A Study Of Influence Of Critical Factors On Accountants Performance In Failure Implementing ERP

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1 Available online at GlobalIlluminators Full Paper Proceeding GIMAR-2015, Vol. 1, FULL PAPER PROCEEDING Multidisciplinary Studies ISBN: GIMAR 2015 A Study Of Influence Of Critical Factors On Accountants Performance In Failure Implementing ERP Asadizeidabadi 1, Heshmatolah 2* Islamic Azad University, Sirjan, Iran. Abstract his study examines impact of five major factors - over-reliance on heavy customization, poor I infrastructure, ERP system misfit, poor consultant effectiveness, too tight project schedule- on performance of accountants in failure implementing ERP.he was 138 accountants who were using ERP in Iranian companies, which has been chosen by available sampling. Regression has been used in order to examine correlation of independent variables- over-reliance on heavy customization, poor I infrastructure, ERP system misfit, poor consultant effectiveness, too tight project schedule- and dependent variable, performance of accountants in ERP implementation.he results have been confirmed that re is a meaningful relationship between five keies factories- over-reliance on heavy customization, poor I infrastructure, ERP system misfit, poor consultant effectiveness, too tight project schedule- with performance of accountants in failure implementing ERP. Regardless to necessity of using ERP and importance of accountants role in business environment, results will be practical. It is also hoped that this study will serve as a guideline for researchers wishing to investigate failure factors or problems associated with ERP implementation he Authors. Published by Global Illuminators. his is an open access article under CC BY-NC-ND license ( Peer-review under responsibility of Scientific & Review committee of GIMAR Keywords: Critical Factors, Accountants Performance, Implementing and ERP. Introduction Nowadays Information echnology has become inseparable part of any activity. An ERP system is an integrated software solution, typically offered by a vendor as a package that supports seamless integration of all information flowing through a company, such as financial, accounting, human resources, supply chain, and customer information (Davenport, 1998). ERP systems integrate information and information-based processes within and across functional areas in an organization (Kumar and Bjorn, 1990). ERP implementation is a lengthy and complex process, and re have been many cases of unsuccessful implementations (Parr and Shanks, 2000), which have had major impacts on business performance. As ERP plays a very important role in business, ERP implementation and its critical issues, success factors and implementation problems have been investigated in past (Parr and Shanks, 2000; Majed et al., 2003; Soh et al.,2000; Sumner, 2000). he systems *All correspondence related to this article should be directed to Kanu, Ikechukwu Anthony, Islamic Azad University, Sirjan, Iran he Authors. Published by Global Illuminators. his is an open access article under CC BY-NC-ND license ( Peer-review under responsibility of Scientific & Review committee of GIMAR-2015.

2 have been credited with reducing inventories, shortening cycle times, lowering costs, and improving supply chain management practices. ERP has been credited with increasing speed with which information flows through a company (Davenport, 1998) Despite benefits that earn from ERP, implementation se systems can be very dangerous because of ir complex nature. It reported that three quarters of ERP projects were judged to be unsuccessful by ERP implementation firms (Griffith, Zammuto and Iman, 1999) About 90 percent of ERP implementations are late or over budget (Martin, 1998). Recently ERP failure rate is estimated 40% to 60% (Liang, Saraf, Hu and Xue, 2007). It has related antisis statistics about ERP implementation failure rate yet. But it is obvious that ERP implementation is risky. Failure has been defined as an implementation that does not achieve a sufficient Return On Investment (ROI) identified in project approval phase. Using this definition, it has been found that failure rates are in range of 60 90% (Ptak, 2000). Objective of study In this paper was tried to examine five major factors - over-reliance on heavy customization, poor I infrastructure, ERP system misfit, poor consultant effectiveness, too tight project schedule- on performance of accountants in failure of ERP implementation. Literature Review Gartner Institute described ERP as Business strategies and enabling software that integrate manufacturing, financial and distribution functions to dynamically balance and optimize enterprise resources. ERP software suites include integrated manufacturing, distribution and financial applications. ERP can enable enterprises to optimize ir business processes and analysis capabilities for improved speed and efficiency (Gartner, 2004) ERP systems evolved from MRP II (Manufacturing Resource Planning II) systems but unlike MRP II, which focused on manufacturing, ERP systems serve or businesses, such as distribution and services. ERP systems integrate inventory data with financial, sales, and human resources data, allowing organizations to price products, produce financial statements, and manage human, materials, and financial resources (Markus, anis, Van and Fenema, 1999; Vogt, 2002)]. ERP systems were first implemented in 1980s. Since n, some success stories in implementing and using an ERP system have been reported (Sanchez and Bernal, 2007). However, implementation of ERP is a complex process, and many adopters have encountered problems in different phases. Robbins-Gioia surveyed 236 companies in 2001, finally revealed that 51% of ERP projects are unsuccessful. With regard to high ERP failure rate and enormous expenditures of se systems, notice to factors which raise ERP implementation success can be very essential and helpful. In last two decades many authors have done significant research on identifying critical factors in ERP implementation. Holland and Light (1999) have classified success factors in two broad categories of 266

3 strategic and tactical factors. Somers and Nelson (2001) proposed a comprehensive list of 22 critical success factors(csf) associated with ERP implementation. Umble et al. (2003) extended research on CSF and came out with nine CSFs for ERP implementation. Shahin and Sulaiman (2009) had a comprehensive literature review for articles published during and identified 17 CSFs. Considering a large failure rates in ERP implementations some researchers such as Momoh et al (2010) attempted to find out critical failure factors (CFFs) in ERP implementation. On basis of a comprehensive literature review y propose 9 CFFs-Lack of change management, Excessive customization, Dilemma of internal integration, Poor understanding of business implication and requirements, Poor data quality, Lack of top management support, Hidden cost, Misalignment of I with business, Limited training. Research It is Survey and applied research and questionnaire has been used to do it. he methodology was used in this study was descriptive. he data collected was conducted in two stages. he first stage was research library to form basis of oretical research, and in second one by using questionnaire data were prepared, using appropriate statistical techniques, final analysis was performed. Population included accountants in Iranian companies who have implemented ERP and was selected randomly among m (its number was 138). Data analysis o examine questions of current research method of regression was used. he results have come in following paragraphs: Does performance of accounting to implement ERP was affected by relying too much on localization process? o investigate first question regression was used result as comes in table 1 shows that it has impact on failure ERP implementation. able1: performance of accounting to implement ERP and relying too much on localization process Unized ized population 267

4 Intercept 0/23 1/45-4/16 0/000 Slope of 0/03 0/56 0/43 6/12 0/000 Does performance of accounting to implement ERP was affected by Weak I structure? Second question was examined by regression it is shown in table 2. By analyzing data it is clear that weak I structure has impact on failure ERP implementation. able 2: performance of accounting to implement ERP and Weak I structure Unized ized population Intercept 0/113 6/78-38/43 0/000 Slope of 0/084 0/72 0/498 10/78 0/000 Does performance of accounting to implement ERP was affected by mismatching system of ERP? Impact of mismatching system of ERP on performance of accounting to implement ERP was investigated by regression. he result comes in table 3, it illustrates that this variable has impact on failure ERP implementation. able3: performance of accounting to implement ERP and mismatching system of ERP Unized ized 268

5 population Intercept 0/19 6/15-54/87 0/000 Slope of 0/13 1/73 0/435 8/98 0/000 Does performance of accounting to implement ERP was affected by poor consultation? Forth research question was also examined by regression (table 4) it showed that poor consultation has impact on failure ERP implementation. able 4: performance of accounting to implement ERP was affected by poor consultation Unized ized population Intercept 0/17 5/154-32/65 0/000 Slope of 0/17 0/09 0/17 0/6 0/000 Does performance of accounting to implement ERP was affected by Intensive program? Question five asks about Intensive program that data analysis show it has impact on failure ERP implementation. 269

6 able 5: performance of accounting to implement ERP and too tight project schedule Unized ized population Intercept 0/78 6/78-46/98 0/000 Slope of 0/098 5/45 0/76 5/87 0/000 Discussion On basis of it was found that five variables - over-reliance on heavy customization, poor I infrastructure, ERP system misfit, poor consultant effectiveness, too tight project schedule- of current research that we can call m as critical factors which have influence on performance of accountants in Failure Implementing ERP. In spite of some research which have been done about failure factors but re is no one that investigate failure factor on accountant s performance; for example Sanjay (2011) used he Interpretive Structural ing (ISM) to find mutual relationships among se critical failure factors. It was observed that 3 factors namely poor understanding of business implications and requirements, poor data quality, and lack of top management support have big impact on failure ERP implementation, and this author mentioned that if An organization not willing to change is more likely to fail in process of ERP implementation. Conclusion Since re was not any study about critical failure factors on accountants performance in Failure Implementing ERP, his research has conducted impact of five critical failure factors on ir performance in Failure Implementing ERP. Regardless to necessity of using ERP and importance of accountants role in business environment, results will be practical. It is also hoped that this study will serve as a guideline for researchers wishing to investigate failure factors or problems associated with ERP implementation. 270

7 References DAVENPOR,. (1998) Putting Enterprise into Enterprise System. Harvard Business Review 76(4), pp Griffith L, Zammuto RF, iman-smith L.(1999). Why new technologies fail. Industrial Management-chicago n Atlanta: Kumar K, Bjorn-Andersen N(1990). A cross-cultural comparison of IS designer values.communications of ACM; 33:538. Liang H, Saraf N, Hu Q, Xue Y. (2007). Assimilation of enterprise systems: he effect of institutional pressures and mediating role of top management. MIS Quarterly; 2007, 31: Martin MH.(1998). An ERP strategy. Fortune; 2: Gartner. (2004). In he Gartner Glossary of Information echnology Acronyms and erms. Edited by: Gartner; MAJED, A., ABDULLAH, A. and MOHAMED, Z. (2003) Enterprise resource planning: A taxonomy of critical factors. European Journal of Operational Research (146), pp Markus ML, anis C, Van Fenema PC. (1999). Enterprise resource planning: multisite ERP implementations. Communications of ACM; 43: PARR, A. and SHANKS G. (2000) A of ERP Project Implementation. Journal of Information echnology 15(2), pp PAK C. (2000) ERP: ools, echniques, and Applications for Integrating Supply Chain. St. Lucie Press, Boca Raton, FL. Sanchez NG, Bernal LE. (2007). Determination of Critical Success Factors in Implementing an ERP System: A Field Study in Mexican Enterprises. Edited by: Information echnology for Development; vol 13.] Sanjay Jharkharia. (2011). Interrelations of Critical Failure Factors in ERP Implementation: An ISM-based Analysis. Rd International Conference on Advanced Management Science IPEDR vol.19, IACSI Press, Singapor. SOH, C., SIA, S. K., and AY-YAP, J. (2000) Cultural Fits and Misfits: Is ERP a Universal Solution. Communications of ACM 43(4), pp SUMNER, M. (2000) Risk Factors in Enterprise-wide/ERP Projects. Journal of Information echnology (15), pp Vogt C. (2002). Intractable ERP: a comprehensive analysis of failed enterprise-resourceplanning projects. ACM SIGSOF Software Engineering Notes: 27:

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