Information & Management 40 (2002) 87–114

An innovation—diffusion view of implementation of enterprise resource planning (ERP) systems and development of a research model$
Palaniswamy Rajagopal*
Department of Information Systems, School of Business and Economics, Michigan Technological University, 1400 Townsend Drive, Houghton, MI 49931, USA Received 16 January 2001; accepted 13 October 2001

Abstract Firms around the world have been implementing enterprise resource planning (ERP) systems since the 1990s to have an uniform information system in their respective organizations and to reengineer their business processes. Through a case type analysis conducted in six manufacturing firms that have one of the widely used ERP systems, various contextual factors that influenced these firms to implement this technology were understood using the six-stage model proposed by Kwon and Zmud. Three types of ERP systems, viz. SAP, Baan and Oracle ERP were studied in this research. Implementation of ERP systems was found to follow the stage model. The findings from the process model were used to develop the items for the causal model and in identifying appropriate constructs to group those items. In order to substantiate that the constructs developed to measure the causal model were congruent with the findings based on qualitative analysis, i.e. that the instrument appropriately reflects the understanding of the case interview; ‘triangulation’ technique was used. The findings from the qualitative study and the results from the quantitative study were found to be equivalent, thus, ensuring a fair assessment of the validity and reliability of the instrument developed to test the causal model. The quantitative measures done only at these six firms are not statistically significant but the samples were used as a part of the triangulation method to collect data from multiple sources, to verify the respondents’ understanding of the scales and as an initial measure to see if my understanding from the qualitative studies were accurately reflected by the instrument. This instrument will be pilot tested first and administered to a large sample of firms. # 2002 Elsevier Science B.V. All rights reserved.
Keywords: Enterprise resource planning (ERP) systems; Process model; Causal model; Contextual factors; Triangulation; Integration and performance

$ Due to various problems and issues encountered by the author while pursuing doctoral studies, it took lot of time to finalize the manuscript and submit to the journal. The author is going to continue working on his Ph.D. in Information Technology Management through distance learning from a different school while working as a lecturer of Information Systems and Information Technology at Michigan Technological University. * Tel.: þ1-906-487-2529; fax: þ1-906-487-2944. E-mail address: rpalanis@mtu.edu (P. Rajagopal).

0378-7206/02/$ – see front matter # 2002 Elsevier Science B.V. All rights reserved. PII: S 0 3 7 8 - 7 2 0 6 ( 0 1 ) 0 0 1 3 5 - 5

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1. Introduction When met with high levels of competition and pressure from the industry, most organizations invariably turn to the information systems department to help them attain advantages in the market by performing better internally through saving resources and through becoming adept in responding to these challenges from the environment. Many manufacturing and other organizations around the world have been able to achieve high levels of performance during the recent turbulent decades because of the application and usage of various IT tools that automated many of their routine organizational activities. Implementation and wide usage of IT tools have helped organizations to function in an organized fashion, thus, alleviating many redundancies that were ubiquitous across the entire organization. Venkatraman [57] recently mentioned that ‘‘We are at an interesting turning point in our business history: the industrial age is giving way to the information age and the digital infrastructure is fast replacing the physical infrastructure’’. Similar to how industrial machinery and tools were used at the transition from Agrarian to Industrial Economy, currently we are at a stage where information technology tools available and the systems developed using those tools are at infant or premature stages of development and usage with more room for research, development and usage. If we take into account the number of users and how these users utilize these tools, this statement becomes more valid. The work force is slowly being transformed from ‘manual and routine task performing workers’ to knowledge workers because of the rapid use of IT that involves information processing, dissemination and data gathering rather than physical exertion as explained by Zuboff [59]. Information technology application and usage are associated with many inherent drawbacks that were opaque to many of the organizational decision-makers for many years. The changes in the global economy and the intense competition during the early 1990s resulted in a ‘rude awakening’ to many industrial organizations to chart new strategies to be successful if not at least to survive even in local markets. Information technology based tools were seen as one of the significant enablers of success, and organizations went on an IT investment binge in the hope that implementation of IT tools would automatically put them in a

comfortable position where all of an organization’s activities were expected to be automated resulting in an ‘efficient’ organization. But they were in for a surprise. Of the US$ 275 billion spent by US firms in 1996 in software applications, 53% of the projects failed [23], and these failures were not because the software were coded incorrectly, rather the companies failed to understand the real organizational needs and systems required to solve their problems to improve performance. After all there was no shortage in the brainpower required to code programs and definitely it was not a laggard to stop US firms from designing an appropriate system. Based on empirical research, Quinn and Baily [45] found that the investments made in IT did not result in any improvements in industrial productivity. The reason for the inability of the firms to realize competitive gains even after spending billions of dollars is that proper usage of IT necessitates changes in the design and structure of an organization as mentioned by Brynjolfsson and Hitt [9] in their paper about ‘productivity paradox’. Brynjolfsson and Mendelson [10] found that organizations might not be able to realize full benefits of a technology unless they make the necessary changes in organizational structure, strategies and processes. Many renowned scholars in MIS including Grover, Teng, Segars, Fiedler, Henderson, Venkatraman, Scott-Morton, Lucas and Baroudi have called for changes in business processes, organizational structures and such management related issues in order to take full advantage of the implemented information technologies [25,28, 50,38]. On the technical side of IT, one of the primary reasons for the inability of many firms to realize the full potential offered by IT is the incompatibility among the various computer hardware and software systems as was found during the case studies and as reported by Ives and Jarvenpaa [29], Stevens [55] and others. Individual functions and divisions started implementing various computer hardware and software systems in their respective functions and divisions during the last decade, which eventually resulted in organizations characterized by a myriad of different systems that could not communicate with one another. Individual functions and divisions were able to realize better performance and efficiency but at an organizational level they were impeded from performing better through using all of the available information because

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of the systems’ incompatibility. As organizations grew by mergers and acquisitions and as firms transcended beyond their national boundaries, the disparity among their computer hardware and software systems kept increasing. As mentioned by Ives and Jarvenpaa [29] such incompatibility among the various computer hardware and software systems in a global context only encumbered their performance. Discrete automation of business processes that would not result in smooth, continuous and coherent information flows in the entire value chain only impaired an organization’s ability to grow and excel. Since the current information-age business environment bases its competitive requirements on knowledge and information, organizations are forced to work together, rather than in independent functional silos, making available various dispersed information that were available but left untapped due to lack of technical adeptness. Many IT professionals are of the opinion that only a fraction of the available information is used in organizational decision-making processes with the other remaining latent [23]. Because of such incompatibility, information is exchanged only at the local units rather that at a global level. Such automation of only individual functions and divisions that resulted in ‘islands of automation’ is unlikely to have significant impact on the productivity of an organization [25]. Hence, an information technology tool that could help organizations alleviate incompatibility issues to make disparate computer hardware and software systems communicate with one another and at the same time help organizations shift from a traditional functional mode to a business process mode and optimize the resultant business processes to take full advantage of the technology is likely to help organizations enhance their performance. Davenport [18] in his paper on new industrial engineering explained that information technology and business process redesign are two vital tools which by ‘‘working together have the potential to create a new type of industrial engineering’’. The ERP systems do just that, i.e. besides being an IT innovation, it is also a business process reengineering (BPR) mechanism and, hence, it enables organizations to practice new forms of industrial engineering, a shift away from the traditional forms where IT functioned independent of the business objectives [57]. It should be of no surprise that the sales of the ERP systems was expected to be around

US$ 20 billion by the year 2000 and the eventual market size is projected to be around US$ 1 trillion by the year 2010 [6]. To overcome the problems associated with incompatibility, during recent years many organizations in the US and other countries have been implementing enterprise resource planning (ERP) systems, and the demand for the implementation of these systems is growing rapidly. Through implementation of ERP, these firms are able to achieve an ‘‘end-to-end’’ connectivity, thus, bringing various diverse functions and divisions together. Multinational firms are able to integrate their geographically dispersed subsidiaries with headquarters resulting in a single uniform and coordinated information system and are, thus, able to coordinate and monitor their performance in real time. Many of the inherent drawbacks associated with the materials requirement planning (MRP) and manufacturing resources planning (MRP II) systems have been overcome through implementation of ERP systems, since ERP systems integrate manufacturing function with most or all of the functions in an organization [35]. MRP II systems were used mostly at individual manufacturing facilities or manufacturing facilities in isolation of one another and were not so successful when an organization had multiple and dispersed production facilities. Such problems became more pronounced when organizations grew through mergers and acquisitions, which resulted in higher degree of disparate systems. Through implementing ERP systems, organizations have overcome many of the problems associated with using disparate information systems. From the shop floor activities to performance monitoring in the headquarters, a flawless integration has been achieved through ERP implementation, thus, making the various computer hardware and software platforms compatible to one another. Organizations that implemented ERP systems have made improvements in cross-functional coordination and have improved business performance at various levels. No other IT innovated thus far has had such a profound effect across an entire organization, even at the global level, as did ERP systems, as learned during case interviews. Since ERP is an IT integration tool (and a BPR mechanism) that connects all the databases, activities related to a certain business process occur simultaneously in various functions unlike in sequential manner where information about tasks

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associated with a business process were ‘passed on’ from one department to another [53]. Since such activities occur simultaneously much of the related paper work is alleviated and time taken to complete a certain task through a certain business process is greatly reduced as observed at the Owens Corning Company. Since there were only a few research works about ERP implementation reported in the literature when this research was initiated, the need to conduct an empirical study in this area became rather obvious. A research work that would explain ERP implementation with a theoretical model is likely to benefit both academics and industry professionals, since such research is likely to shed more light on this recent IT innovation. Any technology implementation is best understood by analyzing and understanding the various contextual factors both from within and from the external environment that resulted in implementation of the technology, the various issues involved during and after implementation and the resulting performance [33,44]. To clearly understand the factors of influence, issues, barriers, facilitators and performance, the stage model was found to be a useful tool, because this model frames an implementation as going through certain stages before that technology becomes widely used in an organization. Various issues such as facilitators and barriers to implementation and usage are observed in each of the stages. The reasons for certain firms to implement and widely use a technology compared to some other firms that may have difficulties could be identified using such approach. Justification and details for using the stage model is given in Section 3. With the background set about the changes in the business environment, given the details of ERP systems and the justification to use the stage model to study ERP implementation, this research aims to: 1. Explain the emerging role of ERP in organizations; 2. Explain the various contextual factors associated with the innovation and diffusion of various types of ERP systems using the stage (process) model proposed by Kwon and Zmud [33] and the resulting enhanced performance and; 3. Develop a research (causal) model using the case study findings and based on literature about IT implementation.

As a first step to form a robust model, an exploratory research was conducted in six manufacturing firms. This research paper is part of an ongoing research project that aims to explore the business processes both internal and external to an organization due to implementation and usage of advanced IT. ERP implementation research is to understand business processes that are internal to an organization and future research about Internet based processes is to study about business processes that involve elements that are external to an organization. The uniqueness of this research paper is that it combines a process model and causal model, utilizes innovation–diffusion based stage theory to frame implementation of ERP systems and uses triangulation technique to verify the congruence between qualitative findings and the quantitative measures. There are hardly any papers in the IS area that have used Triangulation technique advocated by Kaplan and Duchon [30] in their qualitative analyses.

2. Literature review 2.1. Enterprise resource planning (ERP) systems Laughlin [36] defined ERP as ‘‘software packages that affect everything from order capturing to accounting and procurement to warehousing. They grew out of the need to plan, manage and account for resources in predominately discreet manufacturing environments’’. Slater [54] defines ERP as ‘‘ERP integrates key business and management processes to provide a sky-level view of much of what is going on in the organization. The idea behind ERP is that the software needs to communicate across functions’’ and that ERP systems permit efficient exchange of relevant data regarding the production processes and their associated administrative tasks. Minahan [40] explained that ERP systems take into account every business transaction entered into the system no matter where the data is input and that ERP ‘‘digitally records’’ all these transactions. Data available to everyone in the organization at a global level is always current and not from ancient times. It was found during interviews at one of the companies, that executives from corporate headquarters in the US could monitor performance at production facilities located in a foreign country, if desired, in real time

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and such global coordination and monitoring enable them to optimize their operations at a global level since most ERP systems are capable of handling international currency units and are available in many languages. 2.2. IT implementation The literature on information technology implementation may be classified into process research, factors research and political research [16,33]. Based on the definition of these research categories, my research could be classified into ‘factors research’, since it addresses only the ‘‘individual, organizational and technological issues’’ related to implementation of an ERP system. In a field characterized by rapid advances where yesterday’s technology becomes obsolete today, implementation research in IT is likely to continue to be of interest in the current and coming years as stressed by Lai and Mahapatra [34]. 2.3. Stage model Premkumar, Ramamurthy and Nilakanta [44] used the stage model to study implementation of electronic data interchange (EDI) and justified using the stage model to study that IT innovation since it helps in understanding some of the salient issues in implementation of a technology. Depending on the nature of a technology, type of organization and the degree of inertia associated with using a previous technology, the time between stages may vary as we found during our case studies. Companies that have numerous production facilities and complex manufacturing systems may take a couple of years to implement the technology compared to an organization with few production facilities. These stages have been called by different names by different researchers during the past few decades. Kwon and Zmud [33] proposed that IT implementation follows six-stages or phases, viz. initiation, adoption, adaptation, acceptance, routinization and infusion. In this paper, using Kwon and Zmud’s innovation–diffusion model, various issues related to the ERP implementation and performance are addressed. Cooper and Zmud [16] applied this six-stage model to examine the implementation of MRP systems. Since ERP is an extension of MRP systems, using Kwon and Zmud’s stage model is only

appropriate. (Langenwalter [35] is a good reference to understand the differences between the MRP and ERP systems). The stage model proposed by Kwon and Zmud [33] is a process or temporal model and the observations from using such a model helped me to develop a causal model. In this research, the observations of the process model formed a basis to identify meaningful constructs and items to measure the latent constructs for the causal model. The six-stage model and the associated issues in each of the six-stages are shown in Fig. 1. The items shown in this figure are from Kwon and Zmud [33]; Cooper and Zmud [16]; Cooke and Peterson [15]; Chengalur-Smith and Duchessi [12] and most others from the case studies conducted in six firms. During the case studies, the various factors that influenced these firms to implement an integrated system like ERP and the important issues in each of these phases were observed and noted down. The points noted were found to fall into the constructs developed by Chengalur-Smith and Duchessi [12], viz. competitive motives, efficiency motives, technical motives and operations motives and a construct developed by Cooke and Peterson [15], viz. strategic motives. Together these five constructs measure the predictor variable, ‘‘factors of influence for the firms to implement ERP systems in their respective organizations’’. The items proposed by Chengalur-Smith and Duchessi and Cooke and Peterson together with those that we identified from our case findings are to be used for the quantitative analysis. Through ‘triangulation’ (Kaplan and Duchon [30]) technique the validity of the items to satisfactorily measure the constructs was verified as explained in Section 3. Thus, these five constructs form the independent variables for the model. One of the useful instruments to study the performance of information technology, my criterion variable, is that developed by Mahmood and Soon [39], which measures the strategic impact of IT in organizations. Sethi and Carraher [52] validated this model. Palvia [42] extended this model to study the impact of IT in a global context to understand the global, strategic and competitive performance due to implementation of IT. The instrument developed by Palvia [42] provided the constructs to classify and group the various manifest variables and their respective items that were observed in our case studies.

92 P. Rajagopal / Information & Management 40 (2002) 87–114 Fig. 1. Kwon and Zmud’s [33] IT implementation model as applied to ERP implementation (some of the items for stages were adapted from literature and others were from interviews conducted with respondents).

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The items to measure the performance of an ERP system were found to fall into the manifest variables of flexible operations, inter-organizational efficiency, coordination, internal organizational efficiency and effectiveness, customer satisfaction, human resources management, end-to-end connectivity, manufacturing performance, organizational performance and information systems performance. Churchill’s [13] recommendation to conduct empirical survey research consists of ‘‘specifying the domain of the construct, generating a sample of items which capture the domain as specified, purifying the measure through coefficient alpha or factor analysis, assessing reliability with new data, assessing the construct validity and developing norms’’. Segars [51] explained the steps involved in conducting a survey research to test and validate a model as shown in Fig. 2. Segars [51] approach is similar to that recommended by Churchill but includes the detailed procedures to test the uni-dimensionality also. The first few steps of empirical research recommended by Churchill [13] and reiterated by Segars [51] are being accomplished in this research. Because of a lack of empirical research about ERP, which is different from most of the IT tools, exploratory studies were conducted first in order to gain knowledge about them. Besides understanding the technology, the contextual factors involved and various issues in implementation ERP needed to be understood first. Literature about IT integration issues and IT implementation provided the basis to develop constructs and a model. The instrument developed based on case analysis was validated to some extent through triangulation. Recently, Benbasat and Zmud [4] in their paper about ‘‘practice of relevance’’, stressed that research in information technology should be of interest to academicians, practitioners and journals and that researchers in MIS should address those issues that are likely to benefit all audiences. Nemetz and Fry [41] stated that very little research about the ‘‘strategic and organizational implications of a new technology’’ is reported in the literature. In line with the views of these scholars and given the following facts:  Many business entities have been reengineering their business processes in order to achieve competitive advantages since the 1990s following the fiasco in both local and global markets. 

Information technology tools such as ERP are vital in their reengineering initiatives.  There is only a little empirical research about ERP systems. It is believed that the findings of this research will be of most use to both academicians and practitioners, since they explain the various organizational and environmental variables and the issues involved in implementing ERP systems and the resulting enhanced performance.

3. Research methodology Two notable IT innovations that are revolutionizing business activities in the recent years that caught my attention and are expected to do so in the coming years are ERP and the Internet. ERP systems are both an IT innovation and a BPR mechanism and, hence, they are different from many of the traditional IT tools used. Hence, an exploratory type research was conducted first to obtain a clear picture of this technology. Lai and Mahapatra [34], in their meta-analysis of IT implementation research, classified the case study as an empirical study and hypothesized that empirical research methods such as field experiments, case studies, field studies and lab experiments are preferred to non-empirical methods such as conceptual studies and reviews/tutorials in IT implementation research. Case analysis is a good starting point in the inductive process of theory building, in other words, case analysis is the method of choice for inductive or teleological studies since it lets the researcher observe and gather information about the new subject being studied. Such inductive study is needed to develop a model that can be tested using deductive methods with quantitative tools as the basis. Yin [58] explains the relevance of case type research in MIS field and accentuates the role of case study research in MIS through the words of a professor from the Harvard Business School who mentioned that ‘‘whereas traditional MIS systems were simply a sub-function of an organization, the newer MIS could potentially lead to the re-structuring of the entire organization with the firm in its entirety becoming an MIS, . . ., only the case study method could capture such dynamic and changing conditions’’. Also since there was no clear understanding of ERP systems,

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Fig. 2. Segars [51] theoretical and statistical paradigm for assessing uni-dimensionality.

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exploratory studies were conducted first to understand about the systems, their characteristics, the implementation issues, various organizational and environmental factors and the performance through interviews with the information systems executives. This provided a starting point to develop casual models, identify and develop constructs and relevant items to measure the latent constructs. Conducting case studies in companies of various sizes that used different types of ERP systems widened my horizon and enabled me to obtain a broader and clearer view of various issues involved in this technology. The generalizability of the findings will be found out through large-scale empirical survey to be conducted in the near future. Benbasat et al. [5] mentioned that case study is suited for research in information systems, since current research interests in information systems involve study of organizational rather than the technical issues. As mentioned by Yin [58] case type research helps in understanding the ‘how’ and ‘why’ aspects of the research. This is especially true in ERP research since this technology is still in the pre-mature stages of development and usage (at the time the research was conducted). However, the reader should be aware of the limitations of case studies. Chen and Small [11] have explained the advantages of case type research in their paper about implementation of advanced manufacturing technologies. Lee [37] has explained some of the problems of case studies, which include (1) inability to make controlled observations, (2) inability to make controlled deductions, (3) inability to allow for replicability and (4) inability to allow for generalizability. Some of the drawbacks of field studies include those that mentioned by Kerlinger [31]—feasibility, cost, sampling and time. Every organization is different and unique and there will always be certain ‘unique factors’ that differentiates a firm from the other. But case study is useful for initial observations before developing a research model especially if the subject is rather new and is never researched about earlier. I am not a strong proponent of quantitative methods to test models that were developed using literature alone, since IT is an area characterized by short product life cycles where yesterday’s technology becomes obsolete today. However, once a sound model is developed after doing good number of exploratory analyses, testing the generalizability of the model could be done using quantitative tools.

Open-ended questions were asked and the responses were audio taped. After the interviews were completed in a company, the written manuscript was e-mailed to the respondents for their review and approval, thus, alleviating any mis-interpretation of the responses. To validate the constructs and items used to measure the constructs and to make sure that the responses and the researcher’s understanding of the respondents’ answers were congruent, it was decided to do ‘triangulation’, following the recommendation of Kaplan and Duchon [30]. Kaplan and Duchon [30] stated that ‘‘using multiple methods increase the robustness of results, because findings can be strengthened through triangulation’’. Based on the literature, Kaplan and Duchon defined ‘triangulation’ as ‘‘the cross-validation achieved when different kinds and sources of data converge and are found to be congruent’’. Collecting data by more than one-method gives a clear picture about the subject under study as suggested by Bonoma [7]. A questionnaire that quantified the constructs developed through the case findings and literature review was e-mailed to respondents and were requested to fax their responses. Respondents were contacted after a few days through e-mail reminding them to fax the completed questionnaire; most of them faxed their responses within 1 week’s time. This measurement technique was used for a preliminary assessment of my understanding of the implementation processes, identification of items for the constructs and verifying whether the qualitative data from the interviews matched their quantitative responses. Case interviews involved discussion about the various issues but through measuring the constructs quantitatively, the confidence in the findings increased notably. There was a ‘‘convergence’’ of the findings from the qualitative and the quantitative analysis. In this research, three different widely used ERP systems, viz. SAP,1 Oracle2 and Baan3 were studied. The web sites of these vendors were visited, to locate those who were geographically close were chosen due
SAP R/31 and R/21 are registered trademarks of SAP Aktiengesellschaft, Systems, Applications and Products in Data Processing, Neurottstrasse 16, 69/90 Walldorf, Germany. 2 Oracle1 is the registered trademark of Oracle Corporation, 500 Oracle Parkway, Redwood Shores, CA 94065, USA. 3 Baan1 is a registered trademark of the Baron Van Nagellstratt 89 AC Barneveld 3770, The Netherlands.
1

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to limited availability of time. Field trips to Owens Corning and Viskase Corporation were undertaken to analyze the SAP system and to Valenite Inc. and Diebold Inc. to learn about the Baan systems. Oracle systems were studied at Leeson Electric Company and Food Processing Company (actual name anonymous per their request). All companies are located within about 500 miles of Toledo, Ohio. Detailed interviews were conducted with the chief information officers or MIS directors or project leaders in-charge of implementation of ERP systems in these organizations, depending on the designation of the person in-charge of ERP implementation. In some companies, the interviews were conducted with their manufacturing executives and time permitting in some companies I had an opportunity to see their ERP systems in use. The first case study interview was conducted at Owens Corning where interviews were conducted with their MIS executives followed by interviews with their manufacturing executives. This initial case study helped in understanding ERP systems and in developing the interview questionnaire for other case studies. An overall picture about the factors of influence for these firms to implement ERP systems, various issues such as barriers and facilitators to implementation and usage and the subsequent performance and the items for the constructs were obtained after the first case study at Owens Corning.

reengineering and implementation of ERP efforts. All of these companies are internationally active and Owens Corning is ‘‘live’’ with its ERP systems in many countries. Most of these companies have production facilities in multiple countries. Thus, samples chosen, besides representing a variety of different widely used ERP systems, also represent samples that vary in terms of size, sales, investments and number of users of ERP systems. Such diverse samples provided comprehensive sample characteristics, thus, increasing the generalizability of the findings, though not statistically significant. Also such sample variety was helpful to understand if the differences in the sample characteristics have any effect on the implementation and performance of the ERP systems. The details of the case findings are given in Appendix A. 4.1. Modeling ERP implementation after stage theory—a process model of implementation of ERP The six-stages proposed by Kwon and Zmud [33] and various issues related to these six-stages are as follows. Fig. 1 shows the six-stages and the corresponding salient issues in each of these stages. The items indicated in this diagram are from Ives and Jarvenpaa [29]; Chengalur-Smith and Duchessi [12]; Cooke and Peterson [15] and Kwon and Zmud [33]. Others were from the case interviews. 4.1.1. Initiation The first or the initiation stage is characterized by the various exo- and endogenous factors that influenced the organizations to implement an integrated system like an ERP system. At Owens Corning, the CEO wanted an organization wide integration so as to meet the rapid changes taking place in the business environment especially at the global level. At Diebold, they needed a ‘global product configurator’ that would enable them to manufacture automated teller machines (ATM) for their international customers taking into consideration differences such as language and currency in various countries. At Leeson, the top management wanted to change their business processes and systems in order to keep up with the changing business environment at the global level and integrate their various functions and the newly acquired companies into a common IS platform. At the Food Processing

4. Results and discussion Table 1 summarizes the demographics of the firms interviewed. All the sample firms are in the manufacturing sector, is the firm sizes range widely from US$ 40 million to 5 billion, and in terms of employment, the range is from 120 to 6500. Also the number of ERP users ranged from 20 to 3500. The Food Processing Company invested only US$ 0.9 million in implementing its ERP compared to US$ 100 million spent by Owens Corning. Some companies, like Viskase, spent most of their ERP investments in revamping their IT architecture, and companies like Owens Corning spent most of their investments in training people and in time spent in converting from the Legacy systems to ERP systems. Four out of the six firms studied have Oracle as their database systems. Most of these companies employed outside consultants to assist them in their

Table 1 Demographics of sampled firms Owens Corning Primary industry Sales Number of employees Number of total ERP users Investment in ERP Investment in hardware Investment in software Remainder of investment Database ERP consultant Number of IS staff Number countries where products are sold Number of countries where production takes place Number of countries ‘‘live’’ with ERP Manufacturing fiberglass US$ 5 billion 2000 3500 US$ 100 million US$ 10 million US$ 10 million People and time Oracle Deloitte and Touche 65 45 30 20 Valenite (pilot tested in a single facility) Manufacturing NA NA NA NA NA NA NA NA NA NA NA NA NA Viskase Manufacturing food processing US$ 450 million 3000 800 US$ 20 million US$ 15 million US$ 3 million NA Oracle IBM Global Services 20 Almost all 7 7 Diebold Manufacturing banking equipment US$ 1.2 billion 6500 2500 US$ 34 million US$ 2 million NA NA Informix Arthur Anderson 160 150 4 2 Leeson Manufacturing electric motors US$ 180 million 1200 300 US$ 5 million US$ 2 million US$ 3 million None Oracle Greenbrier and Russell 20 Global; multiples agents 2 1 Food Processing Company Manufacturing food processing US$ 40 million 120 20 US$ 0.9 million US$ 0.1 million US$ 0.8 million None Oracle NA 5 10 1 1

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Company, their previously used system was unable to meet their expectations and also had inherent flaws. At Viskase, they did not have a MRP type system, and they faced many problems with their previous Legacy type mainframe system. Because of many changes in their business environment, they were required to find all possible ways to better compete. Such factors, from both within and from outside these firms, necessitated that they implement an integrated system like ERP. The details are given in Section 5. 4.1.2. Adoption Investment decisions and cost–benefit analysis related to implementation of ERP systems and choice of brand or vendor were carried out during the second or adoption stage as suggested by Cooper and Zmud [16]. Some companies like Leeson spend more than a year in selecting an appropriate vendor. For companies like the Food Processing Company, budgetary constraints from the top management were a major barrier to overcome in their ERP selection process. Large manufacturing companies like Owens Corning found SAP to be the most suitable type of ERP. For Diebold, the performance of the product configuration module of the ERP system was the deciding factor in their selection of a particular type or ERP. Whereas the Owens Corning Company spent US$ 100 million in their ERP implementation process, the Food Processing Company spent less than 1 million to implement their ERP system. Conducting case analysis in firms of various sizes that use different types of ERP provided a comprehensive picture of the various issues regarding the adoption of a particular type of ERP. Unlike any other IT tool, firms need to customize the ERP software to suit the requirements of their organization and, hence, adaptation of ERP systems follows once a particular type or ERP is chosen. 4.1.3. Adaptation The implementation of the ERP system requires changes in the way business is conducted, and the companies that were interviewed carried out BPR before implementing an ERP system. They do a ‘‘self-discovery’’ process where they analyze the details of the various business processes and look for improvements or to redesign the same. Some of the firms, perhaps for the first time, switch to a business process approach from their traditional functional type

of working in order to complete a certain task. The business processes need to be redesigned in order to realize the full benefits of ERP technology. BPR or business process change (BPC) is defined by Kettinger et al. [32] as ‘‘an organizational initiative to design business processes to achieve significant (radical) improvement in performance through changes in the relationships between management, information, technology, organizational structure and people’’. Schnitt [49] defines a business process as ‘‘an activity in the organization fundamental to operating the business that serves an internal or external customer and has a well-defined outcome or series of outcomes’’. Earl [22] defines a process as ‘‘a lateral or horizontal form that encapsulates the interdependence of tasks, roles, people, departments and functions required to provide a customer with a product or service’’. Davenport [20], Bancroft [1] and Curran and Ladd [17] are some good sources of references to understand business processes and the role of ERP in enabling organizations in their BPR efforts. It should be noted that ERP is a prime enabler of BPR efforts in the organizations. Had they not implemented an integrated system like ERP, they would have only realized marginal or incremental changes in their business processes and resulting performance. Due to ERP implementation they were able to see ‘‘radical changes’’ [27] in performance since ERP implementation necessitates that firms do BPR first. Unlike any other IT tools, ERP does not just result in computerization or a mere automation of the existing business processes but brings about changes that enable radical breakthroughs in performance, which is the fundamental purpose of reengineering the business processes. The source codes written mostly in Cþþ language are supplied to customers by the vendors to enable them to customize the middleware to include their business logic as determined by the way they organize their work or the way they want to reengineer their work processes. Data are transferred from the previously used Legacy type mainframe systems to the ERP systems. Once the business processes are redesigned and the systems are customized, the software becomes available to the end-users. Training is given to the end-users during this adaptation stage, and resistance is observed because of the ‘‘inertia’’ associated with using the previous system. This adaptation stage corresponds to the planning and design phase in the

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Preece’s model [43]. All of the respondents agreed that this was the toughest of all the stages since the business processes need to be understood and structured appropriately to exploit the full potential of ERP. Teamwork, revamping of IT infrastructure to a client/ server architecture, a thorough understanding of how the organizational activities were carried out and how these will be affected due to ERP implementation, top management support, cross functional coordination and consulting help from the vendor and others are some facilitators that would make this difficult phase successful. Laughlin [36], Davenport [21] and Bingi [6] have given recommendations with real world examples to realize success in implementation of ERP systems. The complexity of the systems, lack of top management support, higher levels of inertia, mainframe-based systems, outdated IT infrastructure and lack of user support are barriers. 4.1.4. Acceptance The systems become increasingly available for use in the organization. The systems are modified in order to solve the problems reported by the end-users. Continuous improvements are made to make the system easy to use and to solve various problems. Various modules of ERP are implemented in respective functions and the users become comfortable with using the ERP systems. The benefits of using the new system are observed during this stage. The ability of the system to make the organizational IS ‘‘open’’ by enabling compatibility among disparate systems is realized. For example, data entered in materials planning affects data in accounting in real time and the accounting databases are current, reflecting the transactions made in the production department. This is something, perhaps organizational personnel only dreamt about earlier and yearned for, but could not realize or do so, because they were constrained by incapable technologies or did not posses the prowess to derive information. With an integrated system, information is available for everyone for easy decision-making. Brynjolfsson and Mendelson [10] recommended that in order to make information needed for decision-making available to the users at the right time and right place, organizations could choose either the MIS solution, which is to bring the information needed to the decision-makers or organizational redesign solution, which is to redesign

the entire organization so that the decision-makers are there where the information needed for the decisionmaking is available. Brynjolfsson and Mendelson [10] also suggest that the MIS solution is a better strategy to transfer ‘general knowledge’ about an organization and organizational redesign solution is a better choice to transfer ‘specific knowledge’. The implementation of ERP has given the firms both MIS solution through making various information systems compatible, thus, bringing information dispersed in various types of databases to everyone in the organization as needed, and since companies do BPR prior to implementing ERP systems, they are also able to realize the advantages made possible through organizational redesign solution. Again for such reasons ERP is different than any IT tool studied, thus, far. The integration of various functional units is realized during this acceptance phase. The acceptance stage is similar to the Installation stage proposed by Preece [12,43]. 4.1.5. Routinization The users accept the system. At Owens Corning, one of the customer service representatives when asked if she or others in the office would prefer the previously used mainframe based Legacy system over SAP, the reply was ‘‘absolutely no’’. Various functional units do not have to rely on MIS for information and reports. The ability of ERP systems to integrate the vastly ignored manufacturing information with the popular administrative functions of an organization are realized. There is one single information about various business functions in the organization, and it is available to those needed in real time, unlike in the past when individual functions were making decisions based on vastly different information since the systems were incompatible and, hence, knowledge dissemination and sharing were rather painful, if not impossible. The usage becomes a regular day-to-day activity [33]. The users turn-on their systems, the ERP systems is right there, and they begin to work using ERP systems, instead of having to navigate many different systems to acquire and disseminate information and feed data manually from various files and moving data and information physically instead of digitally. Also instead of working with ancient and outdated data, they work using current data since all the databases are always current. All information about various activities related to a customer or a product or a certain

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production unit or about movement of materials and products are all kept current in the system and such current information is critical in decision-making processes. Previously, they did nightly ‘‘batch processes’’ to make changes in the various databases to keep the information current. Preece [12,43] terms this stage operationalization stage. The data entered by one person in some location affects or changes the databases of the entire organization and such connectivity among the systems makes information available in real time across the entire organization. Similarly, as mentioned by Bingi [6], if someone makes an error, and if it is not corrected immediately, it will result in erroneous information across the entire organization. As much as the ERP systems have many virtues, the companies that implement these systems should be aware of the weaknesses also. 4.1.6. Infusion The system is used to enhance the performance of the organization. If there are some problems in a production facility, the production could be easily diverted to another facility to utilize its idle capacity and such, easily since such information is available readily to the decision-makers. This also applies to movement of raw materials, production control, inventory management and optimizing the manufacturing processes at the global level. The cost of implementing an ERP system was found in most organizations to be far less than that of maintaining the previously used Legacy system. Preece calls this the evaluation stage [12,43]. This stage is expected to be of the shortest duration of all the six-stages because of the rapid rate at which the technology is changing in the current environment. For example, Dow-Chemicals spent US$ 500 million in implementing the mainframe based SAP R/21 system, and before it became fully accepted, they decided to change to the client–server based SAP R/31 system [6]. Thus, the drawbacks of the SAP R/21 system became the initiation to implement the SAP R/31 system.

5. A research (causal) model to understand the ERP implementation Various issues identified by us during the field trips and those reported by Cooke and Peterson [15] in their

survey about SAP were found to fall under the constructs developed by Chengalur-Smith and Ducchsei [12], viz. ‘‘competitive’’—those relating to the competitive forces in the markets; ‘‘organizational’’— those relating to various problems faced within the organization; ‘‘technical’’—those related to the drawbacks in the previously used technology in an organization and ‘‘operational’’—those related especially to the manufacturing function within an organization. In addition, a construct and items proposed by Cooke and Peterson [15], i.e. ‘‘strategic’’ motives was added to measure the issues related to the strategic choice of firms such as the need to standardize company processes, support globalization strategy, reduce time to market, operationalize the vision of the CEO, improve business processes and satisfy the top management. The items developed by these authors were also observed during our case studies, and in addition, other relevant items were added relating to implementation of ERP. The stage model proved to be useful to understand the various issues in the implementation of an ERP system. The next step in this research was to verify that the case findings and the items in the survey instrument to measure the factors of influence, issues and performance due to implementation of ERP, match to some extent. Besides our case study findings, the reported literature on ERP, Davenport [21] and Bingi [6] for example, provided support to determine the factors of influence for the firms to implement an integrated IT. The findings of the case studies and the literature provided by the ERP vendors about the success stories of their customers provided a basis to develop constructs for the performance of the ERP systems. In any implementation, there are barriers and facilitators to change and ERP implementation is no exception, as found during our interviews. Often, organizational members refrain from switching to new technologies because they are accustomed to using a particular system for a prolonged period of time, (inertia) and this is a commonly observed barrier in any new technology implementation. Similarly, to implement a new technology, facilitators such as top management support, resources and skills are needed. Based on the factors of influence, facilitators, barriers and performance, a conceptual model was developed as shown in Fig. 3. The conceptual model served as a good basis for us to design the open-ended

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Fig. 3. A research model of ERP implementation—factors of influence, barriers, facilitators and performance (the constructs and items are shown in Appendix A).

questionnaire for the subsequent interviews after the initial interview. During the interviews, illustration of Kwon and Zmud’s six-stage model (Fig. 1) was shown to the respondents and were asked if they observed such stages in their ERP implementation process and all of them agreed that implementation of ERP or any technology indeed happens in stages or phases. Kwon and Zmud’s model enabled me to clearly identify such phases and the characteristics associated with each of those phases. Various issues mentioned by the respondents related to each of the stages are shown in this figure. These comprehensively cover all of the issues faced in the six firms where the exploratory studies were conducted. The initiation or the first stage of the Kwon and Zmud’s model describes the factors of influence for implementing an ERP system. The results observed during acceptance and routinization stages cover the performance of ERP systems in the causal model. Based on the research findings from these six companies, a research model was developed and is shown in Fig. 3. Table 2 summarizes the mean values of the constructs to measure the factors of influence and performance of an ERP implementation. The interview and survey responses provided a strong basis to develop the research model. The items that measure the constructs for factors of influence, facilitators and barriers are also shown in Fig. 3. In all of the firms where interviews were conducted, the items that scored highest for the construct ‘‘competitive motives’’ were the expected growth in sales and competitive pressures. Similarly

for the ‘‘efficiency motives’’ salient items were the need to reduce cycle times and cost. Significant items for ‘‘technical motives’’ included the need to change from mainframe to client–server type IT architecture, to alleviate incompatibility among various database types and to provide uniform systems across the organization. Some of the salient items for ‘‘operations motives’’ were empowering users, re-engineering the business processes and enhancing organizational flexibility. For ‘‘strategic motives’’ such issues as standardizing company processes, supporting globalization strategy, operationalizing the vision of the CEO and reducing the time to market scored high. Such factors influenced these organizations to implement a system like ERP, and the salient characteristics of an implemented ERP systems are integrated IT, compatible database types, cross functional coordination, end-to-end connectivity and uniform systems in organization. This has been explained in the acceptance and routinization stages in the previous sections. Salient consequences of an ERP implementation are information diffusion, enhanced manufacturing performance, customer satisfaction, and information availability for fast decision-making and organizational integration. At Owens Corning, for example, after implementing SAP, they achieved 1% improvement in productivity in period costs, efficiencies and labor with a dollar value of about US$ 15 million (these data were from a performance chart given to me by the respondent during the interview). The executives at the corporate headquarters are able to monitor the performance of all of their facilities in the US and

Table 2 Issues involved in various stages of ERP implementation based on Kwon and Zmud’s model Stages SAP Owens Corning Initiation Expected sales increase, CEO’s, vision of growth, incompatible systems Vendor screening, software selection, cost–benefit analysis Viskase Need for change, aging Legacy system, high levels of competition Oracle Leeson electric Food Processing Company Previous manufacturing system not good, need for a database-based system and applications Oracle database chosen, evaluation of vendors, performance of Oracle at other firms realized Oracle applications was chosen and implemented, oracle manufacturing was implemented, personnel trust the numbers from Oracle Less frustration observed among the users, still they are working batch mode and are planning to switch to real time mode, in this stage now Baan Diebold Need to sell the products in multiple countries, need to configure products Vendor screening, suitability and cost of the various programs evaluated Oracle chosen, implementation in modules begin, systems use begins Valenite Changing business environment, Y2K problems, aging Legacy systems Pilot study in Canada, vendor screening, software selection Baan chosen, customization begins, training for users, systems become available

Adoption

Adaptation

SAP chosen, customization begins, training of users, implementation begins

Acceptance

Increasing usage of SAP, more training, higher compatibility

Changing business environment, need for a better system to compete in the markets Vendor screening, Evaluation of vendors, software selection, pros and cons of various investment decisions software and the suitability of the software evaluated Oracle was chosen and SAP chosen, customization begins, implemented in phases, systems become available, training and usage begin, project teams translate training for users the work processes to be carried out in Oracle environment More training, increasing Use of Oracle becomes usage of SAP, higher a regular activity, performance enhanced performance

Increasing use of Oracle, enhanced performance realized

More training, increasing use of Baan, improvements realized

Routinization

Users accept the system, flaws corrected, use of SAP is routine

Approaching this stage

Future plans

In this stage now, routine usage of Baan, users accept the system

In this stage now, increasing use of Baan, constant improvement, Baan usage is routine

Infusion

IT integration realized Has not reached this stage, many foreign subsidiaries, not gone live with SAP

Not reached this stage

Approaching this stage

Implementation of the program at global level being planned

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other countries in real time. They are able to monitor the various processes across the entire organization easily, which was something that would have cost them considerable time with the previous Legacy type mainframe systems. At Valenite, their customer service representatives reported increases in customer satisfaction after Baan implementation because of the speed of service made possible by rapid information deployment. The model developed based on the findings of case studies is validated to some extent by the results of the survey. As seen from Table 3, almost all of the constructs developed based on the case findings scored more than 3 on a scale of 1–5. The constructs corresponding to those issues that were most significant in each of the firms as reported by the respective respondents during the interviews, scored the highest, thus, indicating that the instrument developed is good enough to quantify the findings of the exploratory study. And this will be confirmed after the large-scale mail survey using the refined instrument developed based on the pilot test. At Owens Corning, the highest scoring variables for ‘‘factors of influence’’ were ‘‘efficiency motives’’ and

‘‘operations motives’’, and due to SAP implementation, they realized enhanced performance in these areas as reflected by high scores in the variables ‘‘internal organizational efficiency and effectiveness’’, ‘‘customer satisfaction’’ and ‘‘manufacturing performance’’. At Diebold, during the interview, it was found that one of their primary motives to implement Baan ERP was to better coordinate their internal supply chain and at the same time to be flexible enough to configure their products for their global customers. Accordingly, the constructs ‘‘efficiency motives’’ and ‘‘operations motives’’ scored high in the factors of influence, and correspondingly, on the performance side, the variables ‘‘flexible operations’’ and ‘‘coordination’’ scored high. Again it shows that the instrument is good, and the scores and the results of exploratory studies are congruent. In line with the views of Kaplan and Duchon [30] who mentioned that using multiple methods increases the robustness of results because findings can be strengthened through ‘‘triangulation’’, it was found that using both qualitative and quantitative methods provided us confidence that the items measure the constructs developed satisfactorily. Guha et al. [26] in their study

Table 3 Mean values of the constructs to measure factors of influence and performancea SAP Owens Corning Viskase Baan Valenite Diebold Oracle Leeson 4 3.31 3.57 3.8 3.375 3.0 3.8 4 4 3.7 4 3 4 3.4 Comp A 3 4.86 3.6 3.8 3.88 3.67 3 2 4 3 2 2 2.5 2.83

Factors of influence (scores were collected on a scale of 1–5, 1 being very low and 5 being very high) 1 Competitive motives (5) 3.6 3.4 3.8 3.4 2 Efficiency motives (7) 4 3.7 4.29 3.85 3 Technical motives (9) 3.6 2.8 3.8 4 4 Operations motives (5) 4 3.6 3.8 3.4 5 Strategic motives (8) 3.33 (9)b 3.125 NA 3.125 Performance 1 Flexible operations (6) 2 Inter-organizational efficiency (5) 3 Coordination (2) 4 Internal organizational efficiency and effectiveness (3) 5 Customer satisfaction (3) 6 Information systems functioning (2) 7 Human resources management (3) 8 End-to-end connectivity (4) 9 Manufacturing performance (5)
a

3.5 3.6 3.5 4 4 3 3 3.5 4.2

3.5 3.6 4 3.7 3 3 2 3 2.8

3 3 3 3.3 3.3 4 3 3.5 4.2

4.8 3.8 5 3.33 4 4.5 2.7 3.5 2.8

The numbers in parenthesis denote the number of items used to measure the constructs and the bold numbers indicate some of the constructs that scored high. b The respondent of Owens Corning added another item for this construct.

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Table 4 Summary of driving forces, technical aspects and other issues related implementation of various ERP systems
Case samples ERP system SAP Owens Corning Driving forces Needed a system to cope with the increasing sales, needed a system to enable them perform better rather than being an impediment in growth and expansion Viskase Needed change, needed to enhance manufacturing performance Baan Valenite Need to change the IT for competitive reasons, Need to enhance manufacturing performance Diebold Need for a better product configuration, need to enhance performance of manufacturing function, the old systems based on mainframe was not useful for the changed environment Loss of staff, over run of estimated budget, increased work load in order entry function, need to convert the various processes into Baan Alleviation of Y2K, better manufacturing cycles, reduced inventory, information diffusion across the entire organization, better global positioning using the Baan product configurator, better internal supply chain management US$ 34 million Manufacturing, sales, finance and product configurator Oracle Leeson Electric Company Need to change, utilize Internet capabilities, increasing functionality Food Processing Company Systems not performing to meet the needs in the market, need for a better system

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Issues in implementation

Outsourced maintenance of previous system to H-P, employee turn over

Employee turn over, resistance to change because some modules of the previous systems were better than ERP

Need to change all of the old systems into Baan, need to shift to client– server environment, increased work load in order entry Low inventory Increased availability of information, alleviation of Y2K, information diffusion across the firm, increased profitability

Data translation, beta testing, user resistance, employee training

Cost, lack of top management support, training

Performance

Reduction in inventory

Enhanced manufacturing performance, better coordination among the various facilities

Integration, connectivity, less paper work, less manual work, organizational, visibility, reduction in inventory

Reliable data, reduction in inventory, reduction in WIP, information diffusion

Cost Modules used

US$ 100 million Manufacturing and details of other modules NA

US$ 15 million Manufacturing and details of other modules NA

US$ 2.5 million Manufacturing, finance and sales

US$ 3.5 million Oracle manufacturing, Oracle financial and Oracle human resources (only to some extent) (source: Oracle web page)

US$ 0.9 million Oracle manufacturing (GL, payables, purchasing, inventory, BOM, MRP, WIP and cost) Oracle discoverer (OLAP like system that helps in data warehousing) (source: Oracle web page) None

Consulting services Number of Oracle users Hardware

SAP

SAP and Coopers and Lybrand 35

Baan only

Arthur Anderson and Baan

None

1200

35

350

300

75

Sun Solaris server, many types of PCs MS office products WAN connecting their various facilities

Their data center has been outsourced to IBM Global Services, many PCs and support systems such as Microsoft tools, back office and Lotus Notes were purchased and installed, AT&T manages their WAN, Viskase switched from the AS 400 to a RISC 6000 with 14 servers, a number of LANs, routers, back office tools and MS office products

Sun Enterprise 6000 and 3000, servers running on Sun Solaris (source: Oracle web page)

DEC Alpha/VMS, Intel servers running on Windows NT and PCs using Windows 1995 (source: Oracle web page)

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about BPC and organizational performance used such research methods, as per the recommendation of Yin [58] who mentioned that triangulation reduces the bias and, hence, is recommended for case studies. Clark and Hammond [14] in their study about improving supply chain performance through reengineering channel re-ordering process also have used such research methods. Table 4 comprehensively summarizes the issues, technology and performance of implementation of various ERP systems in the companies where exploratory studies were conducted.

6. Future research A robust survey instrument is ready to be mailed to conduct quantitative analysis following a pilot test of the same after these case studies. Factor analysis will be conducted for each of the constructs to purify them or if needed to develop more constructs. Structural equations modeling (SEM) will be used after initial principal component analysis to increase confidence about the extracted factors. SEM will also be applied to test the model and hypotheses. An invariance analysis will be carried out to test the applicability of the model and the robustness of the developed instrument to study various types of ERP systems such as SAP, Baan and Oracle. Such analysis will provide a foundation to understand those aspects that are unique and different for different ERP systems based on which appropriate changes in the model and instrument could be made to reflect those differences. If there are no differences then the instrument is generalizable to study any of the different ERP system. The differences in global, competitive and strategic performance between ERP and non-ERP firms will be carried out using a simple t-test. Such differences will elucidate the advantages of ERP systems because of the IT integration over the fragmented and incompatible information systems.

7. Conclusion Kaplan and Duchon [30] based on the research of Bredo and Feinberg [8] and Van Maanen [56] mentioned that ‘‘in qualitative studies, researchers develop categories and meanings from data through an itera-

tive process that starts by developing an initial understanding of the perspectives of those being studied and that particular understanding is then tested and modified through cycles of additional data collection and analysis until coherent interpretation is reached’’. This was realized in our case studies. During the first case study at Owens Corning there was hardly an understanding of the ERP systems, its technology and usage in organizations and the performance enhancement upon implementation. After many interviews with this company a clear picture was obtained, and the findings were used to develop interview questions and an instrument for triangulation for other interviews. During the course of the field studies in various companies, the understanding of these systems improved and a coherent interpretation of the factors of influence, issues and performance were realized after data collection in many sample firms. It may not have been possible to obtain a clearer picture to develop theoretical models based on exploratory analysis of just a few firms, and on the other hand, it would be totally wrong to develop and test models about a new area like ERP without doing case studies first. From the results of the research reported in Table 3, it is obvious that all of these companies, which differ widely in many of the organizational characteristics, benefited more than they anticipated through implementing these ERP systems and that without such an integrated system in place they could not gain competitive advantages in the current and coming years. Besides automating the various business processes, the ERP systems implementation has resulted in new ways of thinking about the organizational activities. Various problems faced by the organizations due to the incompatibility among the computer hardware and software systems were found to be overcome due to the implementation of ERP systems. The current business environment necessitates that an organization work together as a whole and also integrate to their organization the external elements such as the customers and suppliers in order to achieve competitive superiority. The information technology integration through implementation of ERP enabled them to achieve these objectives fairly easily by making available information needed for decision-making in real time. Based on the case analysis conducted in these six firms that have implemented ERP systems, this study explained the factors of influence for ERP implemen-

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tation, the process of ERP implementation, usage of the systems in the organization and the enhanced performance of the organization through implementation of ERP systems. The ERP implementation process was found to go through stages as mentioned by Kwon and Zmud, and this stage model was found to be useful in understanding the various issues associated with the implementation of ERP systems. All of the constructs were operationalized based on the field interviews and IT implementation literature. The case findings and the results of the preliminary survey were highly congruent indicating that the instrument developed is good to measure the factors of influence, issues and performance. The barriers and facilitators were not measured in this preliminary survey but will be during the pilot test. Since ERP is a recent IT innovation, the research and reported literature are still in the initial stages. This paper makes a contribution to the literature by providing an empirical finding about the various ERP systems and their role in enhancing performance in an organization. Toward developing a model and an instrument to understand and quantify the ERP implementation process, the first two steps recommended by Churchill [13] have been achieved through this research. Future research will complete the other six steps, and a sound and robust model about implementation and performance of ERP systems will be presented in the near future.

Appendix A. Details of ERP implementation in firms The information about the companies studied were obtained from their respective websites available in the world wide web. Information was also obtained from responses from interviews. A.1. Systems, analysis and products for data processing or SAP A.1.1. Owens Corning A.1.1.1. The company. Owens Corning is a leading producer of fiberglass-based building materials used in insulation and roofing and in commercial products such as boats and automobiles. They are headquartered in Toledo, OH. The interview was conducted with their chief information officer, Mr. David Johns. Many other MIS staff, manufacturing staff and public relations officers were also present during the meeting. Following this, individual meetings were conducted with some manufacturing executives. They use systems, analysis and products for data processing or SAP as their ERP system. The details of the factors of influence and performance of SAP systems in their organizations are given elsewhere [46,47]. Their position in the stage model is shown in Fig. 1. A.1.1.2. Issues and processes. Some of the salient factors involved in the first or the initiation stage were the need for a different type of IT that would enable the organization to meet the challenges related to the expected increase in sales and growth activities. The IT infrastructure was expected to provide competitive advantages to the firm and not be an impediment in their growth. The disparate systems were to be made compatible to augment communication within the organization so as to enhance their performance at the global level. In the next stage of adoption, various software vendors were screened to choose the suitable software. As mentioned by Cooper and Zmud [16] choice of vendors, cost– benefit analysis and suitability of the chosen ERP system to the organizational needs were some of the characteristics observed during this stage. During the third stage of adaptation, the IS department started customizing the software to meet

Acknowledgements The author is thankful to the Information Systems and Operations Management Department of The College of Business Administration at The University of Toledo for providing the financial support through an Academic Challenge Grant and to the respondents from Owens Corning, Valenite, Leeson, Food Processing Company, Diebold and Viskase for giving many hours of their valuable time to explain about the implementation and performance of their ERP systems. I am thankful to Mr. Tyler Frank for all the help rendered during case interviews. We have co-authored papers and conference proceedings that are published elsewhere.

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the organizational needs. Given the large size of the organization, the SAP system needed to be customized to suit the business processes that went through lot of changes because of BPR done a few months earlier to SAP implementation. The implementation of ERP results in various changes in the design and structure of an organization indicating that tech-nology dictates the organizational design and structure. During the course of SAP implementation, the Legacy system maintenance was outsourced to Hewlett-Packard (H-P). Training activities were started. The project team comprising of staff from various functions was formed. The users showed signs of reluctance to change to the new system because of the ‘‘inertia’’ associated with using the old system, which enabled particular functions in a company to do well but together did not provide any competitive advantage to the firm. The adaptation stage is the toughest stage in the implementation process. As mentioned earlier, SAP and other ERP systems are business transformation processes, not just an information technology tool. Hence, customizing it to fit to the needs of the organization requires significant amounts of time and effort by the project members. During the acceptance stage the users began to accept the system and the integration of the technology was realized in the organization. There was increasing usage of the system. With the Legacy system, the amount of paper work and the time for processing an order before an item was shipped to the customer was high. Since the time a sales order was taken, it took at least 3 days before the item was shipped. Multiple copies of the various documents were circulated from office to office. In every office copies of the same documents were made and filed before it was passed onto the next department. But with an integrated IT through SAP, they are shifting toward a paper-free environment, where all the transactions are automatic and digitized instead of being manual with volumes of documents. There are no routine and physically exerting work, instead they are intellectually stimulating where everyone’s action affects the entire organization and the decision-making process is dispersed instead of concentrated in some part of the organization; in other words, information is available to make decisions in places where it makes the most impact instead of being made in some place and trickling down the hierarchy before making the impact.

The company is currently in the fifth or routinization stage. Various flaws in the system are constantly being modified and the users realize the benefits of using the SAP systems. During the visit, the staff mentioned that SAP has significantly reduced the paperwork related to the order taking process. The reductions in the inventory level, the on line availability of various data and other benefits of SAP are realized across the entire organization. They use PeopleSoft14 for their Human Resources Management and this module is connected to SAP using a ‘‘bolt-on’’. Davenport [19] is a good source of reference for the readers interested is gaining knowledge about SAP ERP. A.1.2. Viskase Corporation A.1.2.1. The company. Viskase is a leading manufacturer of cellulosic casings for the food industry. Headquartered in Chicago, IL, they are the world leaders in this industry. The company faced many problems due to increasing competition. For example, within a time span of 3 years they faced about 50% price cut in the markets. Organizational members began to feel that there was a lack of focus. Interview was conducted with their MIS director, Don Pelka at their corporate headquarters in Chicago. A.1.2.2. Issues and processes. In 1993, the firm hired Cooper and Lybrand Consultants to conduct a BPR analysis. It was found that their sales force was disorganized and that there was a need to develop high level teams to contend with the top management staff of the customers. Viskase’s leadtime was very high since the systems were nonintegrated. The company did not have any material resource planning systems such as MRP II. Viskase produced and held inventory based on the customer orders in its warehouses for up to 9 months and the customers were not billed until and as and when the product was used. The high and sporadic production tied up their pro-duction capacity and rush orders were impossible to be processed. These issues and the inherent problems of the fragmented systems characterize the initiation stage that prompted them
PeopleSoft1 is a registered trademark of PeopleSoft Corporate Headquarters, 4460 Hacienda Drive, Pleasanton, CA 94588-8618, USA.
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to implement an integrated IT in their organization. The CEO wanted changes in the organization and the MIS department was called on to provide the organization with possible solutions to overcome the problems. After many meetings and decision-making processes, the executives of Viskase decided on implementing SAP so as to have one uniform, standardized system in the organization through which various functions and divisions may be able to access and disseminate information easily and efficiently. They went ‘‘live’’ with SAP in 1998 and have spent, thus, far US$ 15 million in their implementation process. Their data center has been outsourced to IBM Global Services1. This describes the second or adoption stage and in the third or the adaptation stage of the process, their IT infrastructure was modified. AT&T was chosen to manage their WAN. Viskase switched from the IBM AS 400 system to an IBM RISC 6000 system with 14 servers, a number of LANs, routers, back office tools, Lotus Notes and MS Office products. Their archiving and facsimile systems were also connected to SAP. Thus, the IT integration started during this stage. The third or the adaptation stage of the SAP implementation was the most challenging and difficult part of the process. This also involved training to the employees, not just in the IS department but in every function of the organization. The SAP system needed to be customized to meet the requirements of the company. The business processes were redesigned first and the software was customized to carry out the various business processes efficiently. The software became available in the organization. Various business processes were translated to the ERP system and the data were transferred to the new system if needed. The company was just reaching the acceptance stage and has not entered the routinization stage at the time of the interview. The staff are realizing the benefits of IT integration. When information is entered in one department automatically data are updated in all the databases that are related to that transaction, journal entries are made, invoices generated and the entire business transaction is on-line, thus, making the data as current as possible. Personnel in different functions are able to understand the role of other functions and are able to get a whole view of the organizational process unlike before when they were focused only on their respective units or divisions.

One of the drawbacks observed during this stage is employee turn over. Viskase went ‘‘live’’ with SAP in January 1998 and by November they had lost 12 people. Retaining experienced, knowledgeable employees is a big problem when implementing SAP. According to a recent global survey by Deloitte and Touche Company [24], such employee turn over is not unique to SAP but is invariant among all ERP systems including Baan and Oracle. The world average employee turn over in firms that implemented ERP systems is reported as 10.6 with companies that implemented Oracle having lowest ETO of 8.9. The position of Viskase in the stage model is shown in Fig. 1. A.2. Baan systems A.2.1. Valenite A.2.1.1. The company. Valenite is one of the four largest manufacturers of industrial cutting tools in the world and offers engineering solutions for the metal cutting industry. Valenite offers the metalworking industry a complete line of standard and special indexable-insert turning, boring, milling, drilling and high-speed steel products under the Widia Valenite1 brand. A.2.1.2. Issues and processes. With the changing business environment, just like any other business organization they needed to plan on changes necessary to be competitive in the global market. One of the areas that needed attention was information system. The respondent noted that on a scale of 1 (very low) to 5 (very high), the degree of compatibility was 1 before switching to Baan. The Y2K problem was another issue faced by them when using the mainframe systems. Under these circumstances, the company started planning the changes needed in their information systems. The need to reorganize and solve Y2K problems were some of the significant aspects of the initiation stage at Valenite. During the second or the adoption stage, they screened various vendors and of the 3 vendors selected viz. SAP, Baan and Oracle; they chose Baan as their ERP system. Since SAP company felt that the firm was not large enough for them to offer their services and since Oracle did not have some of the modules that Valenite wanted, Baan was the system of choice at

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Valenite. They decided to pilot test this software in their Canadian subsidiary, before implementing the system across the entire organization. During the next stage of adaptation, they began customizing the software to suit their business needs. Various business processes were analyzed, documented and these processes were translated to Baan. A team consisting of representatives from various functions was formed to understand the intricacies in the Baan system. Various issues and obstacles because of transformation to Baan were analyzed and appropriate steps were taken. The training activities began in this stage. The Baan consulting team spent considerable time at their Canadian facility to train their employees. Some of the obstacles faced in the organization were the employee resistance to change to the new system and the increasing workload associated with Baan system in customer order entry. After considerable training, the employees began to realize that the benefits because of the amount of information available once the information has been entered into the system more than offset the increases in the workload. The company has approached the routinization stage and various business activities are being done using the Baan system. At the US facilities, they still use the old mainframe based system and the performance differences between the US and the Canadian subsidiary are already being realized. The systems in the US facilities are fragmented and the coordination and control require lot of time and effort. Plans are underway to implement an ERP system in their US facilities also. For details of Baan implementation and performance at Valenite and Diebold, please refer [48]. A.2.2. Diebold Inc. A.2.2.1. The company. Diebold is one of the leading manufacturers of ATM. Their annual sales in 1998 was US$ 1.2 billion. Their customers include banks, financial institutions and various retail outlets. The interview was conducted with Mr. Rick Lindenberger, director of Information Technology Planning was the respondent and the interview was conducted at their corporate headquarters located in North Canton, Ohio. A.2.2.2. Issues and processes. Their previously used mainframe based systems was good enough to do the

routine work in the company but was not enough to enable them achieve competitive gains in the coming years especially in manufacturing ATMs for the global customers. They needed a global product configurator that would help them manufacture products for their customers in various countries taking into consideration the differences in language, currency and usage. The ‘product configurator’ module of the Baan was found to best suit their needs. Until a few years ago, their main market was within the US and they were distributing their products through IBM. But recent changes in their global competitive position necessitated that they produce and sell in various markets around the World according to the specifications warranted by the various markets. Another drawback of their previously used system was that they were disparate. The systems in various locations were not communicating with each other and this would not support their internal supply chain. These were the factors of influence for them to implement an ERP system. In the adoption stage, a committee of staff from various functions was formed to screen the vendors and choose appropriate ERP software. Of the various software available, Baan was found to be the most applicable to the company’s needs because of the Baan’s product configuration capabilities and its ability to meet the needs of the project based manufacturing. Arthur Anderson Consulting helped them in their BPR efforts. During the third or the adaptation stage, data was converted and translated and all of the business processes done previously in the mainframe systems were converted into Baan in the client–server type architecture. Training was given to the staff and the user resistance was observed in some areas, especially in the area of order entry. The design of the Baan is such that the users need to go from record to record before getting into the appropriate module and this is rather a time consuming process. In a time study conducted to calculate the time taken to process 20 invoices, it was found that it took about 14 min using Baan compared to only about 7 min using the previous system. Once data is entered, the amount of information available for process analysis and decision is enormous, but the data entry itself is a laborious process. The users who expected that the new system would lessen their workload were disappointed, but

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steps are being taken to overcome this. During the acceptance stage, the systems became widely used in the organization and people were able to see the transactions and information in real time. Previously, they used to do nightly batch processes so that the information is updated in all of the databases. With Baan in place, they need not do any data conversion or data re-entry since data once entered automatically touches and affects all of the databases. Beatty and Gordon [2] in discussing the barriers to implement CAD/CAM systems mentioned that one of the barriers to the implementation is systems incompatibility. Different computers in the manufacturing division use different software that are incompatible and, hence, communication among the systems was not possible. These authors mentioned that much time and effort is wasted in reentering the same data several times, which could have been transferred automatically, had the systems been compatible. Beatty [3] contends that the final aim of the factory automation is to integrate the entire database, including CAD, CAM, bill of materials (BOM) and CAPP and that a sophisticated level of integration would be where such data could be shared automatically with financial and accounting systems, i.e. an organization wide integrated IS. She also mentions that one should be able to transfer data from one system to another easily and that the users should be able to file, store, back up and retrieve data efficiently. The issues addressed by these authors are overcome through implementation of an ERP system like Baan ERP. During the routinization stage, the Baan usage is a routine and day-to-day activity in the organization. The system has not reached the infusion stage at Diebold, since they are still working on modifications to overcome certain issues and on implementing the system in various countries. For an investment of US$ 34 million, Diebold has seen improvements in manufacturing cycles, inventory and many others. The position of the company in the Kwon and Zmud’s model is shown in Fig. 1. A.3. Oracle systems A.3.1. Food Processing Company A.3.1.1. The company. This firm is a manufacturer of food processing equipment and is headquartered in the

Great Lakes area. This company did not want their name or details to be disclosed in the paper and, hence, it is referred to as Food Processing Company. Their products use a patented technology and are considered to be at the upper end of the market. An interview was conducted with their MIS director who has been with the company since the last 10 years. A.3.1.2. Issues and processes. In 1995, Food Processing Company realized that their previous manufacturing system had problems and was not adequate to meet the needs of the company. During a trial run in the MIS office, the system worked well but when put to use on the production floor, resulted in a total failure. The inventory numbers were always low and the transaction results had errors. These were some of the characteristics of the initiation stage at this company. To overcome these limitations Food Processing Company decided to switch from a flat file systems to a database system and out of Oracle database, Cybase and another database, they chose Oracle Database because of its suitability to the functionality of the firm. During the adoption and adaptation stages, the previous system was replaced and Oracle manufacturing, consisting of MRP II, inventory, purchasing, accounts payable, work in process (WIP), BOM and costing, was implemented. They also purchased the engineering and order entry modules but have not yet implemented these modules. The Oracle systems resulted in immediate performance improvements as outlined in the following section. The Oracle systems are Y2K compliant and offer multi-currency functionality to handle future expected international growth. The Oracle ERP systems made exclusively for the small and medium sized firms fit their budget and, hence, Oracle Apps was chosen over other ERP systems. The changes in the information were realized and people started trusting the numbers. During the acceptance stage, the inventory numbers became reliable and the earlier problems in the BOM were alleviated. The data once entered is always there in various modules of the Oracle systems and, hence, tracing back errors and modifying the same have become easy. They have reached the routinization stage. Since they are still working on batch mode, they have not achieved total integration and, hence, have not

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approached the infusion stage. They will be switching to graphical user interface (GUI) in the near future and are planning to implement various other modules of Oracle to make the systems tight and integrated. A.3.2. Leeson Electric Company A.3.2.1. The company. Leeson is one of the leading suppliers of ac and dc electric motors in the world. Their products could be found in pumps, fans, food processing equipment, data processing machines, power transmission products, machine tools and others. Leeson is active in over 35 countries and sell a diverse range of motors. Unlike the past, where the customers were content with buying standardized products, the current market demands that electric motors be made to suit their needs and, hence, customization is a key to success in this industry just as it is in others. One of their core competencies is their degree of customization of their products to meet the needs of their customers. The annual revenue of Leeson is about US$ 180 million and it employs approximately 1200 persons. The number of Oracle users is currently about 300 but this is expected to increase. A.3.2.2. Issues and processes. In 1993, the respondent, Ms. Mary Fonder was hired as the chief information officer, which was vacant for 3 years. The management realized that their information systems needed to be changed in order to cope with the changing business environment. The system used earlier was an MRP II system running on an AS 400 platform. It was in use at Leeson for about 5 years and was customized to meet the needs. That system was enough to meet the company’s needs then but was not good enough to meet the future growth and needs of the company. That system was inflexible and was not Y2K compliant. The paper work involved was very high and reporting was done manually. Various departments relied on MIS for report generation and frequently the functional units had to call others for information. They also faced many scheduling issues in the company. The need to change, the need to meet the future growth requirements, increasing the functionalities and the need to utilize the Internet capabilities were the driving forces for the company to consider an integrated system like an Oracle system

and this forms the initiation or the first stage of the Kwon and Zmud’s model. During the second or the adoption stage, a core group consisting of three staff from MIS and one each from manufacturing (materials), controller (general ledger, accounts payable and accounts receivable), sales (order entry and accounts receivable), scheduling (MRP and production scheduling) and two from engineering (materials management) were formed to look into various ERP systems. They screened various vendors and of the six vendors selected, they chose the Oracle systems because of its suitability to meet the company needs, its Internet capabilities and the financial stability of Oracle. The adaptation or the third stage of implementation was described as the most painful process. The data in the previous system were translated into Oracle system and the reports generated by the Oracle system were verified for consistency. The conversion took place in phases but they followed a ‘‘big-bang’’ approach in final implementation. For example, the general ledger, inventory, accounts payable and order entry were done first followed by other modules and the system overall was implemented in December 1996. Training to the end-users and formation of user groups were the salient aspects of this stage. Before Oracle implementation, the end-users used the MRP II system in a routine manner with no understanding of what their actions did to the various business processes. With Oracle in place, they need to have a clear understanding of their actions and how the system works. This required enormous amounts of time and effort in training and they are in a continuous learning process. During the acceptance stage the systems became widely used in the organization. Changes to meet the needs and the various problems were overcome. The Oracle ERP system was changed from a two-tier architecture to a three-tier architecture. The two-tier architecture was highly expensive to operate since all the client PCs had some module of Oracle and whenever a patch was sent from an user, it touched all the PCs before going into the database. The inquiries required third party involvement and this process was time consuming and expensive. At this stage, when Oracle announced their web based ERP, i.e. Network Computing Architecture or NCA1, Leeson decided to change to this new web based ERP. Using the Applet Viewer supplied by the Oracle or Netscape

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P. Rajagopal / Information & Management 40 (2002) 87–114 [8] E. Bredo, W. Feinberg, Part II. The interpretive approach to social and educational research, in: E. Bredo, W. Feinberg (Eds.), Knowledge and Values in Social and Educational Research, Temple University Press, Philadelphia, PA, 1982. [9] E. Brynjolfsson, M. Hitt, Beyond the productivity paradox— computers are the catalyst for bigger changes, Communications of the ACM 41, 1998, pp. 49. [10] E. Brynjolfsson, H. Mendelson, Information systems and the modern enterprise, Journal of Organizational Computing 12 (1993) [11] I.J. Chen, M.H. Small, Implementing advanced manufacturing technology: an integrated planning model, OMEGA, International Journal of Management Science 22 (1), 1994, pp. 91. [12] S. Chengalur-Smith, P. Duchessi, The initiation and adoption of client–server technology in organizations, Information and Management 35, 1999, pp. 77. [13] G.A. Churchill, A paradigm for developing better measures of marketing constructs, Journal of Marketing Research 16, 1979, pp. 64. [14] T.H. Clark, J.H. Hammond, Reengineering Channel Reordering Process to Improve Total Supply Chain Performance, Vol. 1, POMS, Global Supply Chain and Technology Management, 1998, p. 112. [15] D.P. Cooke, W.J. Peterson, SAP Implementation: Strategies and Results, New York Conference Board, NY, 1998. [16] R. Cooper, R. Zmud, Information technology implementation research: a technological diffusion approach, Management Science 36 (2), 1990, pp. 123. [17] T. Curran, A. Ladd, SAP R/31 Business Blueprint: Understanding Enterprise Supply Chain Management, PrenticeHall, NJ, 2000. [18] T. Davenport, J. Short, The new industrial engineering: information technology and business process redesign, Sloan Management Review 31 (4), 1990, pp. 11. [19] T. Davenport, Managing with R/31: Effective Use of SAP Information, Final Report, SAP AG, September 1998. [20] T. Davenport, Mission critical: realizing the promise of enterprise systems, Harvard Business School Press, Boston, MA, 2000. [21] T. Davenport, Putting the enterprise into the enterprise system, Harvard Business Review 7/8, 1998, pp. 121–131. [22] M.L. Earl, The new and old of business process redesign, Journal of Strategic Information Systems 3 (1), 1994, pp. 5. [23] J. Edwards, Three-Tier Client–Server At Work, Wiley, 1999. [24] Global Survey of Chief Information Executives, Deloitte and Touche Consulting Group, New York, 1998. [25] V. Grover, J. Teng, A. Segars, K. Fiedler, The influence of information technology and business process changes in perceived productivity: the IS executive’s perspective, Information and Management 34 (3), 1998, pp. 141. [26] S. Guha, V. Grover, W. Kettinger, J. Teng, Business process change and organizational performance: Exploring an antecedent model, Journal of Management Information Systems 14 (1), 1997, pp. 119. [27] M. Hammar, J. Champey, Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business, 1994.

Navigator1 or Internet Explorer1, a user is able to access the Oracle databases directly. With NCA, nothing is in the client PCs except connections to their private WAN. They have a corporate Intranet, which has all of the current information available in table format. Data cannot be entered in the Intranet, but information can be accessed easily. They have not achieved a complete end-to-end connectivity yet, since the shop floor activities are not connected to Oracle. There is only little improvement seen in inventory management and they are still working on improving the scheduling process. They are in the routinization stage and are on their way to the infusion stage of the Kwon and Zmud’s model. Before Oracle, when MRP II was used, only few were able to understand the various processes and quite often various functional staff relied on MIS for data and reports. The Oracle systems have opened up the information in the company and various functional units are able to generate the needed reports by themselves without relying on MIS department. Various complex business processes have become transparent for faster decision-making across the entire organization. The finance, inventory and transactions are all clean without any flaws. Thus, the Leeson Electric Company went through the stages proposed by Kwon and Zmud before the systems became widely used in the organization. References
[1] N. Bancroft, Implementing SAP R/31: How to Introduce a Large System into a Large Organization, Greenwich, Conn., Manning, 1996. [2] C. Beatty, J. Gordon, Barriers to the implementation of CAD/CAM systems, Sloan Management Review 29 (4), 1988, pp. 25. [3] C. Beatty, Implementing advanced manufacturing technologies: rules of the road, Sloan Management Review (1992) 49. [4] I. Benbasat, R. Zmud, Empirical research in information systems: the practice of relevance, MIS Quarterly 23 (1), 1999, pp. 3. [5] I. Benbasat, D.K. Goldstein, M. Mead, The case research strategy in studies of information systems, MIS Quarterly 11 (3), 1987, pp. 369. [6] P. Bingi, M., Sharma, J. Godla, Critical issues affecting an ERP implementation, Information Systems Management (1999) 7. [7] T.V. Bonoma, Case research in marketing: Opportunities, problems and a process, Journal of Marketing Research 22 (2), 1985, pp. 199.

P. Rajagopal / Information & Management 40 (2002) 87–114 [28] J. Henderson, N. Venkatraman, Strategic alignment: a model for organizational transformation via Information Technology in Information Technology and the corporation of the 1990s, in: T. Allen, M. Scott Morton (Eds.), Oxford University Press, Oxford, 1994, p. 202. [29] B. Ives, S. Jarvenpaa, Organizing for global competition: the fit of information technology, Decision Sci. 24 (3), 1993, pp. 547. [30] B. Kaplan, D. Duchon, Combining qualitative and quantitative methods in information systems research: a case study, MIS Quarterly 12, 1988, pp. 571. [31] F.N. Kerlinger, Foundations of Behavioral Research, 3rd Edition, Holt, Reinhart and Winston, New York, 1986. [32] W.J. Kettinger, S. Guha, J.T. Teng, The process reengineering life cycle methodology: a case study, in: V. Grover, W.J. Kettinger, (Eds.), Business Process Change: Reengineering Concepts, Methods and Technologies, Idea Publishers, Harrisburgh, PA, 1995, pp. 210–244. [33] T. Kwon, R. Zmud, Unifying the fragmented models of information systems implementation, in: Boland, Hirschheim (Eds.), Critical Issues in Information Systems Research, Wiley, New York, 1987. [34] V. Lai, R. Mahapatra, Exploring the research in information technology implementation, Information and Management 32, 1997, pp. 187. [35] G. Langenwalter, Enterprise resource planning and beyond: integrating your entire organization, The St. Louis Press APICS Series on Resource Management, 2000, p. 5. [36] S. Laughlin, An ERP game plan, Journal of Business Strategy 20 (1), 1999, pp. 32. [37] A.A. Lee, Scientific methodologies for MIS case studies, MIS Quarterly 13, 1989, pp. 32. [38] H. Lucas, J. Baroudi, The role of information technology in organization design, Journal of Management Information Systems Spring, 1994, pp. 9. [39] M.A. Mahmood, S.K. Soon, A comprehensive model for measuring the potential impact of information technology on organizational strategic variables, Decision Sciences 22 (4), 1991, pp. 869. [40] T. Minahan, Enterprise resource planning: strategies not included, Purchasing 125 (1), 1998, pp. 112–127. [41] P. Nemetz, L. Fry, Flexible manufacturing systems: implications for strategy, The Academy of Management Review 13 (4), 1988, pp. 627. [42] P. Palvia, Developing a model of the global and strategic impact of information technology, Information and Management 32, 1997, pp. 229. [43] D.A. Preece, The why and wherefore of new technology adoption, Management Decision 29 (1), 1991, pp. 53. [44] G. Premkumar, K. Ramamurthy, S. Nilakanta, Implementation of electronic data interchange: an innovation diffusion perspective, Journal of Management Information Systems 11 (2), 1994, pp. 157. [45] J.B. Quinn, M.B. Baily, Information technology: increasing productivity in services, The Academy of Management Executive 8, 1994, pp. 28.

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[46] P.S. Rajagopal, T. Frank, Enhancing manufacturing performance with ERP systems, Information Systems Management 17 (3), 2000, pp. 43. [47] P.S. Rajagopal, F. Tyler, A comparative case analysis of enterprise resource planning systems implementation and performance—SAP, in: Proceedings of the Annual Meeting of Decision Sciences Institute, Orlando, FL, 2000. [48] P.S. Rajagopal, F. Tyler, A comparative case analysis of enterprise resource planning systems implementation and performance—Baan, in: Proceedings of the Annual Meeting of Decision Sciences Institute, Orlando, FL, 2000. [49] D. Schnitt, Reengineering the organization using information technology, Journal of Systems Management 1, 1993, pp. 14. [50] M.S. Scott Morton, The Corporation of the 1990s, Oxford University Press, New York, 1991. [51] A.H. Segars, Assessing the uni-dimensionality of measurement: a paradigm and illustration within the context of information systems research, Omega 25 (1), 1997, pp. 107– 121. [52] V. Sethi, S. Carraher, Developing measures for assessing the organizational impact of information technology: a comment on Mahmood and Soon’s paper, Decision Sciences 24 (4), 1993, pp. 867. [53] A. Shtub, Enterprise Resource Planning (ERP): The Dynamics of Operations Management, Kluwer Academic Publishers, Boston, 1999. [54] D. Slater, What is ERP? CIO 12 (15), 1999, pp. 86. [55] T. Stevens, Kodak Focuses on ERP, Industry Week 8 (18), 1999, pp. 130. [56] J. Van Maanen, Epilog: qualitative methods reclaimed, in: J. Van Maanen (Ed.), Qualitative Methodology, Sage Publications, Beverly Hills. CA, 1983, p. 247. [57] N. Venkatraman, IT agenda 2000: not fixing technical bugs but creating business value, European Management Journal 16 (5), 1998, pp. 573. [58] R.K. Yin, Applications of case study research, Applied Social Research Methods, Vol. 34, Sage Publications, New Bury park, CA, 1993. [59] S. Zuboff, In the Age of Smart Machines: The Future of Work and Power, Basic Books, New York, 1984. Palaniswamy Rajagopal is a lecturer of Information Systems at Michigan Technological University, Houghton, Michigan. He recently obtained his graduate degree in Manufacturing Management and he is in the process of obtaining a PhD in Information Technology Management also, through distance learning. He obtained masters degrees in Chemical Engineering and Chemistry from Southern Illinois University, US. His first paper in MIS appeared in Information Systems Management in summer 2000 and his next paper about Oracle ERP has been accepted for publication in Information Systems Management recently. He has co-authored many papers that appeared in various journals in the area of chemical engineering. He regularly publishes

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P. Rajagopal / Information & Management 40 (2002) 87–114 organizations due to advances in information technology that have resulted in sophisticated information systems and to strategize, based on theoretically tested foundations, how organizations could utilize advanced information technologies to enhance their performance and conduct their various activities at optimal or near optimal levels, thus, saving time and resources. For academicians, such research will pave way for more research opportunities such as developing new methods of research and analysis. His research in ERP systems will become part of the above-mentioned comprehensive research.

in many conferences such as DSI, DSI—International and Production and Operations Management Society. His research interests are in Information Systems, Electronic Commerce and Small and Medium Global High-Tech firms. His teaching interests include Management Information Systems, IT Strategy and Policies, Electronic Commerce, Data Communications and Networking and Enterprise Resource Planning Systems. He is in the process of completing a comprehensive research proposal to request a large grant from the National Science Foundation to undertake various research projects to understand the changes in

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