Comparing the Prioritization of ERP System Effectiveness Measures by Organizational Actors: A Focus on IT Professionals and Business Managers

ABSTRACT Modern organizations adopt Enterprise Resource Planning systems (ERP) to integrate their organizational data resources into unified systems. Researchers tend to concentrate on ERP implementation issues with only a handful studying ERP system effectiveness or success in adopting organizations. In fact, none has studied how key organizational actors prioritize or rank relevant measures or items related to the effectiveness of such systems. This study is designed to fill this gap in research as it aims at investigating how two organizational stakeholder groups, i.e. information technology (IT) professionals and business managers prioritize relevant measures related to ERP systems effectiveness. Using surveys in two European countries with a good record of ERP adoption, the study collected data from 66 respondents in 44 diverse, private, industrial organizations. Prior literature suggests that differences exist between the two organizational groups regarding how each perceives organizational-IT issues. However, this study's findings showed that no significant statistical differences exist between the two groups on the all the measures operationalized for ERP effectiveness assessment with the exception of one dimension: the Vendor/Consultant Quality. The implications of the finding for both practice and research are discussed. INTRODUCTION An Enterprise Resource Planning (ERP) system is packaged business software that integrates organizational processes and functions into a unified system. ERP systems are being adopted for a variety of reasons, including the replacement of legacy systems and cost reductions (Klaus, et al., 2000; Davenport, 1998; 2000; Wu, et al., 2005). The report from AMR Research (2005) indicates that the ERP market worldwide is to grow from US$47.8 billion in 2004 to US$64.8 billion by 2009. These figures or amounts underscore the popularity of the software among organizations, globally. A comprehensive study of the literature shows that researchers often concentrate on issues related to the implementation and adoption of ERP systems (Abdinnour-Helm, et al., 2003; Ifinedo, 2006; Wu, et al., 2005; Galy & LeMaster, 2006) with only a handful researching the success or effectiveness of such systems (Gable et al., 2003; Sedera et al., 2002, 2004; Ifinedo, 2006). Here, "ERP systems effectiveness" refers to the utilization of such systems to enhance the organizational goals (Thong, et al., 1996; Myers, et al., 1997; Gable, et al., 2003; Galy & LeMaster, 2006). This definition differs in scope from the technical implementation success of such systems wherein measurement indicators such as cost overruns, project management metrics, and time estimates are considered vitally important (Martin, 1998; Markus & Tanis, 2000). Some of the dimensions used in this study to represent ERP effectiveness include system quality, information quality, individual impact, and organizational impact. Apparently, these are the same dimensions or factors often used in the information systems (IS) success evaluations literature (DeLone & McLean, 1992). Importantly, the term "IS success" is used interchanging with "IS effectiveness" in the literature (Thong, et al., 1996), and this research study extends the foregoing terms to "ERP success" and "ERP effectiveness", which incidentally are treated as having the same connotations here. That said, the paucity of research on ERP system effectiveness in the literature is the primary motivation for this study, and secondarily this study aims at responding to the calls made by IS researchers (Gable, et al., 2003; Ifinedo, 2006) for more studies to focus on other aspects of ERP systems. The issue of ERP effectiveness or success assessment is an important area of research because for ERP adopting organizations to maximize their returns from investments in such complex and expensive IT systems, the viewpoints of key organizational members on the effectiveness of such systems need to be investigated (and addressed). …