Chapter 2 Literature Review2.0 IntroductionThissection of the study is going to focus on theoretical and empirical review ofvarious literatures concerning Enterprise Resource Planning at postimplementation as well as Information System success factors of the NationalUniversity of Science and Technology. Leedy (2009), postulates that literaturereview is the process of examining historic significant studies or company datathat act as a basis for the proposed study. According to Fink (2010) literaturereview is a systematic explicit and reproducible method for identifying,evaluating and interpreting the existing body of recorded work produced byresearchers, scholars and practitioners (Blaxter L, Hughes C and Malcolm T(2010:120).
Inthis chapter a review of the theoretic framework on Information Systems Successis conducted. While all the information presented in this chapter is neitherconclusive nor exhaustive, the researcher however is of the opinion that thetheoretic framework will represents a fair if not true representation ofreality of the subject of Enterprise Resource Planning post implementationsuccess factors in tertiary institutions particularly the National Universityof Science and Technology. The researcher is going to make references from researchtextbooks, Journals, and other relevant sources. 2.1.1 ERP PostimplementationTheERP post implementation phase consists of the shakedown phase and theonward-and-upward phase. In the shakedown phase, after the ERP system goeslive, the ERP system is performance tuned andintegrated for normal use.
In the onward-and upward phase, entities use the ERPsystems for day-to-day organisational operations in addition to using it effectivelyto its maximum potential (Law, C. C.,Chen, C. C.
, & Wu, B. J. (2010); Velcu, 2010). The post implementation period for ERP systems commencesimmediately after the implementation phase of an ERP system. The post implementationphase offers on-going support such as maintenance, training, and upgrades. Thisenables organisations to sustain and prevent any disruptions to the ERP system.To avert an Information System failure, there is need for continuous support ofthe system from top management (McGinnis & Huang, 2007; Salmeron &Lopez, 2010). Nicolaou and Bhattachanya(2008) asserted that the maintenance ofthe post implementation phase of an ERP system could sustain the long-termperformance gains and efficiencies of the system.
Many organisations upgrade and maintain their ERP systems in thepost implementationphase to prevent any disruptions to the daily operations of the business (Ng,Gable, & Chan,2002). According to Willis and Willis-Brown (2002), the post implementationstage hasmany challenges because the go-live phase signals a new beginning. Theperformance ofthe system continues to be challenging but necessary because the system must beextendedto satisfy the current and all future business requirements (Muscatello andChen, 2008; Wei,Liou and Lee, 2008). 2.
1.2 FactorsImpacting ERP successIfinedo,P., Rapp, B., Ifinedo, A., & Sundberg, K. (2010) tested the plausiblerelationships between the constructs of the comprehensive ERP systems successmeasurement model in an organizational setup post implementation. Ifinedo, Rapp,Ifinedo, et al. indicated that the constructs of system quality, servicequality, individual impact, workgroup impact, and organizational impact aresignificantly relevant in measuring ERP success post implementation.
Law et al. (2010) asserted that maintenanceand support activities in the post implementation phase are critical elementsfor ERP success, and organizations should plan for them in the ERPimplementation phase. Zhu, Y., Li, Y., Wang, W., &Chen, J. (2010) came up with an integrative model to explain ERP post implementationsuccess from the technological (implementation quality), organizational, andenvironmental (external support) aspects.
Zhu et al. results indicated that ERPimplementation quality and organizational readiness (leadership involvement andorganizational fit) significantly influenced postimplementation success. 2.1.3 ERP efficiency,effectiveness, and benefits.
Karimi,Somers, & Bhattacherjee, 2007a, 2007b) indicated that ERP systemsprovide better efficiency in processing leading to added effectiveness andflexibility, which could improve profitability, earnings valuation, and competitiveness.Federici (2009) assessed ERP outcomes (financial performance, managementcontrol, and operating efficiency) as measures of ERP success in the shakedownphase post implementation. Madapusi and D’Souza (2012) indicated that ERPsystems allowed the organization to attain overall operational performanceenhancement inclusive of information quality, inventory management, and on-timedelivery enhancements. Kanellou and Spathis (2013) showed that ERPsystems provided operational and accounting benefits with regards to cost andtime reduction in addition to increased flexibility.
2.1.4 Organizationalperformance and structure. Bendoly and Cotteleer (2008)investigated how organizations and employees react to newly availed rule-structuresthat accompany ERP implementation. Bendoly and Cotteleer put forward that ifthere is existence of a task-technology misfit, managers and end-users mightcircumvent the ERP system rule-structures. Thus to say that management andsystem users ought to be computer literate and technologically savvy so as toembrace the changes in rule structuresthat come along with ERP implementation.
Chou and Chang (2008) studiedmanagerial involvement that affected ERP performancepost-implementation. They indicated that the customisation and organisationalmechanisms significantly affected intermediate ERP post-implementation benefits,which affected the overall ERP benefits. Yoon (2009) studied theorganizational citizenship behaviours of employees (altruism,conscientiousness, courtesy, civic virtue, and sportsmanship) and their effect onorganisational performance (information quality and work efficacy). Yoon showedthat employees’ organisational citizenship behaviours significantly influencedERP success and operational success. Velcu (2010) verified the interrelationsbetween strategic alignment, management of the ERP implementation, processchanges, and the business performance of organizations that implemented ERPsystems.
Velcu (2010) found that in the post-implementation phase, the use of theERP system improved organisational efficiency, which affected the financial performance.Ha and Ahn (2013) studiedthe impact of organisational support (top management support, competency of theinternal ERP team, user training, and inter-department collaboration andcommunication) and continuous improvement on ERP performance post-implementation.Ha and Ahn showed that continuous improvement, and on-going organisationalsupport positively influence ERP performance post-implementation.
They furtherstated that “top management support was found to have continuous significantimportance in the post implementation stage influencing user training,communication and coordination between departments” (Ha & Ahn, 2013, p.11).2.1.5 Organisationalculture, benefits, and knowledge. Seddon, Calvert, and Yang (2010)developed an organisational measurement model to measure the benefits ofenterprise systems using the following factors, functional fit, overcomingorganisational inactivity, integration, process optimisation, improved accessto information, and continuous major enterprise systems business improvementprojects. Seddon et al.
(2010) results showed that the identified model factorsare important for organisational benefits post implementation. 2.1.6 ERP assimilation. Liang, Saraf, Hu, and Xue(2007) examined the effect of top management on the adaptation of ERP systemspost implementation. The study results established that strong top managementbeliefs, role, and participation in the post implementation assimilationefforts resulted in higher ERP assimilation in the organisation. 2.
1.7 ERP usage. Lin (2010) established a model that scrutinised the effects of ERP informationquality, system quality, and top management support on ERP system usage. Lin indicatedthat while ERP information quality and ERP system quality impacted ERP systemusagethrough user satisfaction and perceived usefulness, top management supportdirectlyimpacted ERP system usage and indirectly through perceived usefulness.
2.1.8 Job and computingsatisfaction. Larsen (2009) investigatedend user computing satisfaction during the post implementation phase in an internationalmanufacturing organisation. Larsen found that “communication anddecision-making patterns between users and experts locally, and communicationwith peers in organisational units other than the respondent’s own –contributed more consistently to individual end user computing satisfaction”(p.
666). Larsen’s (2009) study showed that “user training plays a role inexplaining the users’ perceptions of the relevance of the ERP project’s businessobjectives for the organisation and for their own jobs” (p. 666). 2.1.9 ERP End UserNah, Tan, and Beethe (2005) asserted that the benefit of an ERPimplementation depends heavily on how the system is operated by end users.Understanding the relative importance of end users’success factors in ERP systems can help information technology managers putmoreemphasis on the leading issues perceived by end users (Hsu, Lai, & Weng,2008).
This is further supported by Peslak and Boyle (2010) who asserted that peopleare an important variable in order to come up with a winning ERP strategy. Theend users as the system users are an important element that is critical to thecontinued success of an ERP post implementation since the end user contributesto the efficiency and effectiveness of the system resulting in positiveorganisational performance. Hence the need to use the DeLone andMcLean IS success model to evaluate ERP success at NUST. Understanding employees’reaction to ERP and the way they react “could be used to shed new light on whysome ERP implementations are seen as more successful than others andtosuggest ways of avoiding failure” (Dery et al., 2006, p. 210). Dezdar and Ainin(2010) found that the satisfaction of the ERP users with the implemented ERPsystem reliability, functionality, flexibility, and user friendliness featuresis necessary for the success of an ERP implementation.
ERP systems modular andintegrative characteristics make them a critical factorand enabler of establishing an efficient and effective organisation where theERP systemscapabilities and functionality provide better products and services throughouttheorganisation (Chou & Chang, 2008). Organisations leverage the knowledgeskills andexpertise by using the ERP system capabilities and by capitalizing on thecompetenciesand expertise of the system users, partners, and participants in theorganisation’s supply chain. Coordination among the different units in theorganisationthrough the ERP system and the streamlined IT infrastructure are critical increating adifferential business advantage that is flexible and responsive to the diverseand changingcustomer needs (Hsu et al.
, 2008). Nah, Islam, and Tan (2007)indicated that the presence of a learning environment in the organisationalculture positively moderated the impact of enterprise-wide communication on thesuccess of an ERP implementation. Lee et al. 2010 found “training and educationhave a positive effect on ERP perceived usefulness” (p. 280).
Chou, Lin, Lu, Chang, and Chou (2014) stated,”Users have to continue learning after implementation” (p. 19). They arguedthat despite training is a necessary condition for ERP post implementationsuccess, users’ knowledge and competencies enabled the adaptation betweenthe ERP system and the users. Chou, Lin, et al. (2014) stated, “Knowledgesharing plays an important role in facilitating ERP system usage after ERPimplementation” (p.
19). H. W. Chou, Chang, et al. (2014) found that “post implementationlearning, emphasizing informal communication and knowledge sharing among users,can facilitate ERP usage” (p. 274).
They further stated that “social capital byvirtue of social network ties, trust, and shared vision acts as the resource for ERP knowledge sharing andtransfer, which thereby facilitate the conditions for ERP post-implementationlearning” (p. 274). H. W.
Chou, Lin, et al. (2014) argued that effective ERPsystem use post-implementation was through knowledge gained from other users.H.
W. Chou, Lin, et al. (2014) revealed that user self-efficacy enabledemployees to share knowledge. 2.2.0 ERP Risk factors. Peng and Nunes (2009) issuedan array of different ERP risks post-implementation.
Pengand Nunes’ (2009) study revealed that the organisational (processes andprocedures)risks cause ERP system failure in the post-implementation phase. Tsai, W. H., Lee, P.
L., Shen, Y. S.,& Yang, C. C. (2009) studied the organisationalrisks that affect ERP performance improvement levelpost-implementation due to ERP implementation problems. Tsai et al.
revealed that lack of top management participation, the firm’s policies and process,are amongst the top organisational environment risk factors that affect ERPperformance post- implementation. (Singh,Singh, & Pereira, 2010) studied the role of human related risks such aspsychological, behavioural, incomplete training, and data entry human errors onthe success of an ERP system post-implementation. Singh et al. revealed thatend-users’ resistance to technological change and change management techniques hinder ERPsuccess. Peng and Nunes (2010) examined the ERP post implementation barriersand their impact on the operational, analytical, organisational, and technicalrisks. Peng and Nunes found that many ERP barriers and risks are interrelatedand originated from the organisational barriers and risks. Pan, Nunes, and Peng(2011) established that the organisational change and human associated risksled to ERP failure post implementation.
2.3 Higher Education ERP Implementation CSFs Nielsen(2005) reviewed current ERP research literature and created a listing of 29success factors after noticing the shortage of research on CSF relating tohigher education. Thesefactors were applied to a university ERP implementation study to determinetheir criticality in the tertiary academic environment. The study was boundedby a framework which consisted of six elements: (a) strategic factors, (b)organizational context, (c) ERP system quality, (d) ERP implementation quality,(e) ERP project scope, and (f) user satisfaction and use. Citing Yin (1994),Nielsen selected case study research methodology for the university study andutilised pre- and post-implementation interviews of administrators, staff andstudents as the primary means of data collection. 2.4 Observation GapInview of related literature, the study portrayed that in the post Implementationphase, there is consistent need to conduct maintenance of the ERP and trainingof end users to ensure efficiency and effectiveness of the whole Accountinginformation system.
The reviewed literature highlighted among other things thattraining is anecessary condition for ERP post implementation success, users’ knowledge andcompetencies enabled the adaptation between the ERP system and the users thuscontributing positively contributing to the net system benefits.Top management support wasfound to be a significant factor in ERP success, having continuous significantimportance in the post implementation stage influencing user training,communication and coordination between functional areas in an entity andcontributing to ERP assimilation by end users. 2.5 SummaryKronbichler, Ostermann andStaudinger, (2010) stated that ERP success can be multifaceted and challengingto measure; thus evaluating the success of the ERP system has been a focus ofmany ERP studies. An analysis of the ERP literature revealed that researchersused different approaches to measure the success of an ERP system.
Someresearchers investigated the benefits or success of an ERP system using financialindicators, organizational performance, service quality, and customersatisfaction as measures of ERP success. The literature reviewidentified the significant dimensions for determining ERP success, whichconsist of information quality, system quality, self-efficacy, service quality,learning and training, ERP knowledge, individual impact, workgroup impact,organizational impact, and management support.