competitive advantage provided by IT applications is not well-explained. This work discusses the resource-based theory as a means of analyzing sustainability and develops a model founded on this resource-based view of the firm. This model is then applied to four attributes of IT -- capital requirements, proprietary technology, technical IT skills, and managerial IT skills -- which might be sources of sustained competitive advantage. From this resource-based analysis, we conclude that managerial IT skills is the only one of these attributes that can provide sustainability.
Article
Purpose – The purpose of this paper is to identify practical activities that are essential for managing enterprise resource planning (ERP) implementation projects and that answer to the expectations of the widely recognized critical success factors (CSFs). Design/methodology/approach – This work is based on an extensive literature review on CSF, which has been followed by a Delphi survey with a panel of ERP experts. For each CSF, it obtained a range, validated by experts, of practical actions to perform, supported by the resolution of the problems usually encountered in these areas. Findings – The work carried out has a practical scope: the principles of the proposed method directly affect all actors in ERP projects and gives them practical results that they can apply immediately. When applied in the framework of the methodology the paper suggests, these actions will result in better oversight over the requirements of each area of expertise. In this way, overall grasp of the project is facilitated, reducing the inherent uncertainties. Research limitations/implications – Findings may be limited by the small number of respondents, but each one had participated in several implementations. Moreover, no industry sector was specifically targeted; thus, the results apply a priori to most implementations. Originality/value – This research helps to draw the academic and professional domains together by proposing, for the first time, a way for theoretical findings to be translated into practical actions. These results will allow all actors in an ERP implementation to understand the project imperatives faster and more accurately.
Article
Purpose – The purpose of this paper is to examine the relationship between business strategies and the adoption of enterprise resource planning (ERP) in Taiwan's communications industry. This sector has experienced astounding growth in production over the past three years. Design/methodology/approach – Data are collected from 100 organizations through face-to-face interviews. A discriminant analysis is used to test the hypotheses pertaining to the ERP adoption decision. Findings – The results show that a number of identified variables among the key internal and external descriptors of the firm's business strategies are the chief factors that determine whether ERP is adopted or not. Another variable, organization size, is also important, indicating that companies of different size approach the adoption of ERP differently. These variables correctly classify 78 percent of the decisions made with respect to the adoption of ERP. Originality/value – This is the first empirical research study that examines the relationship between a firm's business strategy and the adoption of ERP in the rapidly expanding communications industry in Taiwan. With an increased understanding and better insight into this relationship, it should be possible for managers to be more proactive in their planning of the future adoption of an ERP system.
Debate exists regarding the contribution of information technology to firm performance reflecting predictions of a positive, negative, or nonexistent relationship. Prior research has examined technology and firm performance in the aggregate, however, this study focuses on a specific technology — Enterprise Resource Planning (ERP) and its impact on firm performance. Economic and industrial organization theories provide the basis for the examination of how ERP systems affect firm coordination and transaction costs. ERP systems are expected to: (1) reduce costs by improving efficiencies through computerization; and (2) enhance decision-making by providing accurate and timely enterprise-wide information. These effects should be associated with improved firm performance. This research finds, after accounting for within-firm variances, no significant improvement associated with residual income or the ratio of selling, general, and administrative expenses in each of the 3 years following the implementation of the ERP system. However, a significant improvement in firm performance resulting from a decrease in the ration of cost of goods sold to revenues was found 3 years after the ERP system implementation (but not in the first or second year after implementation). Further, there was a significant reduction in the ratio of employees to revenues for each of the 3 years examined following the ERP implementation.
Purpose – The auto ancillary industry in India has witnessed huge capacity expansion and modernization due to entry of foreign automobile manufacturers in the post liberalization era. In spite of potential benefits, the adoption of advanced IT among small to medium‐sized enterprises (SMEs) is low in India. There are several technological, economical and organizational factors that enable or inhibit the adoption of advanced IT. The primary objective of this research is to identify and evaluate the key factors that are enabling or inhibiting adoption of advanced IT in the Indian auto ancillary SMEs. Design/methodology/approach – In order to identify and evaluate the enablers and inhibitors, a detailed survey was carried out among registered Indian auto ancillary SMEs during 2010. Out of 584 registered SMEs, 110 owners/top managers of the SMEs responded to the survey. The data collected through the survey were analyzed using confirmatory factor analysis and multivariate regression to evaluate the influence of enablers and inhibitors of advanced IT adoption by the auto ancillary SMEs. Findings – The survey findings show that the level of advanced IT adoption in auto ancillaries is low with only 17 per cent of SMEs having adopted technologies. This study reveals that “perceived benefits” and “perceived competitive pressure” enable advanced IT adoption among auto ancillary SMEs in India. However, “lack of financial capacity”, “small scale operation and “lack of in‐house IT manpower” inhibit the adoption. It is also found that enablers such as “changes in business environment”, “IT experience of CEO/owner” and “increased information linkage with OEM/customer” do not have any influence on the adoption. Similarly in the case of inhibitors, “lack of IT Infrastructure” and “lack of information security” do not have significant association with IT adoption. Despite the positive external IT environment and recognition of benefits, advanced IT adoption by SMEs in the auto ancillaries is limited by lack of financial capabilities and in‐house IT human resources. Originality/value – This is one of the early papers that brings out the enablers and inhibitors of advanced IT adoption by auto ancillaries in India. Further, these factors are systematically analyzed to assess the relative importance with reference to the SMEs. The findings contribute to theory of IT adoption among SMEs, but more importantly to the SMEs in the auto ancillary, and policy makers and IT service providers who are likely to facilitate increased adoption.
Article
Lack of a close ‘Information systems (IS)–business relationship’ has been described as a potential inhibitor to improving the contribution that information systems (IS) make to business performance. Yet the value of specific attributes of an enduring relationship between IS and business remains to be demonstrated by empirically confirming their link to IS performance. Using data collected from 167 South African and Australian companies, this study examined the effect of three relational attributes, namely commitment, mutual understanding and shared vision, on the contribution of IS to business performance. The study also examines the interrelationship amongst the relational attributes. Results revealed that a strong IS–business relationship is a significant determinant of IS performance. Organisations more successful in their use of IS are characterised by strong commitment on the part of the business to IS efforts, higher levels of IS understanding of the business, and a long-term agreement, between business and IS executives, on IS priorities. Results have important implications for organisations looking to improve the contribution of IS to organisational performance.
Article
Existing studies have found a linkage between institutional factors and systems adoption, but the literature has overlooked an important question: When is the decision to implement a system influenced by institutional factors? In this paper, the author argues that decisions to adopt systems are not influenced equally by institutional factors, and examines how system characteristics moderate the effects of institutional factors on adoption decisions, specifically decisions to adopt enterprise resource planning (hereafter, ERP) systems. The results of the study reveal that institutional factors, such as mimicry of peers, compliance with industry norms, and coercion from powerful entities influence ERP adoption decisions. The results also show that the effects of institutional factors on adoption decisions are amplified when participants have not already adopted an ERP system, the benefits of the system are difficult to quantify, and the system enhances organizational interaction throughout the supply chain. Through this paper, the author contributes to the institutional theory literature by exploring conditions that enhance the salience of institutional factors and contributes to accounting information systems literature by investigating the boundaries of the influence of institutional factors on ERP adoption.
Understanding people and how they factor into complex information technology (IT) implementations is critical to reversing the growing trend of costly IT implementation failures. Accordingly, this article presents an approach to dissecting the social and organizational influences impacting peoples’ acceptance of technology designed to improve business performance. This article applies the diffusion of innovation theoretical framework to understand and analyze IT innovation implementation challenges. The diffusion approach is applied to two recent cases of implementations of IT supply chain innovations at two aerospace firms, both with complex, global, inter-firm supply chains. Results indicate that several social and organizational factors do affect the implementation's success. Those factors include users’ perceptions of the innovation, the firm's culture, the types of communication channels used to diffuse knowledge of the innovation and various leadership factors.
Article
Purpose – As the number of organizations that have implemented enterprise resourceplanning (ERP) systems unsuccessfully increase, it is necessary to establish the impediments in ERP implementations and the extent to which these impact the success of ERP projects. This study aims to identify the critical impediments that large organizations face in the implementation of ERP systems, and the impact of these impediments on overall success of ERP projects by a survey of Fortune 500 organizations. Design/methodology/approach – A survey was prepared based on 47 impediments identified from previous ERP implementation studies. Findings – This study finds that most of critical impediments are from functional coordination problems related to inadequate support from functional units and coordination among functional units, the project management related to business process change, and change management related to resistance of users. In this study, impediments are categorized based on project phases, and differences in the impediments the organizations faced between less successful and more successful organizations are found. Originality/value – This research provides significant implications for industry managers engaged in large‐scale enterprise system implementations. Our survey results suggest that understanding new requirements for ERP implementation such as functional coordination is more critical issues than understanding technical features of ERP system.
Purpose – Proposes providing an insight about enterprise resource planning (ERP) adoption, highlighting contact points and significant differences between the way small to medium-sized enterprises (SMEs) and large companies approach such a task. Design/methodology/approach – The research is based on a wide literature review, focused on the identification of a taxonomy of business and organizational factors influencing ERP adoption. The deriving research model was incorporated in a questionnaire that was preliminarily tested and finally provided to a sample of 366 companies of any size. Responses were collected through personal interviews made by a dedicated team to a top manager. Findings – The analysis of the empirical data shows that business complexity, as a composed factor, is a weak predictor of ERP adoption, whereas just company size turns out to be a very good one. In other words, companies seem to be disregarding ERP systems as an answer to their business complexity. Unexpectedly, SMEs disregard financial constraints as the main cause for ERP system non-adoption, suggesting structural and organizational reasons as major ones. This pattern is partially different from what was observed in large organizations where the first reason for not adopting an ERP system is organizational. Moreover, the decision process regarding the adoption of ERP systems within SMEs is still more affected by exogenous reasons or “opportunity of the moment” than business-related factors, contrary to large companies that are more interested in managing process integration and data redundancy/inconsistency through ERP implementation. Research limitations/implications – The research model is based on the assumption that business complexity and organizational change are the most relevant variables influencing ERP adoption, and such variables are explained through a set of factors inherently limited by the results of the literature review. Practical implications – The results of the empirical research provide indication to SMEs willing to take into consideration the adoption of an ERP system. The same outcomes could be incorporated into the development strategies of ERP software houses. Originality/value – This paper contributes to enhancing the understanding of the factors influencing the evolution of information systems within SMEs with respect to large companies.
Article
Recently, a significant number of major construction companies embarked on the implementation of integrated information technology solutions such as enterprise resource planning ERP systems to better integrate various business functions. However, these integrated systems in the construction sector present a set of unique challenges, different from those in the manufacturing or other service sectors. There have been many cases of failure in implementing ERP systems in the past, so it is critical to identify and understand the factors that largely determine the success or failure of ERP implementation in the construction industry. This paper presents the process of developing an ERP systems success model to guide a successful ERP implementation project and to identify success factors for ERP systems implementation. The paper identifies factors associated with the success and failure of ERP systems, and develops a success model to analyze the relationships between key factors and the success of such systems. The proposed ERP systems success model adapts the technology acceptance model and DeLone and McLean's information systems success model and integrates those with key project management principles. The goal of the ERP systems success model is to better evaluate, plan, and implement ERP projects and help senior managers make better decisions when considering ERP systems in their organization.
Article
This study is based on the belief that economic organization is shaped by transaction cost economizing decisions. It sets out the basic principles of transaction cost economics, applies the basic arguments to economic institutions, and develops public policy implications. Any issue that arises, or can be recast as a matter of contracting, is usefully examined in terms of transaction costs. Transaction cost economics maintains that governance of contractual relations is mainly achieved through institutions of private ordering instead of legal centralism. This approach is based on behavioral assumptions of bounded rationalism and opportunism, which reflect actual human nature. These assumptions underlie the problem of economic organization: to create contract and governance structures that economize on bounded rationality while safeguarding transactions against the hazards of opportunism. The book first summarizes the transaction cost economics approach to the study of economic organization. It develops the underlying behavioral assumptions and the types of transactions; alternative approaches to the world of contracts are presented. Assuming that firms are best regarded as a governance structure, a comparative institutional approach to the governance of contractual relations is set out. The evidence, theory, and policy of vertical integration are discussed, on the basis that the decision to integrate is paradigmatic to transaction cost analysis. The incentives and bureaucratic limits of internal organization are presented, including the dilemma of why a large firm can't do everything a collection of small firms can do. The economics of organization in presented in terms of transaction costs, showing that hierarchy also serves efficiency and permits a variety of predictions about the organization of work. Efficient labor organization is explored; on the assumption that an authority relation prevails between workers and managers, what governance structure supports will be made in response to various types of job attributes are discussed, and implications for union organization are developed. Considering antitrust ramifications of transaction cost economics, the book summarizes transaction cost issues that arise in the context of contracting, merger, and strategic behavior, and challenges earlier antitrust preoccupation with monopoly. (TNM)
Article
This paper reports on a technique for measuring and analyzing computer user satisfaction. Starting with the literature and using the critical incident interview technique, 39 factors affecting satisfaction were identified. Adapting the semantic differential scaling technique, a questionnaire for measuring satisfaction was then created. Finally, the instrument was pilot tested to prove its validity and reliability. The results of this effort and suggested uses of the questionnaire are reported here.
Article
Some accounting information systems research suggests that the implementation of enterprise resource planning (ERP) systems improves corporate performance [Hayes DC, Hunton JE, Reck JL. Market reaction to ERPS implementation announcements. J Inf Syst 2001;15(1): 3–18; Hunton JE, Lippincott B, Reck J. Enterprise resource planning systems: Comparing firm performance of adopters and nonadopters. Int J Account Inf Syst 2003;4:165–184], while a seemingly disparate line of managerial accounting research indicates that the inclusion of non-financial performance incentives (NFPI) in executive compensation contracts also enhances performance [Said AA, HassabElnaby HR, Wier, B. An empirical investigation of the performance consequences of non-financial measures. J Manage Account Res 2003;15:193–223]. Two theoretical perspectives tie together these research streams. Cybernetic control theory explains how ERP systems offer the means by which managers can effectively use non-financial performance indicators, and agency theory describes how NFPI provide the motive and opportunity for managers to attend to key non-financial performance indicators. The research hypothesis tested herein asserts that the joint adoption of ERP and use of NFPI will yield greater corporate performance than either ERP or NFPI alone. In the current study, performance is reflected by return on assets (ROA) and stock returns (SR). Study results support the hypothesis, as archival data indicate that firms with both NFPI and ERP obtain significantly higher short-term and long-term ROA and SR than either ERP-only or NFPI-only firms. Research findings offer valuable insight into the theoretical and practical implications of jointly adopting the ERP and NFPI strategies.
Article
We examined the relationships between the success of ERP system adoption, extent of business process improvement (BPI), and organizational performance and investigated the associations between the outcomes of these initiatives and such organizational factors as strategic intent, senior management support, and the status of the IT function within a company. A correlation analysis of 96 firms was made to test our hypothesis that the strategic intent to use ERP was closely related to the success of BPI, ERP, and organizational performance. The results also demonstrated that CEO-IT distance may have little direct bearing on the outcomes of ERP and BPI initiatives. A closer CEO-IT reporting relationship, however, was found to be associated with higher levels of senior management support for both types of enterprise projects. This empirical evidence reinforced the long-held assumption that organization-level benefits, BPI, and ERP success were closely related; and that these relationships were subject to the influence of the organizational variables.
Article
User satisfaction (US) is often used as a surrogate measure of information system effectiveness. If an effective system is defined as one that adds value to the firm, then an effective system must have some positive influence on user behavior (i.e., improve productivity, decision making, etc.). Advocates of US argue that there is theoretical support for linking attitudes (i.e., satisfaction) and behavior in the psychology literature. At the same time, there is evidence of increasing employment of US questionnaires in firms as a measure of system effectiveness. Yet there is surprisingly little information systems research linking user satisfaction with user behavior. In this study, measures of user satisfaction and system affected behavior are taken for an indirect and a direct user group of the same information system in 39 organizations. Results indicate that a relationship does exist between satisfaction and behavior for both user groups.
Article
Enterprise resource planning (ERP) system is one of the most widely accepted choices to obtain competitive advantage for manufacturing companies. However, the successful implementation rate is low and many firms did not achieve intended goals in China. This study develops an ERP implementation success framework by adapting the Ives et al. information systems (ISs) research model and DeLone and McLean's IS success model to identify both critical success factors and success measures. Qualitative case study research methodology is used to collect data and Atlas/ti program is used to facilitate data analysis. Discussion is made finally and suggested ERP systems implementation methodology is given at the end.
Article
Current research in information technology (IT) investment has predominantly adopted an efficiency paradigm which tends to view that organizations adopt IT innovation on the basis of predicted economic benefit. This paper, grounded in institutional theory, suggests that organizations make investment on information technology as a response to institutional pressures in order to maintain legitimacy and reduce uncertainty. This would, however, incur an expense of technical efficiency. Propositions on institutional predictors of IT investment are derived for future empirical research. It is argued in this paper that the rational, efficiency paradigm and institutional perspectives should be integrated in order to build a theory of IT investment with explanatory and predictive power.
Article
The evaluation-and-selection of enterprise technologies by firms has been said to be largely rational and deterministic. This paper challenges this notion, and puts forward the argument that substantial ceremonial aspects also play an important role. An in-depth, exploratory longitudinal case study of a bank selecting a ubiquitous and pervasive e-mail system was conducted using grounded theory and a hermeneutic [pre] understanding of institutional and decision making theories. Intuition, symbols, rituals, and ceremony all figured prominently in the decision process. However, rather than being in conflict with the rational processes, we found them to be in tension, leading to a more holistic social construction of decision processes. For researchers, this suggests that a focus on process rationality, not outcomes, might lead to a fuller understanding of these critical decisions. For managers, it underscores the importance of understanding the past in order to create the future.
Article
The main argument in this paper is that in order to understand the phenomenon of how innovative manufacturing practices diffuse we need to invoke theoretical arguments other than the ones that are conventionally used. In particular, neo-institutional arguments can shed light on the determinants of manufacturing practice adoption and implementation. We juxtapose both theoretically and empirically three different theoretical perspectives that can be used to address the phenomenon: strategic contingency, structural contingency and neo-institutional arguments. A preliminary empirical test of the three competing perspectives is tested in a sample of 164 manufacturing plants. We find that the institutional perspective explains much more of the variance in the practices adopted and implemented by the plants than either the structural contingency or the strategic contingency theories. This motivates future research using some of the less familiar theoretical approaches.
The current study examined the longitudinal impact of ERP adoption on firm performance by matching 63 firms identified by Hayes et al. [J. Inf. Syst. 15 (2001) 3] with peer firms that had not adopted ERP systems. Results indicate that return on assets (ROA), return on investment (ROI), and asset turnover (ATO) were significantly better over a 3-year period for adopters, as compared to nonadopters. Interestingly, our results are consistent with Poston and Grabski [Int. J. Account. Inf. Syst. 2 (2001) 271] who reported no pre- to post-adoption improvement in financial performance for ERP firms. Rather, significant differences arise in the current study because the financial performance of nonadopters decreased over time while it held steady for adopters. We also report a significant interaction between firm size and financial health for ERP adopters with respect to ROA, ROI, and return on sales (ROS). Specifically, we found a positive (negative) relationship between financial health and performance for small (large) firms. Study findings shed new light on the productivity paradox associated with ERP systems and suggest that ERP adoption helps firms gain a competitive advantage over nonadopters.
Article
Management and implementation of Enterprise Resource Planning (ERP) systems have tended to concentrate on their transactional and record-keeping aspects, rather than on their decision-support capabilities. This paper explores connections between ERP systems and decision support based on the perceptions of 53 ERP system adopters. It offers new insights into the important objectives that are (and should be) considered in ERP plans, including decision-support objectives. It provides insights into the decision-support benefits of ERP systems. The study also examines relationships between the importance of various objectives in ERP planning and the subsequent realization of decision-support benefits from an ERP system.
Article
This paper documents the effect of investments in Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM) systems on a firm's long-term stock price performance and profitability measures such as return on assets and return on sales. The results are based on a sample of 186 announcements of ERP implementations, 140 SCM implementations, and 80 CRM implementations. Our analysis of the financial benefits of these implementations yields mixed results. In the case of ERP systems, we observe some evidence of improvements in profitability but not in stock returns. The results for improvements in profitability are stronger in the case of early adopters of ERP systems. On average, adopters of SCM system experience positive stock returns as well as improvements in profitability. There is no evidence of improvements in stock returns or profitability for firms that have invested in CRM. Although our results are not uniformly positive across the different enterprise systems (ES), they are encouraging in the sense that despite the high implementation costs, we do not find persistent evidence of negative performance associated with ES investments. This should help alleviate the concerns that some have expressed about the viability of ES given the highly publicized implementation problems at some firms.
Article
The purpose of this paper is to analyse the role played by five groups of factors in ICT adoption: environment, firm structural characteristics, human capital, competitive strategy, and internal organization. In order to achieve this goal, the data collected in a survey with a sample of 337 Spanish workplaces are used. The paper overcomes some of the limitations found in the empirical literature since it examines several ICT infrastructure and usage indicators at the same time, using a sample of workplaces of different sizes in all activity sectors in a context of a developed country with a low rate of ICT incidence. Results highlight the need to study the different ICT separately as well as the importance of establishment size, multinational ownership, and high-skilled workforce in ICT adoption. Quality control systems and team-based organization of work also play a relevant role in the diffusion of certain elements of ICT within firms. The need of reviewing the traditional public support for ICT implementation on small workplaces arises, together with the existence of complementarities with policies aimed to attract foreign investments and to increase the workforce education level as a way to spread ICT implementation. Results also show that managers need to align ICT adoption and the strategic focus of the firm more consistently.
Article
Enterprise resource planning (ERP) systems are highly complex information systems. The implementation of these systems is a difficult and high cost proposition that places tremendous demands on corporate time and resources. Many ERP implementations have been classified as failures because they did not achieve predetermined corporate goals. This article identifies success factors, software selection steps, and implementation procedures critical to a successful implementation. A case study of a largely successful ERP implementation is presented and discussed in terms of these key factors.
Article
Since early 1990s, many firms around the world have shifted their information technology (IT) strategy from developing information systems in-house to purchasing application software such as enterprise resource planning (ERP) systems. IT managers responsible for managing their organization’s ERP implementation view their ERP systems as their organizations’ most strategic computing platform. However, despite such strategic importance, ERP projects report an unusually high failure rate, sometimes jeopardizing the core operations of the implementing organization. This study explores the root of such high failure rate from an “organizational fit of ERP” perspective. Based on the relevant literature, we define the concept of organizational fit of ERP and examine its impact on ERP implementation, together with ERP implementation contingencies. The results from our field survey of 34 organizations show that ERP implementation success significantly depends on the organizational fit of ERP and certain implementation contingencies.
Article
Despite many challenges and highly visible failings, accountants in the U.S. continue to be a selfregulating profession. In large part, this can be attributed to the emergence and acceptance of peer review programs. This paper, using institutional theory as a template, addresses the discrepancies between what this technology promises and what it delivers. The discourse of peer review is reinterpreted to examine its societal consequences and its implications for the future of professional claims.