Critical Success Factors & Enterprise Resource Planning Implementation and Organizational Performance
Journal of Global Economics, Management and Business Research,
Page 19-41
DOI:
10.56557/jgembr/2023/v15i18137
Abstract
The growth of innovativeness and sustainability has increased the need for quality and efficient performance in the information and communication industry. As organizations expand, there is a need to increase the capacity of their data processing unit by administration and synthesing of information within various departments by utilizing Business Management Solution suit called Enterprise Resource Planning (ERP) software. The crux of this study is to identify the relevant factors that can improve organizational performance through ERP system implementation. The hypothesis was drawn and tested using factor analysis and structural equation modeling. Survey method involving the administration of the questionnaire was used to gather data. The result from a sample size of one hundred respondents reveals that critical success factors can have a remarkable influence on ERP business management software suit and organizational performance.
Keywords:
- Critical success factors
- information system
- enterprise resource planning implementation
- organizational performance
How to Cite
Ogedengbe, F. A., & Idolor, E. K. (2023). Critical Success Factors & Enterprise Resource Planning Implementation and Organizational Performance. Journal of Global Economics, Management and Business Research, 15(1), 19-41. https://doi.org/10.56557/jgembr/2023/v15i18137
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Liu L, Miao R, Li C. The impacts of enterprise resource planning systems on firm performance: an empirical analysis of Chinese chemical firms, IFIP International Federation for Information Processing. 2008;254:579-87.
Falk M. ICT-linked firm reorganization and productivity gains. Technovation. 2005;25(11):1229-50.
Poston R, Grabski S. Financial impact of enterprise resource planning implementations. Int J Acc Inf Syst. 2001;2(4):271-94.
Deloitte. Consulting, L. ERP’s second Wave – maximizing the value of ERP-Enabled Processes. New York: Deloitte Consulting; 1998.
Getachew E. Assessment of enterprise resource planning (ERP): the case of Ethios Telecom [masters thesis]. In: Public Management Policy. Ethiopia: Department of Public Administration and Development Management, School of Graduate Studies, Addis Ababa University; 2014.
Swartz D, Orgill K. The reason behind making significant investments in ERP Systems the Critical Success Factors; 2001.
Tarhini A, Ammar H, Tarhini T, Masa’deh R. Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. Int Bus Res. 2015;8(4):25.
Koh SCL, Gunasekaran A, Goodman T. Drivers, barriers and critical success factors for ERPII implementation in supply chains: A critical analysis. J Strateg Inf Syst. 2011;20(4):385-402.
Nizar MA. The implementation of enterprise resource planning (ERP) in the United Arab Emirate. A case of Musanda Corporation. Int J Technol Innov Manag (IJTIM). 2022;2(1):1-22.
Siddiqui SY et al. IOMT cloud-based intelligent prediction of breast cancer stages empowered with Deep Learning. IEEE Access. 2021;9:14649–46478.
Kossaï M, Piget P. Adoption of information and communication technology and firm profitability: empirical evidence from Tunisian SMEs. J High Technol Manag Res. 2014;25(1):9-20.
Amid A, Moalagh M, Zare Ravasan A. Identification and classification of ERP critical failure factors in Iranian industries. Inf Syst. 2012;37(3):227-37.
Xue YJ, Liang HG, Boulton WR, Snyder CA. ERP Implementation Failures; 2005.
Yu CS. Causes influencing the effectiveness of the post-implementation ERP system. Ind Manag Data Syst. 2005;105(1):115-32.
Stefanou CJ. Organizational key success factors for implementing SCM/ERP systems to support decision making. J Decis Syst. 2001;10(1):49-64.
Huang SY, Chiu AA, Chao PC, Arniati A. Critical success factors in implementing enterprise resource planning system for sustainable corporations. Sustainability. 2019;11(23):1-42.
Kemboi H, Wanyoike D, Langat EK. An assessment of factors affecting the implementation of enterprise resource planning system (ERP) in Geothermal Industry in Kenya. Int Acad J Procurement Supply Chain Manag. 2019;3(1):125-42.
Alsharari NM. Internationalization of the higher education system: an interpretive analysis. Int J Educ Manag. 2018;32(3): 359-81.
Lee KL, Romzi PN, Hanaysha JR, Alzoubi HM, Alshurideh M. Investigating the impact of benefits and challenges of IOT adoption on supply chain performance and organizational performance: an empirical study in Malaysia. Uncertain Supply Chain Manag. 2022;10(2):537-50.
Nandi ML, Kumar A. Centralization and the success of ERP implementation. J Enterpr Inf Manag. 2016;29(5):728-50.
Khan MA, Ghazal TM, Lee SW, Rehman A. Data fusion-based machine learning architecture for intrusion detection 2/6/22, 8:01 PM,”. 2022;70(2):3399-413.
Rashid MA, Hossain L, Patrick JD. The evolution of ERP systems: A historical perspective. In: Enterprise resource planning: solutions and management. IGI Global. 2002;35-50.
Shen YC, Chen PS, Wang CH. A study of enterprise resource planning (ERP) system performance measurement using the quantitative balanced scorecard approach. Computers in Industry. 2016;75(1): 127-39.
Beal V. ERP-enterprise resource planning. It Bus Edge Prop Quinstreet Enterp. Retrieved. 2015;21:2.
Raihana GFH. Cloud ERP – a solution model. Int J Comput Sci Inf Technol Sec (IJCSITS). 2015;2(1):76-9.
Lenart A. ERP in the cloud – benefits and challenges. In: Wrycza S, editor. Research in systems analysis and design: models and methods. Heidelberg, Germany: Springer. 2011;93:39-50.
Asamoah D. Enterprise resource planning (ERP) implementation in a Sub-Saharan African Nation: an empirical test of competing models and theories. A thesis submitted to the Department of Information Systems and Decision Sciences. College: School of Business of Art and Sciences. Kumasi, Ghana: Kwame Nkrumah University of Science and Technology; 2014.
Cooper RB, Zmud RW. Information technology implementation research: A technological diffusion approach. Manag Sci. 1990;36(2):123-39.
Amoako-Gyampah K, Salam AF. An extension of the technology acceptance model in an ERP implementation environment. Inf Manag. 2004;41(6): 731-45.
AMR. The steady stream of ERP investments. Action Medical Research Research; 2008.
Andoh-Baidoo F, Ngwenyama O. SSM approach to realizing emancipatory ideas in ERP implementation. Am Conference on Information Systems (AMCIS); 2005.
Anderson G. Predicting the performance of measures in a Confirmatory factor Analysis; 1991.
Esteves J, Pastor J. Enterprise resource planning systems research: an annotated bibliography. Commun Assoc Inf Syst. 2001;7(8):1-52.
Rockart JF. Chief executives define their own data needs. Harv Bus Rev. 1979;57(2):81-93.
Rockart JF, Bullen CV. The rise of managerial computing: the best of the center for information systems research. New York: Dow Jones-Irwin; 1986.
Pinto JK, Slevin DP. Critical factors in successful project implementation. IEEE Trans Eng Manage. 1987;EM-34(1):22-7.
Rabaa’i, Ahmad A. In:: Third International Symposium on Innovation in Information & Communication Technology. Amman, Jordan: Philadelphia University. Identifying Critical Success Factors of ERP Systems at the Higher Education Sector. ISIICT; 2009.
Sammon D, Adam F. Towards a model of organisational prerequisites for enterprise-wide system integration: examining ERP and data warehousing. J Enterpr Inf Manag. 2015;18(4):458-70.
Ibrahim A 2010. What organizations should know about enterprise resource planning (ERP) system. European, Mediterranean & Middle Eastern conference on information systems (EMCIS2010). Abu Dhabi. 2010; 1-16.
Guergov S, Radwan N. Blockchain convergence: analysis of issues affecting IoT, AI and blockchain. Int J CIM. 2021; 1(1):1-17, 202.
Galy E, Sauceda MJ. Post-implementation practices of ERP systems and their relationship to financial performance. Inf Manag. 2014;51(3):310-9.
Nicolaou AI, Bhattacharya S. Organizational performance effects of ERP systems usage: the impact of post-implementation changes. Int J Acc Inf Syst. 2006;7(1):18-35.
Dantes GR, Hasibuan ZA. The impact of enterprise resource planning (ERP) system implementation on organization: case study ERP implementation in Indonesia. IBIMA Bus Rev. 2011:1-10.
Markus M, Axline S, Petrie D, Tanis C. Learning from adopters’ experiences with ERP: problems encountered and success achieved. J Inf Technol. 2000;15: 245-65.
Selvarajan TT, Ramamoorthy N, Flood PC, Guthrie JP, MacCurtain S, Liu W. The role of human capital philosophy in promoting firm innovativeness and performance: test of a causal model. Int J Hum Resour Manag. 2007;18(8):1456-70.
Chen G, Wang J. Analysis on performance evaluation system of ERP implementation. In: Information Science and Management Engineering (ISME), International Conference. 2010;1:185-8.
Karimi J, Somers TM, Bhattacherjee A. The role of information systems resources in ERP capability building and business process outcomes. J Manag Inf Syst. 2007a;24(2):221-60.
Karim J, Somers TM, Bhattacherjee A. The impact of ERP implementation on business process outcomes (BPO): A Factor-Based Study. J Manag Inf Syst. 2007b;24(1):101-34.
Ayogeboh E, Oludayo OO. Critical success factors for ERP system implementation to support financial functions. Acad Acc Financ Stud J. 2019;23(6):1-11.
Astuty W, Pratama I, Basir I, Harahap JPR. Does enterprise resource planning lead to the quality of the management accounting information system? Pol J Manag Stud. 2022;25(2):93-107.
Christain B, Stefan K. Critical success factors in ERP upgrade projects. Ind Manag Data Syst. 2018;119(3):656-75.
Rossella P, Tommaso R, Rafaella S. Industry 4.0 technologies. Critical success factors for implementation and improvements in manufacturing companies. Prod Plan Control. 2021;34(2): 139-58.
Senem SG, Bedir T, Cagalay C. Obstacles of on-premise enterprise resource planning systems and solution directions. J Compute Inf Syst. 2020:1-12.
Sumit P, Syed MA, Mohd AH, Snajoy K, P, Golam K. Critical success factors (CSFs) for supply chain sustainability in the wood industry: an integrated PCA-ISM model. Sustainability. 2022;14(1863):1-18.
Afeneh S, AlHadid I Et al. Malahmeh. Relationship between organizational factors, technological factors and enterprise resource planning system implementation. International Journal of Managing Information Technology (IJMIT). 2015;7(1):1-16.
Nijhia E, Nwirigi FM. The effect of enterprise resources planning system on firms performance: A survey of commercial banks in Kenya. Int J Bus Com. 2014;3(8):120-9.
Murray MG, Coffin GW. A case study analysis of factors for success in ERP system implementation. In: Proceedings of the seventh Americas Conference on Information Systems. 2001;1012-8.
Hair JF, Black WC, Babin BJ, Anderson RE, Tatham RL. Multivariate data analysis. 6th ed. Upper Saddle River, NJ: Prentice Hall; 2005.
Joreskog KG, Sorbom D. LISREL VI user guide. Mooresville. In: Sciencetific Software. 1987;1.
Davenport TH. Mission critical: realizing the promise of enterprise systems. 2010. Boston: Harvard Business School Press; 2011.
Karimi J, Somers TM, Bhattacherjee A. The role of information systems resources in ERP capability building and business process outcomes. Journal of Management Information Systems. Manag Inf Syst. 2007a;24(2):221-60.
Nandi ML, Kumar A. Centralization and the success of ERP implementation. J Enterpr Inf Manag. 2016;29(5): 728-50.
Raheed ARA. The effect of ERP system implementation on organisational performance at small and medium companies in Amman-Jordan. Int J Sci Res (IJSR). 2021;10(2):851-63.
Deltour F, Farajallah M, Lethiais V. L’équipement des PME en systèmes ERP: une adoption guidée par les priorités stratégiques?, [Management international/ international management / gestión internacional]. 2014; 18(2):155-68.
Panomara consulting [cited March 2015]. Available: http://Panorama-Consulting.com/resource-center/2013-erp-report/. Vol. 2013. ERP report; 2014.
Liu L, Miao R, Li C. The impacts of enterprise resource planning systems on firm performance: an empirical analysis of Chinese chemical firms, IFIP International Federation for Information Processing. 2008;254:579-87.
Falk M. ICT-linked firm reorganization and productivity gains. Technovation. 2005;25(11):1229-50.
Poston R, Grabski S. Financial impact of enterprise resource planning implementations. Int J Acc Inf Syst. 2001;2(4):271-94.
Deloitte. Consulting, L. ERP’s second Wave – maximizing the value of ERP-Enabled Processes. New York: Deloitte Consulting; 1998.
Getachew E. Assessment of enterprise resource planning (ERP): the case of Ethios Telecom [masters thesis]. In: Public Management Policy. Ethiopia: Department of Public Administration and Development Management, School of Graduate Studies, Addis Ababa University; 2014.
Swartz D, Orgill K. The reason behind making significant investments in ERP Systems the Critical Success Factors; 2001.
Tarhini A, Ammar H, Tarhini T, Masa’deh R. Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. Int Bus Res. 2015;8(4):25.
Koh SCL, Gunasekaran A, Goodman T. Drivers, barriers and critical success factors for ERPII implementation in supply chains: A critical analysis. J Strateg Inf Syst. 2011;20(4):385-402.
Nizar MA. The implementation of enterprise resource planning (ERP) in the United Arab Emirate. A case of Musanda Corporation. Int J Technol Innov Manag (IJTIM). 2022;2(1):1-22.
Siddiqui SY et al. IOMT cloud-based intelligent prediction of breast cancer stages empowered with Deep Learning. IEEE Access. 2021;9:14649–46478.
Kossaï M, Piget P. Adoption of information and communication technology and firm profitability: empirical evidence from Tunisian SMEs. J High Technol Manag Res. 2014;25(1):9-20.
Amid A, Moalagh M, Zare Ravasan A. Identification and classification of ERP critical failure factors in Iranian industries. Inf Syst. 2012;37(3):227-37.
Xue YJ, Liang HG, Boulton WR, Snyder CA. ERP Implementation Failures; 2005.
Yu CS. Causes influencing the effectiveness of the post-implementation ERP system. Ind Manag Data Syst. 2005;105(1):115-32.
Stefanou CJ. Organizational key success factors for implementing SCM/ERP systems to support decision making. J Decis Syst. 2001;10(1):49-64.
Huang SY, Chiu AA, Chao PC, Arniati A. Critical success factors in implementing enterprise resource planning system for sustainable corporations. Sustainability. 2019;11(23):1-42.
Kemboi H, Wanyoike D, Langat EK. An assessment of factors affecting the implementation of enterprise resource planning system (ERP) in Geothermal Industry in Kenya. Int Acad J Procurement Supply Chain Manag. 2019;3(1):125-42.
Alsharari NM. Internationalization of the higher education system: an interpretive analysis. Int J Educ Manag. 2018;32(3): 359-81.
Lee KL, Romzi PN, Hanaysha JR, Alzoubi HM, Alshurideh M. Investigating the impact of benefits and challenges of IOT adoption on supply chain performance and organizational performance: an empirical study in Malaysia. Uncertain Supply Chain Manag. 2022;10(2):537-50.
Nandi ML, Kumar A. Centralization and the success of ERP implementation. J Enterpr Inf Manag. 2016;29(5):728-50.
Khan MA, Ghazal TM, Lee SW, Rehman A. Data fusion-based machine learning architecture for intrusion detection 2/6/22, 8:01 PM,”. 2022;70(2):3399-413.
Rashid MA, Hossain L, Patrick JD. The evolution of ERP systems: A historical perspective. In: Enterprise resource planning: solutions and management. IGI Global. 2002;35-50.
Shen YC, Chen PS, Wang CH. A study of enterprise resource planning (ERP) system performance measurement using the quantitative balanced scorecard approach. Computers in Industry. 2016;75(1): 127-39.
Beal V. ERP-enterprise resource planning. It Bus Edge Prop Quinstreet Enterp. Retrieved. 2015;21:2.
Raihana GFH. Cloud ERP – a solution model. Int J Comput Sci Inf Technol Sec (IJCSITS). 2015;2(1):76-9.
Lenart A. ERP in the cloud – benefits and challenges. In: Wrycza S, editor. Research in systems analysis and design: models and methods. Heidelberg, Germany: Springer. 2011;93:39-50.
Asamoah D. Enterprise resource planning (ERP) implementation in a Sub-Saharan African Nation: an empirical test of competing models and theories. A thesis submitted to the Department of Information Systems and Decision Sciences. College: School of Business of Art and Sciences. Kumasi, Ghana: Kwame Nkrumah University of Science and Technology; 2014.
Cooper RB, Zmud RW. Information technology implementation research: A technological diffusion approach. Manag Sci. 1990;36(2):123-39.
Amoako-Gyampah K, Salam AF. An extension of the technology acceptance model in an ERP implementation environment. Inf Manag. 2004;41(6): 731-45.
AMR. The steady stream of ERP investments. Action Medical Research Research; 2008.
Andoh-Baidoo F, Ngwenyama O. SSM approach to realizing emancipatory ideas in ERP implementation. Am Conference on Information Systems (AMCIS); 2005.
Anderson G. Predicting the performance of measures in a Confirmatory factor Analysis; 1991.
Esteves J, Pastor J. Enterprise resource planning systems research: an annotated bibliography. Commun Assoc Inf Syst. 2001;7(8):1-52.
Rockart JF. Chief executives define their own data needs. Harv Bus Rev. 1979;57(2):81-93.
Rockart JF, Bullen CV. The rise of managerial computing: the best of the center for information systems research. New York: Dow Jones-Irwin; 1986.
Pinto JK, Slevin DP. Critical factors in successful project implementation. IEEE Trans Eng Manage. 1987;EM-34(1):22-7.
Rabaa’i, Ahmad A. In:: Third International Symposium on Innovation in Information & Communication Technology. Amman, Jordan: Philadelphia University. Identifying Critical Success Factors of ERP Systems at the Higher Education Sector. ISIICT; 2009.
Sammon D, Adam F. Towards a model of organisational prerequisites for enterprise-wide system integration: examining ERP and data warehousing. J Enterpr Inf Manag. 2015;18(4):458-70.
Ibrahim A 2010. What organizations should know about enterprise resource planning (ERP) system. European, Mediterranean & Middle Eastern conference on information systems (EMCIS2010). Abu Dhabi. 2010; 1-16.
Guergov S, Radwan N. Blockchain convergence: analysis of issues affecting IoT, AI and blockchain. Int J CIM. 2021; 1(1):1-17, 202.
Galy E, Sauceda MJ. Post-implementation practices of ERP systems and their relationship to financial performance. Inf Manag. 2014;51(3):310-9.
Nicolaou AI, Bhattacharya S. Organizational performance effects of ERP systems usage: the impact of post-implementation changes. Int J Acc Inf Syst. 2006;7(1):18-35.
Dantes GR, Hasibuan ZA. The impact of enterprise resource planning (ERP) system implementation on organization: case study ERP implementation in Indonesia. IBIMA Bus Rev. 2011:1-10.
Markus M, Axline S, Petrie D, Tanis C. Learning from adopters’ experiences with ERP: problems encountered and success achieved. J Inf Technol. 2000;15: 245-65.
Selvarajan TT, Ramamoorthy N, Flood PC, Guthrie JP, MacCurtain S, Liu W. The role of human capital philosophy in promoting firm innovativeness and performance: test of a causal model. Int J Hum Resour Manag. 2007;18(8):1456-70.
Chen G, Wang J. Analysis on performance evaluation system of ERP implementation. In: Information Science and Management Engineering (ISME), International Conference. 2010;1:185-8.
Karimi J, Somers TM, Bhattacherjee A. The role of information systems resources in ERP capability building and business process outcomes. J Manag Inf Syst. 2007a;24(2):221-60.
Karim J, Somers TM, Bhattacherjee A. The impact of ERP implementation on business process outcomes (BPO): A Factor-Based Study. J Manag Inf Syst. 2007b;24(1):101-34.
Ayogeboh E, Oludayo OO. Critical success factors for ERP system implementation to support financial functions. Acad Acc Financ Stud J. 2019;23(6):1-11.
Astuty W, Pratama I, Basir I, Harahap JPR. Does enterprise resource planning lead to the quality of the management accounting information system? Pol J Manag Stud. 2022;25(2):93-107.
Christain B, Stefan K. Critical success factors in ERP upgrade projects. Ind Manag Data Syst. 2018;119(3):656-75.
Rossella P, Tommaso R, Rafaella S. Industry 4.0 technologies. Critical success factors for implementation and improvements in manufacturing companies. Prod Plan Control. 2021;34(2): 139-58.
Senem SG, Bedir T, Cagalay C. Obstacles of on-premise enterprise resource planning systems and solution directions. J Compute Inf Syst. 2020:1-12.
Sumit P, Syed MA, Mohd AH, Snajoy K, P, Golam K. Critical success factors (CSFs) for supply chain sustainability in the wood industry: an integrated PCA-ISM model. Sustainability. 2022;14(1863):1-18.
Afeneh S, AlHadid I Et al. Malahmeh. Relationship between organizational factors, technological factors and enterprise resource planning system implementation. International Journal of Managing Information Technology (IJMIT). 2015;7(1):1-16.
Nijhia E, Nwirigi FM. The effect of enterprise resources planning system on firms performance: A survey of commercial banks in Kenya. Int J Bus Com. 2014;3(8):120-9.
Murray MG, Coffin GW. A case study analysis of factors for success in ERP system implementation. In: Proceedings of the seventh Americas Conference on Information Systems. 2001;1012-8.
Hair JF, Black WC, Babin BJ, Anderson RE, Tatham RL. Multivariate data analysis. 6th ed. Upper Saddle River, NJ: Prentice Hall; 2005.
Joreskog KG, Sorbom D. LISREL VI user guide. Mooresville. In: Sciencetific Software. 1987;1.
Davenport TH. Mission critical: realizing the promise of enterprise systems. 2010. Boston: Harvard Business School Press; 2011.
Karimi J, Somers TM, Bhattacherjee A. The role of information systems resources in ERP capability building and business process outcomes. Journal of Management Information Systems. Manag Inf Syst. 2007a;24(2):221-60.
Nandi ML, Kumar A. Centralization and the success of ERP implementation. J Enterpr Inf Manag. 2016;29(5): 728-50.
Raheed ARA. The effect of ERP system implementation on organisational performance at small and medium companies in Amman-Jordan. Int J Sci Res (IJSR). 2021;10(2):851-63.
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