The Impact of ERP Implementation on Business Process Outcomes: A Factor-Based Study

Abstract

Failures in large-scale information technology implementation are abundantly documented in the practitioner literature. In this study, we examine why some firms benefit more from enterprise resource planning (ERP) implementation than others. We look at ERP implementation from a technological diffusion perspective, and investigate under what contextual conditions the extent of ERP implementation has the greatest effect on business process outcomes. Using empirical data, we find that the extent of ERP implementation influences business process outcomes, and both ERP Downloaded by [University of Exeter] at 05:20 06 August 2015 102 KARIMI, SOMERS, AND BHATTACHERJEE radicalness and delivery system play moderating roles. For information systems (IS) practice, this study helps managers direct their attention to the most promising factors, provides insights into how to manage their complex interactions, and elaborates on their differential effects on business process outcomes. For IS research, it integrates innovation diffusion theory into our current knowledge of ERP implementation and provides theoretical explanations for ERP implementation failures.KEY WORDS AND PHRASES: business process outcomes, enterprise systems, ERP effects, ERP implementation, ERP radicalness, information technology innovation, innovation diffusion theory., a considerable number of firms have not been able to derive full benefits from their IT investments, largely due to their inability to effectively deploy IT in their value-chain activities and business strategies [3, 10, 23]. IT implementation is important because it enables a firm's competitive strategies by lowering production costs, achieving operational flexibility, enhancing supplier or customer linkages, and enhancing or creating new products and services [70]. While some implementations of enterprise resource planning (ERP) systems have led to significant reduction in inventory and in administrative costs, and millions of dollars in logistics savings at firms such as Dow Corning, IBM, and Texas Instruments [47,75,82], others have led to failures at firms such as AMR Corporation, Dow Chemical, Hershey Foods, Fidelity Brokerage Services, and FoxMeyer [82]. Such conflicting results have prompted an empirical examination of the factors that lead to differential outcomes across firms.Most factor-based studies explain the role of one or more organizational (e.g., delivery system), technological (e.g., divisibility, radicalness), user, task, or environmental factors that affect adoption, implementation, or outcomes of innovations [23,37,38,43,84]. Researchers have suggested that (1) organizational and technological factors are most important, difficult to manage and control, and more beneficial to the organization than the other factors [33,54,61,84], and (2) depending on the specific technology in question, organizational factors vary and should be measured as a combined technology-organization factor [37]. Further, a recent review of the technology strategy literature in Fichman [37] identi...

Impact of ERP Implementation on Business Process Outcomes: A Replication of a United States Study in a Sub-Saharan African Nation

“…ERP implementation usually results in enhanced business processes which often translates into improved business performance (Elbashir et al, 2008;Karimi et al, 2007), but not all organizations experience such benefits (Alshawi et al, 2004;Kim et al, 2005;Scot and Vessey, 2002;Soh and Sia, 2004;Voordijk et al, 2005). While the results of prior ERP benefits research are intriguing, most of the studies mainly focused on developed nations, particularly North America and Europe (Abdelghaffar and Abdel Azim, 2010;Huang et al, 2004;Huang and Palvia, 2001).…”

“…This study is a conceptual replication (Dennis and Valacich, 2014) of the study of Karimi et al (2007) which explored the impact of ERP implementation on business process outcomes using manufacturing firms in the US. We used data from firms that have implemented ERP systems in Ghana, a developing SSA country.…”

Extracting Business Value from IT: A Sensemaking Perspective of Post-Adoptive Use

“…(See Table 3 for the mean, median, and standard deviation of each variable.) Figure 2 presents our structural model, reporting the estimated path coefficients and R 2 s. We examined Cook's D and found no influential cases, and checked VIFs and found no harmful collinearity (Karimi et al 2007). Below we discuss the results of the hypothesis testing.…”

A Literature Review on Business Process Management, Business Process Reengineering, and Business Process Innovation

“…This greatly enhances the accuracy of the results when compared to simply counting the same value. Further, the geographical areas were classified based on the AIS regions [52,53].…”

“…The results from Table 4 evidently show that case studies (30 articles, 47.6% from AIS journals and 27 articles, 33.7% from Science Direct) were the most common approach adopted by the authors of both the sources. It is indeed even though BPM, BPR, and BPI have been for a long time, factors such as ever-changing economy, dynamic organizational changes, and IT have made the subjects evolve in a rapid pace in the recent years, and most of the concepts remain largely theoretical [53,54]. In this context, it can be said that it is appropriate to adopt the case study approach in the study of the new or evolving concepts as it allows to induce theories from it [55,56].…”