ERP implementation success

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1 The current issue and full text archive of this journal is available at Examining from a project environment perspective Shahin Dezdar Institute for International Energy Studies (IIES), Tehran, Iran, and Sulaiman Ainin Operations and Management Information Systems Department, Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia 919 Abstract Purpose The purpose of this paper is to identify factors that are crucial for the ful of enterprise resource planning () systems. Although there are many factors that influence the, this study focuses on factors related to the project environment, namely, project management, team composition and competence, and business process reengineering. Design/methodology/approach The study was conducted using a survey questionnaire distributed to users in Iranian organizations. In total, 384 responses were collected and analyzed. Findings A significant relationship was found between project management and team composition with. The better the project management activities the more likely the will be ful. Likewise, the possibility of ful is higher when the team is more coordinated and experienced. Practical implications adopting organizations and managers could gain an understanding of the complexities inherent in installations to avoid barriers and increase the likelihood of achieving desired results. The outcomes of this study are also useful to vendors and consultants to prepare some strategies to overcome the misfit between their products and adopting organizations in developing countries. Originality/value This study is one of the few that examine the of from the perspective of key stakeholders (operational/unit/functional managers). It has contributed to academic research by producing empirical evidence to support the theories of critical factors and. The findings may be useful to vendors and other organizations in other countries, as they could be used as a guideline for future adoption and. Keywords Iran, Business process re-engineering, Project management, Team working, Team composition, Team competence, Developing countries Paper type Research paper 1. Introduction An enterprise resource planning () system is an integrated software package used to manage an organization s resources. systems integrate all departments and functions of a company into a single computer system that can serve all the different departmental needs (Botta-Genoulaz and Millet, 2005). When systems are used effectively and efficiently, they yield significant benefits, such as reduced inventory, faster information transactions, better financial management, tight supply-chain links, reduced transportation and logistic costs, improved responsiveness to customers, increased flexibility, increased productivity, and the groundwork for e-commerce, Business Process Management Journal Vol. 17 No. 6, 2011 pp q Emerald Group Publishing Limited DOI /

2 BPMJ 17,6 920 and make tacit knowledge explicit (Davenport et al., 2004). Nevertheless, in order to obtain these benefits organizations have to plan carefully. Many projects have been delayed, reported as being over budget and have required additional funding (Zhang et al., 2005). In addition, the system is perhaps the single largest IT investment an organization can make (Teltumbde, 2000). Therefore, it is important to understand which factors contribute to the occurrence of problems and identify ways to overcome them. Many researchers have tried to identify the factors leading to the ful of (Al-Mashari et al., 2003; Chien et al., 2007; Gargeya and Brady, 2005; Ifinedo, 2008; Kim et al., 2005; Nah et al., 2001; Yusuf et al., 2004; Zhang et al.,2005). They consider several factors, including organizational, user, and technical or cultural factors. Dezdar (2010) examines factors that affect in Iran using an integrated model which includes the project environment, the organizational environment and system environment. The present study, however, focuses on factors that represent the project environment, as Dezdar found these factors to be the most crucial to, particularly in the Iranian context. Consequently, the aim of this paper is to analyze factors (related to project environment) that have an influence on in a developing country, namely Iran. A developing country has been chosen, because there has not been much research on in developing countries (Ngai et al., 2008; Sawah et al., 2008), particularly Iran. It is hoped that the findings will be useful to vendors as well other organizations in Iran that are contemplating the use of systems. This study is significant as it is one of the few that examine the of from the perspective of key stakeholders. It also provides empirical evidence to support the theories relating to the critical factors (CSFs) for, particularly in terms of the project environment itself. In the following sections, the theoretical framework and hypotheses that have been developed are presented. This is followed by the research methodology chosen to conduct the study. Next, data analysis is described and the findings are discussed. Finally, conclusions and implications for future research are highlighted. 2. Theoretical framework The theoretical framework (Figure 1) was developed based on the review of literature and findings from Dezdar (2010). Dezdar developed a model that illustrates CSFs for in Iran. His study shows that the project environment is one of the main factors that ensure ful in Iran. In addition, a frequency analysis of CSFs from 95 journal articles in Dezdar and Sulaiman (2009) indicates that factors relating to the project environment, namely project management (PRM),, team composition and competence (TCC) and business Project Management H1 Figure 1. project environment and Team Composition & Competence H2 Business Process Reengineering H3 Source: Adapted from Dezdar (2010) Implementation Success

3 process reengineering (BPR), were the top four factors after senior management support. Hence, this paper focuses on these factors relating to the project environment. The following paragraphs discuss these factors. PRM deals with diverse facets of the project, such as planning, organization, information system purchase, employee selection, and monitoring of software (Al-Mudimigh et al., 2001). Zhang et al. (2005) suggest that PRM has five major parts: a formal plan, a realistic time frame, periodic project status meetings, an effective project leader who is also a champion, and project team members who are stakeholders. Strong PRM is critical for projects, including assigning responsibilities, controlling the scope, and defining and evaluating project milestones to avoid schedule and cost overruns. Nah et al. (2003) argue that the PRM process, which includes defining the scope, time and specification, is essential to ensure project. The scope includes modules to be implemented and all tasks to be undertaken. The time factor includes the timeliness of the project including the critical path, deadlines and the milestones to be defined and considered. Specifications include all technical and non-technical issues to be considered. Umble et al. (2003) suggest that ful PRM includes a clear definition of objectives, development of both a work plan and a resource plan, and careful tracking of project progress. As mentioned earlier, PRM, refers to the extent to which timetables, milestones, workforce, equipment, and budgets are specified. In addition, it refers to the ongoing management of the plan. Therefore, it involves not only the planning stages, but also the allocation of responsibilities to various players, the definition of milestones and critical paths, training and human resource planning, and finally the determination of measures of (Nah et al., 2003). To attain the desired benefits, the project progress must be carefully managed and monitored through regular meetings and reports. The frequency of meetings has a direct impact on the effectiveness of project control. Moreover, with regular meetings, the project manger is able to establish if there are any missed deadlines (Zhang et al., 2005). Consequently, the following hypothesis was developed: H1. Effective PRM is positively related to. The second factor influencing is selecting the right project team and project manager. An project needs the cooperation of all departments within the organization. Accordingly, team composition and teamwork among the implementer and vendor/consultant are important, as emphasized by Nah and Delgado (2006). Huang et al. (2004) concluded that the team and its ability to work within the guidelines of a plan, communicate effectively, and work together are essential for the of. Team members should be technologically competent, understand the organization and its business and come from the departments affected by the system. The team should contain the best people in the organization and be cross-functional to reflect the cross-functional nature of systems (Nah et al., 2007). Also important to project is the appointment of a project manager with the essential skills and authority. project managers must have both strategic and tactical PRM qualifications. The project manager should be a high-level executive sponsor who has the power to set goals and legitimize change (Zhang et al., 2005). 921

4 BPMJ 17,6 922 The technological and business proficiency of the team members is crucial for project. The team should be balanced, cross-functional, and comprise a mix of external consultants and internal staff, so that the internal staff can develop the necessary technical skills for system. The members of the team should be expert in the organization s processes as well as familiar with the best business practices in the industry (Nah et al., 2003). During, business users are responsible for ensuring that business process requirements are incorporated in the final software and that the ultimate system is accepted and used by the end-users. Thus, adding business users to the project team to supplement technical resources is critical to project (Somers and Nelson, 2004). It is also important that organizations empower the team to make rational decisions. In addition, the team members should only focus on the project and it should be their top priority (Nah et al., 2007). Accordingly, the following hypothesis was defined: H2. TCC is positively related to. The third factor, BPR is defined by Hammer and Champy (1993) as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance. Most organizations that implement are not expected to have processes and structures that are well matched with the structure, tools, and types of information provided by the system. For this reason, it is expected that organizations implementing will have to reengineer, at a minimum, their main processes, to sustain the requirements of the system. Yusuf et al. (2004) suggested that to take full advantage of software, BPR is a prerequisite. Implementing an system clearly changes the normal mode of operation within and between functions, and changes many social systems throughout the organization. The integrated environment of the system requires the organization to conduct business in a different way. The appropriate of an system should force key business processes to be reengineered and cause a related rearrangement in organizational control to maintain the efficiency of the reengineering activities. As a result, enterprises should be willing to accept the embedded best practice, whenever possible, and model their business processes according to those represented by the system (Murray and Coffin, 2001). systems are built on best practices that are followed in the industry. However, inevitably, the software may not fit the working processes of an adopting firm. In such cases, the software is either customized to fit the organization s needs better or the organization must change its business processes to match the system (Bradford and Florin, 2003). Nah et al. (2003) argue that, as far as possible, the software should not be modified. It is the business that has to be changed and not the other way around. Muscatello and Chen (2008) support this line of argument and declare that organizations should be willing to change their businesses to fit the software in order to minimize the degree of customization needed. software should be changed as little as possible so as to minimize the possibility of errors and take advantage of newer versions and releases of the system (Murray and Coffin, 2001). BPR is important in the early stages from the initiation through the adaptation phase of the (Somers and Nelson, 2004). In the process of configuring the system, a large amount of reengineering should occur iteratively to take advantage of the best practices offered by the system. Thus, the following hypothesis was defined:

5 H3. Business processes reengineering is positively related to. A review of the literature (Dezdar, 2010) pertaining to illustrated that basically can be categorized into four perspectives: the system, the user (user satisfaction), the project, and the adopting organization, i.e. organisational impact. Based on a frequency analysis, Dezdar found that organizational impact and user satisfaction were the two most frequently used measures of. Therefore, the present study incorporates these two measures. A number of studies have been conducted using the single measure of user satisfaction (Grabski and Leech, 2007; Law and Ngai, 2007; Holsapple et al., 2005; Wu and Wang, 2007; Calisir and Calisir, 2004; Somers et al., 2003). User satisfaction is one of the most broadly used elements for evaluating information systems with a sound uniform instrument. Somers et al. (2003) adopted the end-user computing satisfaction instrument developed by Doll and Torkzadeh (1988) to determine end-user satisfaction with systems. They identified several reliable user satisfaction dimensions, including ease of use, content, format, accuracy, and timeliness. The first element assesses the user-friendliness of the system. The remaining four aspects relate to the usefulness of the software. The results of Somers et al. s (2003) study confirm that the end-user computing satisfaction instrument maintains its stability when applied to users of software. This research adapted the definition of user satisfaction from Gable et al. (2008), as the sum of a user s feelings and attitudes towards a variety of factors related to the delivery of information products and services, including being up-to-date, being precise, being comprehensive and so on. Most of the previous research on has employed items such as presenting necessary outputs and reports and accurate information (Gable et al.,2008; Law and Ngai, 2007; Somers et al., 2003), providing output information content which is inclusive (Chien and Tsaur, 2007; Jones et al., 2008; Law and Ngai, 2007; Wu and Wang, 2007), offering output and reports in a useful format (Gable et al., 2008; Sedera et al.,2007; Somers et al., 2003), presenting up-to-date information (Chien and Tsaur, 2007; Jones et al., 2008; Law and Ngai, 2007; Wu and Wang, 2007), improving employee work efficiency (Calisir and Calisir, 2004; Gable et al., 2008; Gattiker and Goodhue, 2005; Ifinedo, 2008; Nah et al., 2007), and overall satisfaction with the system (Bradford and Florin, 2003; Calisir and Calisir, 2004; Gable et al., 2008; Peslak, 2006). The second dimension of is organizational impact. organizational impacts relates to the effect of system and usage on the performance of the organization. Organizational impact refers to the realization of business goals and improved enterprise operating capabilities as a result of the. The perceived organizational impact variable covers both effectiveness and efficiency-based performance improvements in order to capture the business benefits of the system (Stratman and Roth, 2002). Moreover, implementing an system can lead to improvements in business performance by improving decision performance, being more responsive to customer requirements, reducing costs, and improving process efficiency (Somers et al., 2003). systems combine a company s system for managing its logistics, inventory, orders, shipping, customer service, sales, and several other parts. Integrating and standardizing these activities in line with the firm s objectives has a positive impact on the enterprise and staff in enhancing effectiveness and efficiency and inevitably improving competitiveness. To measure 923

6 BPMJ 17,6 924 the organizational impact of system, a wide range of measures have been employed by researchers, such as increased customer service and satisfaction (Kamhawi, 2008; Law and Ngai, 2007; Zhang et al., 2005), reduced organizational costs (Jones et al., 2008; Kamhawi, 2007; Sedera et al., 2007), better use of organizational data resources ( Jones et al., 2008; Bernroider, 2008; Ifinedo, 2008), organizational-wide communication improvement (Ifinedo, 2008; Nah et al., 2007; Stratman and Roth, 2002), business processes rationalization (Gable et al., 2008; Law and Ngai, 2007; Sedera et al., 2007), improved overall productivity of the firm ( Jones et al., 2008; Sedera et al., 2007), and increased profitability ( Jones et al., 2008; Gattiker and Goodhue, 2005). This study adapted the organizational impact definition from Jones et al. (2008), as user perception of improved decision making, organizational communication, business process rationalization, customer satisfaction, cost reduction, and the firm s overall productivity and performance. 3. Research methodology 3.1 Research design The aim of this study is to analyze factors (related to project environment) that affect the of systems in Iran. The population for the research is organizations using systems. Since there was no existing database of the population, various sources of data were used, including the web sites of top international vendors, web sites of top local information system vendors, web sites of Iranian governmental and non-governmental organizations that manage IT, and the annual reports of public listed organizations published by the Tehran Stock Exchange web site. Finally, a list of 31 user companies was identified. A survey questionnaire was utilized to collect data from the companies identified. The questionnaire consists of five sections: Section A: PRM, Section B: team composition, Section C: BPR, Section D:, and Section E: demographics. The items for Sections A-D were adapted from relevant prior research (Bradley, 2008; Kamhawi, 2007; Muscatello and Chen, 2008; Nah et al., 2007; Zhang et al., 2005). All items in Sections A-D were measured using a seven-point Likert-type scale with anchors ranging from strongly disagree to strongly agree. The items used in the questionnaire and the source of references for Sections A-D are provided in the Appendix. The questionnaire was translated into Persian, and then back-translated to ensure that the meanings were the same as in the original. To ensure the reliability of the questionnaire, a pilot study was conducted. The questionnaire was distributed to 54 operational managers and 37 completed questionnaires were collected. The data were tested using the SPSS 16.0 software package. It was found that all the variables Cronbach s a values were above 0.7. Hence, the questionnaire was considered to be reliable, as suggested by Hair et al. (2006). As mentioned earlier, 31 organizations using were contacted and asked to identify a liaison person who could distribute the questionnaire to all their operational/functional/unit managers who use systems (562 in total). Operational/functional/unit managers were chosen as respondents because, as Bradford and Florin (2003) stated, they are among the most knowledgeable informants regarding projects in organizations. After repeated reminders, 411 completed questionnaires (73 percent) were collected. The questionnaires were reviewed

7 and 27 incomplete questionnaires were omitted. Therefore, 384 questionnaires were used in the analysis. 4. Findings This section begins by providing a descriptive statistical analysis of the respondents demographic profile. It then examines the impact of the factors on, using structural equation modeling (SEM). The SEM analysis was carried out in accordance with a two-step methodology proposed by Hair et al. (2006). According to this procedure, after the model has been modified to create the best measurement model, the structural equation model can be analyzed Sample characteristics The characteristics of respondents are illustrated in Table I. There were more male respondents than female respondents. This reflects the Iranian workforce. The results indicate that more than two-thirds of respondents were between 31 and 50 years old and more than three-quarters of the respondents hold a university degree and have worked for more than six years in their organizations. In addition, the majority of respondents were involved fully or partially in the project. These figures show that the respondents have been using, knew the organization business processes and the process and, hence, were the best informants to answer the survey questionnaire. 4.2 Measurement model Assessment of the measurement model included the evaluation of convergent and discriminant validity for each of the measurement scales. Convergent validity was assessed using three measures: factor loading, composite construct reliability and average variance extracted (AVE) (Table II). The total factor loadings of the items in the measurement model were greater than 0.70 and each item loaded significantly ( p, 0.01 in all cases) on its Item Categories Frequency Percent Gender Male Female Age Below 30 years old years old years old Over 50 years old Education Undergraduate Graduate Postgraduate (MS) Postgraduate (PhD) Employment with this organisation Less than three years Three to five years Six to ten years More than ten years Involvement in project Fully involved Partially involved Not involved Table I. Characteristics of the respondents

8 BPMJ 17,6 926 Table II. Convergent validity test Construct Items Factor loading Composite reliability AVE Project management PRM PRM PRM PRM PRM PRM Team composition and competence TCC TCC TCC TCC TCC Business process reengineering BPR BPR BPR BPR BPR SUC SUC SUC SUC SUC SUC SUC SUC underlying construct. The composite construct reliabilities were within the commonly accepted range, greater than The average variances extracted were all above the recommended level of Therefore, all constructs had adequate convergent validity and, hence, were retained, as recommended by Hair et al. (2006). To confirm discriminant validity, the average variance shared between the construct and its indicators should be larger than the variance shared between the construct and other constructs. The outcomes of the convergent validity test (Table III) indicate that constructs share more variance with their indicators than with other constructs. 4.3 Structural model The second stage of the SEM process involves testing the structural model prior to testing the hypotheses. The proposed structural model was examined using AMOS Construct PRM TCC BPR SUC Table III. Discriminant validity test Project management (PRM) Team composition and competence (TCC) Business process reengineering (BPR) (SUC) Note: Leading diagonals represent the square root of the average variance extracted between the constructs and their measures, while off diagonal entries are correlations among constructs

9 16.0 software. The maximum likelihood method was employed to estimate all parameters and fit indices. SEM fit indices measure the extent to which the covariance matrix derived from the hypothesized model is different from the covariance matrix derived from the sample. Based on the results of the SEM fit indices, the proposed model provides a good fit. The normed x 2 was 2.368, which is below the recommended level of 3.0. The RMSEA was 0.071, which is below the recommended 0.08 cut off. The CFI was 0.922, which is greater than the threshold of Overall, the hypothesized structural model provided an acceptable fit for the data. In addition, the SEM path results, standardized path coefficients and t-values of all relationships hypothesized in the model are shown in Figure 2. The non-significant relationship (path) is shown by a dashed line in this figure. H1 posited that effective PRM of an project would have a significant impact on its. The results of SEM analysis support this hypothesis (b ¼ 0.394, p, 0.001). H2 proposed that the composition and competence of the project team would positively influence the of. The coefficient for the path from TCC to SUC is positive and significant (b ¼ 0.401, p, 0.001), which supports H2. Finally, H3 suggested that reengineering the current business processes to align with systems would positively influence the of the. The coefficient for the path from BPR to SUC is not significant (b ¼ 0.075, p ¼ 0.381), which does not support H Linear relationships Table IV shows the results of testing the influence of three independent variables on the (SUC) as dependent variable in Iranian organizations. Project Management H1* (β = 0.394, t = 6.010) Team Composition and Competence Business Process Reengineering H2* (β = 0.401, t = 5.246) H3 (β = 0.075, t = 0.876) Implementation Success *p < Figure 2. Path analysis results for model Standardised coefficients Unstandardised coefficients Model B SE b t-value Sig. 95% confidence interval for B Lower bound Collinearity statistics Upper bound Tolerance VIF Constant PRM TCC BPR Note: Dependent variable: SUC Table IV. Linear regression model

10 BPMJ 17,6 928 The results show that two of the independent variables, PRM (b ¼ 0.186, t ¼ 2.450, p ¼ 0.015) and TCC (b ¼ 0.164, t ¼ 2.263, p ¼ 0.025) contributed significantly to the model at the 0.05 level, while BPR (b ¼ , t ¼ 1.754, p ¼ 0.081) was not significant in the model. Table IV also shows that both PRM and TCC scores were positively related to SUC in Iranian firms. As PRM and TCC factors increase, projects are more likely to be ful. Looking at the standardised value of b coefficients of the PRM and TCC variables, it can be seen that they contribute to or have almost the same impact on the dependent variable in the model. The tolerance values, which are a measure of the correlation between the predictors, are high, meaning that there are no relationships between predictors. 5. Discussion The results of this study support the proposed hypothesis (H1) that there is a positive relationship between PRM and. This result supports the findings of previous researches in developed countries (Bradley, 2008; Umble et al., 2003) and developing nations (Al-Mashari et al., 2006; Chien et al., 2007; Kamhawi, 2007; Nah et al., 2007; Sawah et al., 2008). system is a set of complex activities, involving all business functions and often takes more than one year to implement. Consequently, organizations should have an effective PRM strategy to control the process, avoiding an overrun of the budget and ensuring that the is on schedule. This can be done by establishing the project scope (which provides a detailed project plan with clear objectives, deliverables, realistic project milestones and end-dates) and developing a tracking and monitoring mechanism to monitor the actual progress. implementing companies in Iran must have a strategy for effective PRM to oversee the process of implementing to avoid overspending and ensure the follows the timetable. Implementing an system is a set of difficult actions which often requires about two years of constant effort and engages all business units. If implementing companies do not comprehend the fundamentals of PRM, they will be at risk. In an project, there are some areas that need consideration, such as scope, integration plan, time, quality, cost, human resource, risk, communication, and procurement. The project will be ful if its PRM can organize and balance all of the factors properly. To achieve ful, Iranian firms should assign considerable time prior to starting to prepare a project plan. A project plan is crucial because a company must develop a comprehensive plan early and predict the costs and time of the project. The plan provides a guide throughout the project and helps the project team to maintain the right focus on the objectives and aims of. The project plan is employed to steer the of the project, to ensure easy communication between project team members, and to respond to management comments pertaining to the achievement and schedule of the project. A best practice project plan would cover the project schedule and plans, risk management, and monitoring and feedback, as suggested by Al-Mudimigh et al. (2001). In summary, adopting companies should clearly establish the project scope and control it throughout the project. The company should assess all requests for scope expansion of the project carefully prior to approving them. Moreover, the company should provide and set up a detailed project

11 plan with clear objectives, deliverables, realistic project milestones and end-dates and enforce them with measurable results. The next important effort is to establish the project team and their responsibilities with a clear statement of work and define the performance objectives to coordinate and organize the project activities properly across all different parties involved. Furthermore, it is vital for to assess project progress on a periodic basis. A formal management process is also needed to track and monitor the vendor s/consultant s activities and communications. Lastly, the project manager/prm team should be empowered to manage all aspects of the project, including balancing the business, technical, and change management requirements. The findings of this research also support the proposed hypothesis (H2) that there is a positive relationship between TCC and. The results of previous researches in developed nations (Bradley, 2008; Loh and Koh, 2004; Peslak, 2006) and developing countries (Al-Mashari et al., 2006; Chien et al., 2007; Ramayah et al., 2007) support the findings of the current study. An project demands the effort and cooperation of technical and business experts as well as end-users. It is necessary to form a skill-balanced project team having internal and external experts, managerial competencies, deep knowledge of the processes, and IT skills. Given the positive relationship between TCC and, a number of proposals may be presented to ensure ful. The organization must assign an experienced and reputable project champion/manager to lead the and establish a team consisting of all stakeholders, including users and technical personnel. The team should be working on the project on a full-time basis. An project involves all functional units within a company. This project requires the cooperation and effort of end-users, business professionals and technical experts. adopting firms generally allocate some of their best workforce to the team implementing. A cross-functional and balanced team must be selected and provided with clear definitions of responsibilities. The project team should be composed of business and IT specialists from an external consultant or from within the adopting organization. Using a combination of the company s employees and consultants to work jointly in the project team will allow internal personnel to develop the technical expertise required for the of the system. teams must be multidisciplinary and dedicated teams, and normally include IT experts, operations staff and key users, and consultants with proficiency in managing change and restructuring business processes. It is crucial to form an team which has a balance of skills ranging from management skills, internal and external professionals, IT competencies, to a thorough knowledge of procedures. The technical and business skills of the project team will contribute to the ful of the system. The knowledge and expertise of the project team are vital in providing know-how in the areas where the implementing company requires knowledge. Lastly, the key members of the project must be empowered to make fast and valuable decisions. To summarise, adopting companies should assign an experienced and reputable project champion/manager who is committed to the project. Also, an team should be established by selecting members from a variety of balanced and cross-functional staff and external consultants. In addition, the team should be chosen from people with the best business 929

12 BPMJ 17,6 930 (domain knowledge) and technical IS knowledge. Moreover, the team members should work full time on the project and the project should be their only priority. Furthermore, the team should be authorized to make decisions relating to all aspects of the project, including technical and business issues. BPR was hypothesized (H3) to be positively correlated with. However, the hypothesized relationship was not supported. This result is not consistent with the findings of prior research conducted in developed countries (Dowlatshahi, 2005; Peslak, 2006; Umble et al., 2003). One of the main reasons for this discrepancy may be that Iranian social practices and cultural values differ markedly from Western practices, as Moghadam and Assar (2008) argue. The Iranian organizations that were studied adopted BPR to align their processes with requirements. However, they lack experience in BPR activities causing the system to fail, as Tarokh et al. (2008) describe. Ngai et al. (2008) point out that popular packages developed by developed countries may not fit the requirements of organizations in developing countries because of the different business practices, and legal and government requirements. It is suggested that Iranian organizations that are thinking of implementing should evaluate and select an package carefully, as suggested by Ngai et al. (2008). Sawah et al. (2008) propose that organizations should have a detailed requirements specification before selecting software and they should choose an appropriate vendor that is able to provide a flexible system. From the perspective of the social shaping of technology theory (Williams and Edge, 1996), an system is the result of social processes in a unique cultural background, the source of the system. Incorporated in any software is a collection of assumptions, rules, values, and practices which reflect the requirements of the social context of the vendor. Therefore, the selection of a particular system implies acceptance of all the social aspects fixed in the software, which reveals a corporate culture about how work should be carried out. Several prior studies have emphasized that the popular software designed by developed countries cannot meet the requirements of enterprises in developing countries (Ngai et al., 2008). When companies in a social context implement software developed in a different social context, they will face misfit problems. Several implementing companies in Asia have experienced similar problems of misfit (Liang et al., 2004). In addition, the systems promoted by international vendors replicate practices of industries in the USA or Europe. Although western management practices and philosophies have shaped business practices of Asian companies, many of the practices are still unique. Western practices generally need formalized information and working processes. However, these processes are often incompatible with the exclusive practices of many Iranian firms. Western systems cannot provide many requirements of Iranian companies such as the report formats required by the government, Persian user interfaces, and so on. Iranian social practices and cultural values differ noticeably from Western practices (Moghadam and Assar, 2008). Iranians have specific ways of doing business and there is a misalignment between current business processes and processes. Organizational fit of the system is essential to the of the system. Organizational fit of the system is defined as congruence between the original artifact of and its organizational context (Sawah et al., 2008). To ensure a close match between the adopting organization and the system, companies should

13 choose software that corresponds closely to their business process. Given that it is almost impossible to obtain a complete match between business requirements and an system, the implementing company can either modify the system (software adaptation) to adapt to its processes or modify its processes to adapt to the system (organizational adaptation). adopting companies in Iran started reengineering business processes to align them with requirements. However, they came across two main limitations when conducting BPR. First, Iranian companies have no background and experience in process management orientation and BPR activities. Moreover, the lack of experience of the BPR consulting companies created serious obstacles for process reengineering in Iranian organizations. Second, there were many Iranian government rules and regulations which could not be modified or removed. Many BPR projects in Iran have failed to produce acceptable results due to legal and management obstacles (Tarokh et al., 2008). Consequently, Iranian adopters shifted to customize the systems, even though it took more time and cost more. system customization is an effort to overturn the vendor s preferences, resulting in new software that represents a different viewpoint about how work should be performed in the user environment. Based on the study s findings and the above discussion, several suggestions are made for adopting companies and vendors. First, because of government standards and specific business conditions, companies have to conform to the business practices of their respective country. So, systems may not be able to meet some of the unique requirements of the adopting companies such as different practices, data, and outputs. Any ful project needs a match between the organizational processes and the system. Therefore, the implementing company should assess and select software carefully. The selection of a suitable system is an important step but both a time-consuming and challenging process. Companies intending to select software must have a detailed requirements plan. A thorough assessment of the system features is necessary before selecting the vendor. The main criterion for choosing software is that fits well with local requirements. The system should be compatible with existing business processes to minimize the need for BPR. Another important principle when selecting software is flexibility. The adopting company should select a suitable vendor that is able to offer an system with maximum flexibility. In addition, it is also vital for the adopting organization to select those systems that are easy to customize. In such cases, the time and money spent on modification can be minimized. Second, Iranian and Western cultural perspectives on changes related to BPR are very different. Unlike Western culture, Iranian culture is more reactive, past oriented, and unwilling to make organizational changes (Moghadam and Assar, 2008). Iranian executives and staff are not prepared for such an enormous transformation. BPR practices can damage Iranian firms, rather than raising the level of management of these companies and their effectiveness. Convincing Iranian companies to abandon the processes they have put in place and implement a set of new unfamiliar procedures is a great challenge. Therefore, any organizational change should be achieved step by step, by using a milder change strategy such as business process improvement. BPR is a revolutionary method that calls for radical rethinking and the renovation of the current business processes. In contrast with this, business process improvement involves evolutionary and milder changes, and consequently, it would have a less drastic impact 931

14 BPMJ 17,6 932 on the current processes of the organization (Davenport and Stoddard, 1994). As a result, following business process improvement approaches is a more suitable approach in the context of Iranian companies. Third, various governmental regulations and the legal context of countries oblige companies to have country-specific requirements. So, vendors should prepare themselves to deal with problems of the environment in which their software is implemented. International vendors should localize their systems to reflect the characteristics of local management. Localization of software means that development of the system fits the requirements of the user s context. The requirements usually depend on country, language, and cultural codes. The business processes in Iranian companies have developed in a specific regulatory and cultural context (Moghadam and Assar, 2008) and they are different from business models embedded in international systems. As a result, international vendors which intend to penetrate Iran s market should incorporate Iranian culture into their software. International vendors are advised to hire Iranian software engineers and business analysts to improve their products. 6. Conclusion A review of the literature pertaining to factors influencing illustrated that there is a lack of research conducted in developing countries. This was also mentioned by Ngai et al. (2008). This study undertook the task of examining in a developing country, namely Iran. It developed and empirically tested a model for from the project environment perspective. The proposed model analyzed the relationships between three independent variables PRM, TCC, and BPR with as the dependent variable. The model was tested and validated with empirical data from Iranian organizations. It was found that only one variable, namely BPR, does not have a positive relationship with. As mentioned earlier this finding contradicts the findings of prior research conducted in developed countries such as Australia (Grabski and Leech, 2007), Canada (Peslak, 2006), and the USA (Mabert et al., 2003; Peslak, 2006; Stratman and Roth, 2002; Umble et al., 2003). This study contributes to academic research by producing empirical evidence to support the theories of CSFs and. The research confirms that PRM, and TCC are positively related with ful. These findings are also important if the context of this research is taken into consideration. No prior research has studied projects in Iran. Therefore, this research adds to the growing body of knowledge on s in developing countries. In addition, this study develops a research model that can be applied in other Asian, Muslim and developing countries to test its applicability, and to examine cross-cultural issues of. Lastly, from a comprehensive review of the literature, Finney and Corbett (2007) identify a major gap in the literature, which is the lack of research into CSFs and from the perspective of key stakeholders. This study is one of very few that examine the of from the perspective of key stakeholders (operational/unit/functional managers). This research has significant managerial implications. First, Iranian organizations and managers could gain an understanding of the complexities inherent in

15 installations to avoid barriers and increase the likelihood of achieving the desired results. Second, the outcomes of this study are also useful to vendors and consultants in preparing some strategies to overcome the misfit between their products and adopting organizations in developing countries. Although the findings of the current study contribute to a better understanding of the ful of systems, there are several limitations to this study. The first limitation of this study is its generalizability. This study presents the viewpoints of corporations operating in Iran, which is located in the Middle East. It is difficult to say whether the findings can be generalized to other regions of the world. Furthermore, dimensions were measured using subjective and perceptual measures. This was due to the difficulty in securing the related factual data from the participating organizations. However, the use of subjective measures is common practice in the literature, and this measurement approach was deemed appropriate here (Chien et al., 2007; Nah et al., 2007). Since few empirical studies have examined in developing countries, there are numerous paths for future research and extensions of this study. More studies could be conducted in developing countries in the Middle East, North Africa and other Muslim countries. Moreover, this study focuses on the factors related to the project environment for ful. Future research could examine other factors relating to the organization of the system itself. 933 References Al-Mashari, M., Al-Mudimigh, A. and Zairi, M. (2003), Enterprise resource planning: a taxonomy of critical factors, European Journal of Operational Research, Vol. 146, pp Al-Mashari, M., Ghani, S.K. and Al-Rashid, W. (2006), A study of the critical factors of in developing countries, International Journal of Internet and Enterprise Management, Vol. 4 No. 1, pp Al-Mudimigh, A., Zairi, M. and Al-Mashari, M. (2001), software : an integrative framework, European Journal of Information Systems, Vol. 10, pp Bernroider, E.W.N. (2008), IT governance for enterprise resource planning supported by the DeLone-McLean model of information systems, Information & Management, Vol. 45 No. 5, pp Botta-Genoulaz, V. and Millet, P.A. (2005), A classification for better use of systems, Computers in Industry, Vol. 56, pp Bradford, M. and Florin, J. (2003), Examining the role of innovation diffusion factors on the of enterprise resource planning systems, International Journal of Accounting Information Systems, Vol. 4, pp Bradley, J. (2008), Management based critical factors in the of enterprise resource planning systems, International Journal of Accounting Information Systems, Vol. 9 No. 3, pp Calisir, F. and Calisir, F. (2004), The relation of interface usability characteristics, perceived usefulness, and perceived ease of use to end-user satisfaction with enterprise resource planning () systems, Computers in Human Behavior, Vol. 20, pp Chien, S.W. and Tsaur, S.M. (2007), Investigating the of systems: case studies in three Taiwanese high-tech industries, Computers in Industry, Vol. 58, pp

16 BPMJ 17,6 934 Chien, S.W., Hu, C., Reimers, K. and Lin, J.S. (2007), The influence of centrifugal and centripetal forces on project in small and medium-sized enterprises in China and Taiwan, International Journal of Production Economics, Vol. 107, pp Davenport, T.H. and Stoddard, D.B. (1994), Reengineering: business change or mythic propositions?, MIS Quarterly, Vol. 18 No. 2, pp Davenport, T.H., Harris, J.G. and Cantrell, S. (2004), Enterprise systems and ongoing process change, Business Process Management Journal, Vol. 10 No. 1, pp Dezdar, S. (2010), Critical factors affecting, unpublished thesis, University of Malaya, Kula Lumpur. Dezdar, S. and Sulaiman, A. (2009), Successful enterprise resource planning : taxonomy of critical factors, Industrial Management & Data Systems, Vol. 109 No. 8, pp Doll, W.J. and Torkzadeh, G. (1988), The measurement of end-user computing satisfaction, MIS Quarterly, Vol. 12 No. 2, pp Dowlatshahi, S. (2005), Strategic factors in enterprise resource-planning design and : a case-study approach, International Journal of Production Research, Vol. 43 No. 18, pp Ehie, I.C. and Madsen, M. (2005), Identifying critical issues in enterprise resource planning (), Computers in Industry, Vol. 56, pp Finney, S. and Corbett, M. (2007), : a compilation and analysis of critical factors, Business Process Management Journal, Vol. 13 No. 3, pp Gable, G.G., Sedera, D. and Chan, T. (2008), Re-conceptualizing information system : the IS-impact measurement model, Journal of the Association for Information System, Vol. 9 No. 7, pp Gargeya, V.B. and Brady, C. (2005), Success and failure factors of adopting SAP in system, Business Process Management Journal, Vol. 11 No. 5, pp Gattiker, T.F. and Goodhue, D.L. (2005), What happens after : understanding the impact of inter-dependence and differentiation on plant-level outcomes, MIS Quarterly, Vol. 29 No. 3, pp Grabski, S.V. and Leech, S.A. (2007), Complementary controls and, International Journal of Accounting Information Systems, Vol. 8, pp Hair, J.F., Black, W.C., Babin, B.J., Anderson, R.E. and Tatham, R.L. (2006), Multivariate Data Analysis, 6th ed., Pearson Prentice-Hall, Upper Saddle River, NJ. Hammer, M. and Champy, J. (1993), Reengineering the Corporation: A Manifesto for Business Revolution, HarperCollins, New York, NY. Holsapple, C.W., Wang, Y.M. and Wu, J.H. (2005), Empirically testing user characteristics and fitness factors in, International Journal of Human-computer Interaction, Vol. 19 No. 3, pp Hong, K.K. and Kim, Y.G. (2002), The critical factors for : an organizational fit perspective, Information & Management, Vol. 40, pp Huang, S.M., Chang, I.C., Li, S.H. and Lin, M.T. (2004), Assessing risk in projects: identify and prioritize the factors, Industrial Management & Data Systems, Vol. 104 No. 8, pp Ifinedo, P. (2008), Impacts of business vision, top management support, and external expertise on, Business Process Management Journal, Vol. 14 No. 4, pp

17 Jones, M.C., Zmud, R.W. and Clark, T.D. (2008), in practice: a snapshot of post-installation perception and behaviors, Communications of the Association for Information Systems, Vol. 23, pp Kamhawi, E.M. (2007), Critical factors for of systems: an empirical investigation from Bahrain, International Journal of Enterprise Information Systems, Vol. 3 No. 2, pp Kamhawi, E.M. (2008), Enterprise resource-planning systems adoption in Bahrain: motives, benefits, and barriers, Journal of Enterprise Information Management, Vol. 21 No. 3, pp Kim, Y., Lee, Z. and Gosain, S. (2005), Impediments to ful process, Business Process Management Journal, Vol. 11 No. 2, pp Law, C.C.H. and Ngai, E.W.T. (2007), systems adoption: an exploratory study of the organizational factors and impacts of, Information & Management, Vol. 44, pp Liang, H., Xue, Y., Boulton, W.R. and Byrd, T.A. (2004), Why western vendors don t dominate China s market, Communications of the ACM, Vol. 47 No. 7, pp Loh, T.C. and Koh, S.C.L. (2004), Critical elements for a ful enterprise resource planning in small-and medium-sized enterprises, International Journal of Production Research, Vol. 42 No. 17, pp Mabert, V.A., Soni, A. and Venkataramanan, M.A. (2003), Enterprise resource planning: managing the process, European Journal of Operational Research, Vol. 146, pp Moghadam, A.H. and Assar, P. (2008), The relationship between national culture and e-adoption: a case study of Iran, American Journal of Applied Sciences, Vol. 5 No. 4, pp Murray, M. and Coffin, G. (2001), A case study analysis of factors for in system s, Proceedings of the Seventh Americans Conference on Information Systems, Boston, MA, USA, pp Muscatello, J.R. and Chen, I.J. (2008), Enterprise resource planning () s: theory and practice, International Journal of Enterprise Information Systems, Vol. 4 No. 1, pp Nah, F.H. and Delgado, S. (2006), Critical factors for enterprise resource planning and upgrade, Journal of Computer Information Systems, Vol. 46 No. 5, pp Nah, F.H., Islam, Z. and Tan, M. (2007), Empirical assessment of factors influencing of enterprise resource planning s, Journal of Database Management, Vol. 18 No. 4, pp Nah, F.H., Lau, L.S. and Kuang, J. (2001), Critical factors for ful of enterprise systems, Business Process Management Journal, Vol. 3 No. 7, pp Nah, F.H., Zuckweiler, K.M. and Lau, L.S. (2003), : chief information officers perceptions of critical factors, International Journal of Human-computer Interaction, Vol. 16 No. 1, pp Ngai, E.W.T., Law, C.C.H. and Wat, F.K.T. (2008), Examining the critical factors in the adoption of enterprise resource planning, Computers in Industry, Vol. 59 No. 6, pp Peslak, A.R. (2006), Enterprise resource planning : an exploratory study of the financial executive perspective, Industrial Management & Data Systems, Vol. 106 No. 9, pp

18 BPMJ 17,6 936 Ramayah, T., Roy, M.H., Arokiasamy, S., Zbib, I. and Ahmed, Z.U. (2007), Critical factors for ful of enterprise resource planning systems in manufacturing organizations, International Journal of Business Information Systems, Vol. 2 No. 3, pp Sawah, S.E., Tharwat, A.A.F. and Rasmy, M.H. (2008), A quantitative model to predict the Egyptian index, Business Process Management Journal, Vol. 14 No. 3, pp Sedera, D. and Dey, S. (2006), Multi-stakeholder assessment of critical factors: insights from the world s fastest SAP R/3, Proceedings of the 12th Americas Conference on Information Systems, Acapulco, Mexico. Sedera, D., Tan, F. and Dey, S. (2007), Identifying and evaluating the importance of multiple stakeholders perspective in measuring ES-, Proceedings of European Conference on Information Systems, Gothenburg, Sweden, pp Somers, T.M. and Nelson, K.G. (2004), A taxonomy of players and activities across the project life cycle, Information & Management, Vol. 41, pp Somers, T.M., Nelson, K. and Karimi, J. (2003), Confirmatory factor analysis of the end-user computing satisfaction instrument: replication within an domain, Decision Sciences, Vol. 34 No. 3, pp Stratman, J.K. and Roth, A.V. (2002), Enterprise resource planning () competence constructs: two-stage multi-item scale development and validation, Decision Sciences, Vol. 33 No. 4, pp Tarokh, M.J., Sharifi, E. and Nazemi, E. (2008), Survey of BPR experiences in Iran: reasons for and failure, Journal of Business & Industrial Marketing, Vol. 23 No. 5, pp Teltumbde, A. (2000), A framework for evaluating projects, International Journal of Production Research, Vol. 38, pp Umble, E.J., Haft, R.R. and Umble, M.M. (2003), Enterprise resource planning: procedures and critical factors, European Journal of Operational Research, Vol. 146, pp Williams, R. and Edge, D. (1996), The social shaping of technology, Research Policy, Vol. 25, pp Wu, J.H. and Wang, Y.M. (2007), Measuring : the key-users viewpoint of the to produce a viable IS in the organization, Computers in Human Behavior, Vol. 23, pp Yusuf, Y., Gunasekaran, A. and Abthorpe, M.K. (2004), Enterprise information systems project : a case study of in Rolls-Royce, International Journal of Production Economics, Vol. 87, pp Zhang, L., Lee, M.K.O., Zhang, Z. and Banerjee, P. (2003), Critical factors of enterprise resource planning systems in China, paper presented at 36th Hawaii International Conference on System Sciences, Big Island, HI. Zhang, Z., Lee, M.K.O., Huang, P., Zhang, L. and Huang, X. (2005), A framework of systems in China: an empirical study, International Journal of Production Economics, Vol. 98, pp

19 Appendix Variable/item Sources Project management The project scope was clearly established and controlled A detailed project plan (i.e. the activities to cover at each stage) was provided and established Realistic project milestones and end dates were defined and set with measurable results The responsibility for all parts of the project was defined and assigned The project activities across all affected parties were coordinated and organized properly There was a formal management process to track and monitor the vendor activities The project progress was reviewed and assessed on a periodic basis Team competence and composition The project had an experienced and reputable project champion/manager who was committed to the project A variety of balanced or cross-functional team members were selected for the The people selected for teams had the best business (domain knowledge) and technical knowledge The team was empowered to make decisions relating to the project Those selected for the were working on the project full time as their only priority Sufficient incentives or compensation were given to those selected for the project Business process reengineering Our firm relied heavily on reengineering its business processes to fit systems with minimal customization Muscatello and Chen (2008), Sedera and Dey (2006), Nah and Delgado (2006) Muscatello and Chen (2008), Nah et al. (2007), Kamhawi (2007), Ehie and Madsen (2005) Nah et al. (2007), Sedera and Dey (2006), Nah and Delgado (2006), Ehie and Madsen (2005) Muscatello and Chen (2008), Nah et al. (2007), Sedera and Dey (2006), Nah and Delgado (2006) Nah and Delgado (2006), Sedera and Dey (2006), Nah et al. (2003) Muscatello and Chen (2008), Nah et al. (2003), Stratman and Roth (2002) Muscatello and Chen (2008), Nah et al. (2003), Zhang et al. (2003), Stratman and Roth (2002) Bradley (2008), Sedera and Dey (2006), Nah and Delgado (2006), Zhang et al. (2003), Stratman and Roth (2002) Nah et al. (2003, 2007), Nah and Delgado (2006), Ehie and Madsen (2005), Kim et al. (2005) Nah et al. (2003, 2007), Wu and Wang (2007), Sedera and Dey (2006), Ehie and Madsen (2005) Sedera and Dey (2006), Nah and Delgado (2006), Nah et al. (2003) Bradley (2008), Nah et al. (003, 2007), Sedera and Dey (2006), Nah and Delgado (2006) Bradley (2008), Nah et al. (2007), Nah and Delgado (2006), Sedera and Dey (2006) Muscatello and Chen (2008), Kamhawi (2007), Sedera and Dey (2006), Ehie and Madsen (2005), Nah et al. (2003), Bradford and Florin (2003), Zhang et al. (2003) Our firm initially mapped out (identified and Muscatello and Chen (2008), Ehie and Madsen documented) existing business processes (2005), Huang et al. (2004) Our firm standardized the business processes to Muscatello and Chen (2008), Law and Ngai (2007), align with the as far as possible Ehie and Madsen (2005), Hong and Kim (2002) Our firm analyzed and integrated redundant and Muscatello and Chen (2008), Hong and Kim (2002) inconsistent organizational processes to align with the Our firm developed new organizational processes Kim et al. (2005), Hong and Kim (2002) to align with the Our firm tried to customize the systems to Kamhawi (2007), Sedera and Dey (2006), Huang our business processes with a minimal amount of et al. (2004), Nah et al. (2003) BPR (reverse coded) 937 Table AI. Items used to measure the project environment and source of references

20 BPMJ 17,6 938 Table AII. Items used for measuring and source of references Factor/items Sources User satisfaction The provides output and reports that I need Gable et al. (2008), Law and Ngai (2007), Somers et al. (2003) The provides precise and clear information Gable et al. (2008), Law and Ngai (2007), Somers et al. (2003) The presents output and reports in a useful format Gable et al. (2008), Sedera et al. (2007), Somers et al. (2003) The output information content provided by the system is Jones et al. (2008), Law and Ngai (2007), Wu and Wang (2007), Chien and comprehensive Tsaur (2007), Somers et al. (2003) The information provided by the system is up to date Jones et al. (2008), Gable et al. (2008), Law and Ngai (2007), Wu and Wang (2007), Chien and Tsaur (2007), Somers et al. (2003) The system is beneficial for the tasks of individuals and improves Jones et al. (2008), Gable et al. (2008), Ifinedo (2008), Nah et al. (2007), employee work efficiency Gattiker and Goodhue (2005), Calisir and Calisir (2004) Overall, there is satisfaction with the system Peslak (2006), Calisir and Calisir (2004), Bradford and Florin (2003), Gable et al. (2008) Organizational impact Kamhawi (2008), Jones et al. (2008), Bernroider (2008) and Ifinedo (2008) Implementing the system has promoted better use of the organizational data resource and enhances higher quality of decision making Ifinedo (2008), Nah et al. (2007), Stratman and Roth (2002) Implementing the system has helped to improve organizational-wide communication and sharing of information across the enterprise Kamhawi (2008), Bernroider (2008), Gable et al. (2008), Ifinedo (2008), Law and Ngai (2007), Sedera et al. (2007) Implementing the system has helped to improve and rationalize business processes and to eliminate redundant tasks Implementing the system has helped to increase (internal or external) Kamhawi (2008), Jones et al. (2008), Bernroider (2008), Ifinedo (2008), Law service/satisfaction and Ngai (2007), Zhang et al. (2005) Implementing the system has helped to reduce organizational cost Jones et al. (2008), Ifinedo (2008), Kamhawi (2007), Sedera et al. (2007), Zhang et al. (2005) Jones et al. (2008), Ifinedo (2008), Huang et al. (2004) Implementing the system has helped to improve managerial efficiency and effectiveness Jones et al. (2008), Kamhawi (2008), Gable et al. (2008), Ifinedo (2008), Sedera et al. (2007) Implementing the system has helped to improve the firm s overall productivity Jones et al. (2008), Bernroider (2008), Gattiker and Goodhue (2005) Implementing the system has helped to improve the firm s overall business performance/profitability

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