John. M. Sharp, Management and Management Research Institute, Salford Business School,
Salford University, Greater Manchester, UK
j.m.sharp@salford.ac.uk
Abstract
This paper presents a theoretical framework that has been developed which portrays the “soft”
critical success factors in the process of implementing an ERP system. It was developed
through a critical synthesis of the relevant literature. The results of the implementation
framework, being tested in a case study Libyan Oil company, are presented and some
conclusions drawn.
1 INTRODUCTION
Enterprise Resource Planning (ERP) system solutions are currently in high demand by both
manufacturing and service organisations, because they provide a tightly integrated solution to
an organisation’s information system needs. ERP allows employees to manage their company
with one system that integrates the entire business process and creates an enterprise-wide
view of significant corporate information. Today organisations face a new challenge of
increasing competition, expanding markets and enhancement in customer expectations
(Umble et al., 2003) and thus ERP systems have been developed to provide a total business
system (Huang, et al, 2001) in order to improve business performance. ERP software is a set
of applications that links systems such as manufacturing, financial, human resources, data
warehousing, sales force, document management, and after-sales service together, and helps
organisations handle jobs such as order processing and production scheduling. O’Kane,
(2004) points out that the attention of researchers in implementing ERP solutions should shift
from the “hard” 1 elements to the “soft” 2 issues related to such an implementation, i.e. address
human-related and organisational culture problems, when trying to explain the reasons for
ERP implementation failures. Moreover, an effective ERP implementation requires
appropriate managerial interventions as part of the implementation process. In this regard, our
study considers soft ERP related requirements in the process of introducing such a system.
ability
motivation
working environment
Uden (2005) demonstrated that there are nine identified areas which contribute to influencing
an organisation’s ability to achieve high performance, shown in Table 1, “which is based on
the idea that certain types of behaviour will lead to certain types of results”, and that it is
people who are the main factors, so it is necessary that the working environment is right and
that people are managed in a way that ‘brings out their best’ (Mintzberg (2004, p12), thus
improving morale and commitment, while encouraging them to manage the organisation’s
processes in a way that will increase the level of performance and achievement.
According to Colenso (see Castka et al, 2001), the preconditions to high performance are such
things as purpose, empowerment, support and objectives, with characteristics being things
such as interpersonal skills, participation, decision making, creativity and managing the
external environment. Arnett et al (2002, p90) say that emotions, for example pride, have
been linked to high quality service delivery and employees ‘going out of their way’ or
‘beyond the call of duty’.
Uden (2005) has identified that many authors say that the characteristics of a learning
organisation lead to high performance, and that according to Ford (see Uden, 2005),
“a learning enterprise is one where individuals, teams and the enterprise itself are
continually learning”.
According to Gollan, (2005, p26), overall, the sustainability of high performance work
systems is predicated on organisations recognising the needs of employees and implementing
sustainable policies and practices to reinforce its values and principles through greater
employee involvement and participation and also, by acknowledging the importance of
Almahdi .M. S. Ibrahim 2
A FRAMEWORK FOR THE IMPLEMENTATION OF ERP TO IMPROVE BUSINESS PERFORMANCE: A CASE STUDY
European and Mediterranean Conference on Information Systems 2008 (EMCIS2008)
May 25-26 2008, Al Bustan Rotana Hotel, Dubai
Collis and Hussey (2000) stated that a theoretical framework is a collection of theories and
models from the literature. It is a logically developed, described, and elaborated network of
Almahdi .M. S. Ibrahim 4
A FRAMEWORK FOR THE IMPLEMENTATION OF ERP TO IMPROVE BUSINESS PERFORMANCE: A CASE STUDY
European and Mediterranean Conference on Information Systems 2008 (EMCIS2008)
May 25-26 2008, Al Bustan Rotana Hotel, Dubai
associations between the variables deemed relevant to the problem situation, and which have
been identified through such processes as interviews, observations, and literature survey
(Sekaran, 2000). The theoretical framework to be used for the purposes of this research has
been developed based on an extensive review of the literature. It comprises strategy, people
and organisational critical success factors and attempts to relate them to various
implementation stages as those identified in Table 2.
The theoretical framework (Figure 1) is represented by three main sets of factors, namely
strategy related factors (top management commitment, clear goals focus and scope, legacy
systems, and ERP strategy), people related factors (training and education, users involvement,
employee’s attitude and project team) and organisational related factors (effective project
management, process management, change management strategy, IT maturity, computer
culture, empowerment, organisational culture, and communication).
No attempts have been made in the academic literature to link any soft critical success factors
to the various ERP implementation related stages. A theoretical implementation process was
identified by Ibrahim (2007) such that it is suggested that there is an explicit linkage between
factors and ERP implementation stages. Figure 1 shows the proposed theoretical framework
for ERP implementation.
People Organisational
Factors Factors
Strategy
Factors
4 RESEARCH METHODOLOGY
The empirical data collected for the purposes of this research comes from one case study
conducted in a Libyan oil company. Qualitative data collection methods (mainly semi-
structured interviews) were utilised along with observations and collection of supporting
documentation. The interviews processes relate to the Trust-Confidence-Distrust (TCD)
framework of Gans et al (2003) which was developed to model relationships between
different groups in an organisation/social network. This framework was used to structure the
interview sessions in order to highlight important soft issues that affect the implementation of
Almahdi .M. S. Ibrahim 5
A FRAMEWORK FOR THE IMPLEMENTATION OF ERP TO IMPROVE BUSINESS PERFORMANCE: A CASE STUDY
European and Mediterranean Conference on Information Systems 2008 (EMCIS2008)
May 25-26 2008, Al Bustan Rotana Hotel, Dubai
the ERP modules in this case study. The interviewees were general managers, middle
managers, IT technicians and end users from the different departments within the company
under concern. The empirical data from the case study was collated to see how the three
factors of strategy, organisational and people affect the implementation stages of the
framework. The results confirmed the validity of the proposed framework and enabled
insight to be gained into other issues of particular importance to the process of implementing
an ERP system.
• People Factors
The end users were involved in the ERP project by participating in the system development
and implementation processes in the early stages, involved in defining the company
information system needs and requirements and the company collected end user ideas
regarding the ERP project. There was executive sponsorship available to give users who did
not have the right skills useful feedback about the ERP project. There was resistance to
change from employees in the early stage of the ERP implementation because of the lack of
awareness of the ERP system through employees’ lack of understanding of the strategic
purposes of ERP project. Attitudes changed when top management gave more explanation
about ERP and when employees started to have training about the ERP system. The
implementation team was mixed of internal staff and consultants. Training and education
regarding the ERP system started at the beginning of the project for some selected employees;
this kind of training was about how the system would work and how it would change the
different business processes. Employees received, from the early stages of the ERP project,
different kinds of training in the company as well and training tools were provided in hard
copies for individual training.
• Organisational Factors
A project management unit was established and a project manager was selected from the
better employees. People in project management were given responsibility and the
implementation plan was clearly defined. The ERP system was involved in reengineering the
existing business processes. The business processes were analysed to identify the potential
Almahdi .M. S. Ibrahim 6
A FRAMEWORK FOR THE IMPLEMENTATION OF ERP TO IMPROVE BUSINESS PERFORMANCE: A CASE STUDY
European and Mediterranean Conference on Information Systems 2008 (EMCIS2008)
May 25-26 2008, Al Bustan Rotana Hotel, Dubai
chances of re-engineering. To follow the new system the main business processes were
redesigned and developed to support a variety of organisational structures. A culture for
introducing the new system was created by empowering employees, getting employee
involvement and training and education. Moreover, the main method for informing employees
regarding the ERP project was carried out through personal communication by the manager.
IT maturity and computer culture were perceived to be at the required level. The relevant
qualifications and experience of the employees were also adequate, so that both the IT
maturity and computer culture were helpful for the necessary levels for ERP implementation
success.
6 CONCLUSIONS
Soft ERP implementation factors were identified in the case study company which supported
the key elements of the theoretical framework, however several unique soft implementation
factors were also identified (described in the previous section). From the experience gained by
the authors, from the case study, the most important factors for consideration in similar ERP
implementations would be incentives to encourage employee involvement, the role of the
national organisation that controls all activities related to oil companies and experience of
working with similar software and selecting ERP software and vendor. Regarding the link
between soft factors and ERP implementation stags, all respondents identified that all soft
factors should start from the early stages to the end of the ERP project. Many of the
interviewees felt that the soft factors were adversely affecting the ERP implementation and
thus performance of the company. This agrees with the findings of Markus et al (2000) who
stated that companies implementing ERP should “pay particular attention to the early
identification and correction of problems”. It also supports Huang et at (2001) that the ERP
implementation affects the business performance. From the responses of all interviewees, it
was important to note that strategy factors and people factors were also highlighted as
important factors in the feasibility stage. The results show that the theoretical framework
identified soft issues, however it has only been tested in a single case study developed
therefore can only be generalised to the theory and not to the population (Collis and Hussey,
2000). Clearly more investigations need to be carried out to ensure that the soft issues
identified in this paper are considered for ERP implementations in developing countries such
as Libya.
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European and Mediterranean Conference on Information Systems 2008 (EMCIS2008)
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