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The Evolution of ERP Systems: A Literature Review

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Enterprise applications are complex architectures that assist leaders of organizations to make tactical and strategic business decisions. Many of the studies in the literature review investigated the history of ERP systems, the future of enterprise applications, implementation success, ERP implementations in small and medium environments, and managerial approaches during times of organizational change. The purpose of this literature review was to
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The Evolution of ERP Systems: A Literature Review
Justin L. Goldston, PhD
jlg566@psu.edu
Assistant Professor of Project and Supply Chain Management
Department of Business and Economics
Pennsylvania State University
Abstract
Enterprise applications are complex architectures that assist leaders of organizations to make tactical and
strategic business decisions. Many of the studies in the literature review investigated the history of ERP
systems, the future of enterprise applications, implementation success, ERP implementations in small and
medium environments, and managerial approaches during times of organizational change. The purpose of this
literature review was to analyze and synthesize previous studies as they pertain to enterprise applications.
Published by IJRP.ORG. Selection and/or peer-review under responsibility of International Journal
of Research Publications (IJRP.ORG)
Keywords: Enterprise Resource Planning; digital transformation; organizational change; project management
1. Introduction
As computers were introduced in the 1960s, organizations began to develop applications to track
inventory, assist in ordering materials, and produce finished goods. In a concept identified as inventory
control, firms took the first step in systematically running the operational side of their organization (Jacobs &
Weston, 2007; Thakur, 2016). In the 1970s, Materials Requirements Planning (MRP) applications were
introduced to enable organizations to purchase, forecast, and schedule production, spawning the founding
firms of the industry such as SAP and J. D. Edwards (Egdair, Rajemi, & Nadarajan, 2015; Jacobs & Weston,
2007; Singh & Nagpal, 2014). With the number of organizations creating additional requirements to reduce
their overhead costs, J. D. Edwards enhanced their MRP applications to include closed-loop scheduling,
enhanced shop floor reporting, and forward scheduling known as MRP-II (Jacobs & Weston, 2007; Kumar &
Van Hillegersberg, 2000). As organizational leaders began to revert to technology to assist in daily
operational decision-making, by the end of the 1980s, the primary ERP vendors were established - SAP, IBM,
J. D. Edwards, Baan, PeopleSoft, and Oracle (Razzhivina, Yakimovich, & Korshunov, 2015). With enterprise
applications enabling decision-makers to provide better visibility of their inventory and production levels,
organizations also looked to these applications to set themselves apart from their competition.
Available online at www.ijrp.org
International Journal of Research Publications
Volume-50, Issue-1,April 2020
Accepted and Published Manuscript
The Evolution of ERP Systems: A Literature Review
Justin Goldston, PhD
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DOI: 100501420201041
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Received date: 03 Apr 2020
Accepted date: 08 Apr 2020
Published date: 08 Apr 2020
Please cite this article as: Justin Goldston, PhD , The Evolution of ERP Systems: A Literature Review ,
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2020 Published by IJRP.ORG. Selection and/or peer-review under responsibility of International Journal of
Research Publications (IJRP.ORG)
The Evolution of ERP Systems: A Literature Review
Justin L. Goldston, PhD
jlg566@psu.edu
Assistant Professor of Project and Supply Chain Management
Department of Business and Economics
Pennsylvania State University
Abstract
Enterprise applications are complex architectures that assist leaders of organizations to make tactical and
strategic business decisions. Many of the studies in the literature review investigated the history of ERP
systems, the future of enterprise applications, implementation success, ERP implementations in small and
medium environments, and managerial approaches during times of organizational change. The purpose of this
literature review was to analyze and synthesize previous studies as they pertain to enterprise applications.
Published by IJRP.ORG. Selection and/or peer-review under responsibility of International Journal
of Research Publications (IJRP.ORG)
Keywords: Enterprise Resource Planning; digital transformation; organizational change; project management
1. Introduction
As computers were introduced in the 1960s, organizations began to develop applications to track
inventory, assist in ordering materials, and produce finished goods. In a concept identified as inventory
control, firms took the first step in systematically running the operational side of their organization (Jacobs &
Weston, 2007; Thakur, 2016). In the 1970s, Materials Requirements Planning (MRP) applications were
introduced to enable organizations to purchase, forecast, and schedule production, spawning the founding
firms of the industry such as SAP and J. D. Edwards (Egdair, Rajemi, & Nadarajan, 2015; Jacobs & Weston,
2007; Singh & Nagpal, 2014). With the number of organizations creating additional requirements to reduce
their overhead costs, J. D. Edwards enhanced their MRP applications to include closed-loop scheduling,
enhanced shop floor reporting, and forward scheduling known as MRP-II (Jacobs & Weston, 2007; Kumar &
Van Hillegersberg, 2000). As organizational leaders began to revert to technology to assist in daily
operational decision-making, by the end of the 1980s, the primary ERP vendors were established - SAP, IBM,
J. D. Edwards, Baan, PeopleSoft, and Oracle (Razzhivina, Yakimovich, & Korshunov, 2015). With enterprise
applications enabling decision-makers to provide better visibility of their inventory and production levels,
organizations also looked to these applications to set themselves apart from their competition.
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In the 1990s, with the market becoming more competitive, the major players looked for a competitive
advantage and began to release applications that integrated the operational portion of the organization with the
accounting area of the firm (Bhuiyan, Chowdhury, & Ferdous, 2014). Coined ERP by the Gartner Group, this
new technological development spurred immense growth with the core six business application vendors
(Jacobs & Weston, 2007). With the fear of the unknown approaching for the year 2000 with Y2K, ERP
industry marketing caused firms to scramble to install these applications sparking dramatic growth in ERP
vendors and offerings (Brumberg et al., 2016; Salimi, Dankbaar, & Davidrajuh, 2015). When the dotcom
bubble of 2001 rocked the entire technology industry, the major players in the industry were pressured to
downsize (Fadlalla & Amani, 2015). By the end of the 2000s, the ERP landscape changed as J. D. Edwards,
and PeopleSoft were acquired by Oracle (Palanisamy, Verville, & Taskin, 2015) and a new entrant in the
market, Infor Global Solutions acquired Baan (Verdouw, Robbemond, & Wolfert, 2015) and IBM’s MAPICS
product (Banerjee, 2015), resulting in SAP, Oracle, and Infor becoming the top three ERP vendors in the
market respectively.
In reaching the maturity stage of its lifecycle, ERP applications have continued to progress with the
gradual introduction of cloud computing. Cloud computing reduces the information technology (IT) overhead
for firms by moving all hardware to support its ERP application off premise to a vendor-hosted site (Bento,
Bento, & Bento, 2015). In a 2016 ERP Report performed by Panorama Consulting, the survey of 215
organizations deploying ERP applications uncovered a 40% increase in firms implementing cloud versus on-
premise solutions compared to 2015 (Solutions, 2016). To analyze the dramatic increase, the reduced
misconceptions of cloud computing also led to the dramatic increase (Solutions, 2016). As ERP providers
continue to increase application security to mitigate the risk against security breaches, more organizations are
moving from on-premise solutions to cloud-based offerings.
In addition to cloud computing, in an effort to reduce waste within operations, the supply chain community
instituted Lean initiatives over the past decade which were also integrated into ERP applications (De Soete,
2016). In an effort to develop a tool to track sustainable processes, researchers have begun to call these new
applications Sustainable Enterprise Resource Planning (S-ERP) applications. As the next phase of business
applications, the premise of the next section focuses on how S-ERPs can positively impact all three aspects of
an organization’s TBL, as well as global sustainability. Refer to Table 2 for a graphical representation of the
evolution of business applications.
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3
TABLE 1
THE EVOLUTION OF BUSINESS APPLICATIONS
2. The Birth of S-ERP
As firms become more innovative and socially conscious, leaders are utilizing technology to integrate
sustainable operations, processes, and information through knowledge-sharing within their organization.
Sustainable development and production can be characterized as development that fulfills current
requirements of individuals without compromising the requirements of individuals in the future (De Soete,
2016). As business partners of global firms continue to question whether their supply chains and productions
facilities are sustainable and safe (De Soete, 2016), these companies have vowed to become environmentally
sustainable. To document their efforts, these companies are working with ERP providers to modify their
current applications to create modules to track their information. Zvezdov and Hack (2016) performed a study
of a multinational food company that created a carbon information management (CIM) module within their
ERP system to track carbon emissions across their portfolio of operating facilities. In addition to carbon
emissions tracking, De Soete (2016) provided the following examples of how organizations can utilize their
existing business applications to make more sustainable decisions:
• Utilizing a product’s bill of materials to track plastics and solvent use
• Tracking the time duration of a chemical synthesis step
• Analyzing the energy consumption of a production line
Although initial steps have been taken to develop S-ERP applications, with the failure rates of traditional
ERP implementations ranging in the area of 60% (Maas, Fenema, & Soeters, 2014; Ravasan & Mansouri,
2016), the adoption of S-ERP applications could be even more complex to implement (Chofreh et al., 2016).
Decade
Applications
1960s
Early computers, Reorder point systems, and early Materials Requirements Planning (MRP)
1970s
MRP
1980s
MRPII and early Enterprise Resource Planning
1990s
ERP
2000s
Introduction to ERP cloud computing, early ERP vendor consolidations, mergers, and
acquisitions
The future
Sustainable Enterprise Resource Planning (S-ERP)
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With new data types, data, and stakeholders such as environmentalists and scientists of a firm that previously
would not have interacted with the ERP application, Chofreh et al. (2016) posited that the implementation of
S-ERP applications would be new territory for firms.
The foundation of traditional ERP applications is built upon optimizing operational and financial processes
resulting in increased profits. In an S-ERP world, all facets of the TBL are covered within an organization,
which in turn will affect all stakeholders of an organization (Chofreh, Goni, Shaharoun, Ismail, & Klemeš,
2014). In comparing the two applications, the philosophy of traditional ERP systems focuses primarily on
profit to centralize all data and decision-making functions within one application. With S-ERP, the primary
focus is on the TBL, which is composed of profit, people, and planet (Ahmad & Mehmood, 2015; Gianni,
Gotzamani, & Tsiotras, 2017). Profit within the TBL refers to value-added activities performed within an
organization (Chofreh et al., 2014). The people component refers to a firm’s most important asset, the
employees. Finally, planetrefers to the environment, and the world’s natural resources (Chofreh et al., 2016).
Although the environmental impact has not yet been fully realized with a phased sustainability approach,
organizations can leverage technology to make a positive impact on social change.
2.1 Implementing S-ERP Applications
As Information Technology (IT) projects have varying methodologies, S-ERP applications could be
implemented utilizing similar approaches (Chofreh et al., 2016). Referring to the proposed S-ERP
implementation methodology as the S-ERP master plan, this plan would shorten the implementation timeline,
cost, and resources (Chofreh et al., 2016). In developing a structured approach, risk can be mitigated
throughout the implementation lifecycle. Similar to other implementation methodologies, the S-ERP
methodology has three parts the project roadmap, the application framework, and the project guidelines. In
reviewing recent studies, a gap was uncovered regarding the outcome of successful S-ERP implementations.
In scoping out the proposed architecture of an S-ERP application, obtained with permission, Figure 3 depicts
the complexity of this application. While decision-makers in firms can utilize existing technology using the
tools and information they currently have at their disposal, the following caveats could be identified regarding
the implementation of S-ERP applications:
Data management in organizations
• Data penetrations through ERP systems consistency in data logging
• Supply chain transparency
• Supply chain reliability
• The language (and education) issue (De Soete, 2016)
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While leaders of organizations speak to supply chain concepts from a theoretical perspective, these leaders
could move toward advanced sustainable technology to put these theories into practice.
Figure 1. Proposed S-ERP system with modules. Adapted from “Sustainable Enterprise Resource Planning:
Imperatives and Research Directions” by A. G. Chofreh, F. A. Goni, A. M. Shaharoun, S. Ismail, and J. J.
Klemeš, 2014, Journal of Cleaner Production, 71, p. 141. Copyright 2014 by Elsevier Limited.
3. ERP Systems in Small and Medium Business Environments
Although ERP systems were initially developed to run large scale enterprises, SMEs are increasingly
motivated to introduce ERP implementations (Upadhyay, Basu, Adhikary, & Dan, 2010). Small and medium
enterprises are represented by a range of inherent characteristics that distinguish them from large enterprises,
such as ownership type, structure, culture, and market (Amba & Abdulla, 2014). Concerning the issue of
IT/IS adoption, limited resources, limited IS knowledge, and the lack of IT expertise are constraints facing
SMEs in implementation projects (Bansal & Agarwal, 2015). In an SME environment, once approved, a full
annual IT budget could be spent on ERP implementation efforts (Hsu, Ray, & Li-Hsieh, 2014). Researchers
found that ERP implementation costs, as a percent of revenue, range from 0.82% for large firms compared to
13.65% for SME firms due to economies of scale working for the larger firms (Bohórquez & Esteves, 2008).
Major SME projects face increased external and internal risks when compared to large organizations.
Externally, SMEs are more fragile than large companies and face greater difficulty in obtaining credit (Zach
& Munkvold, 2012). Such external risks could lead SMEs to delay the project of ERP implementation or
forego it altogether. Internally, SMEs may find it difficult to implement reengineering projects due to limited
resources. Overall, SMEs may face greater challenges in adopting technology as compared to large enterprises
given the constraints mentioned above (Zach & Munkvold, 2012).
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Given the hidden costs of ERP implementations, SMEs should understand the total cost of ownership of an
ERP application before embarking on a project of this magnitude. Successfully implemented, ERP
applications allow an organization to gain a competitive advantage by saving resources and by responding to
the ever-changing business environment (Mahdavian, Wingreen, & Ghlichlee, 2016; Sudhaman & Thangavel,
2015). Additionally, a successfully deployed ERP system can increase customer satisfaction, reduce
inefficient spending, strengthen sales and forecasts, reduce inventory turn-around times, and enhance
employee productivity (Maas et al., 2014). Because large enterprises have been implementing ERP solutions
since the mid-1990s, SMEs view an ERP solution as the answer to set them apart from the competition but
this belief could be due to their lack of experience and knowledge of ERP implementations. If leaders of
SMEs continue to implement these applications without education, unless the differences between SMEs and
large enterprises are clearly conceived, ERP implementations may continue to be painful and unfruitful for
SMEs (Huin, 2004).
4. Managerial Theories in ERP Implementations
Although researchers have outlined various critical failure factors in the literature, management and
leadership approaches are identified as failure factors in ERP implementations (Elkhani, Soltani, & Ahmad,
2014; Mitra & Mishra, 2016). Although prior research focused on IT-related theories such as the task-
technology-fit (TTF) theory and the DOI theory (Pishdad, Koronios, Reich, & Geursen, 2014), researchers
still identify a gap between leadership theories and ERP implementation risk. In the next section, leadership
theories, and how they can be integrated into CSFs in ERP implementations are reviewed.
4.1 Transformational leadership theory
Leaders are instruments of transformation exerted through the followers or employees to bring about
change in governance and productivity (Dunn, Lafferty, & Alford, 2012; García-Morales, Jiménez-
Barrionuevo, & Gutiérrez-Gutiérrez, 2012). First introduced by Burns (1978), transformational leadership can
be characterized as the ability of a leader to inspire employees to perform work beyond their expectations
(Elkhani et al., 2014). When leaders of organizations embark on an ERP implementation, they are performing
an internal business process reengineering (BPR) initiative. With this new project, firms should appoint a
leader to the project that is equipped with BPR skills and has experience in being a change agent (Mitra &
Mishra, 2016).
In research on change management during ERP implementations, Iveroth (2016) found that change
management should be at the top of executive’s strategic agenda and the leaders should refer to the empirical
experience of internal and external resources. Also, during this time of change, leaders should act as
transformational managers and focus on continuous improvement even after the project is closed (Iveroth,
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2016). Although the external consultant working with the leader most likely has these skills, an internal
change agent may be included on the implementation team to influence and lead operational decisions.
In portraying the following traits, transformational leaders can inspire, encourage, empower, and influence
project team members to work toward the common objective of a successful implementation. When leaders
encourage creativity through transformational leadership, users are more likely to experiment with the system
features, enabling them to learn the system more quickly (Elkhani et al., 2014). Additionally, transformational
leadership can create a higher level of psychological empowerment (PE), commitment to the project, and trust
(Mittal, 2016).
Leadership and organizational change will help develop leaders and managers to adapt to change and
complex situations. Valuable information for future leaders involves continued training in specialized areas
such a communication, adapting to change, complex situations, and effective leadership and management
skills. Research has shown a large percentage of leaders lack global leadership skills, and less than ten percent
of organizations have a program in place to fulfill this gap (Minner, 2015). Regarding the future of
management, there is room left for improvement that will be achieved through transformational leadership.
4.2 Servant leadership theory
Another leadership theory that is compared to transformational leadership is servant leadership. In
comparing the two theories, it has been found that transformational leaders focus on organizational objectives
while servant leaders focus on people as followers (Elkhani et al., 2014). Introduced by Greenleaf (1970,
1977), servant leadership includes ethics, virtues, and morality and has been noted as a model that may assist
a leader in dealing with issues that arise within an organization. The primary objective of a servant leader is to
empower followers to make a positive impact on the organization (Flynn, Smither, & Walker, 2015). Servant
leaders are more empathetic than transformational leaders and incorporate emotional intelligence (EI).
Kennedy (2012) found that EI has more importance to multicultural leadership than task-related knowledge or
IQ. An emotionally intelligent leader demonstrates the ability to, identify not only the emotions of others but
also acknowledge personal bias. With EI, leadership becomes the base for servant leadership by promoting
the strengths of others. In researching servant leadership qualities within ERP implementations, Krog and
Govender (2015a) described five additional servant leadership dimensions: altruistic calling, emotional
healing, wisdom, persuasive mapping, and organizational stewardship. In reviewing each of these dimensions
as they pertain to projects, several studies revealed that persuasive mapping and altruistic caring would lead to
employee empowerment, which in turn would harness innovative behavior, commitment, and trust (Hassan,
Asad, & Hoshino, 2016; Krog & Govender, 2015b).
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5. Challenging Conventional Leadership
Although leaders in various industries have shifted to transformational or servant leadership approaches,
many leaders of small and medium organizations continue to follow conventional leadership methods (Larteb,
Benhadou, Haddout, & Nahla, 2016; Ndalila, Mjema, Kundi, & Kerefu, 2015). As a conventional leadership
culture is established by its leaders, to harness creativity and innovation to create a competitive advantage for
an organization, leaders may consider a transition from conventional leadership (Chawla & Sujatha, 2015). In
the next section, approaches of how leaders have challenged conventional leadership will be reviewed (Acar,
2012).
5.1 Challenging conventional leadership with shared leadership
In the complex environment of increased global presence, conventional wisdoms and old managerial
approaches are continually challenged. Leaders should be more improvisational and innovative as
organizations leverage technology to gain a competitive edge over their competitors (Kasemsap, 2016;
Ranjan, Jha, & Pal, 2016). To expand on this philosophy, former General Electric Chief Executive Officer
Jack Welch posited “if the outside environment is changing faster than the inside environment, the company
is doomed (Harvey & Buckley, 2002, p. 371). Although there may not be a universal managerial approach,
managers must analyze their current business environment, reflect on the organization’s strategic vision, and
act on complexities many organizations face in the late 2010s.
Mitra and Mishra (2016) stated that leadership is the most important factor in a successful or unsuccessful
ERP implementation. Given ERP applications integrate all operational and financial functions of an
organization, the traditional hierarchical leadership approaches have been proven unfavorable in these types
of projects. With the cross-functional requirement of these engagements, a distribution of leadership may be
required. The concept of shared leadership is a concept that has been studied at the executive and board
member level in the past. To place shared leadership at the ERP project level, this approach could improve
team effectiveness by sharing responsibilities which in turn could bring collaboration, trust, and mutual
accountability (Le Pennec & Raufflet, 2016). Given younger professionals are more technologically
experienced, and more tenured professionals have years of managerial experience, a shared leadership
approach could be implemented during ERP implementations. In following this approach, blending technical
and managerial experience could lead to successful ERP implementations within organizations.
5.2 Challenging conventional leadership with sponsor-leader exchange
Because ERP projects can last from 6 months to 2 years (Bansal & Agarwal, 2015), power struggles could
potentially arise among project leaders and team members. In the world of ERP implementations, the
common misconception is that when one refers to a leader within a project, they are referring to upper-level
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management. In this case, the leader could be internal Project Manager, an external Project Manager or lead
consultant, and organizational leaders are referred to as executive sponsors. With firms of all sizes
implementing enterprise applications, leaders from different departments may be identified as the project
leader resulting in various leadership styles. A managerial approach extensively researched in the area of
leadership is known as leader-manager exchange (LMX). With this approach, leaders perform knowledge-
sharing to provide the agreed upon vision of the firm’s leadership team. LMX could lead to employee
commitment and job satisfaction within an organization (Hall, Baker, Andrews, Hunt, & Rapp, 2015).
In translating this approach to ERP projects, when the executive sponsor (corporate leader) assigns a
project leader to the implementation, he or she must outline the reasons why the organization decided to
embark on implementing a new business application in a concept that could be coined as sponsor-leader
exchange (SLX). By instituting an SLX approach in an ERP implementation, the leader is not only sharing
information with managers and employees, but they are also sharing responsibilities. This approach not only
enables alignment throughout the organization’s network, but it also increases the interpersonal trust between
the centralized leadership, decentralized management, and employees of the organization (Scandura &
Pellegrini, 2008). In the implementation of SLX, project team members will have the ability to take the
information regarding the executive sponsor’s vision and knowledge of the application to other employees
within the organization, enabling decentralized decision-making, empowerment, and job enrichment.
In reflecting on the transformational and servant leadership theories, one possible conclusion is the
appropriate approach depends on the project and culture of the organization. To enhance the innovativeness
and creativity within ERP implementations, firms can blend transformational and servant leadership (Elkhani
et al., 2014). On the topic of challenging conventional leadership, shared leadership and SLX can share the
responsibilities of the implementation to harness the experiences and creativity of all members of a project. In
closing, while there is no one-size-fits-all approach, as the business landscape continues to change, firms must
find innovative ways to mitigate risk and remain sustainable within their respective markets.
6. Benefits of ERP Systems
As the global market shrinks because of technological and logistical advances, leadership teams of
organizations are looking for ways to make strategic decisions to maintain or increase their market share in
their respective industries. To turn these systems into a competitive advantage, leaders of firms have utilized
ERP systems to make their operational, tactical and strategic processes more efficient and effective (Shao,
Wang, & Feng, 2015). ERP systems are integrated, customized, and packaged software-based systems that
handle the majority of system requirements in all functional areas of a business such as finance, human
resources, manufacturing, sales and marketing (Lin, 2010). In addition to using ERP systems as a tool to make
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day-to-day business decisions, these systems can also be used as a tool to improve knowledge sharing within
the organization. With ERP applications, organizations will enable departments and facilities to share
knowledge and collaborate instead of operating out of disparate systems.
6.1 Technological benefits of ERP systems
With the rise of technology in the recent decades, ERP systems have made advances by shrinking the
supply chain for organizations and their networks. ERP systems bring numerous competitive advantages to
enterprises, including the reduction of business cost, quick response to customers, and the acceleration of
corporate connections (Tsai, Li, Lee, & Tung, 2011). Moreover, ERP systems can increase an organization’s
financial performance by reducing inventory turnover, increasing receivables turnover, and increasing profit
margins.
In addition to internal advantages, these systems also impact social change by passing on cost savings, as
well as communicating important information generated by these systems to the consumer. In various studies,
researchers have found that ERP systems increase trading partner satisfaction with the use of the Supplier
Relationship Management (SMR) and Customer Relationship Management (CRM) modules within the
application. In one study, May, Dhillon, and Caldeira (2013) found ERP systems will ensure the ability for
firms to understand customer desires to provide suggestions based on buying patterns generated by the
application. With the increase in communication and visibility through the use of ERP systems, organizations
can work closer with their partners to build stronger alliances.
6.2 Knowledge sharing benefits of ERP systems
Given ERP systems can be leveraged to positively impact management decisions, knowledge sharing can
be included with the implementation of these applications. Knowledge sharing, also known as knowledge
transfer, is defined as the process through which one organizational unit is affected by the experience of
another as an event through which one entity learns from the experience of another (Rezania & Ouedraogo,
2013). Typically, when organizations implement ERP systems, they will hire outside consultants that have the
knowledge of the application, along with the familiarity of the industry best practices needed to successfully
implement these solutions. Although selecting an experienced consultant is a critical success factor in the
implementation and maintenance of an ERP system (Maditinos, Chatzoudes, & Tsairidis, 2012), the effective
transfer of knowledge is more vital. Jeng and Dunk (2013) found knowledge creation within a firm is a strong
predictor of ERP success. As organizational leaders continue to build their knowledge base throughout the
implementation lifecycle, they will increase the likelihood of a successful ERP installation.
Regarding social impact, companies are using technology to alert their vendors and customers of inventory
levels, forecasts, etc., allowing these trading partners can better manage their supply chains. With this
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information, an organization’s trading partners can be proactive in identifying demand spikes, enabling them
to increase headcount by employing more members of their communities. While technology and knowledge
sharing can impact positive social change within an organization, management and leadership also play an
important role.
6.3 Leadership benefits of ERP systems
When organizational leaders make the decision to bring new technology within an organization,
management teams of these organizations play a key role in the decision-making process throughout the life
of the implementation. For a new technology installation to be successful, management buy-in is one of the
critical success factors. In one study, the researchers found that top management support is a prerequisite for
the successful ERP system implementation (Maditinos et al., 2012). In another study, Lin (2010) concluded
that top management support influences both perceived usefulness and ERP system usage. With the level of
change of an ERP implementation, some leaders may encounter resistance from their workforce, which could
indicate the need for a change in leadership approach.
Once an ERP application is installed, management support does not stop there. Just as with any operational
process or procedure, the management team of organizations must practice continuous improvement methods
to realize the full capability of ERP applications. In organizations that have installed ERP systems, the post
implementation calls for intensive interactions among managers with system users consisting of knowledge
creating, sharing, extraction, preservation, and learning (Tsai et al., 2011). Throughout the life of the installed
application, management must periodically review the usage of the ERP application to ensure users are not
reverting to legacy systems and external applications, creating islands of information. From a strategic
management perspective, Maditinos et al. (2012) found when top management works closely with ERP users,
the communication between business groups is enhanced, and conflict resolution becomes attainable. Based
on a review of the research on technology and knowledge sharing in organizations, all stakeholders of an
organization should be held accountable for attaining the long-term success of installing an ERP application.
7. Summary and Conclusions
A review of the literature uncovered ERP implementations continue to fail due to a number of reasons.
Although researchers have concluded that top management support, user feedback, training and education,
project management, and ERP package selection are factors that can mitigate the risk of failed
implementations, a gap still exists (Baykasoğlu & Gölcük, 2017; Leyh & Sander, 2015; Shao, Feng, & Hu,
2016; Sun, Ni, & Lam, 2015; Tarhini, Ammar, & Tarhini, 2015). With the lack of consensus regarding critical
success factors identified in the literature versus those applied in small and medium business environments
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(Alshardan, Goodwin, & Rampersad, 2015; Venkatraman & Fahd, 2016), the goal of this literature review
was to narrow the scholar-practitioner gap.
In performing a literature search on positive social change and ERP implementations, the search results
uncovered the gap still exists on the research topic (Elbardan & Kholeif, 2017; Seth, Goyal, & Kiran, 2017).
Narrowing this gap may contribute to positive social change by working toward building a consensus among
practitioners and scholars to improve project success and the triple bottom line for large enterprises and small
and medium enterprises.
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... The main benefits of ERP as mentioned by (Beheshti , 2006) in his research are saving million of dollars for companies during a log run of the system, reducing a huge amount of paperwork, integrating mangy systems in a unified system and improving business processes [17]. A research by Justin (Goldston, 2020) classified the ERP benefits into three main categories which are technological benefits, knowledge sharing benefits and leadership benefits [19]. More benefits have been mentioned by Stair and Reynolds on their book "principles of information systems" including ERP support of the operational decision making by improving data access to all information related to business transactions, enabling organizations to reduce the cost of utilizing many separated systems by replacing them with a single system that integrates all business functions and provide enhancement of organization's work processes [18]. ...
... The main benefits of ERP as mentioned by (Beheshti , 2006) in his research are saving million of dollars for companies during a log run of the system, reducing a huge amount of paperwork, integrating mangy systems in a unified system and improving business processes [17]. A research by Justin (Goldston, 2020) classified the ERP benefits into three main categories which are technological benefits, knowledge sharing benefits and leadership benefits [19]. More benefits have been mentioned by Stair and Reynolds on their book "principles of information systems" including ERP support of the operational decision making by improving data access to all information related to business transactions, enabling organizations to reduce the cost of utilizing many separated systems by replacing them with a single system that integrates all business functions and provide enhancement of organization's work processes [18]. ...
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