SlideShare ist ein Scribd-Unternehmen logo
1 von 16
Downloaden Sie, um offline zu lesen
Information & Management 40 (2002) 25±40




            The critical success factors for ERP implementation:
                       an organizational ®t perspective
                                     Kyung-Kwon Hong, Young-Gul Kim*
                    Graduate School of Management, Korea Advanced Institute of Science and Technology (KAIST),
                             207-43 Cheongryangri-Dong, Dongdaemun-Gu, Seoul 130-012, South Korea
                                         Received 20 May 2001; accepted 1 September 2001



Abstract

   Since early 1990s, many ®rms around the world have shifted their information technology (IT) strategy from developing
information systems in-house to purchasing application software such as enterprise resource planning (ERP) systems. IT
managers responsible for managing their organization's ERP implementation view their ERP systems as their organizations'
most strategic computing platform. However, despite such strategic importance, ERP projects report an unusually high failure
rate, sometimes jeopardizing the core operations of the implementing organization. This study explores the root of such high
failure rate from an ``organizational ®t of ERP'' perspective. Based on the relevant literature, we de®ne the concept of
organizational ®t of ERP and examine its impact on ERP implementation, together with ERP implementation contingencies.
The results from our ®eld survey of 34 organizations show that ERP implementation success signi®cantly depends on the
organizational ®t of ERP and certain implementation contingencies.
# 2002 Elsevier Science B.V. All rights reserved.

Keywords: ERP implementation; Organizational ®t; ERP adaptation; Process adaptation; Organizational resistance



1. Introduction                                                       quality [28]. Although application packages have these
                                                                      bene®ts over custom design of applications, packaged
   Under the pressure to proactively deal with the                    software has problems of their own: uncertainty in ac-
radically changing external environment, many ®rms                    quisition [14] and hidden costs in implementation [29].
have changed their information system (IS) strategies                    In a survey of the IT managers responsible for
by adopting application software packages rather than                 managing their organization's ERP projects, two-
in-house development [12,25]. An application pack-                    thirds of the respondents viewed their ERP systems
age such as enterprise resource planning (ERP) system                 as their organizations' most strategic computing plat-
is one solution to the information technology (IT)                    form [47]. Despite such perceived importance, it was
industry's chronic problems of custom system design:                  reported that three quarters of the ERP projects were
reduced cost, rapid implementation, and high system                   judged to be unsuccessful by the ERP implementing
                                                                      ®rms [13]. What makes ERP implementation so
  *                                                                   unsuccessful? Swan et al. [46] argued that the root
    Corresponding author. Tel.: ‡82-2-958-3614;
fax: ‡82-2-958-3604.
                                                                      of such high failure rate is the difference in interests
E-mail addresses: kyungkh@kgsm.kaist.ac.kr (K.-K. Hong),              between customer organizations who desire unique
domino2@unitel.co.kr (Y.-G. Kim).                                     business solutions and ERP vendors who prefer a

0378-7206/02/$ ± see front matter # 2002 Elsevier Science B.V. All rights reserved.
PII: S 0 3 7 8 - 7 2 0 6 ( 0 1 ) 0 0 1 3 4 - 3
26                           K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40


generic solution applicable to a broad market. Such             of technology, task, people, structure, and culture [7].
con¯icting interests led us to explore an organizational        Thus organizational resistance to change is identi-
®t perspective of ERP implementation.                           ®ed as a critical success factor for ERP implementa-
   An important criterion used in selecting an ERP              tion [26,34]. In this study, we de®ne the concept of
system is the ERP ®t with the current business                  organizational ®t of ERP and empirically examine its
processes [9]. Although the ®t between ERP and                  impact on ERP implementation success along with the
the organizational context is believed to be critical           moderating roles of ERP implementation contingency
for successful ERP implementation, few examined the             variables such as ERP adaptation, process adaptation,
organizational ®t issues of ERP empirically. Soh et al.         and organizational resistance.
[44] suggested that the organizational ®t of ERP                   This paper is organized in ®ve sections. First,
might be worse in Asia, because the reference process           ERP related literatures are reviewed. The next section
model underlying most ERP systems is in¯uenced by               introduces the research model and hypotheses.
European or US industry/business practices, which are           Research methodology is then described, followed
different from Asian business practices.                        by the presentation of the results. The paper concludes
   The relative invisibility of the ERP implementation          with the discussion of the research ®ndings and impli-
process is also identi®ed as a major cause of ERP               cations for future research and practice.
implementation failures [13]. Markus and Robey [33]
attributed such invisibility to the unpredictably com-
plex social interaction of IT and organization. The             2. Theoretical perspectives
critical challenge of ERP implementation is believed
to be the mutual adaptation between the IT and user             2.1. Organizational ®t of ERP
environment [49]. Such mutual adaptation process
brings the organization's existing operating processes             Because of the multiplicity of the organizational
and the packaged software's embedded functionality              dimension, researchers studying IS contingencies
into alignment through a combination of software                have typically focused on the ®t between speci®c
con®guration and organizational change [49]. But                organizational dimension and IS [21,23]. In a review
there are con¯icting views on which type of adapta-             of the IS contingency research, Weil and Olson
tion, package adaptation or organizational adaptation,          [51] found that over seventy percent of the studies
is more desirable in the different contexts.                    followed a model assuming that the better the ®t
   ERP diffusion agencies including ERP vendors and             among the contingency variables, the better the per-
consulting ®rms recommend strongly that ERP pro-                formance. They categorized the contingency variables
jects embody the universally applicable `best practice'         of interest to IS researchers into strategy, structure,
and should be implemented without extensive adapta-             size, environment, technology, task, and individual
tion of the packaged software [1]. In contrast, some            characteristics.
academics maintain that the notion of `best practice' is           Attributing the inability to realize value from IT
illusory and potentially disruptive because ERP does            investments to lack of alignment between the business
not provide models for every process of every industry          and IT strategies, Henderson and Venkatraman [19]
and most ®rms usually recon®gure or add new func-               developed the `strategic alignment model', emphasiz-
tionality to ERP systems for optimal use within their           ing the multivariate ®t among business strategy, IT
unique context [46].                                            strategy, organizational infrastructure and processes,
   Besides, since ERP philosophy is process-based,              and IT infrastructure and processes. With an explora-
rather than function-based, ERP necessitates disrup-            tory survey of small business, Marius and Ashok [30]
tive organizational changes [17,49,50]. Successful              hypothesized that packaged software implementation
ERP implementation must be managed as a program                 success is positively associated with the degree of
of wide-ranging organizational change initiatives               vendor ®t with user organization and the degree of
rather than as a software installation effort [18]. Such        software ®t with user organization, respectively.
IT-driven initiatives require change of the organiza-              In ERP research, Gattiker and Goodhue [10] sug-
tion's socio-technical system, which is intertwined             gested that while inter-dependences among sub-units
K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40                      27


give rise to better ®t of ERP with global operation              to the package [7]. ERP implementation also involves
needs, differentiation among sub-units develop poor              business process change (BPC) and ERP adaptation to
®t of ERP with local operation needs. Soh et al. [44]            align the software with the business processes [20].
also suggest that ERP mis®t stems from the ®rm-, or              Which direction is desirable depends on one's point
country-speci®c requirements that do not match the               of view and various implementation contingencies
capabilities of ERP. Swan et al. [46] argue that orga-           [27,40].
nizational mis®ts of ERP exist due to the con¯icting                Typically, ERP vendors recommend process adap-
interests of user organization and ERP vendors. Thus,            tation and discourage ERP adaptation for fear of
the concept of organizational ®t seems to be the core            potential performance and integrity degradation as
research construct to explain the implementation suc-            well as maintenance and future upgrade dif®culties.
cess in diverse IT implementation contexts. In the ERP           On the other hand, the user departments of the cus-
implementation context, however, the impact of orga-             tomer organization would prefer ERP adaptation to
nizational ®t of ERP was not empirically tested. In this         process adaptation which will necessitate the signi®-
paper, based on Markus and Robey [32] de®nition, we              cant changes in their work environment.
de®ne organizational ®t of ERP as the congruence
between the original artifact of ERP and its organiza-
tional context and will examine its impact on ERP                3. Research model and hypotheses
implementation success empirically.
                                                                   This study examines the relationship between the
2.2. ERP implementation contingencies                            organizational ®t of ERP and ERP implementation
                                                                 success. The effects of three implementation contin-
   Implementation of a technical innovation is viewed            gencies on this relationship are explored as moderat-
as a dynamic process of mutual adaptation, that is:              ing variables. The research model is illustrated in
``re-invention of the technology and simultaneous                Fig. 1 and discussed below.
adaptation of the organization'' [27]. Adaptation
may address the user' procedures, assumption, knowl-             3.1. ERP implementation success
edge, or relationships as well as physical aspects of the
technology [48]. In the adaptation stage of IT imple-               While some ®rms announced ERP implementation
mentation model, an IT application is developed,                 success, many others reported negative results of ERP
installed, and maintained; organizational procedures             implementation [5,6]. An ERP implementation failure
are revised and developed; organization members are              may be fatal to a ®rm: either wasting enormous sums
trained both in the new procedures and in the new IT             of money or destroying the competitive advantage of
application [4]. The adaptation concept is applicable            the ®rm [5,6]. To manage ERP implementation suc-
not only to custom software but also to off-the-shelf            cessfully, a high level ERP implementation success
packages [34]. Most studies on the implementation of             measure is required [39]. Markus and Tanis [34]
application software packages emphasize the critical             argued that a minimum set of success metrics includes
nature of the adaptation process [10,14,28].                     project metrics, early operational metrics, and long-
   From the duality perspective of technology, ERP is            term business results. In this study, we de®ne ERP
a ``technological artifact bundling material and sym-            implementation success from the ERP implementation
bolic properties in some socially recognizable form              project perspective.
(e.g. hardware, software, practice)'' [36]. The adapta-             While there is a wide range of con®gurations avail-
tion of ERP and organizational processes is an iterative         able in any major ERP product, ERP is frequently
process entailing on-going social action that is clearly         unable to model some of the adopting ®rm's existing
constrained by both the structural properties of the             procedures [10]. A critical challenge in ERP imple-
organization and the built-in properties of the ERP [50].        mentation has to do with ®rst identifying gaps between
   There are two alternative approaches to the imple-            the ERP generic functionality and the speci®c organi-
mentation of a packaged software: package adaptation             zational requirement, and then deciding how these
to organizational needs and organizational adaptation            gaps will be handled [1,44,49,50]. For the successful
28                            K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40




                                                  Fig. 1. Research model.




implementation of ERP, organizational ®t of ERP                  adaptation, identifying eight ERP adaptation types.
is important, because organizational mis®t of ERP                Glass [11] categorized ERP adaptation types into
requires massive changes in the adopting organization's          customization, extension, and modi®cation. ERP cus-
business process, ERP systems, or both [37]. Besides,            tomization (also called con®guration) is to choose
while there must be the minimum organizational ®t                among the reference processes and set the parameters
level which ERP implementation is destined to fail               in ERP without changing the ERP source code. ERP
regardless of whatever adaptations, none of the ERP              extensions utilize the ``user exit'' function for local
vendors acknowledge the fact or attempts to assess               code, a specialized programming language and third-
the implementation feasibility based on the organiza-            party bolt-on software to ®ll the gap between ERP
tional ®t of ERP. Laughlin [26] regarded matching                functionality and organizational requirements. In con-
functionality with ERP as one of the major factors               trast, ERP modi®cation changes the ERP source code.
for ERP implementation. This leads to our ®rst                   In this paper, we restrict ERP adaptation to extension
hypothesis.                                                      and modi®cation because customization does not
                                                                 change the basic ERP identity.
Hypothesis 1. Organizational fit of ERP is positively               In base relation, we hypothesize that organizational
related to ERP implementation success.                           ®t of ERP is positively related to ERP implementation
                                                                 success. In the case of low ERP adaptation, we expect
3.2. ERP adaptation                                              that organizational ®t of ERP will be more strongly
                                                                 associated with ERP implementation success, because
   Technological adaptation is referred to as the                the low level of ERP adaptation would not affect the
adjustments and changes following the installation               initial organizational ®t of ERP value signi®cantly.
of a new technology in a given setting [48]. While               But in the case of high ERP adaptation, we expect that
ERP vendors presume that ERP embodies the uni-                   organizational ®t of ERP will not be as strongly
versally applicable best practices, most organizations           associated with ERP implementation success as in
adapt ERP to their unique organizational contexts                low ERP adaptation because the high level of ERP
[46]. ERP adaptation increases the feature-function              adaptation would have reduced the gap between ERP
®t between ERP and the adopting organization, which              and organization, mitigating the effect of organiza-
is likely to result in lower resistance, reduced training        tional ®t of ERP. Thus, when the level of ERP adapta-
needs, less organizational adaptation [2]. It is also            tion is low, we expect a stronger the base relationship
argued that re-invention or adaptation of an innovation          and expect the opposite when the level of ERP adapta-
might reduce mistakes resulting from the implemen-               tion is high.
tation uncertainty [40].
   Brehm et al. [3] contend that ERP implementation              Hypothesis 2. There is an interaction effect of the
success depends on the type and extent of ERP                    level of ERP adaptation on the relationship between
K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40                       29


organizational fit of ERP and ERP implementation                implementation. In a political perspective, Markus
success.                                                        [31] explains resistance to IT implementation in terms
                                                                of power distribution mis®t of IS. She noted that the
3.3. Process adaptation                                         political perspective appears to be primarily applic-
                                                                able for cross-functional IS. In an MRP study, Cooper
   ERP implementation may cause radical organiza-               and Zmud [4] suggested that organizational resistance
tional changes that need to be carefully managed                and lack of MRP understanding had more explanatory
[2,17,18]. Unlike the design and development of a               power of inhibiting MRP infusion within its work
custom software, implementation of a packaged soft-             environment than the task ®t of MRP.
ware requires that its implementing organization adapt             Since the organization and process changes induced
some of its organizational processes to ®t the basic            by ERP implementation force involuntary changes
business practices that are embedded in such applica-           and frequently lead to different power and resource
tion packages [8,28]. When ERP implementation                   allocations, ERP implementation usually triggers a
involves adapting the existing business processes to            diverse group of overt and covert opponents within the
the standard business process of ERP, other organiza-           organization. Based on this realization, we expect that
tional components (e.g. organizational structure, mea-          organizational resistance will moderate the relation-
surement compensation, organizational culture,                  ship between organizational ®t of ERP and ERP
training, etc.) and their interactions must also be             implementation success. When the level of organiza-
changed together [17].                                          tional resistance is low, we expect the stronger base
   The adaptation of organizational process in BPC              relationship and expect the opposite when the level of
literature emphasizes the need to take account of the           ERP adaptation is high.
management of organizational change. Grover et al.
[15] empirically found that change management is                Hypothesis 4. There is an interaction effect of the
the most critical source of BPC implementation. Since           organizational resistance on the relationship between
process adaptation induces the same effect on the               organizational fit of ERP and ERP implementation
relationship between organizational ®t of ERP and               success.
implementation success as ERP adaptation, based on
the same reasoning for hypothesis two, when the level
of process adaptation is low, we expect a stronger              4. Research method
relationship and expect the opposite when the level of
process adaptation is high.                                     4.1. Sample and data collection

Hypothesis 3. There is an interaction effect of the                The target of this study was the organization that
level of process adaptation on the relationship between         has implemented ERP. We used the key informant
organizational fit of ERP and ERP implementation                method for collecting information on a social setting
success.                                                        by interviewing (or surveying) a selected number
                                                                of participants. Fifty ®rms were identi®ed from the
3.4. Organizational resistance                                  lists provided by the ERP vendors. We contacted the
                                                                ERP project managers in charge of ERP implementa-
   ERP implementation will affect most of the com-              tion in each ®rm. About 350 survey questionnaires
pany's business functions and in¯uence users directly.          were sent to the ERP project manager of each ®rm,
Resistance to a change stems from change in the                 who forwarded our questionnaires to his/her project
job content and uncertainty of the new system [22].             team members in charge of individual process. In total,
Any ERP project team will face a certain level of               one hundred and six questionnaires were collected
organizational resistance due to its disruptive change          from 34 ®rms. One case was dropped due to incom-
[26]. Previous IS research, based on different theore-          plete data entry. Two missing values, one item for
tical perspectives, has made a substantial progress             implementation success and another item for ERP
in understanding the resistance introduced by IS                adaptation, were identi®ed and replaced with the
30                                 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40


average value of the rest of the items. On the average,                   4.4. Organizational ®t of ERP
three or four persons per ®rm participated in our
survey (Appendix A).                                                         ERP technological artifacts are basically character-
                                                                          ized as integration of data and process within and
4.2. Measurement development                                              across functions of an organization [6,24,34]. In a
                                                                          traditional software application perspective, Soh et al.
   We ®rst conducted a series of in-depth interviews                      [44] examined organizational ®t of ERP in terms of
with various ERP project managers and members to                          data, process, and output. Considering that user inter-
examine the external validity of our research model.                      face plays an increasingly critical role for the mission-
We then developed the questionnaire items based on                        critical enterprise systems such as ERP, we operatio-
the literature and the ®eld visits, as well as the                        nalized the organizational ®t of ERP construct in terms
comments gathered from the interviews. The survey                         of data, process, and user interface ®t of ERP before or
questionnaire was revised through four rounds of                          at the initial implementation period.
line-by-line discussion with the help of business
process experts with signi®cant ERP project experi-                       4.5. Implementation contingencies
ence. To pretest the reliability and validity of the
instruments, we conducted a pilot study, using the 32                        We identi®ed the type of ERP adaptation based on
questionnaire responses from six ®rms. Some items                         the industry expert interviews and developed the ERP
were revised on the basis of the pilot result. The                        adaptation measurement. We con®rmed that the ERP
operational de®nitions of the variables used are                          adaptation instrument was applicable to different ERP
summarized in Table 1.                                                    systems through a series of the project team's reviews
                                                                          and pretests. Process adaptation and organizational
4.3. ERP implementation success                                           resistance measurements were developed and evalu-
                                                                          ated based on the relevant literature and validated
   ERP implementation success, the dependent vari-                        through a series of in-depth discussion with different
able in this study, is different from the traditional IS                  ERP project teams.
success measure in that it is not evaluated by the
general users but by the project team members. Imple-                     4.6. Characteristics of respondent ®rms
mentation project success is frequently de®ned in terms
of the achievement of some predetermined goals,                              Respondent ®rms consist of 25 manufacturing ®rms
which normally include multiple parameters such as                        and nine non-manufacturing ®rms, including service
time, cost, function [34]. In this study, we measured                     and distribution ®rms. Firms were using four ERP
ERP implementation success in terms of the perceived                      products: SAP R/3 (14), UniERP (13), Oracle ERP (6),
deviation from the expected project goals such as                         Bann BPCS (1). Table 2 shows pro®les of the respon-
cost overrun, schedule overrun, system performance                        dent ®rms in terms of annual revenue and number of
de®cit, and failure to achieve the expected bene®ts.                      total employees.


Table 1
Operational de®nitions of variables

Variable                      Operational definition
                          a
Implementation success        The degree of deviation from project goal in terms of expected cost, time, system performance and benefits
Organizational fit of ERP     The degree of alignment between ERP model and organization needs in terms of data, process and user interface
ERP adaptation                The extent of efforts and time spending in ERP alteration to align with organizational process needs except for
                              ERP customization
Process adaptation            The extent of efforts and time spending in process change to align with ERP
Organizational resistance     The strength of negative organizational response to ERP implementation
     a
         Reverse scale.
K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40                         31

Table 2                                                            4.10. Construct validity
Pro®le of respondent ®rms

Range                                 Frequency   Percentage          Construct validity is established by relating a mea-
                                                                   suring instrument to a general theoretical framework
Annual revenue
  More than $1 billion and above       6           17.6            in order to determine whether the instrument is tied to
  $100 million to below $1 billion    14           41.2            the concepts and theoretical assumption they are
  $10 million to below $100 million   11           32.4            employing. In order to obtain evidence of the construct
  Less than $10 million                3            8.8            validity of an instrument, a researcher must make use
Total                                 34          100              of both a convergent validity and a discriminant
                                                                   validity [35].
Number of employees                                                   For convergent validity, we evaluated the item-to-
  10,000 and above                     2            5.9
  1000 to below 10,000                 8           23.5
                                                                   total correlation, based on the correlation of each item
  100 to below 1000                   21           61.8            to the sum of the remaining items. This approach
  Less than 100                        3            8.8            assumes that the total score is valid and thus the extent
Total                                 34          100              to which the item correlates with the total score is
                                                                   indicative of convergent validity for the item. Table 3
                                                                   shows the correlations for each of research variables
4.7. Instrument validation                                         whose item-to-total correlation score was greater than
                                                                   0.4. Discriminant validity was checked by factor
   Instrument validation is a prior and primary process            analysis. In Table 3, discriminant validity was con-
in empirical research. We followed Straub's [45]                   ®rmed when items for each variables loaded onto
guidelines to validate the instruments used in our                 single factors with loadings of greater than 0.5 [16].
research.                                                             Since each variable was measured by the multi-item
                                                                   constructs, we conducted factor analysis to check the
4.8. Content validity                                              unidimensionality of the items. Table 4 provides the
                                                                   factor pattern matrix that shows the loadings of each
   Content validity means how representative and                   item on independent and dependent variables. Five
comprehensive the items were in creating the scale.                factors emerged with no-cross construct loadings
The content validity of the instruments was estab-                 above 0.5, indicating good discriminant validity.
lished through the adoption of the relevant construct in           The instrument also demonstrated convergent validity
the literature, a series of reviews with the help of               with factor loadings exceeding 0.5 for each construct.
business process experts with deep ERP knowledge,                  These results con®rm that each of these construct is
and a pilot pretest.                                               unidimensional and factorially distinct and that all
                                                                   items used to operationalize a particular construct is
4.9. Reliability                                                   loaded onto a single factor.

   Reliability is the accuracy or precision of a measur-
ing instrument, that is the extent to which the respon-            5. Results
dent can answer the same or approximately the same
questions the same way each time [45]. The internal                  The correlation matrix between variables is pre-
consistency reliability was assessed by calculating                sented in Table 5. A common concern of any regression
Cronbach's alpha values. The reliability results of                analysis is the multi-collinearity that may exist among
the constructs are summarized in the ®fth column                   the independent variables [16]. In our model, multi-
of Table 3. The internal consistency (Cronbach's alph)             collinearity is not a problem since we have only one
of the construct ranged from 0.75 (for implementation              independent variable. Correlations among the pro-
success) to 0.93 (for process adaptation). Given the               posed moderating variables do exist but would not
exploratory nature of the study, the result seems                  pose a serious problem since their values are less than
acceptable.                                                        0.5 [16] and each of them will be analyzed separately.
32
                                                                                                                                                                           K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40
Table 3
Summary of reliability and validity of the measurement

Measure                        Items      Mean       S.D.   Reliability          Convergent validity                            Discriminant validity
                                                            (Cronbach's alpha)   (correlation of item with total score-item)    (factor loading on single factors)

Implementation success (R)a      4        4.06       1.60   0.75                 0.451, 0.613, 0.590, 0.551                     0.655, 0.799, 0.802, 0.773
Organizational fit of ERP      11                           0.83                 0.798,   0.806,   0.759, 0.746                 0.890, 0.896, 0.865, 0.857
  Process fit                   4         3.49       1.32   0.90                 0.620,   0.714,   0.595, 0.666                 0.790, 0.854, 0.768, 0.823
  Data fit                      4         3.95       1.26   0.82                 0.515,   0.637,   0.548                        0.600, 0.737, 0.637
  User fit                      3         3.71       1.33   0.74                 0.741,   0.826,   0.814, 0.767, 0.624, 0.603   0.822, 0.890, 0.881, 0.836, 0.724, 0.702
ERP adaptation                   6        4.57       1.46   0.89                 0.845, 0.842, 0.825, 0.830, 0.775              0.904, 0.903, 0.890, 0.894, 0.854
Process adaptation               5        4.63       1.36   0.93                 0.682, 0.804, 0.797, 0.748, 0.603              0.798, 0.892, 0.889, 0.844, 0.726
Organizational resistance        5        4.33       1.50   0.89
   a
       Reverse score.
K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40                             33

Table 4
The result of factor analysisa

Scale items                             Factors

                                        1                     2                     3                     4              5

ORGFIT1                                    0.745                À0.255                À0.003                   0.070          0.187
ORGFIT2                                    0.752                À0.347                 0.012                   0.010          0.187
ORGFIT3                                    0.744                À0.250                 0.018                  À0.048          0.166
ORGFIT4                                    0.756                À0.217                À0.015                   0.027          0.083
ORGFIT5                                    0.714                 0.019                À0.203                   0.059          0.090
ORGFIT6                                    0.754                 0.063                À0.037                  À0.156          0.079
ORGFIT7                                    0.629                À0.278                À0.055                  À0.091          0.137
ORGFIT8                                    0.681                À0.196                À0.061                   0.056          0.265
ORGFIT9                                    0.546                À0.228                 0.048                  À0.258         À0.294
ORGFIT10                                   0.585                À0.039                 0.050                  À0.446         À0.175
ORGFIT11                                   0.735                 0.052                À0.060                  À0.248          0.061
ERPADPT2                                  À0.189                 0.669                 0.270                   0.066         À0.160
ERPADPT3                                  À0.172                 0.806                 0.220                  À0.066         À0.177
ERPADPT4                                  À0.205                 0.788                 0.256                   0.058         À0.237
ERPADPT5                                  À0.135                 0.846                 0.114                   0.106         À0.169
ERPADPT6                                  À0.186                 0.737                 0.071                   0.057         À0.087
ERPADPT7                                  À0.162                 0.643                 0.361                   0.118          0.100
PROCADPT1                                 À0.113                 0.260                 0.838                   0.128         À0.104
PROCADPT2                                 À0.081                 0.165                 0.848                   0.203         À0.117
PROCADPT3                                  0.126                 0.180                 0.871                   0.145         À0.069
PROCADPT4                                 À0.081                 0.139                 0.847                   0.212         À0.027
PROCADPT5                                 À0.063                 0.262                 0.780                   0.189          0.038
ORGRST1                                    0.079                 0.083                 0.217                   0.745         À0.199
ORGRST2                                   À0.062                 0.015                 0.314                   0.786         À0.191
ORGRST3                                   À0.168                À0.096                 0.321                   0.792         À0.035
ORGRST4                                   À0.192                À0.015                 0.230                   0.800         À0.068
ORGRST5                                    0.011                 0.230                À0.030                   0.778          0.023
PJTSUC1                                    0.115                À0.059                À0.124                  À0.220          0.635
PJTSUC2                                    0.089                À0.235                À0.199                   0.040          0.781
PJTSUC3                                    0.346                À0.357                 0.049                  À0.077          0.648
PJTSUC4                                    0.323                À0.216                 0.184                  À0.335          0.555
Eigenvalues                                  5.91                  4.37                  4.29                  3.78           2.34
Percentage of variance explained            19.1                  14.1                  13.9                  12.2            7.5
Cumulative percentage                       19.1                  33.2                  47                    59             66.7
   a
       Extraction method: principal component analysis; rotation method: varimax with Kaiser normalization.



The results from the normal probability plot and                          success was signi®cant (r ˆ 0:51, P < 0:002), support-
Kolmogorov±Smirnov test indicated no violation                            ing the Hypothesis 1. In simple regression of organiza-
of normality for the regression model (statistic ˆ                        tional ®t of ERP on implementation success, the value
0:54±0.72, P > 0:200).                                                    of R2 and adjusted R2 was 0.26 and 0.24, respectively.
                                                                          It indicates that 24% of the implementation success
5.1. Testing the base relationship                                        variance is explained by the organizational ®t of ERP.

   Correlation analysis was used for testing the base                     5.2. Testing the contingency relationships
relationship between organizational ®t of ERP and ERP
implementation success. The base relation between                           For analysis of the moderator variables, we will use
organizational ®t of ERP and ERP implementation                           the typology of moderator variables and the method
34                                  K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40

Table 5                                                                   criterion variables, implying a signi®cant interaction
Correlations matrix between variables
                                                                          between the moderator and predictor variables.
                                    (1)     (2)        (3)     (4)           Cell 3 is referred to as quasi-moderator, which not
                                                                          only interacts with the predictor variable but is a
Implementation success (1)
Organizational fit of ERP (2)        0.51**                               predictor variable itself. Cell 4 is referred to as pure
ERP adaptation (3)                  À0.49** À0.58**                       moderator, which interacts with predictor variables
Process adaptation (4)              À0.22 À0.18 0.36*                     while having a negligible correlation with the criterion
Organizational resistance (5)       À0.46** À0.39* 0.42*       0.42*      itself.
     *
         P < 0:05.                                                           To test the three contingency variables, we followed
     **
          P < 0:01.                                                       the four-step procedure for identifying moderator
                                                                          variables [42] (described in Appendix B). The test
for identifying moderator variables developed by                          results of the three moderating effects are summari-
Sharma et al. [42]. Fig. 2 depicts this typology, which                   zed in Table 6. While the ®rst line in each pair of
has two dimensions: whether the target variable is                        regression models of the table shows the results
related to a criterion (dependent) variable and whether                   of the regression run without interaction, the results
the target variable interacts with the predictor (inde-                   of the regression run with the interaction term are in
pendent) variable.                                                        the second line.
   The target variable in cell 1 is referred to as an                        In the ®rst pair of regression models, it is found that
intervening, exogenous, antecedent, suppressor, or                        the interaction term was signi®cant at the level of 0.01.
predictor variable depending on its other character-                      In the correlation matrix of Table 5, ERP adaptation
istics. Variables in cells 2±4 are referred to as mod-                    was negatively correlated with both organizational ®t
erator variables. The target variable in cell 2 is referred               of ERP (À0.58) and ERP implementation success
to as homologizer, which in¯uences the strength of the                    (À0.49) at the level of signi®cance 0.01. These two
relationship between the predictor and criterion vari-                    facts suggest that ERP adaptation is a quasi-moderator
ables across homogeneous subgroups. In contrast,                          of the base relationship between organizational ®t
moderator variables in cells 3 and 4 in¯uence the                         of ERP and implementation success, supporting the
form of the relationship between the predictor and                        Hypothesis 2.




                                                   Fig. 2. Typology of moderator variables.



Table 6
The test results of the moderated regression effects

Regression modela                                 b (interaction)          p (interaction)       R2             p (model)       DR2

ORGFIT                                                                                           0.26           0.002
ORGFIT ‡ ERPADPT ‡ interaction                    À0.58                    0.006                 0.47           0.000           0.21
ORGFIT                                                                                           0.26           0.002
ORGFIT ‡ PROADPT ‡ interaction                    À0.50                    0.005                 0.44           0.000           0.18
ORGFIT                                                                                           0.26           0.002
ORGFIT ‡ ORGRST ‡ interaction                     À0.25                    0.243                 0.37           0.003           0.11
     a
         ORGFIT, organizational ®t of ERP; ERPADPT, ERP adaptation; PROADPT, process adaptation; ORGRST, organizational resistance.
K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40                                      35

Table 7
Summaries of the moderated regression analysis

                                                  Related to either criterion or predictor           Not related to criterion and predictor

No interaction with predictor                     Organizational resistance is not moderator
Interaction with predictor                        ERP adaptation is quasi-moderator                  Process adaptation is pure moderator




   In the second pair of regression models, it was also
found that the interaction term was signi®cant at the
level of 0.01. The correlation matrix in Table 5 shows
that process adaptation is neither associated with
organizational ®t of ERP nor associated with imple-
mentation success. So we believe that process adapta-
tion is a pure moderator of the base relationship
between organizational ®t of ERP and implementation                       Fig. 4. Family of base relationships across process adaptation.
success, supporting the Hypothesis 3.
   In the third pair of regression models, there is no
interaction effect. And the correlation matrix in Table 5               ERP adaptation and process adaptation, respectively.
shows that organizational resistance is negatively                      We ®nd that the relationship between organizational ®t
associated with both organizational ®t of ERP and                       of ERP and ERP implementation success changes
implementation success. Based on these facts, we                        from ``positive'' to ``negative'' as the level of adapta-
suggest that organizational resistance is not a mod-                    tion (both ERP and process) intensi®es.
erator of the base relation but one of the intervening,                    In the range of ``above the in¯ection point'', in-
exogenous, antecedents, suppressor, or predictor vari-                  creasing each adaptation has a negative impact on
able types. Table 7 summarizes the results of these                     implementation success given the same level of orga-
moderated regression analyses.                                          nizational ®t of ERP. In the range of ``below the
                                                                        in¯ection point'', increasing each adaptation is pre-
5.3. Interpreting the moderating effects                                dicted to have a positive impact on implementation
                                                                        success given the same level of organizational ®t of
  To properly test a contingency hypothesis, it is                      ERP.
necessary to display interaction term graphically as
well as to examine it mathematically [41]. We plotted
the joint effect of the main and interaction term in                    6. Discussion
Figs. 3 and 4. Figs. 3 and 4 represent the family of the
base relationships between organizational ®t of ERP                        Although ERP implementation has been one of the
and implementation success for different values of                      most signi®cant challenges for IS practitioners in the
                                                                        last decade, relatively little research has been con-
                                                                        ducted about ERP implementation [49,50]. In the
                                                                        previous section, we found that organizational ®t of
                                                                        ERP has a signi®cant effect on ERP implementation
                                                                        success. It was also found that while ERP adaptation is
                                                                        a quasi-moderator of the base relationship between
                                                                        organizational ®t of ERP and ERP implementation
                                                                        success, process adaptation works as a pure moderator
                                                                        of the base relationship. Organizational resistance was
                                                                        not found to have a moderating effect. We will discuss
   Fig. 3. Family of base relationships across ERP adaptation.          these facts in detail below.
36                            K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40


6.1. Organizational ®t of ERP                                    tonically decreased in the higher range of organizational
                                                                 ®t of ERP and monotonically increased in the lower
   In the simple regression, 26% of the implementa-              range. Since ERP adaptation as a quasi-moderator has
tion success variance was signi®cantly explained by              interaction effect as well as direct effect on ERP imple-
the organizational ®t of ERP. Lucas et al. [28] found            mentation success while process adaptation has only the
some support for the role of organizational mis®t of             interaction effect, we speculate that ERP adaptation may
production system package in the implementation                  have stronger explainability on ERP implementation
process. Besides, the extended models with interaction           success than process adaptation. This speculation is
term (ERP adaptation and process adaptation) signi®-             supported by the comparison of R2 change of the models
cantly explained 47 and 44% of the implementation                one and two in Table 6 (0.21 and 0.18, respectively).
success variance, respectively. Because the organiza-               From a resource dependence view, ERP adaptation
tional ®t of ERP was found to have a signi®cant effect           might be more exposed to threats and risks than
on ERP implementation success, project managers,                 process adaptation, because ERP adaptation requires
before embarking on an ERP implementation project,               heavier dependence upon uncontrollable resources
must evaluate organizational ®t of ERP and plan for              such as consulting ®rms or ERP vendors than process
appropriate type and level of adaptation.                        adaptation. It might be interesting to explore ERP
   Soh et al. [44] argue that mis®t analysis requires            functionality enhancement process issues [43] for
both comprehensive understanding of critical organi-             ERP implementation success.
zational processes and detailed knowledge of the
complex ERP. Before ERP adoption, thorough mis®t                 6.3. Organizational resistance
analysis and resolution plan based on ERP knowledge
will mitigate the escalating project risk over the course           Because organizational resistance did not interact
of implementation. To assure organizational ®t of                with organizational ®t of ERP to explain ERP imple-
ERP, managers can also utilize the proof of concept              mentation success but had signi®cantly negative asso-
methodology [38], where instead of developing and                ciation with ERP implementation success, we conclude
evaluating the exhaustive list of functional require-            that it is not a moderator variable. We investigated
ments, they can focus on the key process features of             the potential mediating effect of organizational resis-
the organization in advance of ERP adoption.                     tance between organizational ®t of ERP and implemen-
                                                                 tation success. Since organizational resistance also had
6.2. ERP adaptation and process adaptation                       a signi®cantly negative relationship with organizatio-
                                                                 nal ®t of ERP, we believe it is an intervening variable
   Despite the ERP vendor's caution, the practice of             between organizational ®t of ERP and implementation
adapting software package has become increasingly                success with very marginal effect (DR2 ˆ 0:08) on
common in reality [46]. This study found that there is a         improving the predictive validity of the model.
signi®cant threshold interaction effect of ERP adapta-
tion on the relationship between organizational ®t of
ERP and ERP implementation success. The impact of                7. Limitation and conclusions
ERP adaptation on ERP implementation success was
negative in the organizational ®t range above 2.84 and              There are many limitations in this study. First, we
positive in its range below 2.84. This might imply that,         focus on a limited number of variables for ERP imple-
beyond a certain level of organizational ®t, the higher          mentation success. More relevant variables associated
ERP adaptation only leads to the lower implementa-               with ERP implementation, for example, project team
tion success.                                                    competence, may be added to improve the understand-
   Since process adaptation was not associated with              ing of ERP implementation success. Second, we only
organizational ®t of ERP or ERP implementation suc-              used perceived project metrics in de®ning implementa-
cess, it was found to be a pure moderator of the base            tion success, leaving out factual aspect of success out-
relation. Similar to the ERP adaptation, the impact of           come in the IS research. This was due to the dif®culty
process adaptation on implementation success mono-               in securing the factual data from the participating
K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40                       37


organizations. Third, this paper has a common method            1. The cost of ERP project was signi®cantly higher
bias because the dependent variable and independent                than the expected budgets.
variables rated by the same respondent. Again, this was         2. The ERP project took signi®cantly longer than
due to the dif®culty of securing data from both ERP                expected.
project members and operating department personnel.             3. The system performance of ERP is signi®cantly
   Despite the fact that more and more companies are               below the expected level.
investing in ERP for replacing their custom-built               4. The anticipated bene®ts of ERP have not been
legacy systems, the research in organizational ®t of               materialized.
ERP has been generally overlooked. While it is
                                                                  Organizational ®t of ERP (seven-point Likert type
recognized that organizational ®t of ERP is a critical
                                                                scale)
selection criterion for ERP [9], the link between
                                                                  (Process ®t)
organizational ®t of ERP and ERP implementation
success was not empirically validated. Many ERP
                                                                 1. The processes built in ERP meet all needs
vendors just ignore the organizational ®t concept
                                                                    required from organizational processes.
and urge blind trust on ERP from their clients.
                                                                 2. The processes ¯ow built in ERP correspond to
   In this study, we found that organizational ®t of ERP
                                                                    ¯ow of organizational processes.
is indeed critical in explaining ERP implementation
                                                                 3. The processes built in ERP accommodate the
success. In addition, we found that both ERP and
                                                                    change required from organizational processes.
process adaptations interact with organizational ®t of
                                                                 4. The processes built in ERP correspond to the
ERP on ERP implementation success. We learned that
                                                                    business practices of our company.
ERP and process adaptation are only effective when
                                                                     (Data ®t)
organizational ®t of ERP is relatively low. Beyond a
                                                                 5. The name and meaning of the ERP data items
certain level of organizational ®t, more adaptation will
                                                                    correspond to those of the documents used in our
only lead to lower implementation success. We also
                                                                    company (i.e. an sales order sheet, sales report).
learned that, since ERP adaptation also shows a sig-
                                                                 6. The form and format data items of the ERP
ni®cantly negative direct correlation with implementa-
                                                                    correspond to those of the documents used
tion success (while process adaptation only shows
                                                                    in our company.
interaction effect), as many ERP vendors have claimed,
                                                                 7. The output data items of the ERP correspond to
process adaptation may be a safe choice than ERP
                                                                    those of the documents used in our company.
adaptation when organizational ®t of ERP is low.
                                                                 8. The input data items of the ERP correspond to
   Therefore, for successful ERP implementation,
                                                                    those of the documents used in our company.
ERP implementation managers as well as top manage-
                                                                     (User interface ®t)
ment should be able to assess the ®t between their
                                                                 9. User interface structures of the ERP is well
organization and the target ERP system before its
                                                                    designed to the work structure required for
adoption and, once adoption is decided, should mea-
                                                                    conducting business in our company.
sure and manage the impact of ERP and process
                                                                10. User interface of the ERP is well designed to the
adaptations from a risk assessment approach as sug-
                                                                    user capabilities of our company.
gested in Brehm et al. [3] to minimize the potential
                                                                11. User interface of the ERP is well designed to the
business disruptions and user resistance.
                                                                    business needs of our company.
Appendix A. Survey instrument                                      ERP adaptation (seven-point Likert type scale)

   The different opinions are indicated by the numbers          1. Signi®cant time and effort have been required to
1: strongly disagree; 2: disagree; 3: somewhat disagree;           alter ERP data items to align with our organiza-
4: neutral; 5: somewhat agree; 6: agree; 7: strongly               tional process needs.
agree.                                                          2. Signi®cant time and effort have been required to
   Implementation success (seven-point Likert type                 append new ERP data items to align with our
reverse scale)                                                     organizational process needs.
38                            K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40


3. Signi®cant time and effort have been required to              the hypothesized moderator variable and independent
   alter ERP processes to align with our organiza-               variable. If a signi®cant interaction exists, go to step 2.
   tional process needs.                                         Otherwise, proceed to step 3.
4. Signi®cant time and effort have been required to                 Step 2: Determine if the moderator variable is
   append new ERP processes to align with our                    signi®cantly related to the dependent variable. If it
   organizational process needs.                                 is, then the variable is a quasi-moderator. If not, the
5. Signi®cant time and effort have been required to              variable is a pure moderator.
   alter ERP input/output screens to align with our                 Step 3: Determine if the moderator variable is
   organizational process needs.                                 signi®cantly related to the independent variable. If
6. Signi®cant time and effort have been required to              it is, then it is an exogenous, predictor, intervening,
   alter ERP reports to align with our organizational            antecedent, or suppressor variable. If not, proceed to
   process needs.                                                step 4.
                                                                    Step 4: Develop subgroups based on the hypothe-
     Process adaptation (seven-point Likert type scale)
                                                                 sized moderator variable. Test for the signi®cance of
1. Signi®cant time and effort have been required to              differences in predictive validity across subgroups.
   alter elementary processes to align with the ERP.             If the difference is signi®cance, the variable is a
2. Signi®cant time and effort have been required to              homologizer operating the error term. If a signi®cant
   alter our process ¯ows to align with the ERP.                 difference is not found, then the variable is not a
3. Signi®cant time and effort have been required to              moderator.
   standardize our organizational processes to align
   with the ERP.
4. Signi®cant time and effort have been required to              References
   integrate our redundant organizational processes
   to align with the ERP.                                         [1] N.H. Bancroft, H. Seip, A. Sprengel, Implementing SAP
                                                                      R/3, 2nd Edition, Manning Publications, Greenwich, CT,
5. Signi®cant time and effort have been required to
                                                                      1998.
   alter our document and data elements to align with             [2] P. Bingi, M.K. Sharma, J.K. Golda, Critical issues affecting
   the ERP.                                                           an ERP implementation, Information Systems Management
                                                                      (1999) 7±14.
  Organizational resistance (seven-point Likert type              [3] L. Brehm, A. Heinzl, M.L. Markus, Tailoring ERP systems: a
scale)                                                                spectrum of choices and their implications, in: Proceedings of
                                                                      the 34th Annual Hawaii International Conference on System
1. There have been many users resisting the ERP                       Sciences, January, 2001.
   implementation.                                                [4] R.B. Cooper, R.W. Zmud, Information technology imple-
2. There have been many cases blaming occurrence                      mentation research: a technological diffusion approach,
   of business problem upon ERP.                                      Management Science 36 (2), 1990, pp. 123±139.
                                                                  [5] T.H. Davenport, Putting the enterprise into the enterprise
3. There have been many cases in which users persist
                                                                      system, Harvard Business Review (1998) 121±131.
   traditional business practice even though ERP                  [6] T.H. Davenport, Mission Critical: Realizing the Promise of
   change the way of conducting business.                             Enterprise Systems, HBS Press, 2000.
4. There have been many cases in which user                       [7] G.B. Davis, M.H. Olson, Management Information Systems,
   departments did not reply to the business request                  McGraw-Hill, New York, 1985.
                                                                  [8] G.B. Davis, Commentary on information systems: to buy,
   of the ERP project team.
                                                                      build, or customize? Accounting Horizons (1988) 101±
5. There have been many people wishing ERP to fail.                   103.
                                                                  [9] Y. Everdingen, J. Hillergersberg, E. Waarts, ERP adoption by
                                                                      European midsize companies, Communications of the ACM
Appendix B. Framework for identifying                                 43 (3), 2000, pp. 27±31.
                                                                 [10] T.F. Gattiker, D.L. Goodhue, Understanding the plant level
moderator variables
                                                                      cost and bene®ts of ERP: will the ugly duckling always
                                                                      turn into a swan?, in: Proceedings of the 33rd Annual
  Step 1: Using the moderated regression analysis,                    Hawaii International Conference on System Sciences,
determine if a signi®cant interaction exists between                  2000.
K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40                                    39

[11] R.L. Glass, Enterprise resource planningÐbreakthrough and/      [33] M.L. Markus, D. Robey, Information technology and
     or term problem? Database 29 (2) (1998) 14±16.                       organizational change: causal structure in theory and
[12] L.L. Gremillion, P. Pyburn, Breaking the system develop-             research, Management Science 34 (5), 1988, pp. 583±598.
     ment bottleneck, Harvard Business Review 61 (2), 1983, pp.      [34] M.L. Markus, C. Tanis, The enterprise systems experienceÐ
     130±137.                                                             from adoption to success, in: R.W. Zmud (Ed.), Framing the
[13] T.L. Grif®th, R.F. Zammuto, L. Aiman-Smith, Why new                  Domains of IT Research: Glimpsing the Future Through the
     technologies fail? Industrial Management (1999) 29±34.               Past, Pinna¯ex Educational Resources Inc., Cincinnati, OH,
[14] P.H.B. Gross, M.J. Ginzberg, Barriers to the adaptation of           2000, pp. 173±207.
     application software packages, Systems, Objectives, Solu-       [35] C.F. Nachmias, D. Nachmias, Research Method in the Social
     tions 4 (4), 1984, pp. 211±226.                                      Sciences, St. Martin Press, New York, 2000.
[15] V. Grover, S.R. Jeong, W.J. Kettinger, J.T.C. Teng, The         [36] W.J. Orlikowski, The duality of technology: rethinking the
     implementation of business process reengineering, Journal            concept of technology in organizations, Organization Science
     of Management Information Systems 12 (1), 1995, pp. 109±             3 (3), 1992, pp. 398±427.
     144.                                                            [37] R.E. Pereira, Resource view theory analysis of SAP as a
[16] J.F. Hair, R.E. Anderson, R.L. Tatham, W.C. Black,                   source of competitive advantage for ®rms, Database 30 (1),
     Multivariate Data Analysis, Prentice-Hall, Englewood Cliffs,         1999, pp. 38±46.
     NJ, 1995.                                                       [38] C. Prosser, D. Canty, Proof of concept: an ef®cient way
[17] M. Hammer, S. Stanton, How processes enterprise really               to shop, APICSÐThe Performance Advantage (1998) 50±
     work, Harvard Business Review (1999) 108±118.                        52.
[18] M. Hammer, Up the ERP revolution, Information Week              [39] L. Radosevich, Measuring up, CIO, Framingham 12 (23)
     (1999) 186.                                                          (1999) 52±60.
[19] J.C. Henderson, N. Venkatraman, Strategic alignment:            [40] E. Rogers, Diffusion of Innovation, Free Press, New York,
     leveraging information technology for transforming organiza-         1995.
     tions, IBM Systems Journal 32 (1), 1993, pp. 4±16.              [41] C.B. Schoonhoven, Problems with contingency theory:
[20] C.P. Holland, B. Light, A critical success factors model for         testing assumptions hidden within the language of contin-
     ERP implementation, IEEE Software (1999) 30±36.                      gency theory, Administrative Science Quarterly 26, 1981, pp.
[21] J. Iivari, The organizational ®t of information systems,             349±377.
     Journal of Information Systems 2, 1992, pp. 3±29.               [42] S. Sharma, R.M. Durand, O. Gur-Arie, Identi®cation and
[22] J.J. Jiang, W.A. Muhanna, G. Klein, User resistance and              analysis of moderator variables, Journal of Marketing
     strategies for promoting acceptance across systems types,            Research 18, 1981, pp. 291±300.
     Information and Management 37, 2000, pp. 25±36.                 [43] J.E. Scott, L. Kaindl, Enhancing functionality in an enterprise
[23] P. Kanellis, M. Lycett, R.J. Paul, Evaluating business               software package, Information and Management 37, 2000, pp.
     information systems ®t: from concept to practical applica-           111±122.
     tion, European Journal of Information Systems 8, 1999, pp.      [44] C. Soh, S.S. Kien, J. Tay-Yap, Cultural ®ts and mis®ts: is
     65±76.                                                               ERP a universal solution? Communications of the ACM 43
[24] K. Kumar, J. Hillegersberg, ERP experiences and evolution,           (3), 2000, pp. 47±51.
     Communications of the ACM 43 (3), 2000, pp. 22±26.              [45] D.W. Straub, Validating instruments in MIS research, MIS
[25] K.C. Laudon, J.P. Laudon, Management Information                     Quarterly (1989) 147±169.
     Systems: Organization and Technology, Prentice-Hall, Engle-     [46] J. Swan, S. Newell, M. Robertson, The illusion of `best
     wood Cliffs, NJ, 1996.                                               practice' in information systems for operations management,
[26] S.P. Laughlin, An ERP game plan, Journal of Business                 European Journal of Information Systems 8, 1999, pp. 284±
     Strategy (1999) 32±37.                                               293.
[27] D. Leonard-Barton, Implementation as mutual adaptation of       [47] J. Sweat, ERP: enterprise application suits are becoming a
     technology and organization, Research Policy 17, 1988, pp.           focal point of business and technology planning, Information
     251±267.                                                             Week (1998) 42±52.
[28] H.C. Lucas, E.J. Walton, M.J. Ginzberg, Implementing            [48] M.J. Tyre, W.J. Orlikowski, Windows of opportunity:
     packaged software, MIS Quarterly (1988) 537±549.                     temporal patterns of technological adaptation in organiza-
[29] R.K. Lynch, Implementing packaged application software:              tions, Organization Science 5 (1), 1994, pp. 98±118.
     hidden costs and new challenges, Systems, Objectives,           [49] O. Volkoff, Enterprise system implementation: a process of
     Solutions 4 (4), 1984, pp. 227±234.                                  individual metamorphosis, American Conference on Informa-
[30] J. Marius, S. Ashok, Package software: selection and                 tion Systems, 1999.
     implementation policies, INFOR (1996) 133±151.                  [50] O. Volkoff, Using the structurational model of technology to
[31] M.L. Markus, Power, politics, and MIS implementation,                analyze an ERP implementation, in: Proceedings of Academy
     Communications of the ACM 26 (6), 1983, pp. 430±444.                 of Management '99 Conference, 1999.
[32] M.L. Markus, D. Robey, The organizational validity of           [51] P. Weill, M.H. Olson, An assessment of the contingency
     management information systems, Human Relations 36 (3),              theory of management information systems, Journal of
     1983, pp. 203±226.                                                   Management Information Systems 6 (1), 1989, pp. 59±85.
40           K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40

     Kyung-Kwon Hong is a doctoral can-                                 Young-Gul Kim is an Associate Professor
     didate at the Graduate School of                                   at the Graduate School of Management of
     Management of the Korea Advanced                                   the Korea Advanced Institute of Science
     Institute of Science and Technology                                and Technology (KAIST) in Seoul. He
     (KAIST) in Seoul. He received his BS                               received his BS and MS degrees in
     and MS degrees in Industrial Engineer-                             Industrial Engineering from Seoul National
     ing from the Hanyang University and                                University, Korea and his PhD degree in
     KAIST, respectively. He has worked for                             MIS from the University of Minnesota. His
     Korea Telecom during 10 years. His                                 active research areas are: Knowledge
     research interests include Packaged                                Management, IT Management, Data and
     Software Implementation, Information       Process Modeling and Customer Relationship Management. He has
     Systems Innovation, and Knowledge          published in Communications of the ACM, Information and Manage-
     Management.                                ment, Journal of MIS, Decision Support Systems, Database, etc.

Weitere ähnliche Inhalte

Was ist angesagt?

The Role of the Architect in ERP and PDM System Deployment
The Role of the Architect in ERP and PDM System DeploymentThe Role of the Architect in ERP and PDM System Deployment
The Role of the Architect in ERP and PDM System DeploymentGlen Alleman
 
Principles of program governance
Principles of program governancePrinciples of program governance
Principles of program governanceGlen Alleman
 
Top 10 Reasons for ERP Project Failure
Top 10 Reasons for ERP Project FailureTop 10 Reasons for ERP Project Failure
Top 10 Reasons for ERP Project FailureJohn Paulson
 
Measures of Effectiveness, Measures of Performance, Technical Performance Mea...
Measures of Effectiveness, Measures of Performance, Technical Performance Mea...Measures of Effectiveness, Measures of Performance, Technical Performance Mea...
Measures of Effectiveness, Measures of Performance, Technical Performance Mea...Glen Alleman
 
Sabaruddin de AB_S_Six Step ERP Project Management_FINAL
Sabaruddin de AB_S_Six Step ERP Project Management_FINALSabaruddin de AB_S_Six Step ERP Project Management_FINAL
Sabaruddin de AB_S_Six Step ERP Project Management_FINALsabaruddin de AB
 
ERP Readiness Audit Importance for ERP Project Success
ERP Readiness Audit Importance for ERP Project SuccessERP Readiness Audit Importance for ERP Project Success
ERP Readiness Audit Importance for ERP Project Successvelcomerp
 
Heliotropic Abundance
Heliotropic AbundanceHeliotropic Abundance
Heliotropic AbundanceGlen Alleman
 
Five immutable principles
Five immutable principlesFive immutable principles
Five immutable principlesGlen Alleman
 
Project organisation and erp implementation method
Project organisation and erp implementation methodProject organisation and erp implementation method
Project organisation and erp implementation methodGaurav Kumar
 
DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)Glen Alleman
 
SE1 - Integrating SE and PPM to Increase the Probability of Success
SE1 - Integrating SE and PPM to Increase the Probability of SuccessSE1 - Integrating SE and PPM to Increase the Probability of Success
SE1 - Integrating SE and PPM to Increase the Probability of SuccessGlen Alleman
 
System Engineering Panel Session
System Engineering Panel SessionSystem Engineering Panel Session
System Engineering Panel SessionGlen Alleman
 
Cpm 200 c technical performance measures - alleman (ppm)
Cpm 200 c   technical performance measures - alleman (ppm)Cpm 200 c   technical performance measures - alleman (ppm)
Cpm 200 c technical performance measures - alleman (ppm)Glen Alleman
 

Was ist angesagt? (20)

JF Burguet - ERP Experiences
JF Burguet - ERP ExperiencesJF Burguet - ERP Experiences
JF Burguet - ERP Experiences
 
The Role of the Architect in ERP and PDM System Deployment
The Role of the Architect in ERP and PDM System DeploymentThe Role of the Architect in ERP and PDM System Deployment
The Role of the Architect in ERP and PDM System Deployment
 
Principles of program governance
Principles of program governancePrinciples of program governance
Principles of program governance
 
GAP Analysis
GAP AnalysisGAP Analysis
GAP Analysis
 
Top 10 Reasons for ERP Project Failure
Top 10 Reasons for ERP Project FailureTop 10 Reasons for ERP Project Failure
Top 10 Reasons for ERP Project Failure
 
BIS11 ERP
BIS11 ERPBIS11 ERP
BIS11 ERP
 
Measures of Effectiveness, Measures of Performance, Technical Performance Mea...
Measures of Effectiveness, Measures of Performance, Technical Performance Mea...Measures of Effectiveness, Measures of Performance, Technical Performance Mea...
Measures of Effectiveness, Measures of Performance, Technical Performance Mea...
 
Sabaruddin de AB_S_Six Step ERP Project Management_FINAL
Sabaruddin de AB_S_Six Step ERP Project Management_FINALSabaruddin de AB_S_Six Step ERP Project Management_FINAL
Sabaruddin de AB_S_Six Step ERP Project Management_FINAL
 
ERP Readiness Audit Importance for ERP Project Success
ERP Readiness Audit Importance for ERP Project SuccessERP Readiness Audit Importance for ERP Project Success
ERP Readiness Audit Importance for ERP Project Success
 
Heliotropic Abundance
Heliotropic AbundanceHeliotropic Abundance
Heliotropic Abundance
 
Five immutable principles
Five immutable principlesFive immutable principles
Five immutable principles
 
Project organisation and erp implementation method
Project organisation and erp implementation methodProject organisation and erp implementation method
Project organisation and erp implementation method
 
PMP ERP
PMP ERPPMP ERP
PMP ERP
 
Session 2 & 3
Session 2 & 3Session 2 & 3
Session 2 & 3
 
DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)
 
SE1 - Integrating SE and PPM to Increase the Probability of Success
SE1 - Integrating SE and PPM to Increase the Probability of SuccessSE1 - Integrating SE and PPM to Increase the Probability of Success
SE1 - Integrating SE and PPM to Increase the Probability of Success
 
Notes on CMMI
Notes on CMMINotes on CMMI
Notes on CMMI
 
System Engineering Panel Session
System Engineering Panel SessionSystem Engineering Panel Session
System Engineering Panel Session
 
Cpm 200 c technical performance measures - alleman (ppm)
Cpm 200 c   technical performance measures - alleman (ppm)Cpm 200 c   technical performance measures - alleman (ppm)
Cpm 200 c technical performance measures - alleman (ppm)
 
PMI Presentation2
PMI Presentation2PMI Presentation2
PMI Presentation2
 

Andere mochten auch

50 Ways To Drive ERP Systems To Success
50 Ways To Drive ERP Systems To Success50 Ways To Drive ERP Systems To Success
50 Ways To Drive ERP Systems To SuccessKirsean Consulting FZE
 
Erp presentation
Erp presentationErp presentation
Erp presentationNayi Piyush
 
Pre planning for large ERP/CRM initiative
Pre planning for large ERP/CRM  initiativePre planning for large ERP/CRM  initiative
Pre planning for large ERP/CRM initiativesureshgk
 
Top 6 Factors for ERP Success
Top 6 Factors for ERP SuccessTop 6 Factors for ERP Success
Top 6 Factors for ERP SuccessCasey Cramer
 
Organisational Change Management in ERP Projects
Organisational Change Management in ERP Projects Organisational Change Management in ERP Projects
Organisational Change Management in ERP Projects Lumenia Consulting
 
How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...
How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...
How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...The HR Observer
 
ERP - Implementation Road Map
ERP - Implementation Road Map ERP - Implementation Road Map
ERP - Implementation Road Map Talib Imran
 
My Erp Implementation Lifecycle
My Erp Implementation LifecycleMy Erp Implementation Lifecycle
My Erp Implementation LifecycleVineetha Menon
 
Chapter 7 Erp Implementation Lifecycle Alexis Leon
Chapter 7  Erp Implementation Lifecycle   Alexis LeonChapter 7  Erp Implementation Lifecycle   Alexis Leon
Chapter 7 Erp Implementation Lifecycle Alexis LeonSonali Chauhan
 
Critical Success Factors for ERP
Critical Success Factors for ERPCritical Success Factors for ERP
Critical Success Factors for ERPGlen Alleman
 
ERP implementation
ERP implementationERP implementation
ERP implementationSourabh Jain
 
ERP Project Management Primer
ERP Project Management PrimerERP Project Management Primer
ERP Project Management Primersureshgk
 
ERP - Implementation is The Challenge
ERP - Implementation is The ChallengeERP - Implementation is The Challenge
ERP - Implementation is The Challengevinaya.hs
 
Requirements analysis
Requirements analysisRequirements analysis
Requirements analysisasimnawaz54
 

Andere mochten auch (18)

ERP systems implementation
ERP systems implementationERP systems implementation
ERP systems implementation
 
Erp introduction uwsb
Erp introduction   uwsbErp introduction   uwsb
Erp introduction uwsb
 
50 Ways To Drive ERP Systems To Success
50 Ways To Drive ERP Systems To Success50 Ways To Drive ERP Systems To Success
50 Ways To Drive ERP Systems To Success
 
Erp presentation
Erp presentationErp presentation
Erp presentation
 
Pre planning for large ERP/CRM initiative
Pre planning for large ERP/CRM  initiativePre planning for large ERP/CRM  initiative
Pre planning for large ERP/CRM initiative
 
Top 6 Factors for ERP Success
Top 6 Factors for ERP SuccessTop 6 Factors for ERP Success
Top 6 Factors for ERP Success
 
Organisational Change Management in ERP Projects
Organisational Change Management in ERP Projects Organisational Change Management in ERP Projects
Organisational Change Management in ERP Projects
 
How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...
How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...
How to Streamline Your Induction Programme to Fit Into Your Organisational Cu...
 
ERP - Implementation Road Map
ERP - Implementation Road Map ERP - Implementation Road Map
ERP - Implementation Road Map
 
My Erp Implementation Lifecycle
My Erp Implementation LifecycleMy Erp Implementation Lifecycle
My Erp Implementation Lifecycle
 
Chapter 7 Erp Implementation Lifecycle Alexis Leon
Chapter 7  Erp Implementation Lifecycle   Alexis LeonChapter 7  Erp Implementation Lifecycle   Alexis Leon
Chapter 7 Erp Implementation Lifecycle Alexis Leon
 
Critical Success Factors for ERP
Critical Success Factors for ERPCritical Success Factors for ERP
Critical Success Factors for ERP
 
ERP implementation
ERP implementationERP implementation
ERP implementation
 
ERP Project Management Primer
ERP Project Management PrimerERP Project Management Primer
ERP Project Management Primer
 
ERP - Implementation is The Challenge
ERP - Implementation is The ChallengeERP - Implementation is The Challenge
ERP - Implementation is The Challenge
 
ERP components
ERP componentsERP components
ERP components
 
Requirements analysis
Requirements analysisRequirements analysis
Requirements analysis
 
ERP And Enterprise Architecture
ERP And Enterprise ArchitectureERP And Enterprise Architecture
ERP And Enterprise Architecture
 

Ähnlich wie The Critical Success Factors For Erp Implementation An Organisational Fit Perspective

Evaluating E R P Implementation Luo Strong
Evaluating  E R P Implementation  Luo StrongEvaluating  E R P Implementation  Luo Strong
Evaluating E R P Implementation Luo StrongMark
 
Erp research agenda(imds)
Erp research agenda(imds)Erp research agenda(imds)
Erp research agenda(imds)012roger
 
Integration impediment during ERP Development
Integration impediment during ERP DevelopmentIntegration impediment during ERP Development
Integration impediment during ERP Developmentijtsrd
 
An Empirical Investigation Of Factors Affecting ERP Impact
An Empirical Investigation Of Factors Affecting ERP ImpactAn Empirical Investigation Of Factors Affecting ERP Impact
An Empirical Investigation Of Factors Affecting ERP ImpactLisa Muthukumar
 
Example erp analysis
Example erp analysisExample erp analysis
Example erp analysisIkram KASSOU
 
A Study and Analysis of Various Existing Implementation Framework Related to ...
A Study and Analysis of Various Existing Implementation Framework Related to ...A Study and Analysis of Various Existing Implementation Framework Related to ...
A Study and Analysis of Various Existing Implementation Framework Related to ...EECJOURNAL
 
IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...
IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...
IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...IRJET Journal
 
Interpretive Structural Modeling based analysis for Critical Failure Factors ...
Interpretive Structural Modeling based analysis for Critical Failure Factors ...Interpretive Structural Modeling based analysis for Critical Failure Factors ...
Interpretive Structural Modeling based analysis for Critical Failure Factors ...IRJET Journal
 
Digitalization of operations of micro industries using web-based ERP system.
Digitalization of operations of micro industries using web-based ERP system.Digitalization of operations of micro industries using web-based ERP system.
Digitalization of operations of micro industries using web-based ERP system.IRJET Journal
 
Pre assessment model for erp implementation
Pre assessment model for erp implementationPre assessment model for erp implementation
Pre assessment model for erp implementationIAEME Publication
 
Pre assessment model for erp implementation
Pre assessment model for erp implementationPre assessment model for erp implementation
Pre assessment model for erp implementationIAEME Publication
 
Migrating from a legacy enterprise resource planning (erp) system to a new er...
Migrating from a legacy enterprise resource planning (erp) system to a new er...Migrating from a legacy enterprise resource planning (erp) system to a new er...
Migrating from a legacy enterprise resource planning (erp) system to a new er...eSAT Publishing House
 
A Critical Success Factors Model For Enterprise Resource Planning Implementation
A Critical Success Factors Model For Enterprise Resource Planning ImplementationA Critical Success Factors Model For Enterprise Resource Planning Implementation
A Critical Success Factors Model For Enterprise Resource Planning ImplementationJoko Sriyanto
 
Implementing Erp Systems In Small And Midsize Manufacturing Firms
Implementing Erp Systems In Small And Midsize Manufacturing FirmsImplementing Erp Systems In Small And Midsize Manufacturing Firms
Implementing Erp Systems In Small And Midsize Manufacturing FirmsDonovan Mulder
 
Development of a Practical ERP Pre – Implementation Assessment Model for Orga...
Development of a Practical ERP Pre – Implementation Assessment Model for Orga...Development of a Practical ERP Pre – Implementation Assessment Model for Orga...
Development of a Practical ERP Pre – Implementation Assessment Model for Orga...IRJET Journal
 
CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...
CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...
CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...cscpconf
 
Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...
Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...
Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...csandit
 
Enterprise Applications Modernization, Issues and Opportunities
Enterprise Applications Modernization, Issues and OpportunitiesEnterprise Applications Modernization, Issues and Opportunities
Enterprise Applications Modernization, Issues and OpportunitiesIJARIIT
 
Information management example
Information management exampleInformation management example
Information management exampleIkram KASSOU
 

Ähnlich wie The Critical Success Factors For Erp Implementation An Organisational Fit Perspective (20)

Evaluating E R P Implementation Luo Strong
Evaluating  E R P Implementation  Luo StrongEvaluating  E R P Implementation  Luo Strong
Evaluating E R P Implementation Luo Strong
 
Erp research agenda(imds)
Erp research agenda(imds)Erp research agenda(imds)
Erp research agenda(imds)
 
ERP
ERPERP
ERP
 
Integration impediment during ERP Development
Integration impediment during ERP DevelopmentIntegration impediment during ERP Development
Integration impediment during ERP Development
 
An Empirical Investigation Of Factors Affecting ERP Impact
An Empirical Investigation Of Factors Affecting ERP ImpactAn Empirical Investigation Of Factors Affecting ERP Impact
An Empirical Investigation Of Factors Affecting ERP Impact
 
Example erp analysis
Example erp analysisExample erp analysis
Example erp analysis
 
A Study and Analysis of Various Existing Implementation Framework Related to ...
A Study and Analysis of Various Existing Implementation Framework Related to ...A Study and Analysis of Various Existing Implementation Framework Related to ...
A Study and Analysis of Various Existing Implementation Framework Related to ...
 
IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...
IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...
IDENTIFYING VIABILITY PARAMETERS OF ERP SOFTWARE FOR CONSTRUCTION COMPANIES I...
 
Interpretive Structural Modeling based analysis for Critical Failure Factors ...
Interpretive Structural Modeling based analysis for Critical Failure Factors ...Interpretive Structural Modeling based analysis for Critical Failure Factors ...
Interpretive Structural Modeling based analysis for Critical Failure Factors ...
 
Digitalization of operations of micro industries using web-based ERP system.
Digitalization of operations of micro industries using web-based ERP system.Digitalization of operations of micro industries using web-based ERP system.
Digitalization of operations of micro industries using web-based ERP system.
 
Pre assessment model for erp implementation
Pre assessment model for erp implementationPre assessment model for erp implementation
Pre assessment model for erp implementation
 
Pre assessment model for erp implementation
Pre assessment model for erp implementationPre assessment model for erp implementation
Pre assessment model for erp implementation
 
Migrating from a legacy enterprise resource planning (erp) system to a new er...
Migrating from a legacy enterprise resource planning (erp) system to a new er...Migrating from a legacy enterprise resource planning (erp) system to a new er...
Migrating from a legacy enterprise resource planning (erp) system to a new er...
 
A Critical Success Factors Model For Enterprise Resource Planning Implementation
A Critical Success Factors Model For Enterprise Resource Planning ImplementationA Critical Success Factors Model For Enterprise Resource Planning Implementation
A Critical Success Factors Model For Enterprise Resource Planning Implementation
 
Implementing Erp Systems In Small And Midsize Manufacturing Firms
Implementing Erp Systems In Small And Midsize Manufacturing FirmsImplementing Erp Systems In Small And Midsize Manufacturing Firms
Implementing Erp Systems In Small And Midsize Manufacturing Firms
 
Development of a Practical ERP Pre – Implementation Assessment Model for Orga...
Development of a Practical ERP Pre – Implementation Assessment Model for Orga...Development of a Practical ERP Pre – Implementation Assessment Model for Orga...
Development of a Practical ERP Pre – Implementation Assessment Model for Orga...
 
CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...
CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...
CRITICAL SUCCESS FACTORS (CSFS) OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM ...
 
Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...
Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...
Critical Success Factors (CSFS) of Enterprise Resource Planning (ERP) System ...
 
Enterprise Applications Modernization, Issues and Opportunities
Enterprise Applications Modernization, Issues and OpportunitiesEnterprise Applications Modernization, Issues and Opportunities
Enterprise Applications Modernization, Issues and Opportunities
 
Information management example
Information management exampleInformation management example
Information management example
 

Mehr von Donovan Mulder

Towards A Model Of Organisational Prerequistes For Enterprise Wide Sys Integ
Towards A Model Of Organisational Prerequistes For Enterprise Wide Sys IntegTowards A Model Of Organisational Prerequistes For Enterprise Wide Sys Integ
Towards A Model Of Organisational Prerequistes For Enterprise Wide Sys IntegDonovan Mulder
 
The Royalty Of Loyalty Crm, Quality And Retention
The Royalty Of Loyalty Crm, Quality And RetentionThe Royalty Of Loyalty Crm, Quality And Retention
The Royalty Of Loyalty Crm, Quality And RetentionDonovan Mulder
 
The Hidden Financial Costs Of Erp Software
The Hidden Financial Costs Of Erp SoftwareThe Hidden Financial Costs Of Erp Software
The Hidden Financial Costs Of Erp SoftwareDonovan Mulder
 
Realising Enhanced Value Due To Business Network Redesign Through Extended Er...
Realising Enhanced Value Due To Business Network Redesign Through Extended Er...Realising Enhanced Value Due To Business Network Redesign Through Extended Er...
Realising Enhanced Value Due To Business Network Redesign Through Extended Er...Donovan Mulder
 
Managing Dirty Data In Organization Using Erp
Managing Dirty Data In Organization Using ErpManaging Dirty Data In Organization Using Erp
Managing Dirty Data In Organization Using ErpDonovan Mulder
 
16. Erp Ii A Conceptual Framework For Next Generation Enterprise Systems
16. Erp Ii A Conceptual Framework For Next Generation Enterprise Systems16. Erp Ii A Conceptual Framework For Next Generation Enterprise Systems
16. Erp Ii A Conceptual Framework For Next Generation Enterprise SystemsDonovan Mulder
 
15. Assessing Risk In Erp Projects Identify And Prioritize The Factors
15. Assessing Risk In Erp Projects Identify And Prioritize The Factors15. Assessing Risk In Erp Projects Identify And Prioritize The Factors
15. Assessing Risk In Erp Projects Identify And Prioritize The FactorsDonovan Mulder
 
14. Business Process Approach Towards An Inter Organizational Enterprise System
14. Business Process Approach Towards An Inter Organizational Enterprise System14. Business Process Approach Towards An Inter Organizational Enterprise System
14. Business Process Approach Towards An Inter Organizational Enterprise SystemDonovan Mulder
 
13. Effectiveness Of Erp Systems
13. Effectiveness Of Erp Systems13. Effectiveness Of Erp Systems
13. Effectiveness Of Erp SystemsDonovan Mulder
 
10. What Managers Should Know About Erp Erpii
10. What Managers Should Know About Erp Erpii10. What Managers Should Know About Erp Erpii
10. What Managers Should Know About Erp ErpiiDonovan Mulder
 
12. Managing Risk Factors In Erp Implementation And Design
12. Managing Risk Factors In Erp Implementation And Design12. Managing Risk Factors In Erp Implementation And Design
12. Managing Risk Factors In Erp Implementation And DesignDonovan Mulder
 
11. Requirements Of An Erp Enterprise Erp Modeller
11. Requirements Of An Erp Enterprise Erp Modeller11. Requirements Of An Erp Enterprise Erp Modeller
11. Requirements Of An Erp Enterprise Erp ModellerDonovan Mulder
 
8. Erp Managing The Implementation Process
8. Erp   Managing The Implementation Process8. Erp   Managing The Implementation Process
8. Erp Managing The Implementation ProcessDonovan Mulder
 
9. Factors Affecting Erp System Adoption
9. Factors Affecting Erp System Adoption9. Factors Affecting Erp System Adoption
9. Factors Affecting Erp System AdoptionDonovan Mulder
 
7. A Conceptual Model For Erp
7. A Conceptual Model For Erp7. A Conceptual Model For Erp
7. A Conceptual Model For ErpDonovan Mulder
 
4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...
4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...
4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...Donovan Mulder
 
6. The Usefulness Of Erp Systems For Effective Management
6. The Usefulness Of Erp Systems For Effective Management6. The Usefulness Of Erp Systems For Effective Management
6. The Usefulness Of Erp Systems For Effective ManagementDonovan Mulder
 
5. Change Management Strategies For Successful Erp Implementation
5. Change Management Strategies For Successful Erp Implementation5. Change Management Strategies For Successful Erp Implementation
5. Change Management Strategies For Successful Erp ImplementationDonovan Mulder
 
2. Erp Innovation Implementation Model Incorporating Change Management
2. Erp Innovation Implementation Model Incorporating Change Management2. Erp Innovation Implementation Model Incorporating Change Management
2. Erp Innovation Implementation Model Incorporating Change ManagementDonovan Mulder
 

Mehr von Donovan Mulder (20)

Towards A Model Of Organisational Prerequistes For Enterprise Wide Sys Integ
Towards A Model Of Organisational Prerequistes For Enterprise Wide Sys IntegTowards A Model Of Organisational Prerequistes For Enterprise Wide Sys Integ
Towards A Model Of Organisational Prerequistes For Enterprise Wide Sys Integ
 
The Royalty Of Loyalty Crm, Quality And Retention
The Royalty Of Loyalty Crm, Quality And RetentionThe Royalty Of Loyalty Crm, Quality And Retention
The Royalty Of Loyalty Crm, Quality And Retention
 
The Hidden Financial Costs Of Erp Software
The Hidden Financial Costs Of Erp SoftwareThe Hidden Financial Costs Of Erp Software
The Hidden Financial Costs Of Erp Software
 
Realising Enhanced Value Due To Business Network Redesign Through Extended Er...
Realising Enhanced Value Due To Business Network Redesign Through Extended Er...Realising Enhanced Value Due To Business Network Redesign Through Extended Er...
Realising Enhanced Value Due To Business Network Redesign Through Extended Er...
 
Managing Dirty Data In Organization Using Erp
Managing Dirty Data In Organization Using ErpManaging Dirty Data In Organization Using Erp
Managing Dirty Data In Organization Using Erp
 
Higher Order Testing
Higher Order TestingHigher Order Testing
Higher Order Testing
 
16. Erp Ii A Conceptual Framework For Next Generation Enterprise Systems
16. Erp Ii A Conceptual Framework For Next Generation Enterprise Systems16. Erp Ii A Conceptual Framework For Next Generation Enterprise Systems
16. Erp Ii A Conceptual Framework For Next Generation Enterprise Systems
 
15. Assessing Risk In Erp Projects Identify And Prioritize The Factors
15. Assessing Risk In Erp Projects Identify And Prioritize The Factors15. Assessing Risk In Erp Projects Identify And Prioritize The Factors
15. Assessing Risk In Erp Projects Identify And Prioritize The Factors
 
14. Business Process Approach Towards An Inter Organizational Enterprise System
14. Business Process Approach Towards An Inter Organizational Enterprise System14. Business Process Approach Towards An Inter Organizational Enterprise System
14. Business Process Approach Towards An Inter Organizational Enterprise System
 
13. Effectiveness Of Erp Systems
13. Effectiveness Of Erp Systems13. Effectiveness Of Erp Systems
13. Effectiveness Of Erp Systems
 
10. What Managers Should Know About Erp Erpii
10. What Managers Should Know About Erp Erpii10. What Managers Should Know About Erp Erpii
10. What Managers Should Know About Erp Erpii
 
12. Managing Risk Factors In Erp Implementation And Design
12. Managing Risk Factors In Erp Implementation And Design12. Managing Risk Factors In Erp Implementation And Design
12. Managing Risk Factors In Erp Implementation And Design
 
11. Requirements Of An Erp Enterprise Erp Modeller
11. Requirements Of An Erp Enterprise Erp Modeller11. Requirements Of An Erp Enterprise Erp Modeller
11. Requirements Of An Erp Enterprise Erp Modeller
 
8. Erp Managing The Implementation Process
8. Erp   Managing The Implementation Process8. Erp   Managing The Implementation Process
8. Erp Managing The Implementation Process
 
9. Factors Affecting Erp System Adoption
9. Factors Affecting Erp System Adoption9. Factors Affecting Erp System Adoption
9. Factors Affecting Erp System Adoption
 
7. A Conceptual Model For Erp
7. A Conceptual Model For Erp7. A Conceptual Model For Erp
7. A Conceptual Model For Erp
 
4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...
4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...
4. Expectation And Reality In Erp Implementation Consultant And Solution Prov...
 
6. The Usefulness Of Erp Systems For Effective Management
6. The Usefulness Of Erp Systems For Effective Management6. The Usefulness Of Erp Systems For Effective Management
6. The Usefulness Of Erp Systems For Effective Management
 
5. Change Management Strategies For Successful Erp Implementation
5. Change Management Strategies For Successful Erp Implementation5. Change Management Strategies For Successful Erp Implementation
5. Change Management Strategies For Successful Erp Implementation
 
2. Erp Innovation Implementation Model Incorporating Change Management
2. Erp Innovation Implementation Model Incorporating Change Management2. Erp Innovation Implementation Model Incorporating Change Management
2. Erp Innovation Implementation Model Incorporating Change Management
 

Kürzlich hochgeladen

Artificial Intelligence: Facts and Myths
Artificial Intelligence: Facts and MythsArtificial Intelligence: Facts and Myths
Artificial Intelligence: Facts and MythsJoaquim Jorge
 
Handwritten Text Recognition for manuscripts and early printed texts
Handwritten Text Recognition for manuscripts and early printed textsHandwritten Text Recognition for manuscripts and early printed texts
Handwritten Text Recognition for manuscripts and early printed textsMaria Levchenko
 
Scaling API-first – The story of a global engineering organization
Scaling API-first – The story of a global engineering organizationScaling API-first – The story of a global engineering organization
Scaling API-first – The story of a global engineering organizationRadu Cotescu
 
08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking Men08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking MenDelhi Call girls
 
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...
Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...Neo4j
 
Presentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreterPresentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreternaman860154
 
[2024]Digital Global Overview Report 2024 Meltwater.pdf
[2024]Digital Global Overview Report 2024 Meltwater.pdf[2024]Digital Global Overview Report 2024 Meltwater.pdf
[2024]Digital Global Overview Report 2024 Meltwater.pdfhans926745
 
Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024
Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024
Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024The Digital Insurer
 
A Call to Action for Generative AI in 2024
A Call to Action for Generative AI in 2024A Call to Action for Generative AI in 2024
A Call to Action for Generative AI in 2024Results
 
IAC 2024 - IA Fast Track to Search Focused AI Solutions
IAC 2024 - IA Fast Track to Search Focused AI SolutionsIAC 2024 - IA Fast Track to Search Focused AI Solutions
IAC 2024 - IA Fast Track to Search Focused AI SolutionsEnterprise Knowledge
 
Histor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slideHistor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slidevu2urc
 
TrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law DevelopmentsTrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law DevelopmentsTrustArc
 
Slack Application Development 101 Slides
Slack Application Development 101 SlidesSlack Application Development 101 Slides
Slack Application Development 101 Slidespraypatel2
 
The 7 Things I Know About Cyber Security After 25 Years | April 2024
The 7 Things I Know About Cyber Security After 25 Years | April 2024The 7 Things I Know About Cyber Security After 25 Years | April 2024
The 7 Things I Know About Cyber Security After 25 Years | April 2024Rafal Los
 
Tata AIG General Insurance Company - Insurer Innovation Award 2024
Tata AIG General Insurance Company - Insurer Innovation Award 2024Tata AIG General Insurance Company - Insurer Innovation Award 2024
Tata AIG General Insurance Company - Insurer Innovation Award 2024The Digital Insurer
 
How to Troubleshoot Apps for the Modern Connected Worker
How to Troubleshoot Apps for the Modern Connected WorkerHow to Troubleshoot Apps for the Modern Connected Worker
How to Troubleshoot Apps for the Modern Connected WorkerThousandEyes
 
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...apidays
 
The Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptxThe Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptxMalak Abu Hammad
 
Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...
Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...
Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...Miguel Araújo
 
A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?Igalia
 

Kürzlich hochgeladen (20)

Artificial Intelligence: Facts and Myths
Artificial Intelligence: Facts and MythsArtificial Intelligence: Facts and Myths
Artificial Intelligence: Facts and Myths
 
Handwritten Text Recognition for manuscripts and early printed texts
Handwritten Text Recognition for manuscripts and early printed textsHandwritten Text Recognition for manuscripts and early printed texts
Handwritten Text Recognition for manuscripts and early printed texts
 
Scaling API-first – The story of a global engineering organization
Scaling API-first – The story of a global engineering organizationScaling API-first – The story of a global engineering organization
Scaling API-first – The story of a global engineering organization
 
08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking Men08448380779 Call Girls In Greater Kailash - I Women Seeking Men
08448380779 Call Girls In Greater Kailash - I Women Seeking Men
 
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...
Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...Workshop - Best of Both Worlds_ Combine  KG and Vector search for  enhanced R...
Workshop - Best of Both Worlds_ Combine KG and Vector search for enhanced R...
 
Presentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreterPresentation on how to chat with PDF using ChatGPT code interpreter
Presentation on how to chat with PDF using ChatGPT code interpreter
 
[2024]Digital Global Overview Report 2024 Meltwater.pdf
[2024]Digital Global Overview Report 2024 Meltwater.pdf[2024]Digital Global Overview Report 2024 Meltwater.pdf
[2024]Digital Global Overview Report 2024 Meltwater.pdf
 
Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024
Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024
Bajaj Allianz Life Insurance Company - Insurer Innovation Award 2024
 
A Call to Action for Generative AI in 2024
A Call to Action for Generative AI in 2024A Call to Action for Generative AI in 2024
A Call to Action for Generative AI in 2024
 
IAC 2024 - IA Fast Track to Search Focused AI Solutions
IAC 2024 - IA Fast Track to Search Focused AI SolutionsIAC 2024 - IA Fast Track to Search Focused AI Solutions
IAC 2024 - IA Fast Track to Search Focused AI Solutions
 
Histor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slideHistor y of HAM Radio presentation slide
Histor y of HAM Radio presentation slide
 
TrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law DevelopmentsTrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
TrustArc Webinar - Stay Ahead of US State Data Privacy Law Developments
 
Slack Application Development 101 Slides
Slack Application Development 101 SlidesSlack Application Development 101 Slides
Slack Application Development 101 Slides
 
The 7 Things I Know About Cyber Security After 25 Years | April 2024
The 7 Things I Know About Cyber Security After 25 Years | April 2024The 7 Things I Know About Cyber Security After 25 Years | April 2024
The 7 Things I Know About Cyber Security After 25 Years | April 2024
 
Tata AIG General Insurance Company - Insurer Innovation Award 2024
Tata AIG General Insurance Company - Insurer Innovation Award 2024Tata AIG General Insurance Company - Insurer Innovation Award 2024
Tata AIG General Insurance Company - Insurer Innovation Award 2024
 
How to Troubleshoot Apps for the Modern Connected Worker
How to Troubleshoot Apps for the Modern Connected WorkerHow to Troubleshoot Apps for the Modern Connected Worker
How to Troubleshoot Apps for the Modern Connected Worker
 
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
 
The Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptxThe Codex of Business Writing Software for Real-World Solutions 2.pptx
The Codex of Business Writing Software for Real-World Solutions 2.pptx
 
Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...
Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...
Mastering MySQL Database Architecture: Deep Dive into MySQL Shell and MySQL R...
 
A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?A Year of the Servo Reboot: Where Are We Now?
A Year of the Servo Reboot: Where Are We Now?
 

The Critical Success Factors For Erp Implementation An Organisational Fit Perspective

  • 1. Information & Management 40 (2002) 25±40 The critical success factors for ERP implementation: an organizational ®t perspective Kyung-Kwon Hong, Young-Gul Kim* Graduate School of Management, Korea Advanced Institute of Science and Technology (KAIST), 207-43 Cheongryangri-Dong, Dongdaemun-Gu, Seoul 130-012, South Korea Received 20 May 2001; accepted 1 September 2001 Abstract Since early 1990s, many ®rms around the world have shifted their information technology (IT) strategy from developing information systems in-house to purchasing application software such as enterprise resource planning (ERP) systems. IT managers responsible for managing their organization's ERP implementation view their ERP systems as their organizations' most strategic computing platform. However, despite such strategic importance, ERP projects report an unusually high failure rate, sometimes jeopardizing the core operations of the implementing organization. This study explores the root of such high failure rate from an ``organizational ®t of ERP'' perspective. Based on the relevant literature, we de®ne the concept of organizational ®t of ERP and examine its impact on ERP implementation, together with ERP implementation contingencies. The results from our ®eld survey of 34 organizations show that ERP implementation success signi®cantly depends on the organizational ®t of ERP and certain implementation contingencies. # 2002 Elsevier Science B.V. All rights reserved. Keywords: ERP implementation; Organizational ®t; ERP adaptation; Process adaptation; Organizational resistance 1. Introduction quality [28]. Although application packages have these bene®ts over custom design of applications, packaged Under the pressure to proactively deal with the software has problems of their own: uncertainty in ac- radically changing external environment, many ®rms quisition [14] and hidden costs in implementation [29]. have changed their information system (IS) strategies In a survey of the IT managers responsible for by adopting application software packages rather than managing their organization's ERP projects, two- in-house development [12,25]. An application pack- thirds of the respondents viewed their ERP systems age such as enterprise resource planning (ERP) system as their organizations' most strategic computing plat- is one solution to the information technology (IT) form [47]. Despite such perceived importance, it was industry's chronic problems of custom system design: reported that three quarters of the ERP projects were reduced cost, rapid implementation, and high system judged to be unsuccessful by the ERP implementing ®rms [13]. What makes ERP implementation so * unsuccessful? Swan et al. [46] argued that the root Corresponding author. Tel.: ‡82-2-958-3614; fax: ‡82-2-958-3604. of such high failure rate is the difference in interests E-mail addresses: kyungkh@kgsm.kaist.ac.kr (K.-K. Hong), between customer organizations who desire unique domino2@unitel.co.kr (Y.-G. Kim). business solutions and ERP vendors who prefer a 0378-7206/02/$ ± see front matter # 2002 Elsevier Science B.V. All rights reserved. PII: S 0 3 7 8 - 7 2 0 6 ( 0 1 ) 0 0 1 3 4 - 3
  • 2. 26 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 generic solution applicable to a broad market. Such of technology, task, people, structure, and culture [7]. con¯icting interests led us to explore an organizational Thus organizational resistance to change is identi- ®t perspective of ERP implementation. ®ed as a critical success factor for ERP implementa- An important criterion used in selecting an ERP tion [26,34]. In this study, we de®ne the concept of system is the ERP ®t with the current business organizational ®t of ERP and empirically examine its processes [9]. Although the ®t between ERP and impact on ERP implementation success along with the the organizational context is believed to be critical moderating roles of ERP implementation contingency for successful ERP implementation, few examined the variables such as ERP adaptation, process adaptation, organizational ®t issues of ERP empirically. Soh et al. and organizational resistance. [44] suggested that the organizational ®t of ERP This paper is organized in ®ve sections. First, might be worse in Asia, because the reference process ERP related literatures are reviewed. The next section model underlying most ERP systems is in¯uenced by introduces the research model and hypotheses. European or US industry/business practices, which are Research methodology is then described, followed different from Asian business practices. by the presentation of the results. The paper concludes The relative invisibility of the ERP implementation with the discussion of the research ®ndings and impli- process is also identi®ed as a major cause of ERP cations for future research and practice. implementation failures [13]. Markus and Robey [33] attributed such invisibility to the unpredictably com- plex social interaction of IT and organization. The 2. Theoretical perspectives critical challenge of ERP implementation is believed to be the mutual adaptation between the IT and user 2.1. Organizational ®t of ERP environment [49]. Such mutual adaptation process brings the organization's existing operating processes Because of the multiplicity of the organizational and the packaged software's embedded functionality dimension, researchers studying IS contingencies into alignment through a combination of software have typically focused on the ®t between speci®c con®guration and organizational change [49]. But organizational dimension and IS [21,23]. In a review there are con¯icting views on which type of adapta- of the IS contingency research, Weil and Olson tion, package adaptation or organizational adaptation, [51] found that over seventy percent of the studies is more desirable in the different contexts. followed a model assuming that the better the ®t ERP diffusion agencies including ERP vendors and among the contingency variables, the better the per- consulting ®rms recommend strongly that ERP pro- formance. They categorized the contingency variables jects embody the universally applicable `best practice' of interest to IS researchers into strategy, structure, and should be implemented without extensive adapta- size, environment, technology, task, and individual tion of the packaged software [1]. In contrast, some characteristics. academics maintain that the notion of `best practice' is Attributing the inability to realize value from IT illusory and potentially disruptive because ERP does investments to lack of alignment between the business not provide models for every process of every industry and IT strategies, Henderson and Venkatraman [19] and most ®rms usually recon®gure or add new func- developed the `strategic alignment model', emphasiz- tionality to ERP systems for optimal use within their ing the multivariate ®t among business strategy, IT unique context [46]. strategy, organizational infrastructure and processes, Besides, since ERP philosophy is process-based, and IT infrastructure and processes. With an explora- rather than function-based, ERP necessitates disrup- tory survey of small business, Marius and Ashok [30] tive organizational changes [17,49,50]. Successful hypothesized that packaged software implementation ERP implementation must be managed as a program success is positively associated with the degree of of wide-ranging organizational change initiatives vendor ®t with user organization and the degree of rather than as a software installation effort [18]. Such software ®t with user organization, respectively. IT-driven initiatives require change of the organiza- In ERP research, Gattiker and Goodhue [10] sug- tion's socio-technical system, which is intertwined gested that while inter-dependences among sub-units
  • 3. K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 27 give rise to better ®t of ERP with global operation to the package [7]. ERP implementation also involves needs, differentiation among sub-units develop poor business process change (BPC) and ERP adaptation to ®t of ERP with local operation needs. Soh et al. [44] align the software with the business processes [20]. also suggest that ERP mis®t stems from the ®rm-, or Which direction is desirable depends on one's point country-speci®c requirements that do not match the of view and various implementation contingencies capabilities of ERP. Swan et al. [46] argue that orga- [27,40]. nizational mis®ts of ERP exist due to the con¯icting Typically, ERP vendors recommend process adap- interests of user organization and ERP vendors. Thus, tation and discourage ERP adaptation for fear of the concept of organizational ®t seems to be the core potential performance and integrity degradation as research construct to explain the implementation suc- well as maintenance and future upgrade dif®culties. cess in diverse IT implementation contexts. In the ERP On the other hand, the user departments of the cus- implementation context, however, the impact of orga- tomer organization would prefer ERP adaptation to nizational ®t of ERP was not empirically tested. In this process adaptation which will necessitate the signi®- paper, based on Markus and Robey [32] de®nition, we cant changes in their work environment. de®ne organizational ®t of ERP as the congruence between the original artifact of ERP and its organiza- tional context and will examine its impact on ERP 3. Research model and hypotheses implementation success empirically. This study examines the relationship between the 2.2. ERP implementation contingencies organizational ®t of ERP and ERP implementation success. The effects of three implementation contin- Implementation of a technical innovation is viewed gencies on this relationship are explored as moderat- as a dynamic process of mutual adaptation, that is: ing variables. The research model is illustrated in ``re-invention of the technology and simultaneous Fig. 1 and discussed below. adaptation of the organization'' [27]. Adaptation may address the user' procedures, assumption, knowl- 3.1. ERP implementation success edge, or relationships as well as physical aspects of the technology [48]. In the adaptation stage of IT imple- While some ®rms announced ERP implementation mentation model, an IT application is developed, success, many others reported negative results of ERP installed, and maintained; organizational procedures implementation [5,6]. An ERP implementation failure are revised and developed; organization members are may be fatal to a ®rm: either wasting enormous sums trained both in the new procedures and in the new IT of money or destroying the competitive advantage of application [4]. The adaptation concept is applicable the ®rm [5,6]. To manage ERP implementation suc- not only to custom software but also to off-the-shelf cessfully, a high level ERP implementation success packages [34]. Most studies on the implementation of measure is required [39]. Markus and Tanis [34] application software packages emphasize the critical argued that a minimum set of success metrics includes nature of the adaptation process [10,14,28]. project metrics, early operational metrics, and long- From the duality perspective of technology, ERP is term business results. In this study, we de®ne ERP a ``technological artifact bundling material and sym- implementation success from the ERP implementation bolic properties in some socially recognizable form project perspective. (e.g. hardware, software, practice)'' [36]. The adapta- While there is a wide range of con®gurations avail- tion of ERP and organizational processes is an iterative able in any major ERP product, ERP is frequently process entailing on-going social action that is clearly unable to model some of the adopting ®rm's existing constrained by both the structural properties of the procedures [10]. A critical challenge in ERP imple- organization and the built-in properties of the ERP [50]. mentation has to do with ®rst identifying gaps between There are two alternative approaches to the imple- the ERP generic functionality and the speci®c organi- mentation of a packaged software: package adaptation zational requirement, and then deciding how these to organizational needs and organizational adaptation gaps will be handled [1,44,49,50]. For the successful
  • 4. 28 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 Fig. 1. Research model. implementation of ERP, organizational ®t of ERP adaptation, identifying eight ERP adaptation types. is important, because organizational mis®t of ERP Glass [11] categorized ERP adaptation types into requires massive changes in the adopting organization's customization, extension, and modi®cation. ERP cus- business process, ERP systems, or both [37]. Besides, tomization (also called con®guration) is to choose while there must be the minimum organizational ®t among the reference processes and set the parameters level which ERP implementation is destined to fail in ERP without changing the ERP source code. ERP regardless of whatever adaptations, none of the ERP extensions utilize the ``user exit'' function for local vendors acknowledge the fact or attempts to assess code, a specialized programming language and third- the implementation feasibility based on the organiza- party bolt-on software to ®ll the gap between ERP tional ®t of ERP. Laughlin [26] regarded matching functionality and organizational requirements. In con- functionality with ERP as one of the major factors trast, ERP modi®cation changes the ERP source code. for ERP implementation. This leads to our ®rst In this paper, we restrict ERP adaptation to extension hypothesis. and modi®cation because customization does not change the basic ERP identity. Hypothesis 1. Organizational fit of ERP is positively In base relation, we hypothesize that organizational related to ERP implementation success. ®t of ERP is positively related to ERP implementation success. In the case of low ERP adaptation, we expect 3.2. ERP adaptation that organizational ®t of ERP will be more strongly associated with ERP implementation success, because Technological adaptation is referred to as the the low level of ERP adaptation would not affect the adjustments and changes following the installation initial organizational ®t of ERP value signi®cantly. of a new technology in a given setting [48]. While But in the case of high ERP adaptation, we expect that ERP vendors presume that ERP embodies the uni- organizational ®t of ERP will not be as strongly versally applicable best practices, most organizations associated with ERP implementation success as in adapt ERP to their unique organizational contexts low ERP adaptation because the high level of ERP [46]. ERP adaptation increases the feature-function adaptation would have reduced the gap between ERP ®t between ERP and the adopting organization, which and organization, mitigating the effect of organiza- is likely to result in lower resistance, reduced training tional ®t of ERP. Thus, when the level of ERP adapta- needs, less organizational adaptation [2]. It is also tion is low, we expect a stronger the base relationship argued that re-invention or adaptation of an innovation and expect the opposite when the level of ERP adapta- might reduce mistakes resulting from the implemen- tion is high. tation uncertainty [40]. Brehm et al. [3] contend that ERP implementation Hypothesis 2. There is an interaction effect of the success depends on the type and extent of ERP level of ERP adaptation on the relationship between
  • 5. K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 29 organizational fit of ERP and ERP implementation implementation. In a political perspective, Markus success. [31] explains resistance to IT implementation in terms of power distribution mis®t of IS. She noted that the 3.3. Process adaptation political perspective appears to be primarily applic- able for cross-functional IS. In an MRP study, Cooper ERP implementation may cause radical organiza- and Zmud [4] suggested that organizational resistance tional changes that need to be carefully managed and lack of MRP understanding had more explanatory [2,17,18]. Unlike the design and development of a power of inhibiting MRP infusion within its work custom software, implementation of a packaged soft- environment than the task ®t of MRP. ware requires that its implementing organization adapt Since the organization and process changes induced some of its organizational processes to ®t the basic by ERP implementation force involuntary changes business practices that are embedded in such applica- and frequently lead to different power and resource tion packages [8,28]. When ERP implementation allocations, ERP implementation usually triggers a involves adapting the existing business processes to diverse group of overt and covert opponents within the the standard business process of ERP, other organiza- organization. Based on this realization, we expect that tional components (e.g. organizational structure, mea- organizational resistance will moderate the relation- surement compensation, organizational culture, ship between organizational ®t of ERP and ERP training, etc.) and their interactions must also be implementation success. When the level of organiza- changed together [17]. tional resistance is low, we expect the stronger base The adaptation of organizational process in BPC relationship and expect the opposite when the level of literature emphasizes the need to take account of the ERP adaptation is high. management of organizational change. Grover et al. [15] empirically found that change management is Hypothesis 4. There is an interaction effect of the the most critical source of BPC implementation. Since organizational resistance on the relationship between process adaptation induces the same effect on the organizational fit of ERP and ERP implementation relationship between organizational ®t of ERP and success. implementation success as ERP adaptation, based on the same reasoning for hypothesis two, when the level of process adaptation is low, we expect a stronger 4. Research method relationship and expect the opposite when the level of process adaptation is high. 4.1. Sample and data collection Hypothesis 3. There is an interaction effect of the The target of this study was the organization that level of process adaptation on the relationship between has implemented ERP. We used the key informant organizational fit of ERP and ERP implementation method for collecting information on a social setting success. by interviewing (or surveying) a selected number of participants. Fifty ®rms were identi®ed from the 3.4. Organizational resistance lists provided by the ERP vendors. We contacted the ERP project managers in charge of ERP implementa- ERP implementation will affect most of the com- tion in each ®rm. About 350 survey questionnaires pany's business functions and in¯uence users directly. were sent to the ERP project manager of each ®rm, Resistance to a change stems from change in the who forwarded our questionnaires to his/her project job content and uncertainty of the new system [22]. team members in charge of individual process. In total, Any ERP project team will face a certain level of one hundred and six questionnaires were collected organizational resistance due to its disruptive change from 34 ®rms. One case was dropped due to incom- [26]. Previous IS research, based on different theore- plete data entry. Two missing values, one item for tical perspectives, has made a substantial progress implementation success and another item for ERP in understanding the resistance introduced by IS adaptation, were identi®ed and replaced with the
  • 6. 30 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 average value of the rest of the items. On the average, 4.4. Organizational ®t of ERP three or four persons per ®rm participated in our survey (Appendix A). ERP technological artifacts are basically character- ized as integration of data and process within and 4.2. Measurement development across functions of an organization [6,24,34]. In a traditional software application perspective, Soh et al. We ®rst conducted a series of in-depth interviews [44] examined organizational ®t of ERP in terms of with various ERP project managers and members to data, process, and output. Considering that user inter- examine the external validity of our research model. face plays an increasingly critical role for the mission- We then developed the questionnaire items based on critical enterprise systems such as ERP, we operatio- the literature and the ®eld visits, as well as the nalized the organizational ®t of ERP construct in terms comments gathered from the interviews. The survey of data, process, and user interface ®t of ERP before or questionnaire was revised through four rounds of at the initial implementation period. line-by-line discussion with the help of business process experts with signi®cant ERP project experi- 4.5. Implementation contingencies ence. To pretest the reliability and validity of the instruments, we conducted a pilot study, using the 32 We identi®ed the type of ERP adaptation based on questionnaire responses from six ®rms. Some items the industry expert interviews and developed the ERP were revised on the basis of the pilot result. The adaptation measurement. We con®rmed that the ERP operational de®nitions of the variables used are adaptation instrument was applicable to different ERP summarized in Table 1. systems through a series of the project team's reviews and pretests. Process adaptation and organizational 4.3. ERP implementation success resistance measurements were developed and evalu- ated based on the relevant literature and validated ERP implementation success, the dependent vari- through a series of in-depth discussion with different able in this study, is different from the traditional IS ERP project teams. success measure in that it is not evaluated by the general users but by the project team members. Imple- 4.6. Characteristics of respondent ®rms mentation project success is frequently de®ned in terms of the achievement of some predetermined goals, Respondent ®rms consist of 25 manufacturing ®rms which normally include multiple parameters such as and nine non-manufacturing ®rms, including service time, cost, function [34]. In this study, we measured and distribution ®rms. Firms were using four ERP ERP implementation success in terms of the perceived products: SAP R/3 (14), UniERP (13), Oracle ERP (6), deviation from the expected project goals such as Bann BPCS (1). Table 2 shows pro®les of the respon- cost overrun, schedule overrun, system performance dent ®rms in terms of annual revenue and number of de®cit, and failure to achieve the expected bene®ts. total employees. Table 1 Operational de®nitions of variables Variable Operational definition a Implementation success The degree of deviation from project goal in terms of expected cost, time, system performance and benefits Organizational fit of ERP The degree of alignment between ERP model and organization needs in terms of data, process and user interface ERP adaptation The extent of efforts and time spending in ERP alteration to align with organizational process needs except for ERP customization Process adaptation The extent of efforts and time spending in process change to align with ERP Organizational resistance The strength of negative organizational response to ERP implementation a Reverse scale.
  • 7. K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 31 Table 2 4.10. Construct validity Pro®le of respondent ®rms Range Frequency Percentage Construct validity is established by relating a mea- suring instrument to a general theoretical framework Annual revenue More than $1 billion and above 6 17.6 in order to determine whether the instrument is tied to $100 million to below $1 billion 14 41.2 the concepts and theoretical assumption they are $10 million to below $100 million 11 32.4 employing. In order to obtain evidence of the construct Less than $10 million 3 8.8 validity of an instrument, a researcher must make use Total 34 100 of both a convergent validity and a discriminant validity [35]. Number of employees For convergent validity, we evaluated the item-to- 10,000 and above 2 5.9 1000 to below 10,000 8 23.5 total correlation, based on the correlation of each item 100 to below 1000 21 61.8 to the sum of the remaining items. This approach Less than 100 3 8.8 assumes that the total score is valid and thus the extent Total 34 100 to which the item correlates with the total score is indicative of convergent validity for the item. Table 3 shows the correlations for each of research variables 4.7. Instrument validation whose item-to-total correlation score was greater than 0.4. Discriminant validity was checked by factor Instrument validation is a prior and primary process analysis. In Table 3, discriminant validity was con- in empirical research. We followed Straub's [45] ®rmed when items for each variables loaded onto guidelines to validate the instruments used in our single factors with loadings of greater than 0.5 [16]. research. Since each variable was measured by the multi-item constructs, we conducted factor analysis to check the 4.8. Content validity unidimensionality of the items. Table 4 provides the factor pattern matrix that shows the loadings of each Content validity means how representative and item on independent and dependent variables. Five comprehensive the items were in creating the scale. factors emerged with no-cross construct loadings The content validity of the instruments was estab- above 0.5, indicating good discriminant validity. lished through the adoption of the relevant construct in The instrument also demonstrated convergent validity the literature, a series of reviews with the help of with factor loadings exceeding 0.5 for each construct. business process experts with deep ERP knowledge, These results con®rm that each of these construct is and a pilot pretest. unidimensional and factorially distinct and that all items used to operationalize a particular construct is 4.9. Reliability loaded onto a single factor. Reliability is the accuracy or precision of a measur- ing instrument, that is the extent to which the respon- 5. Results dent can answer the same or approximately the same questions the same way each time [45]. The internal The correlation matrix between variables is pre- consistency reliability was assessed by calculating sented in Table 5. A common concern of any regression Cronbach's alpha values. The reliability results of analysis is the multi-collinearity that may exist among the constructs are summarized in the ®fth column the independent variables [16]. In our model, multi- of Table 3. The internal consistency (Cronbach's alph) collinearity is not a problem since we have only one of the construct ranged from 0.75 (for implementation independent variable. Correlations among the pro- success) to 0.93 (for process adaptation). Given the posed moderating variables do exist but would not exploratory nature of the study, the result seems pose a serious problem since their values are less than acceptable. 0.5 [16] and each of them will be analyzed separately.
  • 8. 32 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 Table 3 Summary of reliability and validity of the measurement Measure Items Mean S.D. Reliability Convergent validity Discriminant validity (Cronbach's alpha) (correlation of item with total score-item) (factor loading on single factors) Implementation success (R)a 4 4.06 1.60 0.75 0.451, 0.613, 0.590, 0.551 0.655, 0.799, 0.802, 0.773 Organizational fit of ERP 11 0.83 0.798, 0.806, 0.759, 0.746 0.890, 0.896, 0.865, 0.857 Process fit 4 3.49 1.32 0.90 0.620, 0.714, 0.595, 0.666 0.790, 0.854, 0.768, 0.823 Data fit 4 3.95 1.26 0.82 0.515, 0.637, 0.548 0.600, 0.737, 0.637 User fit 3 3.71 1.33 0.74 0.741, 0.826, 0.814, 0.767, 0.624, 0.603 0.822, 0.890, 0.881, 0.836, 0.724, 0.702 ERP adaptation 6 4.57 1.46 0.89 0.845, 0.842, 0.825, 0.830, 0.775 0.904, 0.903, 0.890, 0.894, 0.854 Process adaptation 5 4.63 1.36 0.93 0.682, 0.804, 0.797, 0.748, 0.603 0.798, 0.892, 0.889, 0.844, 0.726 Organizational resistance 5 4.33 1.50 0.89 a Reverse score.
  • 9. K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 33 Table 4 The result of factor analysisa Scale items Factors 1 2 3 4 5 ORGFIT1 0.745 À0.255 À0.003 0.070 0.187 ORGFIT2 0.752 À0.347 0.012 0.010 0.187 ORGFIT3 0.744 À0.250 0.018 À0.048 0.166 ORGFIT4 0.756 À0.217 À0.015 0.027 0.083 ORGFIT5 0.714 0.019 À0.203 0.059 0.090 ORGFIT6 0.754 0.063 À0.037 À0.156 0.079 ORGFIT7 0.629 À0.278 À0.055 À0.091 0.137 ORGFIT8 0.681 À0.196 À0.061 0.056 0.265 ORGFIT9 0.546 À0.228 0.048 À0.258 À0.294 ORGFIT10 0.585 À0.039 0.050 À0.446 À0.175 ORGFIT11 0.735 0.052 À0.060 À0.248 0.061 ERPADPT2 À0.189 0.669 0.270 0.066 À0.160 ERPADPT3 À0.172 0.806 0.220 À0.066 À0.177 ERPADPT4 À0.205 0.788 0.256 0.058 À0.237 ERPADPT5 À0.135 0.846 0.114 0.106 À0.169 ERPADPT6 À0.186 0.737 0.071 0.057 À0.087 ERPADPT7 À0.162 0.643 0.361 0.118 0.100 PROCADPT1 À0.113 0.260 0.838 0.128 À0.104 PROCADPT2 À0.081 0.165 0.848 0.203 À0.117 PROCADPT3 0.126 0.180 0.871 0.145 À0.069 PROCADPT4 À0.081 0.139 0.847 0.212 À0.027 PROCADPT5 À0.063 0.262 0.780 0.189 0.038 ORGRST1 0.079 0.083 0.217 0.745 À0.199 ORGRST2 À0.062 0.015 0.314 0.786 À0.191 ORGRST3 À0.168 À0.096 0.321 0.792 À0.035 ORGRST4 À0.192 À0.015 0.230 0.800 À0.068 ORGRST5 0.011 0.230 À0.030 0.778 0.023 PJTSUC1 0.115 À0.059 À0.124 À0.220 0.635 PJTSUC2 0.089 À0.235 À0.199 0.040 0.781 PJTSUC3 0.346 À0.357 0.049 À0.077 0.648 PJTSUC4 0.323 À0.216 0.184 À0.335 0.555 Eigenvalues 5.91 4.37 4.29 3.78 2.34 Percentage of variance explained 19.1 14.1 13.9 12.2 7.5 Cumulative percentage 19.1 33.2 47 59 66.7 a Extraction method: principal component analysis; rotation method: varimax with Kaiser normalization. The results from the normal probability plot and success was signi®cant (r ˆ 0:51, P < 0:002), support- Kolmogorov±Smirnov test indicated no violation ing the Hypothesis 1. In simple regression of organiza- of normality for the regression model (statistic ˆ tional ®t of ERP on implementation success, the value 0:54±0.72, P > 0:200). of R2 and adjusted R2 was 0.26 and 0.24, respectively. It indicates that 24% of the implementation success 5.1. Testing the base relationship variance is explained by the organizational ®t of ERP. Correlation analysis was used for testing the base 5.2. Testing the contingency relationships relationship between organizational ®t of ERP and ERP implementation success. The base relation between For analysis of the moderator variables, we will use organizational ®t of ERP and ERP implementation the typology of moderator variables and the method
  • 10. 34 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 Table 5 criterion variables, implying a signi®cant interaction Correlations matrix between variables between the moderator and predictor variables. (1) (2) (3) (4) Cell 3 is referred to as quasi-moderator, which not only interacts with the predictor variable but is a Implementation success (1) Organizational fit of ERP (2) 0.51** predictor variable itself. Cell 4 is referred to as pure ERP adaptation (3) À0.49** À0.58** moderator, which interacts with predictor variables Process adaptation (4) À0.22 À0.18 0.36* while having a negligible correlation with the criterion Organizational resistance (5) À0.46** À0.39* 0.42* 0.42* itself. * P < 0:05. To test the three contingency variables, we followed ** P < 0:01. the four-step procedure for identifying moderator variables [42] (described in Appendix B). The test for identifying moderator variables developed by results of the three moderating effects are summari- Sharma et al. [42]. Fig. 2 depicts this typology, which zed in Table 6. While the ®rst line in each pair of has two dimensions: whether the target variable is regression models of the table shows the results related to a criterion (dependent) variable and whether of the regression run without interaction, the results the target variable interacts with the predictor (inde- of the regression run with the interaction term are in pendent) variable. the second line. The target variable in cell 1 is referred to as an In the ®rst pair of regression models, it is found that intervening, exogenous, antecedent, suppressor, or the interaction term was signi®cant at the level of 0.01. predictor variable depending on its other character- In the correlation matrix of Table 5, ERP adaptation istics. Variables in cells 2±4 are referred to as mod- was negatively correlated with both organizational ®t erator variables. The target variable in cell 2 is referred of ERP (À0.58) and ERP implementation success to as homologizer, which in¯uences the strength of the (À0.49) at the level of signi®cance 0.01. These two relationship between the predictor and criterion vari- facts suggest that ERP adaptation is a quasi-moderator ables across homogeneous subgroups. In contrast, of the base relationship between organizational ®t moderator variables in cells 3 and 4 in¯uence the of ERP and implementation success, supporting the form of the relationship between the predictor and Hypothesis 2. Fig. 2. Typology of moderator variables. Table 6 The test results of the moderated regression effects Regression modela b (interaction) p (interaction) R2 p (model) DR2 ORGFIT 0.26 0.002 ORGFIT ‡ ERPADPT ‡ interaction À0.58 0.006 0.47 0.000 0.21 ORGFIT 0.26 0.002 ORGFIT ‡ PROADPT ‡ interaction À0.50 0.005 0.44 0.000 0.18 ORGFIT 0.26 0.002 ORGFIT ‡ ORGRST ‡ interaction À0.25 0.243 0.37 0.003 0.11 a ORGFIT, organizational ®t of ERP; ERPADPT, ERP adaptation; PROADPT, process adaptation; ORGRST, organizational resistance.
  • 11. K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 35 Table 7 Summaries of the moderated regression analysis Related to either criterion or predictor Not related to criterion and predictor No interaction with predictor Organizational resistance is not moderator Interaction with predictor ERP adaptation is quasi-moderator Process adaptation is pure moderator In the second pair of regression models, it was also found that the interaction term was signi®cant at the level of 0.01. The correlation matrix in Table 5 shows that process adaptation is neither associated with organizational ®t of ERP nor associated with imple- mentation success. So we believe that process adapta- tion is a pure moderator of the base relationship between organizational ®t of ERP and implementation Fig. 4. Family of base relationships across process adaptation. success, supporting the Hypothesis 3. In the third pair of regression models, there is no interaction effect. And the correlation matrix in Table 5 ERP adaptation and process adaptation, respectively. shows that organizational resistance is negatively We ®nd that the relationship between organizational ®t associated with both organizational ®t of ERP and of ERP and ERP implementation success changes implementation success. Based on these facts, we from ``positive'' to ``negative'' as the level of adapta- suggest that organizational resistance is not a mod- tion (both ERP and process) intensi®es. erator of the base relation but one of the intervening, In the range of ``above the in¯ection point'', in- exogenous, antecedents, suppressor, or predictor vari- creasing each adaptation has a negative impact on able types. Table 7 summarizes the results of these implementation success given the same level of orga- moderated regression analyses. nizational ®t of ERP. In the range of ``below the in¯ection point'', increasing each adaptation is pre- 5.3. Interpreting the moderating effects dicted to have a positive impact on implementation success given the same level of organizational ®t of To properly test a contingency hypothesis, it is ERP. necessary to display interaction term graphically as well as to examine it mathematically [41]. We plotted the joint effect of the main and interaction term in 6. Discussion Figs. 3 and 4. Figs. 3 and 4 represent the family of the base relationships between organizational ®t of ERP Although ERP implementation has been one of the and implementation success for different values of most signi®cant challenges for IS practitioners in the last decade, relatively little research has been con- ducted about ERP implementation [49,50]. In the previous section, we found that organizational ®t of ERP has a signi®cant effect on ERP implementation success. It was also found that while ERP adaptation is a quasi-moderator of the base relationship between organizational ®t of ERP and ERP implementation success, process adaptation works as a pure moderator of the base relationship. Organizational resistance was not found to have a moderating effect. We will discuss Fig. 3. Family of base relationships across ERP adaptation. these facts in detail below.
  • 12. 36 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 6.1. Organizational ®t of ERP tonically decreased in the higher range of organizational ®t of ERP and monotonically increased in the lower In the simple regression, 26% of the implementa- range. Since ERP adaptation as a quasi-moderator has tion success variance was signi®cantly explained by interaction effect as well as direct effect on ERP imple- the organizational ®t of ERP. Lucas et al. [28] found mentation success while process adaptation has only the some support for the role of organizational mis®t of interaction effect, we speculate that ERP adaptation may production system package in the implementation have stronger explainability on ERP implementation process. Besides, the extended models with interaction success than process adaptation. This speculation is term (ERP adaptation and process adaptation) signi®- supported by the comparison of R2 change of the models cantly explained 47 and 44% of the implementation one and two in Table 6 (0.21 and 0.18, respectively). success variance, respectively. Because the organiza- From a resource dependence view, ERP adaptation tional ®t of ERP was found to have a signi®cant effect might be more exposed to threats and risks than on ERP implementation success, project managers, process adaptation, because ERP adaptation requires before embarking on an ERP implementation project, heavier dependence upon uncontrollable resources must evaluate organizational ®t of ERP and plan for such as consulting ®rms or ERP vendors than process appropriate type and level of adaptation. adaptation. It might be interesting to explore ERP Soh et al. [44] argue that mis®t analysis requires functionality enhancement process issues [43] for both comprehensive understanding of critical organi- ERP implementation success. zational processes and detailed knowledge of the complex ERP. Before ERP adoption, thorough mis®t 6.3. Organizational resistance analysis and resolution plan based on ERP knowledge will mitigate the escalating project risk over the course Because organizational resistance did not interact of implementation. To assure organizational ®t of with organizational ®t of ERP to explain ERP imple- ERP, managers can also utilize the proof of concept mentation success but had signi®cantly negative asso- methodology [38], where instead of developing and ciation with ERP implementation success, we conclude evaluating the exhaustive list of functional require- that it is not a moderator variable. We investigated ments, they can focus on the key process features of the potential mediating effect of organizational resis- the organization in advance of ERP adoption. tance between organizational ®t of ERP and implemen- tation success. Since organizational resistance also had 6.2. ERP adaptation and process adaptation a signi®cantly negative relationship with organizatio- nal ®t of ERP, we believe it is an intervening variable Despite the ERP vendor's caution, the practice of between organizational ®t of ERP and implementation adapting software package has become increasingly success with very marginal effect (DR2 ˆ 0:08) on common in reality [46]. This study found that there is a improving the predictive validity of the model. signi®cant threshold interaction effect of ERP adapta- tion on the relationship between organizational ®t of ERP and ERP implementation success. The impact of 7. Limitation and conclusions ERP adaptation on ERP implementation success was negative in the organizational ®t range above 2.84 and There are many limitations in this study. First, we positive in its range below 2.84. This might imply that, focus on a limited number of variables for ERP imple- beyond a certain level of organizational ®t, the higher mentation success. More relevant variables associated ERP adaptation only leads to the lower implementa- with ERP implementation, for example, project team tion success. competence, may be added to improve the understand- Since process adaptation was not associated with ing of ERP implementation success. Second, we only organizational ®t of ERP or ERP implementation suc- used perceived project metrics in de®ning implementa- cess, it was found to be a pure moderator of the base tion success, leaving out factual aspect of success out- relation. Similar to the ERP adaptation, the impact of come in the IS research. This was due to the dif®culty process adaptation on implementation success mono- in securing the factual data from the participating
  • 13. K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 37 organizations. Third, this paper has a common method 1. The cost of ERP project was signi®cantly higher bias because the dependent variable and independent than the expected budgets. variables rated by the same respondent. Again, this was 2. The ERP project took signi®cantly longer than due to the dif®culty of securing data from both ERP expected. project members and operating department personnel. 3. The system performance of ERP is signi®cantly Despite the fact that more and more companies are below the expected level. investing in ERP for replacing their custom-built 4. The anticipated bene®ts of ERP have not been legacy systems, the research in organizational ®t of materialized. ERP has been generally overlooked. While it is Organizational ®t of ERP (seven-point Likert type recognized that organizational ®t of ERP is a critical scale) selection criterion for ERP [9], the link between (Process ®t) organizational ®t of ERP and ERP implementation success was not empirically validated. Many ERP 1. The processes built in ERP meet all needs vendors just ignore the organizational ®t concept required from organizational processes. and urge blind trust on ERP from their clients. 2. The processes ¯ow built in ERP correspond to In this study, we found that organizational ®t of ERP ¯ow of organizational processes. is indeed critical in explaining ERP implementation 3. The processes built in ERP accommodate the success. In addition, we found that both ERP and change required from organizational processes. process adaptations interact with organizational ®t of 4. The processes built in ERP correspond to the ERP on ERP implementation success. We learned that business practices of our company. ERP and process adaptation are only effective when (Data ®t) organizational ®t of ERP is relatively low. Beyond a 5. The name and meaning of the ERP data items certain level of organizational ®t, more adaptation will correspond to those of the documents used in our only lead to lower implementation success. We also company (i.e. an sales order sheet, sales report). learned that, since ERP adaptation also shows a sig- 6. The form and format data items of the ERP ni®cantly negative direct correlation with implementa- correspond to those of the documents used tion success (while process adaptation only shows in our company. interaction effect), as many ERP vendors have claimed, 7. The output data items of the ERP correspond to process adaptation may be a safe choice than ERP those of the documents used in our company. adaptation when organizational ®t of ERP is low. 8. The input data items of the ERP correspond to Therefore, for successful ERP implementation, those of the documents used in our company. ERP implementation managers as well as top manage- (User interface ®t) ment should be able to assess the ®t between their 9. User interface structures of the ERP is well organization and the target ERP system before its designed to the work structure required for adoption and, once adoption is decided, should mea- conducting business in our company. sure and manage the impact of ERP and process 10. User interface of the ERP is well designed to the adaptations from a risk assessment approach as sug- user capabilities of our company. gested in Brehm et al. [3] to minimize the potential 11. User interface of the ERP is well designed to the business disruptions and user resistance. business needs of our company. Appendix A. Survey instrument ERP adaptation (seven-point Likert type scale) The different opinions are indicated by the numbers 1. Signi®cant time and effort have been required to 1: strongly disagree; 2: disagree; 3: somewhat disagree; alter ERP data items to align with our organiza- 4: neutral; 5: somewhat agree; 6: agree; 7: strongly tional process needs. agree. 2. Signi®cant time and effort have been required to Implementation success (seven-point Likert type append new ERP data items to align with our reverse scale) organizational process needs.
  • 14. 38 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 3. Signi®cant time and effort have been required to the hypothesized moderator variable and independent alter ERP processes to align with our organiza- variable. If a signi®cant interaction exists, go to step 2. tional process needs. Otherwise, proceed to step 3. 4. Signi®cant time and effort have been required to Step 2: Determine if the moderator variable is append new ERP processes to align with our signi®cantly related to the dependent variable. If it organizational process needs. is, then the variable is a quasi-moderator. If not, the 5. Signi®cant time and effort have been required to variable is a pure moderator. alter ERP input/output screens to align with our Step 3: Determine if the moderator variable is organizational process needs. signi®cantly related to the independent variable. If 6. Signi®cant time and effort have been required to it is, then it is an exogenous, predictor, intervening, alter ERP reports to align with our organizational antecedent, or suppressor variable. If not, proceed to process needs. step 4. Step 4: Develop subgroups based on the hypothe- Process adaptation (seven-point Likert type scale) sized moderator variable. Test for the signi®cance of 1. Signi®cant time and effort have been required to differences in predictive validity across subgroups. alter elementary processes to align with the ERP. If the difference is signi®cance, the variable is a 2. Signi®cant time and effort have been required to homologizer operating the error term. If a signi®cant alter our process ¯ows to align with the ERP. difference is not found, then the variable is not a 3. Signi®cant time and effort have been required to moderator. standardize our organizational processes to align with the ERP. 4. Signi®cant time and effort have been required to References integrate our redundant organizational processes to align with the ERP. [1] N.H. Bancroft, H. Seip, A. Sprengel, Implementing SAP R/3, 2nd Edition, Manning Publications, Greenwich, CT, 5. Signi®cant time and effort have been required to 1998. alter our document and data elements to align with [2] P. Bingi, M.K. Sharma, J.K. Golda, Critical issues affecting the ERP. an ERP implementation, Information Systems Management (1999) 7±14. Organizational resistance (seven-point Likert type [3] L. Brehm, A. Heinzl, M.L. Markus, Tailoring ERP systems: a scale) spectrum of choices and their implications, in: Proceedings of the 34th Annual Hawaii International Conference on System 1. There have been many users resisting the ERP Sciences, January, 2001. implementation. [4] R.B. Cooper, R.W. Zmud, Information technology imple- 2. There have been many cases blaming occurrence mentation research: a technological diffusion approach, of business problem upon ERP. Management Science 36 (2), 1990, pp. 123±139. [5] T.H. Davenport, Putting the enterprise into the enterprise 3. There have been many cases in which users persist system, Harvard Business Review (1998) 121±131. traditional business practice even though ERP [6] T.H. Davenport, Mission Critical: Realizing the Promise of change the way of conducting business. Enterprise Systems, HBS Press, 2000. 4. There have been many cases in which user [7] G.B. Davis, M.H. Olson, Management Information Systems, departments did not reply to the business request McGraw-Hill, New York, 1985. [8] G.B. Davis, Commentary on information systems: to buy, of the ERP project team. build, or customize? Accounting Horizons (1988) 101± 5. There have been many people wishing ERP to fail. 103. [9] Y. Everdingen, J. Hillergersberg, E. Waarts, ERP adoption by European midsize companies, Communications of the ACM Appendix B. Framework for identifying 43 (3), 2000, pp. 27±31. [10] T.F. Gattiker, D.L. Goodhue, Understanding the plant level moderator variables cost and bene®ts of ERP: will the ugly duckling always turn into a swan?, in: Proceedings of the 33rd Annual Step 1: Using the moderated regression analysis, Hawaii International Conference on System Sciences, determine if a signi®cant interaction exists between 2000.
  • 15. K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 39 [11] R.L. Glass, Enterprise resource planningÐbreakthrough and/ [33] M.L. Markus, D. Robey, Information technology and or term problem? Database 29 (2) (1998) 14±16. organizational change: causal structure in theory and [12] L.L. Gremillion, P. Pyburn, Breaking the system develop- research, Management Science 34 (5), 1988, pp. 583±598. ment bottleneck, Harvard Business Review 61 (2), 1983, pp. [34] M.L. Markus, C. Tanis, The enterprise systems experienceÐ 130±137. from adoption to success, in: R.W. Zmud (Ed.), Framing the [13] T.L. Grif®th, R.F. Zammuto, L. Aiman-Smith, Why new Domains of IT Research: Glimpsing the Future Through the technologies fail? Industrial Management (1999) 29±34. Past, Pinna¯ex Educational Resources Inc., Cincinnati, OH, [14] P.H.B. Gross, M.J. Ginzberg, Barriers to the adaptation of 2000, pp. 173±207. application software packages, Systems, Objectives, Solu- [35] C.F. Nachmias, D. Nachmias, Research Method in the Social tions 4 (4), 1984, pp. 211±226. Sciences, St. Martin Press, New York, 2000. [15] V. Grover, S.R. Jeong, W.J. Kettinger, J.T.C. Teng, The [36] W.J. Orlikowski, The duality of technology: rethinking the implementation of business process reengineering, Journal concept of technology in organizations, Organization Science of Management Information Systems 12 (1), 1995, pp. 109± 3 (3), 1992, pp. 398±427. 144. [37] R.E. Pereira, Resource view theory analysis of SAP as a [16] J.F. Hair, R.E. Anderson, R.L. Tatham, W.C. Black, source of competitive advantage for ®rms, Database 30 (1), Multivariate Data Analysis, Prentice-Hall, Englewood Cliffs, 1999, pp. 38±46. NJ, 1995. [38] C. Prosser, D. Canty, Proof of concept: an ef®cient way [17] M. Hammer, S. Stanton, How processes enterprise really to shop, APICSÐThe Performance Advantage (1998) 50± work, Harvard Business Review (1999) 108±118. 52. [18] M. Hammer, Up the ERP revolution, Information Week [39] L. Radosevich, Measuring up, CIO, Framingham 12 (23) (1999) 186. (1999) 52±60. [19] J.C. Henderson, N. Venkatraman, Strategic alignment: [40] E. Rogers, Diffusion of Innovation, Free Press, New York, leveraging information technology for transforming organiza- 1995. tions, IBM Systems Journal 32 (1), 1993, pp. 4±16. [41] C.B. Schoonhoven, Problems with contingency theory: [20] C.P. Holland, B. Light, A critical success factors model for testing assumptions hidden within the language of contin- ERP implementation, IEEE Software (1999) 30±36. gency theory, Administrative Science Quarterly 26, 1981, pp. [21] J. Iivari, The organizational ®t of information systems, 349±377. Journal of Information Systems 2, 1992, pp. 3±29. [42] S. Sharma, R.M. Durand, O. Gur-Arie, Identi®cation and [22] J.J. Jiang, W.A. Muhanna, G. Klein, User resistance and analysis of moderator variables, Journal of Marketing strategies for promoting acceptance across systems types, Research 18, 1981, pp. 291±300. Information and Management 37, 2000, pp. 25±36. [43] J.E. Scott, L. Kaindl, Enhancing functionality in an enterprise [23] P. Kanellis, M. Lycett, R.J. Paul, Evaluating business software package, Information and Management 37, 2000, pp. information systems ®t: from concept to practical applica- 111±122. tion, European Journal of Information Systems 8, 1999, pp. [44] C. Soh, S.S. Kien, J. Tay-Yap, Cultural ®ts and mis®ts: is 65±76. ERP a universal solution? Communications of the ACM 43 [24] K. Kumar, J. Hillegersberg, ERP experiences and evolution, (3), 2000, pp. 47±51. Communications of the ACM 43 (3), 2000, pp. 22±26. [45] D.W. Straub, Validating instruments in MIS research, MIS [25] K.C. Laudon, J.P. Laudon, Management Information Quarterly (1989) 147±169. Systems: Organization and Technology, Prentice-Hall, Engle- [46] J. Swan, S. Newell, M. Robertson, The illusion of `best wood Cliffs, NJ, 1996. practice' in information systems for operations management, [26] S.P. Laughlin, An ERP game plan, Journal of Business European Journal of Information Systems 8, 1999, pp. 284± Strategy (1999) 32±37. 293. [27] D. Leonard-Barton, Implementation as mutual adaptation of [47] J. Sweat, ERP: enterprise application suits are becoming a technology and organization, Research Policy 17, 1988, pp. focal point of business and technology planning, Information 251±267. Week (1998) 42±52. [28] H.C. Lucas, E.J. Walton, M.J. Ginzberg, Implementing [48] M.J. Tyre, W.J. Orlikowski, Windows of opportunity: packaged software, MIS Quarterly (1988) 537±549. temporal patterns of technological adaptation in organiza- [29] R.K. Lynch, Implementing packaged application software: tions, Organization Science 5 (1), 1994, pp. 98±118. hidden costs and new challenges, Systems, Objectives, [49] O. Volkoff, Enterprise system implementation: a process of Solutions 4 (4), 1984, pp. 227±234. individual metamorphosis, American Conference on Informa- [30] J. Marius, S. Ashok, Package software: selection and tion Systems, 1999. implementation policies, INFOR (1996) 133±151. [50] O. Volkoff, Using the structurational model of technology to [31] M.L. Markus, Power, politics, and MIS implementation, analyze an ERP implementation, in: Proceedings of Academy Communications of the ACM 26 (6), 1983, pp. 430±444. of Management '99 Conference, 1999. [32] M.L. Markus, D. Robey, The organizational validity of [51] P. Weill, M.H. Olson, An assessment of the contingency management information systems, Human Relations 36 (3), theory of management information systems, Journal of 1983, pp. 203±226. Management Information Systems 6 (1), 1989, pp. 59±85.
  • 16. 40 K.-K. Hong, Y.-G. Kim / Information & Management 40 (2002) 25±40 Kyung-Kwon Hong is a doctoral can- Young-Gul Kim is an Associate Professor didate at the Graduate School of at the Graduate School of Management of Management of the Korea Advanced the Korea Advanced Institute of Science Institute of Science and Technology and Technology (KAIST) in Seoul. He (KAIST) in Seoul. He received his BS received his BS and MS degrees in and MS degrees in Industrial Engineer- Industrial Engineering from Seoul National ing from the Hanyang University and University, Korea and his PhD degree in KAIST, respectively. He has worked for MIS from the University of Minnesota. His Korea Telecom during 10 years. His active research areas are: Knowledge research interests include Packaged Management, IT Management, Data and Software Implementation, Information Process Modeling and Customer Relationship Management. He has Systems Innovation, and Knowledge published in Communications of the ACM, Information and Manage- Management. ment, Journal of MIS, Decision Support Systems, Database, etc.