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ERP Implementation Projects in Asian Countries: A Comparative

Study on Iran and China

Article  in  International Journal of Information Technology Project Management · July 2017

DOI: 10.4018/ijitpm.2017070104

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International Journal of Information Technology Project Management
Volume 8 • Issue 3 • July-September 2017

ERP Implementation Projects

in Asian Countries:
A Comparative Study on Iran and China
Shahin Dezdar, Amirkabir University of Technology, Department of Industrial Engineering and Management Systems,
Tehran, Iran

ABSTRACT

This research studies critical success factors that influence the ERP implementation project in a
Middle-Eastern country, namely Iran and compares the results with findings in a country in East Asia,
namely China. A survey questionnaire was distributed to Iranian organizations with ERP systems.
A total of 384 responses were collected and analysed using the Structural Equation Modelling.
Findings are then compared, with the enterprises of China, to check for the similarities & differences.
The outcomes showed that ERP implementation success in Iran is influenced by Top Management
Support, Project Management Program, Organizational Culture, User Education & Training, ERP
User Involvement, ERP User Characteristics, ERP Software Suitability, ERP Information Quality,
ERP System Quality, ERP Vendor Quality. The central aim of the current research is to understand the
most significant factors of ERP project success that help adopting companies to realize the benefits
of ERP implementation.

Keywords
Asian Countries, China, Critical Success Factor, Enterprise Resource Planning, ERP Implementation Project,
Iran, Organizational Culture, Project Management Program

INTRODUCTION

Enterprise resource planning (ERP) systems can be considered as cornerstone that allows most
organizations to achieve their business goals (Alhirz & Sajeev, 2015). In recent years, many firms
have invested in enterprise resource planning (ERP) in order to integrate all business activities into
a uniform system. The implementation of ERP enables the firm to reduce the transaction costs of
the business and improve its productivity, customer satisfaction and profitability. Companies around
the world have implemented ERP systems because the use of ERP systems has been considered as
a key determinant of competitive advantage. Amiri and Kazerooni (2014) affirmed that enterprise
resources planning (ERP) is the most operative computer application in the present public utility, to
support the operations of a utility enterprise. The ERP systems offer several considerable tangible
benefits to the implementing companies like cost effectiveness in inventory, personnel, procurement,
cash/order management, improvements in productivity, and overall profitability, and they also present
a number of most important intangible benefits such as improved information and processes, internal
integration, and improved customer service (Dezdar & Ainin, 2011a). Regardless of the countless
benefits of the ERP system, its adoption and implementation have not been without issues (Peslak,
2012). Sar and Garg (2012) confirms that 60% to 70% of the ERP projects are not implemented

DOI: 10.4018/IJITPM.2017070104

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52
 International Journal of Information Technology Project Management
Volume 8 • Issue 3 • July-September 2017

successfully. So, there is an urgent need to identify and understand the factors that affect the success
or failure of ERP implementation (Amid et al., 2012). The majority of previous studies have been
devoted to developed countries, while in developing countries, many companies have moved towards
using such systems. The majority of IT/IS management standards and guidelines have been developed
by technologically-leading countries. But developing countries, which mostly confront with especial
challenges, have a different condition from the implicit assumptions of leading countries (Eichhorn &
Tukel, 2015). Dezdar (2012) emphasized that additional effort should be directed to ERP projects in
developing countries as they represent a vast potential ERP market and a very large pool of companies.
Following the gaps discussed above, this study aims to identify the critical success factors that
influence ERP implementation success in Iranian and Chinese companies. Understanding the critical
factors of the success of ERP implementation would be of benefit to both implementing companies
and ERP software vendors. ERP implementing companies could achieve an understanding of the
complexities inherent in ERP implementation projects to avoid possible barriers. In addition, decision
makers will be able to prepare better strategies to increase the likelihood of achieving the desired
results. Besides, ERP system vendors would build ERP products that keep their customers happier
and consequently they may possibly increase their market share and their profits.
In the following sections, the related literature is reviewed. Then, research framework and
hypotheses are presented followed by the research methodology chosen to conduct the study. Next,
data collection and analysis are described and findings are discussed. Finally, conclusions and
implications for future research are highlighted.

CRITICAL FACTORS FOR SUCCESSFUL ERP IMPLEMENTATION

Implementation of an ERP system is a complex process including a great many factors and conditions
which can potentially influence successful implementation. These factors might have a positive effect
on the ERP implementation project outcome, whereas the lack of these conditions could create trouble
through ERP implementation (Dezdar & Ainin, 2011b). In ERP system implementation, CSFs could
be recognized as the few key areas where things must go right for the implementation to succeed
(Callaghan et al., 2013). The CSF method is an attractive method for researchers and managers
because it facilitates the identification and prioritization of critical factors that will possibly affect
ERP implementation benefits (Sar & Garg, 2012).
Critical success factors for ERP projects have been studied from a number of different perspectives
(Zhang et al., 2005). Holland and Light (1999) focused on strategic factors that span the whole project
and tactical factors that can be applied to particular parts of the project. Esteves-Sousa and Pastor-
Collado (2000) concluded that the CSFs model should have four perspectives: strategic, tactical,
organizational and technical. Al-Mashari et al. (2006) presented a categorization of ERP critical factors
where 12 factors were divided into three dimensions related to the stages of ERP project. Nah et al.
(2003) performed a survey of the Chief Information Officers (CIOs) of Fortune 1000 companies to gain
some understanding of the CIOs’ views of the importance of each of the 11 criteria in determining the
success in the implementation of an ERP system. Somers and Nelson (2004) divided the 22 CSFs to
two parts as ‘key players’ and ‘key activities’. Finney and Corbett (2007) identified 26 critical success
factors based on the investigation of all CSFs in the literature and grouped them into strategic and
tactical categories. Finally, Dezdar and Sulaiman (2009) developed a compilation of CSFs for ERP
implementation projects. They employed content analysis method to scrutinize the studies conducted
in last 10 years and provided 17 CSFs in five main categories, as follows:

53
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