erp post implementation - university of...

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ERP post implementation:

Issues, Causes and Improvement margins in a

Pakistan based SME

A study submitted in partial fulfilment of the

requirements for the degree of

Master of Science in Information Systems

Management

at

THE UNIVERSITY OF SHEFFIELD

by

Arif Nasim

September 2009

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ACKNOWLEDGEMENT

In the process of doing my research, I received help and support from different

people, without their assistance, it would have been not been possible for me to

complete this dissertation. So I would like to express my earnest gratitude to all of

them.

First of all, I would like to thank my supervisor Dr. Miguel Nunes for his valuable

support and advices. I learnt numerous things from him. Secondly, I want to thank

my friend Ammad Asif whose help and support provided me the opportunity to work

with Packages (Ltd.)

Finally, I would like to express my gratitude to my parents and friends who

encourage me to complete this dissertation.

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Abstract:

ERP systems are the most commonly used enterprise systems. These are adopted by

particularly large organisations but now more and more SMEs are realising its

potential. Information visibility, integrity, improved business processes are just a few

perceived and promised benefits. In a relatively recent debate in Information System

literature, the highlighted issue is that the actual value of these systems can be

achieved by effective and efficient usage. The terms usage refers to (i) usage by users

and their efficient use of the system (ii) usage by organisations and their efficient use

of system. Both have received attention in literature however the later is relatively

newer.

The phase when the system is in organisation and running is called post

implementation. This research looks into the post implementation stage of

organisations by examining a case study who adopted ERP five years ago. Mixed

method approach is adopted for data collection.

The research first takes a snapshot of expectations and level of fulfilment of those

expectations hence identifying the problem areas. The Risks presented in REPO are

tested. User satisfaction is analysed and finally cultural issues explored.

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Table of Contents

CHAPTER 1 : INTRODUCTION ............................................................................... 1

1.1 Background ........................................................................................................ 1

1.2 Background of Packages Ltd ............................................................................. 3

1.3 Research Questions: ........................................................................................... 3

Chapter 2 ...................................................................................................................... 5

2. Literature Review ..................................................................................................... 5

2.1 Enterprise Resource Planning ............................................................................ 5

2.2 ERP Success ....................................................................................................... 6

2.3 End users ............................................................................................................ 8

2.4 ERP Post Implementation ................................................................................ 10

2.4.1 Usage: ........................................................................................................ 10

2.4.2 Maintenance .............................................................................................. 11

2.4.3 Enhancements ........................................................................................... 12

2.5 Risks associated with ERP systems Post Implementation ............................... 13

2.6 ERP in SME ..................................................................................................... 15

2.7 ERP in Production environments ..................................................................... 15

2.8 ERP in developing Asian countries context ..................................................... 16

2.9 Hofsted‟s Analysis ........................................................................................... 17

Pakistan‟s Scores: .................................................................................................. 18

Chapter 3 .................................................................................................................... 21

Research Design ......................................................................................................... 21

3.1 Research Methodology..................................................................................... 21

3.2 Research Approach .......................................................................................... 23

3.2.1 Rationale for triangulation ........................................................................ 23

3.3 Research Strategy ............................................................................................. 24

3.4 Data collection ................................................................................................. 25

3.4.1 Qualitative Data Collection ....................................................................... 25

3.4.2 Quantitative Data collection ...................................................................... 26

3.4.3 The participants ......................................................................................... 27

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3.4.4 The final Questions ................................................................................... 28

3.5 Data analysis .................................................................................................... 29

3.5.1 Qualitative data analysis ........................................................................... 29

3.5.2 Quantitative data analysis ......................................................................... 29

3.5.3 Justification ............................................................................................... 30

4. Findings and Analysis ............................................................................................ 31

4.1 Qualitative Findings and Analysis ................................................................... 31

4.1.1 Exploration. ............................................................................................... 31

4.2 Quantitative findings and Analysis: ................................................................. 35

4.3 REPO vs Findings: ........................................................................................... 42

Mapping the findings onto REPO risk ontology: ................................................... 42

4.3.1 Operational Risks: ..................................................................................... 42

4.3.2 Analytical Risks: ....................................................................................... 44

4.3.3 Organisation-Wide risks: .......................................................................... 45

4.3.4 Technical Risk ........................................................................................... 47

Chapter 5 .................................................................................................................... 49

Discussion: ................................................................................................................. 49

5.1 Research question A. Exploration: .................................................................. 49

5.2 Research Question B. Confirmation: ............................................................... 52

5.3 New Risks: ....................................................................................................... 55

5.4 Research Question C. User Satisfaction .......................................................... 56

5.5 Research Question D: Cultural Specific .......................................................... 59

5.5.1 Power Distance Index (P D I): .................................................................. 59

5.5.2 Individualism vs Collectivism ( I N D): .................................................... 59

5.5.3 Masculinity vs Feminity (MAS): .............................................................. 59

5.5.4 Uncertainity Avoidence (U A I):............................................................... 60

5.5.5 Long Term Orientation (L T O): ............................................................... 60

Chapter 6 .................................................................................................................... 61

Conclusion ................................................................................................................. 61

6.1 Summary of Research findings: ....................................................................... 61

6.1.1 The Exploration:........................................................................................ 61

6.1.2 Confirmation: ............................................................................................ 62

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6.1.3 User Satisfaction: ...................................................................................... 62

6.1.4 Cultural Issues: .......................................................................................... 63

6.1.5 Overall contribution: ................................................................................. 63

6.2 Limitations: ...................................................................................................... 64

6.3 Recommendations for future research: ............................................................ 64

Appendix-1 ................................................................................................................. 65

Exploration: ................................................................................................................ 65

Advantages ................................................................................................................. 65

Employees .................................................................................................................. 65

Improvements ............................................................................................................. 65

Appendix-2 ................................................................................................................. 66

References: ................................................................................................................. 67

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List of Tables Page Number

Table-1. ERP Maintenance Activities 12

Table-2. Hofsted‟s and it maturity 20

Table-3 Confirmation 52

Table-4 Correlation 58

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Index of Diagrams Page Number

Diagram-1. ERP post implementation ontology 14

Diagram-2. Concurrent triangulation design 24

Diagram-3. Concept Map 51

Diagram-4 Conceptual map of correlations 57

between identified users‟ success measurements

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Word Count

Number of Pages: 95

Number of Words: 15,324

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CHAPTER 1 : INTRODUCTION

1.1 Background

The modern business world is very competitive and companies need to react

efficiently to the ever changing and demanding needs of customers. Customers are

looking for increased quality on reduced costs (Nah et al, 2001). Due to this

competition, companies are always looking for strategies to gain competitive

advantage (Wei et al., 2005). One such advantageous strategy is the adoption of

Enterprise Resource Planning (ERP) systems. “ERP is an industry that always shows

bright prospects. There needs to be no apprehension regarding outsourcing or other

technological advancements. Whatsoever be the case ERP will flourish and penetrate

one segment after the other. They are undoubtedly a complex process and handling

them requires meticulous care and professionalism. ERP product and ERP software

will be demanded forever” (ERPwire,2008). ERP systems evolved from

Manufacturing resource planning (MRPII) systems which were evolved from

Material resource planning systems (MRP) (Koh and Simpson,2005). While primary

focus of MRP and MRPII systems were manufacturing operations, ERP systems

integrated front office and back office along with the business functionalities like

production, sales, marketing, human resource, logistics, purchasing and finance

(Woo,2007; Koh et al., 2008). Integrating these functionalities have provided

organisation with numerous advantages such as increased productivity, reduced

costs, better delivery times, better decision making capabilities and better customer

services (Loh and Koh,2004; Woo, 2007; Ketikidis et al. 2008) attained due to better

information visibility (Giachetti, 2004).

ERP packages are expensive solutions with a high failure rate history and thus only

large organisations used to adopt these enterprise systems. Literature is saturated

with the examples of failures and identification of critical success factors for their

successful implementation (Koh et al, 2009; Botta-Genoulaz and Millet,2006).

However with the increasing business competitive nature, many SMEs are looking to

adopt these systems (Raymond, 2005). Many ERP providers like SAP, Oracle, Baan

have realised the market potential and the desires of SMEs. However due to complex

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nature of these systems it is difficult to successfully implement and achieve the

desired benefits (Loh and Koh, 2004). The research in SME context is relatively low

(Esteves and Bohorques, 2007). It is important to identify needs of SMEs in order to

better understand their demands and uniqueness.

A newer concept has emerged that tends to investigate potential barriers to best

possible outcomes from an adopted system (Peng and Nunes, 2007; Koh, 2009;

Esteves and Bohorques, 2007). The stage of ERP when it is implemented and

running in an organisation is called Post Implementation (Ng et al, 2000). A lack of

research in this area is observed as more and more previous research was focused on

implementation success and failure causes (Esteves and Bohorques, 2007). It is

generally believed amongst the researchers that identifying the key factors of post

implementation stage would lead to better outcomes from the system (Kallin, 2005;

Pend and Nunes, 2007; Pyun, 2002). The way it is used and perceived by the end

users is a hot topic of research and their satisfaction is thought to contribute

considerably for efficient out comes (Nelson,2001; Smith, 2001; Hakken and

Hilmola, 2008). Another area of research is in the cultural context which investigates

the cultural behaviours, patterns or needs of particular societies in order to identify

the misfits (Peng and Nunes, 2007; Soh et al., 2000). Very few studies targeted Asian

cultures in general and south Asian cultures in particular. ERP systems are mostly

designed by western vendors and are built with different business processes than

eastern styles of working and business (Soh et al., 2009).

It is therefore noteworthy that ERP post implementation activities in the context of

SMEs needed to be researched. Firstly this research aimed to address the GAP in

information systems literature in the context of post implementation. Secondly there

is hardly any literature addressing the needs of Pakistani organizations adoption of

ERP and post implementation activities. The identification can lead to better results

from the already adopted expensive systems thus increasing the efficiency of the

firms. The identification of south Asian cultural activities that can lead to barriers in

exploitation of the ERPs can provide organizations with an in depth analysis before

they take the decisions to adopt such a system. The vendors can also recognize their

needs and configure their products accordingly.

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1.2 Background of Packages Ltd

Packages (Ltd) is one of the leading SME of its kind in Pakistan. It is in the paper,

paperboard, packaging material and tissue products business for different customers.

They preferred SAP as its information system over providers like Baan,

J.D.Edwards, Oracle, PeopleSoft or many other ERP providers. It is noteworthy that

Packages were the first to implement SAP in Pakistan. Although SAP is well

renowned and famous ERP brand yet it is more likely to be adapted by large

organizations rather than SMEs (Bernroider and Koch, 2001). Despite the

implementation six years ago, production and planning is often dealt manually and

not according to ERP estimations which makes the ERP implementation success a

doubt. This study tends to research their ERP as it is with the aim of identifying the

risks and barriers. The reason to choose such a company is firstly that they have

sufficient experience in using SAP as their ERP and have gone through various

enhancements and secondly because of personnel contact.

1.3 Research Questions:

The research questions are divided into four parts. First part is named as

„Exploration‟ for convenience. It is divided into three objectives. The aim is to take a

snapshot of what triggered a need of ERP and the extent to which those needs were

met. It was believed that this will point out significant problems in the system. The

second phase is named „Confirmation‟. The aim was to find out which risks are

present in the system. It also aimed to find out some initial level problems which are

dealt with customizations and some long term misfits which remain in the system

even after five to six years of using the system. The third research question looks at

the level of satisfaction of employees with the system. Fourth research question dealt

with identification of any cultural specific issues which could hurdle the efficient use

of adopted system.

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A) Initial phase of the ERP adoption: (Exploration)

Objectives:

• Why was a decision to adopt ERP taken?

• What were the expectations from ERP?

• Up to what extend the expectations are met?

• Is the adopted system a success?

B) Which Managerial and Organisational processes can be improved to obtain

better results out of adopted ERP? (Confirmation)

Objectives:

• Find the risks presents in the system by comparing it to REPO.

• Find some additional risks.

• Separate the initial level problems and long term misfits of the systems.

C) User Satisfaction.

D) Identifying the needs and risks of Pakistani culture when adapting an ERP

system. (Cultural specific)

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Chapter 2

2. Literature Review

2.1 Enterprise Resource Planning

Enterprise Resource Planning (ERP) systems are defined by various authors in

different perspectives (Hossain et al 2002, Klaus et al, 2000). Generally speaking,

ERP systems are business information systems that are widely used by companies for

control and management of purchasing, producing, delivering and accounting of

customer orders and services, distribution or manufacturing companies. A more

holistic definition is provided by Wallace and Kremzar (2001:5)

“ An enterprise-wide set of management tools that balances demand and supply,

containing the ability to link customers and suppliers into a complete supply chain,

employing proven business processes for decision making and providing high

degree of cross-functional integration among sales, marketing, manufacturing,

operations, logistics, purchasing, finance, new product development and human

resources thereby enabling people to run their business with high level of customer

service and productivity, and simultaneously lower costs and inventories, and

providing the foundation for effective e-commerce”

One of the most important benefits ERP provide to the organisation is information

(Genoulaz and Millet, 2005). ERP systems aim to centralize all the internal and

external (suppliers and/or customer) information and process it in a way that better

management and strategic decisions can be achieved that could lead to competitive

advantages (Molla and Bhalla, 2006) However ERP systems are not the magic stick

which could eliminate the problems and put a company on right path. Due to their

complexity, they are time consuming and pretty expensive solutions. ERP failure

rates are very high. 40-50% companies which invest millions of dollars either only

achieve partial success or even a complete scrap of system. 60-90% fail to achieve

perceived return on investment. On the other hand, once ERP is adopted

successfully, it could boost a company‟s performance.

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There has been fair amount of research on how and when is it appropriate to invest in

ERP systems and what strategies should be adopted in order to do so (Genoulaz et al,

2005; Nicolaou, 2004; Al-Mashari, 2003). Several ERP adoption methodologies and

frameworks have been identified by the researchers which analyze good or bad

practices for a successful ERP project. However once the system is adopted, the „go

live‟ stage is the most tricky one (Peng and Nunes, 2007; Moon, 2007; Genoulaz et

al, 2005). This is where most of the companies could face a risk of failure (Peng and

Nunes, 2007).

2.2 ERP Success

Measuring ERP success has always been a hot topic for many researchers. Al-

Mashari (2007) states that “Both IT practitioners and researchers are still not able to

determine the potential impact of ERP adoption on adopting organisations.” This

point is further verified by Gable et al (2003) who explains the hurdles in doing so.

Traditional financial benefits are not the only measures of success in IS evaluations

as there are other tangible and intangible effects. Measuring and quantifying the

intangible benefits is difficult to obtain and easy to manipulate (Gable, 2003).

There are several different dimensions which could be considered and analysed in

order to measure a success. Gable et al (2003) and McGinnis and Huang (2007) has

picked following dimensions as ERP Success. Olhager and Selldin (2003) findings

further suggest these dimensions to be attained by the ERP adopting firms.

Information Quality

System Quality

Individual Impact

Organizational Impact

These dimensions are mainly based on the DeLone and Mclean (1992) IS success

model. Gable et al (2003), McGinnis and Huang (2007) and Teo and Wang (1998)

have omitted „satisfaction‟ from the model considering it as an overall success

measurement rather than a separate dimension of success. The importance of end

users and their satisfaction levels is still considered imperative. Ifinedo (2006)

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extended the aforementioned success dimensions by adding Consultant/Vendor

quality.

Hakkinen and Hilmola (2008) evaluated ERP users‟ perception of ERP success.

They compared the results from the „Shake down phase‟ (when the system was just

adopted) to the „post go-live phase‟ (two years after the system was used). The

previous dimensions were presented in the following table (Table 1).

X referred to explicity and (x) referred to implicity

Table 1. Extracted from Hakkinen and Hilmola (2008).

In their study, Hakkinen and Hilmola chose System quality, Information Quality,

Service Quality as the contributors of Net benefits attained by an organisation. They

adopted these measures from DeLone and McLean (2003) model and modified

according to the table-1.

Moon (2007) states that “Indeed the value of ERP system draws from its effective

and efficient usage and not so much from the system itself”. Genoulaz et al (2005)

has found that in order to gain better efficiency, people should be aligned with the

information system. Going through various researchers, he argues that technology

alone cannot be a successful guarantor. People using the system have equal

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importance and the ERP user‟s satisfaction, training and familiarity with the system

contributes in successful adoption.

Shang and Seddon (2003) listed the possible benefits an organisation can achieve by

adopting ES. The presented dimensions are Operational, Managerial, Strategical, IT

infrastructure and Organisational. In case of SAP, they chose 84 cases in 19 different

industries and 45 countries. All of the cases claimed to have attained the above five

advantages up to some extent.

Beside internal factors, some external factors also contribute in the perception of

success or failure. Poor economic conditions of the country and/or the Industry

climate are also thought to be a factor effecting efficient use of ERP systems

(Gregorio et al, 2005) as they make ERP penetration into the market really hard and

thus in turn a lack of field experts and expertise can be experienced (Ifinedo, 2006).

There is a lack of research in the connection of possible competitive advantages

gained by ERP systems and managerial or organisational processes that could lead to

competitive advantage (Kallin, 2005). However Koh and Simpson (2005) suggest

that ERPs can lead to competitive advantage of “Responsiveness and agility”

provided that uncertainty is identified and dealt with.

Better training and familiarity with system is very important for ERP to be

successful. The stress on user training is intense in literature. Many researchers have

argued that investing time and money in user training should have a high priority

(Laukkanen et al, 2007; Loh and Koh, 2005; Soja, 2006; Al-Mudimigh et al, 2001).

However Kositanurit et al. (2006) argue that ease of use and system quality are the

most important factors for user‟s performance and not training.

2.3 End users

When it comes to using a system, people are the key. It is they who deal with the

system. Research has shown that end user satisfaction plays a crucial role in order to

achieve better results (Genoulaz et al, 2005; Hakkinen and Hilmola, 2008). Gable et

al (2003: 581) states that “User satisfaction is possibly the most extensively used

single measure for IS evaluation”

(Lengnick-Hall et al, 2004) propose that ERP systems should not be considered as

IT solutions to organizational inefficiencies but as a social building block. Peng and

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Nunes (2007) argue that if users are unwilling or face problems or have less

confidence in the system then it can cause troubles. It can even lead to explicit

erroneous entries.

Firstly end user satisfaction is given much importance in literature. Nelson (2001)

used EUCS (end user computing satisfaction) model by Doll and Torkzadeh (1988).

They found the model to be applicable to ERP end users and moreover emphasized

on user training to make them more contented with the system. Motvani et al (2002)

took two companies as case studies, one whose ERP project was a success and

another was a failure. One major difference was lack of user satisfaction in the

failure case study. The management could not convey the need for change to the end

users and they ended up confused. Nicolaou (2004) has found that user training and

familiarity with the system can prevent a bunch of scrape. In a company where users

were only familiar with their own system and were not well educated about the

whole system, certain hitch arises. For instance one wrong amount being entered in

sales order could lead to wrong number of products being prepared. This could create

a ripple effect for production department and accounting department all ending up

with erroneous calculations. An additional construct is System knowledge which is

essential for ERP users to get full understanding of the system and not only parts of it

(Wu et al, 2002; Hirt and Swanson, 1999). Mistakes like these need to be understood,

addressed and users should be well aware of the system on the whole and which

mistakes could end up with what consequences. Better training to users ended up in

better results for the studied companies.

Moreover, knowledge management can play a key role in keeping users up to date.

In order to attain improved results from an ERP, the importance of knowledge

management is also emphasized by McGinnis and Huang (2007). Moreover they

consider knowledge management to be a contributor in user satisfaction as it

increases familiarity with the system. Besides training, ease of use in the ERP

interface has been identified as a user satisfaction contributor.

Nelson (2001) model contains following dimensions to measure user satisfaction in

an ERP environment:

Precise information

Useful information

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Useful reports

Sufficient information

Accuracy of the system

Ease of use

User-friendliness

Timely availability of information

Up-to-date information

2.4 ERP Post Implementation

ERP Post implementation is defined by Ng et al (2000) as

“Post-Implementation activities related to the packaged application software

undertaken by the client-organization from the time system goes live (i.e. successful

implemented and transported to the production system) until it is retired from an

organization‟s production system.”

ERP post implementation is relatively less explored area of ERP. Over the years

researchers have focused on best implementation practices but the importance of

issues related to post implementation or when the system is running couldn‟t get

much attention (Peng and Nunes, 2007; Moon, 2007; Stijin and Wensley, 2000). This

has created a gap in the field. Peng and Nunes (2007) and Esteves and Bohorques

(2007) found out that there was a lack on research addressing ERP post-

implementation risks. Peng and Nunes categorized ERP Post implementation as

using, maintaining and enhancing the system. Nicolaou and Bhattacharya (2006)

classified Enhancements into add-ons, upgrades and abandonments.

Esteves and Bohorques (2007) classified ERP systems post implementation in two

phases. First is „Use and Maintenance‟ and the second is Evolution.

2.4.1 Usage:

Esteves and Bohorques (2007) classified ERP systems post implementation in two

phases. First is „Use and Maintenance‟ phase. Usage is concerned with the need to

use the system in a way that causes minimum commotion and returns expected

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benefits. Importance of end users is once again considered an important factor.

DeLone and McLean (2003) found that net benefits of ERP are dependent on users.

System quality, Information Quality and Service Quality affect the User‟s intension

to use the system, their satisfaction from the system. Acceptance of the system by its

users is certainly a contributor to success and usage to its full potential (Helm and

Hall,2005). One of the risks identified by Peng and Nunes (2007) was explicit wrong

inputs into the system possibly caused due to lack of satisfaction.

Access rights is another major issue that contributes towards better usage of the

system. Authorising access rights to unauthorised users can lead to a risk (Peng and

Nunes, 2007). Yu (2005:128) states “ERP is doomed under the control of

inadequate/wrong person”. He found that this could trigger a chain of events that

affect adversely on the operational performance of an ERP. Best (2000) had an in

depth analysis of the controls in SAP R/3 and presented 8 steps to identify and assign

right controls to right users.

Understanding and utilising full potential of ERP by the company and by the end

users is another contributor towards the better usage (Genoulaz and Millet, 2005; Yu,

2005). Caldwell and Stein (1998) findings suggest many organizations only use 50-

75% functions of their ERP systems.

Kallin (2003) studied a MNC very similar to the Case here i.e. paper packaging

company in Sweden which adopted an ERP system. He suggested that usage should

be viewed in terms of „valuable and unique use of the system‟ in order to attain

competitive advantage.

2.4.2 Maintenance

It is mandatory to keep the system running. Malfunctions and disorders have to be

corrected in order to keep the system running (Esteves and Bohorques 2007).

Shepherd (2009) found out that one of the problematic issues in maintenance is the

maintenance contract with the vendor. These contracts are a must for any

organisation to keep the system running and are really expensive. He argues that this

cost can turn the ES into a liability. According to AMR research ERP vendors

collected more than $14B in maintenance revenues in 2008.

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Hakkinen and Hilmola (2008) found that in ERP user‟s viewpoint, poor helpdesk

support and inflexibility of the system were the main barriers to best possible use of

the ERP system when new change or an update was made.

Nah and Cata (2001) performed an in depth analysis of four case studies each having

SAP R/3 as there ERP system. They also performed extensive literature review in the

context of software and ES maintenance activities. The identified maintenance

categories were

Categories Discription

Corrective Maintenance Troubleshooting, new patches from vendor, Resolving

anomalies.

Adaptive Maintenance Deploying and testing the new customised features ,

authorisations

Perfective Maintenance Implementing new versions.

Preventive Maintenance Improving response times, taking back-ups and error logs,

Monitoring workflow.

User Support Training for new features, system support from IT

experts.

External Parties Coordination with vendors and consultants, OSS

Table-1 ERP Maintenance activities

The last two categories, i.e. User support and External Parties were missing in

previous literature.

These were added by Nah and Cata (2001) specifically for ERP usage.

2.4.3 Enhancements

Nicolaou and Bhattacharya (2006) classified Enhancements into add-ons, upgrades

and abandonments. They noted that add-ons and enhancements preferably enhance

the firm‟s efficiency and are as better as quickly adopted whereas abandonments can

leave a less positive impact.

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Smyth (2001) analyzes that add-on approach is more feasible for organizations as it

is relatively less expensive than customising but carries a high risk of software bugs

as ERP systems are very complex systems.

Esteves and Bohorques (2007) describe enhancement as the „Evolution‟ phase which

is divided into two types. “Upwards” is concerned with adding functionality in terms

of adding and using new and advanced features. “Outwards” deals with interacting

with outside environment by applications such as supply-chain management,

customer relationship management or e-commerce.

Ng (2001) had an in depth analysis of SAP R/3 enhancements. The two types are

user initiated and vendor initiated. These enhancements arise from new business

opportunities or to take benefit of new functionalities. However these activities can

have sufficient effect on the maintenance costs.

2.5 Risks associated with ERP systems Post Implementation

The 2001-2005 bibliography by Esteves and Bohorquez (2007) for ERP publications

in IS journals and conferences does not mention any risk dimensions for the post

implementation stage. They have suggested future studies to consider usage and

evolution phases especially in SME context. They also observed a saturation of case

studies which considered SAP. However this could be because of the SAP‟s success

and penetration into the market. SAP has 27% of the overall ERP market which is

13.3% ahead of closet competitor (SAP, 2007). Therefore it is naturalistic for IS

research to come across SAP more frequently than other providers.

Peng and Nunes (2007) presented a risk ontology for ERP Post-Implementation. It is

perhaps the very first of its kind. The risks are divided into four categories.

Operational risks: These risks are associated with operational staff and their day to

day usage of the system. Analytical risks: These risks are associated with managers

and their intension to use the system. Organisation-wide risk: These are more

concerned with the entire organisation either internal risks or external risks.

Technical risks: Concerned with system and technical factors which also contribute

in meeting performance requirements.

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Figure 1: ERP Post-Implementation Ontology

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2.6 ERP in SME

Esteves and Bohorques (2007) observed a lack of research regarding definition,

usage and adequacy of ERP methodologies in the context of SMEs. However Shang

et al (2002) argue that benefits of ERP in SMEs are very similar to those in LEs.

Competitive advantage, reduced lead times, better customer service, increased sales

etc. are just the few to name. ERPs can provide SMEs with competitive advantage

(Koh and Simpson, 2005). In case of SMEs in developing Asian countries, there is a

high probability for SMEs to obtain competitive advantages (Molla and Bhalla,

2006).

A very expensive solution at a high risk of failure doesn‟t sound appropriate to

SMEs. ERP cost is the key concern for SMEs (Deep et al, 2007). Muscatello et al

(2003) observes that SMEs are very cautious about ERP systems due to their high

risk of failure. Most of the SMEs use ERPs for accounts or finance purposes and

many advanced production planning capabilities are relatively less utilized. Koh et al

(2009) found that ERPs for SMEs are generally easy to use and thus saves

considerable time and money for training. Koh and Simpson (2005) found that in

order to attain competitive advantage with ERP, SMEs biggest challenge is

managing uncertainty. They found that most of the SMEs use buffering and

dampening techniques in order to cope with uncertainty. Their results suggest that

most of the SMEs are not using advanced production tools of ERP such as dimension

changes for product design to cope with uncertainty and thus not exploiting their

ERP capabilities.

2.7 ERP in Production environments

One of the most important desired results of an ERP is production planning and

scheduling. ES in production environment are expected to deliver Planned Order

Release (POR) for efficient product delivery (Koh and Saad, 2006). The supply chain

re-engineering is perhaps the most desirable efficiency perceived by the SAP R/3

16

(Al-Mashari and Zairi, 2003). SAP R/3 is perceived to be a useful supply-chain tool

by many organisations (Al-Mashari and Zairi, 2000)

Koh and Simpson(2005) analysed 64 SMEs in production environments. In order to

gain competitive advantage they suggest delivery performance is the attribute

contributing to winning contracts and keep the customers happy. Managing

uncertainty is the biggest challenge for these organisations as it can lead to late

deliveries and disturbed production timeframes (Koh and Simpson, 2005). They also

found that SMEs normally use the production plan from ERP as a guideline only and

not as a control tool which is a barrier to greater possible efficiency by the ERP.

Akkermans et al (2003) found that current ERP systems lack a full support for supply

chain management (SCM) in the ever changing and evolving SCM techniques. Their

findings suggest that ERPs can in fact limit the SCM opportunities.

The ERP vendors, especially SAP are now trying hard to embed SCM requirements

into their systems. The use of internet to connect supplier and customers is being

developed. One such example is the Advanced planner and optimiser (APO)

provided by SAP. Al-Mashari and Zairi (2000) have suggested an implementation

strategy which could help organisations to gain most out of ERP systems in the

context of SCM.

Olhager and Selldin (2003) researched 190 Swedish manufacturing firms. They

observed that with the adoption of ERP, issues like interaction with customers and

suppliers, inventory levels, on-time delivery and operating costs have been improved

to a lesser amount. The main advantages gained by adopting ERP were information

clarity and integration of business units and processes.

2.8 ERP in developing Asian countries context

Soh et al (2000) suggested that ERP systems are more inclined to western styles of

business and vendors need to consider and recognize the needs of Asian culture.

Huang and Palvia (2001) stated the ERP market occupation as 66% in North

America, 22% in Europe and only 9% in Asia. Considering China, India and Brazil,

Huang and Palvia (2001) observed the dimensions to ERP adoption as „Inadequate

IT infrastructure, governmental policies, small size of companies, lack of IT/ERP

experience, and low IT maturity‟. One of the reasons for low penetration is high

17

adoption costs (Rajapakse and Seddo, 2005, Ng, 2001; Soh et al, 2000) and their

maintenance costs (Shepherd, 2009).

2.9 Hofsted’s Analysis

Hofstede (1991: 5) defines national culture as “the collective programming of the

mind which distinguishes the members of one group or category of people from

another.”

Power Distance Index (PDI) is the extent of unequal power distribution that is

accepted and expected by the les powerful member in the organization.

This is the representation of the inequality in the organization from bottom.

Individualism (IDV) refers to the extent to which people prefer to be a part of large

or small group. Many collectivist societies tend to have closer bonds and one person

might be responsible for several others. On the other hand, there are societies where

people have more personnel life and they are responsible for very small number of

people. Often just immediate family members.

Masculinity (MAS): there are caring people and there are not so caring people. Care

is more attributed towards women and is consistent on different geographical

locations. However attitude of men changes from country to country. Countries

where Modest or men with women like caring attitude are found are named

„feminine‟ and the modest and assertive ones are called „masculine‟

Uncertainty Avoidance Index (UAI) deals with the level of uncertainty people of a

society can face. Or in other words how uncomfortable are the people when

confronted with unstructured, sudden or out of normal routine/task. The people at

higher uncertainty avoidance cultures tends to be more religious, emotional and

motivated. On the other hand people with more uncertainty acceptance, tolerance and

a lesser expression of emotions can be observed.

18

Long-Term Orientation (LTO): The cultures with persistence and carefulness and

who fulfil their social responsibility are long term oriented cultures.

Pakistan’s Scores:

PDI IND MAS UAI LTO

World Average 55 43 50 64 45

Pakistan 55 14 50 70 0

United Kingdom 35 89 66 35 25

United States 40 91 62 46 29

China 80 20 66 30 118

Arab World 80 38 52 68 ---

India 77 48 56 40 61

National culture and IS research is always thought to be interconnected. Mayers and

Tan (2002) observed that most of the research on IS uses Hofsted‟s dimensions to

analyze and address the cultural needs and risks to IS usage and adoption (e.g.

Watson et al, 1997; Watson et al 1994; Walczuch et al, 1995; Sore and

Venkatachalam, 1995; Palvia and Hunter, 1996; Milberg et al, 1995; Harvey, 1997)

with few dimensions added or subtracted in the specific contexts. Out of the 36

considered studies, 24 were based on Hofsted‟s work. However Mayers and Tan

explain that the topic goes beyond the national boundaries and IS researchers needs

to view culture in a more dynamic and emergent way. They have further emphasised

that due to globalisation, organisations can have their own culture. This point of view

is in consistent with Straub et al (2002) who introduced Social Identity theory (by

Tajfel, 1970) to IS researchers (Ford et al, 2003). This theory emphasises that

individuals belong to groups and not necessarily perceive themselves as a part of

national culture.

In Spite of criticism to Hofsted‟s theory, researchers support its usefulness. However

most of the above mentioned studies and Mayers and Tan conclusion suggest that

categorising the cultural effects can lead to successful IS deployment and usage.

19

Silivus (2008) studied business and IT alignment and added Long Term Orientation

to overcome the critique of Hofsted‟s dimensions to be western oriented. This

dimension (LTO) is particularly relevant to Asian culture (Hofsted and Bond, 1988).

Davison (2002) described that ERP systems are typically built for most of the

information available to all employees. This is not part of many cultures especially

where power distance is more. Like Hong Kong and Singapore, Davison argue on

Hofsted (2001) that where power distance is more, employees are less likely to take

initiatives and new responsibilities. This creates a less acceptance of new ES

adoption and their usage.

Silivus (2008) presented a matrix which uses Hofsted‟s dimensions to measure the IT

maturity variables defined by Luftman (2000). It elaborates the usefulness of

maturity variables which are connected to Business and IT alignment. The variables

are Communication, Value measurement, Governance, Partnership, Scope and

Architecture and Skills maturity. The last most Variable, as discussed in end users, is

certainly directly related to ERP usage during its post implementation stage.

The hofsted‟s dimensions have been used in the ERP context. Motwani et al (2008)

and Livermore (2004) have applied Hofsted‟s dimensions on comparison of ERP

implementation strategies across cultures. The findings were then matched to

Hofsted‟s guidelines.

20

Hofsted’s

Dimension

High Levels

Of Maturity PD

I

I N

D

M A

S

U A

I

L T

O

Skill Maturity Low High High Low High

Communications Maturity Low High Low Low High

Value Measurement

Maturity

High High High High Low

Governance Maturity High High High High ---

Partnership Maturity Low Conflict of

Opinins

Low Low High

Scope and Architecture

Maturity

--- Conflict of

Opinins

Low High High

Table-2 Hofsted‟s and IT maturity

21

Chapter 3

Research Design

3.1 Research Methodology

Flyvbjerg (2006: 24) states “Good social science is problem driven and not method

driven..... a combination of qualitative and quantitative methods will do the task

best”. Under the light of above mentioned statement, a mixed method approach is

followed. A mixed method approach combines qualitative and quantitative methods

in a way that overall study possesses the strengths of both techniques. It is important

to mention the qualitative and quantitative parts of this study. A qualitative study

collects participatory worldview and involves open ended questions. A quantitative

approach strategy can be experimental research or survey research. In survey

research a numeric collection of opinions or trends is achieved (Creswell, 2009).

Morse (2003: 190) has differentiated between mixed method approach and multi

method approach. She defines them as:

“Mixed method design is the incorporation of various qualitative and quantitative

strategies within a single project.....whereas Multimethod design is the conduct of

two or more research methods, each conducted rigorously and complete in itself, in

one project. The results are then triangulated”.

However Creswell (2009) does not differentiate between them and simply calls

„multimethod‟ a synonym of „mixed method‟ according to the latest research. Here

the point of view and strategies defined by Creswell are adopted as they tend to be

flexible and latest.

On the philosophical side, A Pragmatic Worldview is adopted. Creswell (2009: 10-

11) states

22

“Pragmatism is not connected to any one system of philosophy and reality. This

applies to mixed methods research in that inquirers draw liberally from both

qualitative and quantitative assumptions when they engage in their research.

Individual researchers have a freedom of choice of methods, techniques and

procedures of research that best meet their needs and purposes.”

Single exploratory case study is chosen as the research approach. Yin(1994)

described case study‟s strength to provide detailed and in-depth insight into the

matter and have an edge over other methodologies when answering „how‟ or „why‟

questions. It is also beneficial to test a well-formulated theory. Yin (1989: 23) quotes

Schramm definition that he gave in 1971 an says : “the essence of a case study, the

central tendency among all types of case study, is that it relies to illuminate a

decision or set of decisions: why they were taken, how they were implemented, and

with what results”. Donmoyer (2000) explained that single case studies can be used

for generalization and had three advantages: Accessibility, Seeing through the

researcher‟s eye and decreased defensiveness. The research question when seen

under the light of above discussion illustrates the importance of case study for these

research questions. Long ago, Benbasat et al (1987) studied importance of case study

approach specifically for information systems. He identified that when the

technology is novel and it is focused to the organization rather than the technical

issues then the case study approach is complementary.

Flyvbjerg (2006), a senior professor, pointed out the common criticism of case study

approach are Lack of reliable information, researcher‟s biasness, not suitable to test

hypothesis, difficult to summarise etc. However in his very interesting paper, he

described the criticism as „misunderstandings‟ and not drawbacks. He praised the

findings of this approach especially in the context of social science.

Justification

In this research the problems faced by the organisations after they have adopted ERP

systems needs to be identified. These are relatively less explored areas in literature

especially in the context of SMEs (Esteves and Bohorques, 2007) and for the vendors

who need to identify the cultural needs and business process in the Asian context

(Soh et al, 2000).

23

3.2 Research Approach

The qualitative approach is Inductive in nature and leads to exploration (Patton,

1987). However Hyde (2000:88-89) described it as a true yet traditional view. He

further added that Inductive approach leads to important questions. These questions

can only be tested deductively and states that

“Both qualitative and quantitative researchers demonstrate inductive and deductive

processes in their research practices. It is important for us as researchers to recognise

and formalise these processes.”

The research question „A‟, i.e. Exploration was designed to gather the information

regarding the expectations from the systems and to the level these expectations are

met. This part is covered qualitatively with interviews from different managers. This

has resulted in the combination of certain problems or failures by the system. These

interviews are presented in a narrative way to explain the findings and present a

concept map of the findings.

Trochim and Donnelly (2007) explain that deductive reasoning starts from a specific

theory narrowed to hypothesis and then using the observations for the confirmation

of the hypothesis. This design is applied to test the REPO ontology presented by

Peng and Nunes (2007).

3.2.1 Rationale for triangulation

As Creswell (2009) guides that a rationale for mixing the data should be present. It is

explained here.The results from qualitative and quantitative findings are triangulated

in order to get a better insight into all the issues defined in REPO. The reasons for

some of the questions were identified as answerable by the managers and others by

the end users. Also the end user point of view needed to be present which could only

be gathered by quantitative data collection.

Research question C, i.e. User satisfaction followed quantitative method but also

looked at the manager‟s point of view of the user‟s satisfaction. The prime objective

was to find if there were any correlations between the dimensions of user

satisfaction. It was thought to result in similarities or discrepancies. The research

24

question D, i.e. Cultural issues mainly looked at the scores of Hofsted‟s dimensions

and attempted to map the overall findings with the literature for cultural issues and

ERP implementations.

3.3 Research Strategy

A concurrent triangulation strategy is adopted in this research. Creswell (2009:213)

identifies this triangulation strategy as the most familiar one and defines it as “In a

concurrent triangulation approach, the researcher collects both qualitative and

quantitative data concurrently and then compares the two databases to determine if

there is convergence, differences or some combination”. It is also less time

consuming however difficult to analyse. Creswell (2009:210) has shown the process

as

Diagram 2: Concurrent Triangulation Design

QUAN

QUAN Data CollectionCollection

QUAN Data Analysis

QUAL

QUAL Data Collection

QUAL Data Analysis

Results

Compared

25

3.4 Data collection

3.4.1 Qualitative Data Collection

Qualitative data is gathered through interviews. Interviews are a qualitative approach

to obtain data and allow participants to explain scenarios according to their own

interpretation (Punch, 1998). The interview questions can be structured before the

interview or they can be structured afterwards. Punch suggests that Structure-before

has a risk of researcher imposing the data whereas Structure-after makes standard

comparisons difficult. In this case it is necessary to obtain manager‟s point of view

on the adopted system and the problems they face with day to day ERP operations.

At the same time there are some common practices in ERP maintenance risks that

existing literature address. Considering these observations, the interviews will be

semi-structured with a mix of open and close ended questions. Open ended questions

although provide enriched information but are time consuming and difficult to

understand where as Closed ended questions though take shorter times but could

restrict the respondents answer due to lack of choice (Oppenheim, 2000). The

questions varied in the context of research questions.

In this way research explored issues and causes within the defined domain of

research objectives. The interviews offer an opportunity to explore. Flick (1998)

explained that interviewee should be given a chance to introduce something new and

the interviewer needs new topics as well as pre thought questions. In this case, firstly,

the research aims to find how and what motivated to the decision to adopt ERP

system (exploration) and were those expectations met and secondly, an analysis of

which REPO risks exist in the usage of the system (confirmation). Fowler (2002:

118) guides three steps to conduct an interview:

1- Locate and enlist selected respondents.

2- Train and motivate respondents to be good respondents.

3- Ask questions, record answers and probe to ensure that question objectives

are met.

These steps were followed to get the effective and efficient results from the system.

The respondents were identified and then approached with a clear picture of the

26

research nature. They were motivated with the fact that there is a lack of literature in

the context of Pakistan based SMEs which needs to be addressed. The Interviews

were telephonic and they were recorded. A common complaint in interview research

is that the interviewee often complaint about the longer time taken than initially

demanded (Brace, 2008). In order to avoid such condition, the questions were

carefully designed and practiced. An average of 15-20 min of interview time was

arranged prior to the telephone call.

3.4.2 Quantitative Data collection

The users of ERP system were sent Questionnaires based on the literature review and

research questions. Questionnaires are a quantitative approach to data collection that

provides basis to mathematically measure the weights of arguments against a

population (Punch, 1998). Here the approach of Likert scale based questioner is

adopted. Brace (2008) explains that Likert scale (or „agree-disagree‟ scale) collects

respondent‟s attitude or level of agreement with a statement. This technique is easier

to analyse and can be given to participants for self completion. Dillman (2000)

suggest some benefits of the questionnaire as:

This is less expensive technique to investigate.

Can reach a large number of people.

Does not need prior arrangements.

Anonymity can be ensured to respondents.

Interviewer bias is absent.

However the disadvantages are:

Questions need to be simple and carefully designed.

A low response rate can be observed.

A time delay for the responses to be collected.

No assistance can be provided.

Incomplete questionnaires can make data analysis complicated.

The questionnaire was based on the literature review. Mainly the items of REPO and

system success which involved user‟s behaviour and perceptions about the system

were gathered. Oppenheim (2000) suggested that users could be frustrated by the

27

questions or lack of response option and hence a neutral option should be present. In

some questions, a neutral option was given. Three questions were added at the end of

questionnaire which gathered opinions of the participants. These open ended

questions were added to get insight into the kind of problems end users are

encountering with the daily use of the system. The questions were emailed to a

central contact person in the organisation who used the intranet to forward it to other

end users. A non probability sampling was used in general and expert sampling in

particular. Expert sampling caters a sample of people who have particular experience

or expertise in certain areas. As Hirt and Swanson (1999) has categorised the users of

ERP into key users and end users. Key users are the ones more familiar with the ERP

activities and the business processes of the company. They are normally the ones

training the end users. The end users normally have information about their own

domain only. Therefore 40 Key users were sent the questionnaire in the Lahore

branch.

3.4.3 The participants

The interviews were conducted with the top management of the operations head

office branch in Lahore. It was planned to interview the following managers

ERP Manager

IT manager

Supply chain and Planning Manager

Sales and Marketing Manager

General Manager

Accounting Manager

However only three of the above mentioned personnel were available for interviews.

In all following four interviews were conducted with the following managers:

(Inve-1): „ERP Manager‟ who is responsible for all the ERP related activities in the

organisation.

(Inve-2): „Supply Chain and Planning Manager‟ who is responsible for all the supply

chain related activities and all the planning related activities as well. It is noteworthy

that both roles are handled by one person.

28

(Inve-3): „Sales and Marketing Manager‟ who is head of sales and marketing and this

is the department where all the orders are initiated and entered into the system for

first time.

(Inve-4): An additional interview was conducted with the „Assistant manager

Operational Planning‟. This person was the central contact point for the study with

whom the researcher has personnel contact.

Inve-1,2,3 were part of the organisation when the system was adopted. Inv-4 joined

the organisation three years ago and is currently responsible for Operational planning

which has been identified as a major problem area.

On the quantitative side 40 people were sent questionnaire however only 11 people

responded. This gives a response rate of 27.5%. The reason of this low response rate

is actually the start of month of fasting. Reader might be thinking how fasting can

affect the response. It is actually the month of Fasting when this company faces

tremendous amount of sudden orders. This issue is further explained in discussion

chapter which itself highlights a cultural issue that in return affects the exploitation

of ERP system.

3.4.4 The final Questions

The final questionnaire was carefully divided in to interview questions and survey

questionnaire in order to get two main answers. The interview questions were

designed with two objectives in mind. Firstly for the exploration part, the open ended

questions were designed. Secondly for the confirmation part, all the risks present in

REPO were covered as close ended questions and asked only if they were not

covered in the exploration part‟s open ended questions. The interviews were

conducted in Urdu and then translated into English at the transcription stage.

In the questionnaire, overall 19 questions were selected which were divided into

three sections. The first section measured the level of agreement to a given statement.

The second part looked for frequency of an event whereas the third section took

opinions about the general problems, improvement margins and previously

encountered risks in the system.

29

3.5 Data analysis

3.5.1 Qualitative data analysis

A content analysis approach was applied to the qualitative data. The data from

interviews was transcribed. Swift (1996) described transcription as a dialogue in

written form. Transcription turned the interview speech into raw data on a paper. To

analyze this data, coding was used. Code provide link between raw data and

theoretical concepts and is a starting point for developing new phenomena (Seidel

and Kelle, 1995). The key points regarding exploration and confirmation research

questions were extracted from the transcriptions. After extracting key points out of

interviews with the help of open coding, the results are presented using Concept map.

In a concept map, the ideas and concepts from one or more participants are presented

in a pictorial way and it is a structured process (Trochim and Donnelly, 2007). The

concept maps are also explained in narrative form.

3.5.2 Quantitative data analysis

The results of questionnaire are analyzed statistically. Descriptive statistics are used

to analyze the data. This analysis is performed with the help of SPSS. SPSS stands

for „Statistical Packages for the Social Sciences‟ and is the most commonly used

statistical tool in the social sciences (Bryman and Cramer,2006). The likert scale are

coded in a numerical way and then descriptive statistics are applied. Analysing the

answers, the quantitative data is qualified. Creswell (2009) explains that a researcher

may quantify the qualitative data or may qualify the quantitative data as and when

needed. However he suggests hat to analyse the findings.

The reason to qualify the quantitative data is that for concurrent triangulation, the

results should be triangulated in order to form a common meaning. These findings

are then presented in a matrix as guided by Creswell (2009). However instead of a

matrix whose one axis is for qualitative and other for quantitative, this matrix shows

which REPO affects are present and which are not.

30

3.5.3 Justification

In this research prime objective is to identify the problems SMEs face in their day to

day operations while using the ERP systems. Hence an insight into what risks are

present in an organisation according to REPO ontology needs to be identified. The

risks are identified and presented as a list which could be viewed as barriers to

exploitation. The identification of these risks also validates the REPO risk ontology

and further adds some risks found in the cultural specific context. Secondly this

research answers the motivation and expectation for SMEs to adopt ERP packages

and listing the expectations which are not met.

31

4. Findings and Analysis

4.1 Qualitative Findings and Analysis

Qualitative data was collected by interviews which were conducted with higher level

of management. The interviews were transcribed and then coded. Following themes

have been identified:

4.1.1 Exploration.

The decision was triggered by a need of

(i) Inefficiency of the Legacy system (Smartturn).

(ii) A need to integrating all the departments and locations of the business.

(iii) To take advantage of the centralized information.

(iv) To gain efficiency in Planning and Control. Especially in initial level

planning and capacity planning.

Level of expectations fulfilled?

(i) Excellent reporting system.

(ii) Data and information visibility.

4.1.1.1 Identified Problems

4.1.1.1.1 Initial level Problems

(i) Data conversion

(ii) Users‟ confusion

(iii) Customisations

Discussion:

The initial level problems are very common in any ERP project. This includes data

conversion from legacy system to the new ES system. However end users have to

deal with the new system. It brings them a completely new working environment.

The users of packages as any other organisation were confused of the new system but

gradually they were aligned with the system.

32

“Initially we had a lot of difficulty shifting from old system to the new one. The staff

was very confused how to operate and use the system. They were used to MS Excel

environment and had troubles in navigating. But once the benefits of information

transparency appeared and information access became easier, most of us started

loving the new system. The reporting system is outstanding” (Inve3)

It appeared from the interviews that requirements of the organisation were not well

understood by the vendor. As some customisations were required, which came at a

cost. Certain features had to be customised especially in Planning, IR, and payroll.

Incentive based salary was not supported and many reports had bugs.

“We had to customise a number of features but eventually everything settled down.”

(Inve1).

4.1.1.2 Current Problems:

(i) Lacks flexibility

(ii) Planning and control didn’t deliver

(iii) Lack of hardware bottleneck detection

(iv) Manual check of predictions

(v) No contribution to Reduced Inventory levels and Reduced delivery times

Discussion:

One of the major themes of this research is to get insight into what problems could

still exist. SAP was adopted about 5 years ago and a number of things were pointed

out by managers which should be addressed by the vendors. Lack of Flexibility was

pointed out by every interviewee. When asked if there is anything you would like to

see in the system, Sales and Marketing manager replied

“SAP uses its own terms which are not simple or generic terms. E.g. If something is

identified by delivery date and we want to identify it by something else, the system

won‟t support us. So the system should be simplified”.

The biggest disappointed from the system came when planning and control module

failed to deliver what was marketed by the vendor. The Inve1 said

“Prime objective to buy the system was Planning and control. Vendor told us that in

case of new orders, the sales person could then and their estimate the delivery time

33

and stock levels on a laptop. However no such functionality could work. Perhaps due

to our very complex manufacturing system, the system failed. It might work for

simple production environments”

Inve2 point of view is that SAP no ways help to reduced inventory levels or reduced

delivery times. Only the reports based upon previous data is reliable. None of the

predictions can be trusted and future planning needs manual work.

In Inve3‟s point of view, the real benefits of the adopted system can only be achieved

when customers and suppliers are linked. At the moment the system is only

connected to multinational customers and they use it to view the quality of their

products. No advance usage by them is observed (Inve-4).

Managers’ View of End Users

Users‟ Behaviour

(i) Everyone from top to bottom uses it.

(ii) Employees are curious to learn.

(iii) More mature usage needed.

Discussion:

It has been identified that everyone from managers to data entry operators use the

system. The new entrants are trained for SAP before they can start their day to day

workings. In every interviewee point of view, users are not reluctant to use the

system anymore.

“ The young workers are curious to learn using at as they see it as a career growth

in the emerging business world” (Inve1)

However it is worth mentioning that a mature usage is needed. Perhaps better

training is needed.

“Many users do not take advantage of new automations, checks etc. Maybe they

don’t have enough knowledge about it” (Inve 1,4)

Users‟ Rights defined.

All the managers were asked if they define right of access to employees. It appeared

that all the departments do so. If some information is restricted for a user, he has to

34

send a request which travels upwards in managerial hierarchy and then the decision

to access is taken.

Enhancements

(i) Customization of Reports.

(ii) Looking forward to integrate SAP APO.

The ERP manager was asked about enhancements into the system. As described

earlier, many features needed customisations. However for future enhancements into

the system, the vendor marketed benefits of SAP APO. But this time company is

looking for a benchmark. There was no sign of add-ons and upgrades as the company

is still using the version 4.5 of SAP R/3. However management is still looking into

buy the newer version.

35

4.2 Quantitative findings and Analysis:

The first section of the questioner is designed to get insight into the end user‟s

behaviour. The second half of the questioner attempts to get insight into the other

factors that can affect ERP usage.

S1: Is the system easy to use (Ease_of_Use):

The ease of use attempts to measure user‟s perception about the ease of use of the

system. More than 70% of users agree that the system is easy to use. 18% strongly

agree and 9% have neutral comment. None of the users were found to be disagreeing

about the ease of use of the system.

S2: Is there any reluctance to use the system (Reluctance):

As the people can sometimes feel reluctant to use the system, this question collects

their opinion about their own behaviour towards the day to day usage. A mixed

opinion can be observed. 27.3% of the users agree that they do occasionally feel

reluctant to use the system. The number of people with neutral opinion and those

who disagree are same (36.4%).

18%

73%

9%

Ease_of_Use

Strongly AgreeAgreeNeutralDisagreeStrongly Disagree

27%

37%

36%

Reluctance


Descriptive Statistics

N Minimum Maximum Mean

Std.

Deviation

Ease_of_Use 11 1 3 1.91 .539

Valid N (listwise) 11



Std.

Deviation

Reluctance 11 2 4 3.09 .831


36

S3: Satisfaction with the training (Training):

It measures the user‟s view point about the training they received on how to use the

system. 27.3% of the users are not satisfied with the amount of training they

received. The percentage is similar to those who agreed to feel reluctant using the

system in S2. 45.5% agree with the statement whereas 18.2% neither Agree nor

Disagree.

S4: It is complicated to Input/Retrieve information.

(Info_retrieve_Complication)

The end users are the ones who have to input and retrieve information from the

system. 36.4% of the users agree that it can be difficult to input and retrieve

information from the system. 54.5% disagree whereas 9.1% have neutral opinion.

46%

18%

27%

9%

Training

Strongly Agree

Agree

36%

9%56%

Info_retreive_Complication




Std.

Deviation

Training 11 2 5 3.00 1.095



N

Mini

mum Maximum Mean Std. Deviation

Info_retreive_

Complication 11 2 4 3.18 .982

Valid N

(listwise) 11

37

S5: The help documents availability. (Help_documents)

When asked about the help documents with the system, 36.4% of the users

mentioned that help documents are not present. 54.5% agree to that the documents

are easy to understand and only 9.1% think the help documents are not easy to use.

Q1: Accuracy and reliability of the Information. (Info_accuracy)

When asked about accuracy and reliability of the information generated from the

system, 72.2% of the users suggest that it is always reliable and accurate. 18.2%

56%36%

9%

Help_documents

Strongly AgreeAgreeNot presentDisagreeStrongly Disagree

73%

18%

9%

Info_accuracy

Always

Most of the Time

Sometimes

Rarely

I have to manually validate their reliability



Std.

Deviation

Help_documents 11 2 4 2.55 .688




Std.

Deviation

Info_accuracy 11 1 5 1.55 1.214

Valid N

(listwise) 11

38

think it is reliable most of the times whereas only 9.1% said they have to manually

validate the reliability.

Q2: Automatic detection of the Invalid input. (Invalid_input)

Q2 asks if invalid inputs are automatically detected by the system. 18.2% chose

Always and 36.4% chose Most of the times that such inputs are detected by the

system. 45.5% of the users said it is detected sometimes.

Q3: Up to what extent user’s use the system to its full. (Extent_of_use)

The respondents were asked how frequently they take advantage of all the features

provided in the system. 27.3% responded always. 27.3% chose Most of the Time and

45.5% answered Sometimes. It was clear from the interviews that more mature usage

is needed.

18%

36%

46%

Invalid_input

AlwaysMost of the TimeSometimesRarelyNever

27%

27%

46%

Extent_of_use




Std.

Deviation

Invalid_input 11 1 3 2.27 .786




Std.

Deviation

Extent_of_use 11 1 3 2.18 .874


39

Q4: The frequency of system Upgrade. (Upgrading)

The users were asked how often the system is upgraded for new and emerging

business requirements. A very mixed opinion is observed here. 27.3% says it is

upgraded most of the time. 18.2% says sometimes, 27.3% are found saying

occasionally whereas 27.3% say that the system is never upgraded.

Q5: Duplicated and outdated records in the system. (Data_duplication)

Duplicate records and outdated records can be present in the system. When asked

about their frequency, 54.5% and 18.2% responded Rarely and Sometimes

respectively. 9.1% find such records in the system most of the time. Only 18.2%

think it never happens.

28%

18%27%

27%

Upgrading


9%

18%

56%

18%

Data_duplication




Std.

Deviation

Upgrading 11 2 5 3.45 1.128




Std.

Deviation

Data_duplication 11 2 5 3.82 .874


40

Q6: Technical bugs/ errors in the system. (Bugs_errors)

Technical bugs can be encounter by the users. When asked about their frequency,

54.5% said rarely, 27.3% said sometimes and 18.2% said most of the time.

Q7: IT experts’ helpfulness in solving the problems. (Helpdesk_support)

Users seem to be satisfied with the IT experts. 27.3% said Always, 63.6% chose

Most of the time and 9.1% responded Sometimes.

Q8: ERP related problems promptly reported. (Bug_Reporting)

There is a clear divide in the behaviour of users in the context of reporting the issues.

54.5% Always do so whereas 45.5% only Rarely do it.

18%

27%56%

Bugs_errors


27%

64%

9%

Helpdesk_support


55%

45%

Bug_Reporting




Std.

Deviation

Bugs_errors 11 2 4 3.36 .809




Std.

Deviation

Helpdesk_support 11 1 3 1.82 .603




Std.

Deviation

Bug_Reporting 11 1 4 2.36 1.567


41

Q9: System Speed. (System_speed)

63.6% of the users believe that the system is sometimes slower than its normal speed.

36 % say that they have rarely encountered the slow speed of the system.

Q10: Manager’s understanding of the problems caused by the system.

(Manager_understanding)

A major portion of users i.e. 46% believe that the managers sometimes understand

the problems caused by the system. Rest of the users are divided in three opinions of

Most of the time, Always and rarely at 18% each.

Q11: Overall system performance rating. (Sys_Rating)

64%36%

System_speed


18%

18%46%

18%

Managers_understandig


73%

27%

Sys_Rating

Excellentv. goodAveragePoorReally bad



Std.

Deviation

System_speed 11 3 4 3.36 .505




Std.

Deviation

Managers_understaning 11 1 4 2.64 1.027




Std.

Deviation

Sys_Rating 11 2 3 2.27 .467


42

Majority of the users around 73% rate the overall performance of the system as Very

good where as 27% rate it is Average.

4.3 REPO vs Findings:

Mapping the findings onto REPO risk ontology:

The findings are matched with REPO risk ontology to find out which risks are faced

by the SMEs.

4.3.1 Operational Risks:

OR1.1 Operational staff are reluctant to use the system:

This question was asked by both, i.e. managers and end users. Managers’ response

was that they have no other choice and as the time passed, everyone became more

and more familiar with the system. There is no reluctance to use the system

anymore.

In end user’s own opinion, a very mixed opinion was observed (described in S2).

27.3% agreed that they do feel reluctant to use the system and 36.4% chose neither

agree nor disagree. A mean of 3.09 is observed with a standard deviation of 0.831.

Hence there are considerable numbers of users who still find themselves in

difficulty or who are reluctant to use the system at times. The Inve-4 response gave

a more clearer picture as he explained:

“A large percentage of relatively new staff still prefers excel sheets and are indeed

reluctant to use the system”

OR1.2 Operational staff input incorrect data to the system:

The users were not asked if they input wrong data into the system either

explicitly or by mistake. However when asked about the possible problems they

face, one of the manager‟s mentioned: “This is indeed the biggest risk and we

used to have extra items produced because of this but now more and more checks

are put into the system which has enabled us to quickly identify when a wrong

input has occurred” (Inve-4). Hence this is indeed a very serious issue though can

be addressed by introducing checks.

43

OR 2.1 Sales staff are not able to obtain needed data and information from the

system:

The Logistics manager and the Sales and Marketing manager both pointed out

that information generated on the basis of past data is reliable. However its

predictions cannot be trusted. The users also appreciated the reliability and

accuracy of the information generated from the system. The mean of

Info_accuracy is 1.55 with a standard deviation of 1.2. Hence if the needed data

is based upon previous data, they can get it. If its something predicted by the

system, then they cannot get it.

OR2.2 Fail to maintain up-to-date and comprehensive customer information

files.

The Logistics manager was asked this question and he mentioned that all the

records are up to date and customer information files are well maintained.

OR3.1 System contains inaccurate supplier records.

“The supplier records are present in the system but against a material, not

independently. We can find them when needed, it takes some time however they

are fine”. (Inve2).

OR 3.2 System contains inaccurate or incomplete bill of material.

This risk has been identified by inve-4 that it does exist sometimes. The reason

underneath this problem is late entries by the end users. It has been identified that

„lack of timely update‟ is observed which makes the bill of material less reliable.

OR 3.3 System contains inaccurate inventory records.

This risk is also identified to exist due the same reason of late entries into the

system.

OR 4.1 Accounting staff are unwilling to release accounting responsibility and

power to non-accounts staff.

Although accounting manager could not be interviewed however inve-4 pointed

out that they certainly have to take up accounting job at times and accounting

staff are really reluctant to hand it over to us. They prefer to do so themselves.

OR 4.2 Non-accounting staff are unwilling/incapable to take up accounting

responsibility.

44

It has also been identified by Inve-4 as a burden and extra work for the staff in

other departments.

4.3.2 Analytical Risks:

AR1.1: Front line managers refuse to use the system:

All the managers were asked if the line managers in their department use the system.

The answer was Yes. Everyone has to use it because they don‟t have any other

option.

AR1.2: Managers cannot retrieve relevant and needed information from the system

Managers seemed to be very comfortable and satisfied with the information they get

based on the past data as none of the interviewee had any problems in accessing the

information they wanted.

AR2.1: The system fails to generate accurate sales forecast.

In normal conditions, sales forecasts are generated from the system and trusted since

the orders to suppliers are placed up to four months in advance. Secondly as the

Inve-4 stated, “Let me give you an example of Ramadan (month of fasting), as soon

as it was announced we received calls from all the big customers about urgent needs

of new number of orders. This is really frustrating, creates haphazardness and system

cannot predict such things”.

AR2.2: Fail to predict demands of new products.

Yes, it does fail to generate any such information. (Inve-3)

AR2.3: System fails to support sales personnel to provide special sales promotion to

existing customers.

The sales department does take advantage of the system to provide sales promotions

for existing customers and it is really helpful in this context (Inve-3).

AR3.1: System fails to generate appropriate master production schedule.

Production has been identified a major problem area. These schedules are not trusted

and hence not followed. (Inve 2,3)

AR3.2: System fails to generate appropriate material net requirement plan.

This has been identified as working fine. Once the orders are put into the system by

the sales departments, material net requirement plan has no problems. (Inve-4)

45

AR4.1: Fail to use the system to generate appropriate financial budgets.

This issue could not be investigated.

4.3.3 Organisation-Wide risks:

OWR1.1: Top Managers make important IT decisions without consulting IT experts

and system users.

Top managers are identified to work very closely with the IT and ERP experts and all

the decisions are taken after joint meetings and thorough investigations. As Inve-1

stated “We make an analysis report which is forwarded to the management who has

to take the decisions. When the consultants come in, we all join the meeting”.

OWR1.2: Substantial personal change in the top management team.

No such event has occurred. (Inve, 1,4)

OWR1.3: Top managers do not provide sufficient support to ERP Post-

implementation.

The system has all the support from top managers. The General manager and CEO

appreciate and encourage the efficient use of the system.

OWR2.1 : IS/ERP development plan is missing, ill defined or misfit with business

strategy:

Although the system has not been upgraded to newer versions so far but development

plan is well defined since identification of problems in the system has been identified

and removed or customised.

OWR2.2: Direction for further ERP improvement and development is unclear.

The direction for the further development is very clear and the organisation is in a

process to take decision about SAP APO. (Inve,1,2,3)

OWR2.3: Budget or fund assigned to ERP post implementation is insufficient.

In ERP manager‟s (Inve-1) view the fund assigned is sufficient. Any customisations,

upgrades needed are identified and supported by the higher management. An online

help service from the vendor is always present especially in case of new features.

(Inve-4)

46

OWR3.1: Fail to form an efficient cross-functional team to continuously review the

system.

No such activity is followed (Inve 1,4).

OWR3.2: Lose qualified IT/ERP experts.

Helpdesk_support from Q2 and the interviewee with Inve-4 elaborates that staff are

generally satisfied with their expertise. “All the ERP experts are SAP qualified”

(Inve-4)

OWR3.3: Lose ERP related know how and expertise accumulated over time:

The question is not directly asked but it can be seen that mature usage is needed. Late

entries into the system are observed. Mostly it is used to view the previous data.

Employees are not familiar with the overall working of the SAP and mostly trained

for their own modules. So it can be concluded that this event has actually

accumulated but to a lesser extent.

OWR4.1: Users (both staff and managers) do not get sufficient and continuous

training.

The ERP Manager commented that employees are always trained and help

documents are present for the customised features. However 27.3% of the employees

still think they need better training. The mean for satisfactory amount of training is

3.00 indicating that employees are perhaps fine with the amount of training.

However 50% of the participants mentioned better training to opinion 2 which asked

any suggestions which could make the system better. Overall there is still margin for

better training since the IT manager mentioned lack of mature usage.

In case of new features, the departmental meetings occur where the features are

explained. The vendors also provide telephone help service but that is mostly what to

press in order to do a certain job. Back end functionality and link to other modules is

not clear to employees.

OWR4.2: Users are uncomfortable to input or retrieve information from the system.

36.4% of the users feel that it is complicated to input retrieve information from the

system with a mean of 3.18 which shows people preferred to choose Neutral on the

whole with a slight tilt towards disagree. However the above mentioned 36.4% is for

sure uncomfortable to input or retrieve information from the system.

OWR4.3: ERP-Related problems are not reported promptly by system users.

47

Q13 covered this area. 54.5% of the staff said they always do so. However 45.5%

only do so occasionally.

OWR 4.4: Data access right is authorised to inappropriate users.

The managers responded that the user rights were defined from very early. Hence the

possibility of occurrence of such an event is low.

OWR 4.5: Confidential data is accessed by unauthorised people.

Due to rights defined from the start, it is less likely to encounter such an event.

OWR 5.1: Cannot receive sufficient technical support from vendors.

The ERP Manager explained that the vendors were efficient in responding to the

problems. Any technical bug or change in feature is dealt quickly. A telephone

helpline is also present.

OWR 5.2: Cannot receive sufficient and proper consulting advice from system

consultants.

The managers are satisfied by the consultants.

4.3.4 Technical Risk

TR1.1: Different modules of the ERP system are not seamlessly integrated.

The modules are integrated and there is no such issue. (Inve1,4)

TR1.2: Legacy systems are not compatible with new ERP system.

No legacy system is in use along with the ERP system.

TR2.1: Invalid data is not detected automatically when getting into the system.

The ERP manager (Inve1) explained that the feature to automatically detect invalid

entries into the system was customised and brought into the system. Inve-4 explained

that this was a major issue couple of years ago but now it has been addressed by the

introduction of checks. The end users (as in Q7) point of view is somewhat

consistent with this observation however 45.5% of the users chose „sometimes‟. The

mean is 2.27 indicating that it is detected Most of the times. However there is still

some margin of improvement.

TR2.2: Hardware or software crash.

“We never experienced a system crash. Although network bugs can make the system

slower at times but we never ever had to tell customers that a late delivery was

48

caused by the system crash. In case of a system crash, all our working will stop and

production would seize.” (ERP Manager)

TR3.1: Technical bugs of the system are not overcome speedily.

The frequency of technical bugs present in the system was asked by the users. Most

of the users tend to chose occasionally however 18.2% chose Often. The mean was

3.36 which indicated more towards Sometimes.

TR3.2: Outdated and duplicated data is not properly managed.

The mean in response to this question was 3.82 referring that it is so very rarely.

18.2% responded never. (Q-10)

TR3.3: System is not modified to meet new business requirements.

According to Inve-1, the requirements of modifications are analysed and dealt

accordingly. It is also obvious from Q9 that the percentage of Often, Ocasionally and

Never turned out to be same, i.e. 27.3%. The mean is 3.45 indicating „Sometimes‟. It

is noteworthy that 27.3% end users responded Never. In the opinions‟ section, 25%

mentioned that system should be regularly updated in order to attain better results

from the system.

49

Chapter 5

Discussion:

5.1 Research question A. Exploration:

The reasons identified to adopt the ERP system are consistent with the literature.

Despite of the high cost and risk associated to the expensive ERP systems (Deep et

al,2007) SMEs are realising the benefits they can gain from the ERP systems. The

benefits should be clearly understood and expectation defined as some of the

expectations might not be fulfilled. A common misconception is that ERP can lead to

dramatic gains (Hakkinen and Hilmola, 2008) but the risks associated with such a

decision should be acknowledged (Davenport, 1998). As in this case some of the

benefits have clearly been achieved but there are some other highly desirable

outcomes which are either not met or need to be clearly understood in order to take

advantage. The example from this case is production and control. Koh and Simpson

(2005) found that many SMEs are not utilising production tools to their fullest. They

also suggested that dealing with uncertainty is the biggest challenge which SMEs

need to address in order to gain competitive advantage. As in this case, „last minute

orders‟ creates a state of uncertainity as the system then has to be overlooked.

However on the benefit side, Delivery performance measurement is one of the

biggest advantages gained by the case company. Koh and Simpson (2005) explained

that to win contracts and to keep customers happy, delivery performance is one of the

most useful things. Hence observing the delivery performance reports provided by

the ERP systems indeed takes firms a step further to competitive advantage. But does

it improve delivery performance itself, the manager‟s answer is no. Olhager and

Selldin (2003) concluded that information clarity and integration of business units

are the most frequently observed advantages, same can be observed with the case

company. They further found out that inventory levels and operating costs were not

addressed by the ERP systems in a sufficient way. Again, the same can be observed

here. The managers even perceive the ERP not built for any such thing. Compared to

the common success measurement parameters presented by different researchers and

50

presented by Hakkinen and Hilmola (2008) as in table 1, following achieved benefits

can be highlighted:

Information Quality: The reliability and accuracy of information has been judged

here and found to be appreciated by the case company participants.

System Quality: Ease of use can be observed from S1. Response time and system

flexibility is though found to be problematic. Usefulness of the system is also

appreciated by the interviewees especially on the basis of past events and data.

Service Quality: User authorisations are supported by the system and observed in the

case. General support material is also present but used to a lesser extent and mostly

telephonic helpline is utilised (Inve-4). Training is however considered problematic

in the case as observed from S3 and some improvement margins still exist as a

mature usage is needed. Among the success factors explained by Shang and

Seddon(2003), Managerial benefits are the most obvious ones gained by the

organisation.

Since the system is under use for over 6 years now, it can be concluded that system

was a success but to a lesser extent as some improvement margins still exist. As

many customisations or Maintenance activities (as explained by Nah and

Cata(2001)) were needed, one could conclude that SMEs should consider the cost for

these customisations under consideration at the initial level of system adoption.

These activities could be very costly (Shepherd,2009). If these initial level of misfits

are not addressed, they can cause enormous problem. As in the studied case, until

checks were introduced, wrong entries lead to wrong production of items. The

review activities and feedback activities can be best for these issues. Peng and Nunes

(2007) consider it a risk not to form an effective review team.

51

Diagram-3: Concept Map

Desired

Benefits

System

enhancement

Training

Vendor

Incapability of

current system

Gap in

Desired benefitsUsage

Problems

Desire for

ERPNew system

better

inefficient

has

decisiontriggers

requires

for

has

marketing

Intial

misfits

Long term

misfits

has

Critical success

factors

look for

triggers

1 - Reluctance

2 - Inappropriate user access

3 - Unauthorized access to confidential data

4 - Inability to detect invalid data

5 - Reports customisation

1 - Incorrect data entry by operational staff

2 - Inability to use the system for demands of products

3 - Accumulation of expertise overtime

4 - Last data entry

5 - Last minute orders

6 - System speed

7 - Flexibility

8 - Less input w indow s

9 - handling unnecessary stock in case of change of product

1 - Corrective

2 - Adaptive

3 - Perfective

4 - Preventive

5 - External parties

types

1 - Departmental / Organisational Integration

2 - Centralised information

3 - Planning and control

4 - Delivery performance measurement

5 - Reports

6 - Operational eff iciencies

7 - Improved business and conmpetitive advantage

8 - Improved SCM

9 - Improved relationship w ith supplier and customer

52

5.2 Research Question B. Confirmation:

The confirmation part of the study aimed to point out some managerial and

organisational processes that can contribute to the effective and efficient usage of the

system. Overall the REPO risk ontology designed by Peng and Nunes (2007) was

used to see which of those risks do exist in the studied organisation. After

Qualifying the Quantitative data, the table 3

Risks Were

never

there

Needs

improvement

Were

present but

solved

(Initial

level)

Long term

Misfits

OR1.1

OR1.2

OR2.1

OR2.2

OR3.1

OR3.2

OR3.3

OR4.1

OR4.2

AR1.1

AR1.2

AR2.1

AR2.2

AR2.3

AR3.1

AR3.2

AR4.1

53

OWR1.

1

OWR1.

2

OWR1.

3

OWR2.

1

OWR2.

2

OWR2.

3

OWR3.

1

OWR3.

2

OWR3.

3

OWR4.

1

OWR4.

2

OWR4.

3

OWR4.

4

OWR4.

5

OWR5.

1

54

OWR5.

2

TR1.1

TR1.2

TR2.1

TR2.2

TR3.1

TR3.2

TR3.3

Table 3: Confirmation

It can be observed that most of the Operational risks are categorized under the

„Needs Improvement‟ heading. It has been identified that most of these risks are

more related to end users rather than the system itself. Regarding OWR 3.2 and 3.3,

the comments of Inv-4 are noteworthy “The floor staff prefer to enter information at

the end of day or even after couple of days. It makes the Bill Of Material or

Inventory records outdated for real time view. This sometimes causes problems for

other employees. The system is capable to tackle these tasks”. Moon(2007) stated

that the effective and efficient usage is more important than the system itself.

The Analytical risks are mostly not present in this Case. The AR2.1 is problematic

because of „last minute orders‟ especially in the times when sudden demands from

the customers. One such occasion is the month of fasting. McGinnis and

Huang(2007) stressed on the need of knowledge management. There perspective was

more on user satisfaction side. However efficient knowledge management can result

into identification of such events and thus tackling them accordingly. AR3.1 is again

connected to late entries by the users into the system. It can be seen that the end users

are not familiar with the overall working of the system. Hirt and Swanson(1999)

explained that end users normally have knowledge about their own domain and

hence not understand the overall working of the system and how one task can effect

the other tasks. The need for better training or at least conveying the consequences of

certain tasks to end users can result in more reliable information.

55

Most of the organisation wide risks again fall on the shoulders of users, their way of

usage and the amount of training they have received. Generally OWR1,2,3 are fine in

the Case however need of proper cross-functional teams is identified in order to

review the system. The more system is reviewed, the more problems can be

identified and hence tackled leading to a stable and mature system. System

enhancements are needed. Also up gradations and new version adoption are needed

in order to exploit the ERP benefits. Nah and Cata(2001) categorised these activities

and explained there importance. It is observed in the Case that Perfective

maintenance (Implementing new versions) is missing. There are sufficient examples

of Corrective maintenance (Troubleshooting, resolving anomalies etc.) in the Case.

The users are found complaining about the system speed which is a type of

Preventive Maintenance (Improving response time). Ng(2001) states that these

activities can have a sufficient cost attached to them. Therefore more funds are

needed. It takes us to OWR 2.3 which perhaps needs to increase.

The Technical risks can be present in the system and needs to corrective

maintenance. In the Case TR 2.1 has been found to be a really problematic issue. The

invalid input checks caused wrong productions initially. However with the

introduction of checks or corrective maintenance, these can be controlled. One can

wonder why these checks are not present in the standard systems and they have to

pay to get them working. However this is a debatable issue which goes to the

business ethics boundaries or maybe exceed it, who knows.

5.3 New Risks:

Late entries:

It is found that some floor staff input data very late into the system. This creates a

gap in real information and available information.

56

Incapability to handle unwanted material:

It is found that when an order is changed by the customer, the materials which are

not needed anymore are not promptly identified by the system. Hence creating an

Inventory waste.

Less Windows:

Many employees complaint about the less unmber of windows that can be opened at

a particular time resulting in slow input of data.

5.4 Research Question C. User Satisfaction

Certain dimensions were found in the literature which measure the user satisfaction.

The opinion were collected quantitatively. Following has been identified from

literature review and measured:

Ease of use of the system

Reluctance to use the system

Satisfaction with training

Information input/retrieval complication

Ease of help documents

Accuracy and Reliability of information

Automatic checks of invalid input

Extent of use (using all the features provided)

Helpdesk support

Speed of system

Presence of Bugs in the system

These dimension are identified on the definition by Nelson(2001). Additional

question of reluctance was added from Peng and Nunes(2007) ontology. Q3 which

measures the extent of use as identified by Caldwell and Stein(1998) who suggest

that in most cases only 50-75% of the functionalities are used. The Inve1,4 also

identified this as a problem. These quantitative measures have been explained in the

findings section. It can be observed that most of the users consider the overall

57

performance as Very good (Q11). However more training is demanded and

reluctance is observed.

A Bivariate analysis was performed to identify the correlations between two

variables. The technique was observed in Peng and Nunes (2008) who used

Spearman‟s rho to find the correlations and analysed from the literature that this is

the most commonly used technique to find correlations. The statistical significance

(P) was measured by one-tailed test. Following correlations have been identified:

Diagram 4: Conceptual map of correlations between identified user success measurements.

58

Corelation rs

R1 As the probability to get better training increases, the probability to

feel reluctant decreases.

.813**

R2 As the probability to introduce more validity checks increases, the

probability to use upto higher extents increases.

.772**

R3 As the probability of Information Input/Retrieval complication

decreases, The probability of higher system rating increases.

.760**

R4 As the probability to have more bugs in the system increases, the

probability to feel more ease of use decreases

.581*

R5 As the probability of system getting slower increases, the

probability to feel reluctant to use the system increases.

.570*

R6 As the probability of bugs in the system increases, the probability

to feel ease of use decreases

.551*

R7 As the probability to get better help desk support increases, the

probability of higher system rating increases.

.530*

R8 As the probability of Information Input/Retrieval complication

decreases, The probability of higher ease of use increases.

.530*

* Correlation is significant at the 0.05 level (1-tailed); ** Correlation is significant at the 0.01 level (1-tailed).

Table-4 Corelation table

59

5.5 Research Question D: Cultural Specific

5.5.1 Power Distance Index (P D I):

Employee participation in decision making is a part of low power distance where as

people tend to obey the command in higher PD environments (Motwani, 2008). In

this case decisions about ERP implementation and upgrades, enhancements are taken

with all the staff involved in the process and managers tend to understand the

problems caused by the ERP systems (Q10). The PDI score of Pakistan is near to the

world average, lower than countries like India, China, Arab world and higher than

countries like UK and USA. It can be expected that some level of employee

participation and initiatives can be observed but ultimately managers and senior‟s

orders will be respected. In this Case the participation and encouragement from

managers to use the system can provide better results and motivate users to use the

system fully. However mature usage of system has been identified as a need by the

Case. Silivus(2008) states that a higher PDI can lead to lesser skill maturity. In order

to gain better results, the managers have to lessen this gap and create a corporate

culture of lesser PDI where employees are motivated to take initiatives, decisions and

even oppose to the managers opinions. With a little effort, an organisation could

bring down the national average down to that of USA.

5.5.2 Individualism vs Collectivism ( I N D):

Pakistan scores low on IND. Higher IND can lead to higher skill maturity

(Silivus,2008). It is obvious from this Case that a less skill maturity is present. This

can validate the use of IND as a skill measurement dimension. However rather than

promoting individualism, other methods could be found for skill maturity.

5.5.3 Masculinity vs Feminity (MAS):

Pakistan scores 50 in MAS indicating

60

5.5.4 Uncertainity Avoidence (U A I):

A high level of UAI score suggest that low rate of risk will be

taken(Livermore,2004). Keeping this in mind, the adopters of SAP will need

assurance of a successful implementation. As in the Case, company took the risk to

be first implementers of SAP in the country but after facing an initial production and

control failure, they are emphasizing on benchmarking before buying SAP APO.

This time a low risk taking is observed. Other less developed organisations would

possibly be very cautious about risk taking. Similarly the employees who are

reluctant to use the system and are not confident in using it will possibly take lesser

level of risk. Silivus (2008) suggests that a lower communication maturity can be

observed in higher UAI scoring countries. The organisations should give their

employees encouragements to try new things with confidence and have more

communication down the hierarchy if they want better results. Moreover, higher UAI

also leads to a lower skill maturity (Silivus,2008).

5.5.5 Long Term Orientation (L T O):

Lower is the LTO, lower can be the skill maturity. A low LTO will result in short

term orientation (Silivus,2008). Pakistan‟s LTO is 0 Indicating a very short term

approach. The last minute orders at the time of high sales times in one such example.

61

Chapter 6

Conclusion

This chapter sums up the amalgamated data collection, analysis and findings into a

more clearer and summarised way. It begins with the findings, explains the

additional risks identified overview the user satisfaction phenomenon and explains

the cultural needs. Recommendations to the company are listed. It then ends on the

possible future research.

6.1 Summary of Research findings:

6.1.1 The Exploration:

It is observed that lack of legacy system and demand of operational efficiency can

trigger a search for new system. A vendor initiated marketing is observed here.

However organisations or the consultants might still fail to get insight into the

requirements of the organisation. Despite of all the extensive literature and

experience of system installations around the world, consultants in less developed

countries might not be able to perform an effective requirement analysis. On the

organisation side, lack of knowledge in the context of „what system to adopt‟ can be

observed. As the Case company went for SAP/R3 but couldn‟t benefit from planning

and control modules.

After initial installations certain misfits can be observed. Some examples include

Inefficient reports, lack of checks, lack of system know-how or data conversions.

However these issues can be solved through corrective maintenance though at a cost

which could be very high. Therefore organisations should assign some extra budget

even immediately after the installation (Or they could end up having extra products

not detected until in the delivery bay).

A continuous review of the system is required for the maintenance, upgrade or to get

add-ons since these could add functionalities, provide ease and remove anomalies.

62

6.1.2 Confirmation:

The findings were triangulated and matched with the risks described in the REPO

risk ontology. A table 3 was generated which shows which risks were initially

present in the system but solved at a later time by identification and customisations.

Strangely even wrong entry checks were absent in the standard system and needed

correctness. Such risks can although be corrected but carry a serious risk until solved

and addressed. Some long term misfits were also found. These are the risks which

are still present in the system after a five year of system post implementation. Such

risks according to REPO are found to be i) System‟s incapability to predict demands

of new products and ii) Lose knowhow of system accumulated over time. Additional

risks have been identified.

The first is the late entries by the end users, especially clerical staff. E.g. at the end of

day rather than at the start of a process. This could cause others to have wrong

information at times. The second identified risk is that system doesn‟t generate an

alarm or notification about the material which is not needed in anymore. E.g. If a

customer change their demand, the material already in the stock will become a waste

and system will fail to prompt. Hence extra inventory can be observed which is

certainly a burden.

6.1.3 User Satisfaction:

All the managers were asked about their perception of end user‟s usage of the

system. INV1,2,3 commented as no reluctance whereas INV,4 felt some reluctance.

It is also obvious from S2. However overall the users thought the system to be easy

to use and rated the overall performance as very good.

Training is the major issue identified. Better training and its need is always there.

Not everyone can be happy and well trained. However performance reviews can

resolve this issue along with better training and explaining the overall working.

Spearman‟s rho was applied to find any bivariate correlations. The found relations

are listed in table 4.

63

6.1.4 Cultural Issues:

As Mayers and Tan (2002) suggest that cultures has subcultures similarly

organisations have their own culture. The organisations should try to keep a low PDI,

Provide the users with confidence especially in higher UAI cultures. The long term

approach should be encouraged as well. These above mentioned Hofsted‟s dimension

if dealt carefully and embedded into organisational culture can in turn increase the

skills maturity and reduce the communication gap between the management and

users. This could in turn have positive effects on the adopted ERP system.

6.1.5 Overall contribution:

This researched has addressed three common gaps in the literature. The risks in:

ERP post implementation.

ERP Post implementation in SME.

ERP Post Implementation in Pakistan based SME.

Have been identified. Moreover, initial level and long term misfits has been

differentiated. A use of mixed method approach with concurrent triangulation is

applied to address different research questions in a same case study thus providing an

overall view of the scenario.

64

6.2 Limitations:

The very first limitation of this research is low response of the qualitative and

quantitative data. Secondly due to time and resource constraint only one organisation

was selected for this research. Thirdly the amount of literature on ERP post

implementation is low. Fourthly the literature on SMEs is slow. Fifth literature on

south Asian or Pakistani organisations who have adopted ERP systems is very very

low. Hence on the above mentioned grounds, the study may not be generalizable.

6.3 Recommendations for future research:

The adopted research approach can be applied to more than one organisation in a

way to get better response rate. Secondly the correlations identified can work as

hypothesis for a study which can verify those in other ERP related or perhaps ES

related user activities. A clear difference of „long term misfits‟ of the adopted system

and short term easily correctable „initial misfits‟ can be studied.

65

Appendix-1

Exploration:

1. When and Why was a decision to invest in SAP taken.

2. Who took adoption decisions?

3. What were the Expectation from the system.

4. How was the Selection time and

5. How was the transition time. Any problems,

6. Upto what extent the expectations are met.

Advantages

1. How often does it cause problem/system crash.

2. What are the advantages gained in the relevant department.

3. Any helping tools, guides available.

Employees

4. How comfortable the staff is with the system.

5. Are they reluctant to use it.

6. Is there enough training.

7. How are the new staff trained.

Improvements

1. Are there any regional, governmental and/or legal issues?

2. What is customer and supplier attitude after adopting the system.

3. Is better training needed?

4. Is it any kind of burden?

5. Are there any cultural issues which creates problem in the efficient use of the

system.

66

Appendix-2

67

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