International Journal of Electronic Business Management, Vol. 11, No. 1, pp.

49-59 (2013) 49

KNOWLEDGE MANAGEMENT ENABLERS AND

KNOWLEDGE CREATION IN ERP SYSTEM SUCCESS

Don Jyh-Fu Jeng* and Nicolas Dunk

Institute of International Management
National Cheng Kung University
Tainan (70101), Taiwan

ABSTRACT
Evaluating the success of enterprise resource planning (ERP) systems for relevant
organizations is an emerging area of study. Many organizations both large and small have
been victims of unsuccessful ERP implementations. This study attempts to complement
ongoing research dedicated to understanding ERP systems more clearly and how
knowledge creation drives success. Knowledge is recognized as a strategic tool within an
organization necessary for sustaining a competitive advantage. Numerous studies have
focused on knowledge management and its relationship to overall organizational
performance, with a lack of observation, however, on individual systems. This study aims
to investigate how knowledge management enablers and knowledge creation relate to ERP
success. This research targets footwear and apparel manufacturers, as these industries are
unique due to product demand challenges and supply chain inefficiencies. The involved
survey contains 187 respondents, with the result of this empirical study indicating that
knowledge creation has an impact on ERP success. Specifically, in knowledge management
enablers, organizational culture and decentralized organization demonstrates a strong
relationship to the knowledge creation that further influences the success of ERP systems.

Keywords: IT strategy, ERP success, knowledge management, knowledge creation,

enterprise systems.

1. INTRODUCTION forecasted sustained demand for ERP systems

1 throughout 2008 and beyond [49].
Enterprise resource planning (ERP) systems are
commercial software packages that integrate
transaction-oriented data and business processes
throughout an organization [30]. ERP systems are
promising to businesses wanting to consolidate and
integrate the many elements that compromise
business practice [41]. Capitalizing on competitive
advantage underlies the motivation of firms for
adopting ERP systems.
Although ERP facilitates competitive
advantage to an organization, there is a high rate of
failure in implementing ERP systems. Statistics
indicate that 74% of manufacturing organizations and
59% of service-based organizations either use or
implement ERP [29]. Panorama Consulting Group
[49] reported that 93% of ERP implementations take
longer than expected and 59% cost more than
expected. Furthermore, only 13% characterize
themselves as “very satisfied” with their company
software implementation. Even though reports
indicate high failure rates, primary research recently
*
Corresponding author: jeng@mail.ncku.edu.tw
Knowledge management (KM) emphasizes
enhancing competitive advantage in firms through
more effectively utilizing their knowledge assets to
subsequently ensure ERP success through the free
flow of knowledge as information across
organizations. Improved knowledge sharing and
creation should enhance flexibility and innovation
[26]. In the context of ERP systems, knowledge is a
critical success factor [5, 8]. Literature based on ERP
success suggests carefully managing knowledge to
maximize its potential. To facilitate knowledge
management, scholars have identified key cultural,
structural, and IT related enablers [12, 27]. These key
infrastructures maximize social capital [12].
This study analyzes the footwear and apparel
industry due to the product demand challenges this
industry faces. Because materials are sourced in
low-cost regions around the world, this industry is
plagued with inflexible supply chains [4], which
reduce the capability to respond to customer demand.
A successful ERP system provides a more efficient
information flow along the supply chain to counteract
such consumer demands. However, several publicized