CULTURAL INFLUENCES ON ERP IMPLEMENTATION SUCCESS

The evolution of Enterprise Resource Planning (ERP) systems has been a highlight in the information systems (IS) literature since early 1990’s. The growth of ERP systems has been enormous; however, the time and cost to implement ERP systems and other critical success factors have undermined its true capabilities. The literature suggests that the organisational culture is often over-looked while implementing ERP systems. Consequently, this research in progress paper is written to address the notion of cultural influences on user satisfaction with ERP implementation. Due to the diverse nature of ERP systems, the author is only concentrating on factors influencing at the post-implementation stage of ERP life cycle in a large Australian University. This interpretive study involves student administration staff as users and applies the theories developed by Hofstede’s work on national culture dimensions to assess the users’ satisfaction and subsequently address the importance of user satisfaction factor as a success measure for ERP implementation. INTRODUCTION ERP systems are regarded as the biggest technology move from the old legacy systems since early 1990s, while Chung & Snyder [CS00] suggest ERP systems have been a popular information technology (IT) in the changing business environment of the 1990s. Recently, the theme of ERP implementation failures has been a major topic of discussion and it is suggested that the organisational culture plays an important role while implementing ERP systems [Bee01], [Cha00], [SD01], [SKT00]. The goal of this paper is to address the notion of cultural influences on user satisfaction with the newly implemented ERP system in a large Australian University. Due to the scope of the research, the author is only assessing the factors influencing the users at the post-implementation stage of ERP life cycle. This interpretive study involves administrative staff users and intends to provide an in-depth analysis regarding their satisfaction by considering the organisational culture based on Hofstede’s work on national culture dimensions. The following figure depicts the author’s perspective on this research and identifies the three major areas and how they are inter-linked together to form a research investigation: Figure 1. Author’s Perspective on Research Study The structure of the paper is divided into background literature, research question, research approach, theoretical framework and the significance of research, which outlines the intended outcomes. This Thavapragasam. Culture and ERP Implementation Success Proceedings of the First Australian Undergraduate Students’ Computing Conference, 2003 page 94 structure attempts to assist the reader in understanding the author’s perspective and hence enabling the reader to view the research situation through the same lens as the author. But, it is important to note that the paper does not provide any information on results gathered or any final conclusions since this is a research in progress paper. BACKGROUND LITERATURE ERP was the major success stories of the 1990’s [BGN02] and Davenport [Dav00] suggests that enterprise systems represent one of the most important information technology categories to emerge in the last decade. Esteves & Pastor [EP01] propose ERP systems as software packages composed of several modules, such as human resources, sales finance and production, providing crossorganisation integration of data through embedded business processes. Aladwani [Ala01] states an ERP system helps the different parts of the organisation and distribution with external suppliers and customers into a tightly integrated system with shared data and visibility [Che01]. Businesses today face a stark reality: anticipate, respond and react to the growing demands of the marketplace or perish [NLK01] and hence it is vital to develop a technology or a solution to overcome this demand. According to Nah et al. [NLK01] ERP systems enable a company to manage the efficient and effective use of resources. Carlino & Kelly [CK99] propose that the ERP market in the United Sates (US) will reach $66.6 billion by this year (2003) with an estimated compound annual growth rate of 32 precent over next five years. Chung & Snyder [CS00] suggests that the top five vendors are SAP, Oracle, PeopleSoft, Baan and J.D. Edwards and these five vendors accounts for 61 percent of total ERP revenue [CK99]. They classify, with this continuation of steady growth, the ERP market will proceed to be one of largest, fastest growing and most influential in the application industry. DeLone & McLean [DM92] suggest, that successful integration by management with the IS can be measured in terms of user satisfaction. While Greenbaum [Gre03] depicts that, one of the great ironies of the software industry is its historical indifference to customer satisfaction. The importance of user satisfaction is heavily addressed by Greenbaum [Gre03] as market forces are becoming increasingly compelling, foreshadowing a fundamental shift in the software industry that places customer satisfaction in the very top of the competitive checklist hierarchy. User satisfaction plays a major role in the post-implementation of the ERP life cycle and user satisfaction with the developed system has been widely employed by researchers as a surrogate for system success [Cav95]. Culture has different layers [SD01] and culture is always a collective phenomenon, because it is at least partly shared aspects with people who live or lived within the same social environment [Hof91]. ERP software packages that manage and integrate business processes across organizational functions and locations cost millions of dollars to buy, several times as much to implement, and necessitate disruptive organizational change [SKT00]. Skok and Döringer [SD01] suggests there has been an increase in reported ERP failures, suggesting that the implementation issues are not just technical, but encompass wider behavioural factors and Chatfield [Cha00] suggests that the organisation’s culture and structure had a significant effect upon the implementation process. The concept of cultural influences on work practices in the university are portrayed by findings gathered by Beekhuyzen [Bee01] as “There’s an overall general social culture that people get on but then a work discipline culture that is focused around the areas that people are interested in”. The IS literature on culture and ERP provides a general understanding of the possible culture concepts and its impact on ERP projects but these typologies of culture have inherent weaknesses and limitations [SD01]. Therefore, these limitations will need to be borne in mind as we consider potential cultural impact on the use of information systems, particularly ERP systems [SD01]. The ERP Phenomena has evolved so much in the past decade and it has been adopted by many organisations across the world. However, the debates over success and failure stories of ERP implementation are shown in Nielsen [Nie02] “the ways to fail an ERP implementation outnumbers the ways to succeed it”. IS literature identifies the time and cost to implement ERP systems have undermined its true capabilities while debacles with ERP implementation failures have provoked serious consideration to identify factors influencing ERP systems success. Subsequently, identifying user satisfaction as a success measure is vital and organisational culture seem to have an influence Thavapragasam. Culture and ERP Implementation Success Proceedings of the First Australian Undergraduate Students’ Computing Conference, 2003 page 95 on users and how they interact with the system based on culture dimensions developed Hofstede [Hof85], their age, gender and past experiences from using similar systems.