Factors affecting ERP system implementation effectiveness

Purpose – Enterprise resource planning (ERP) systems enhance productivity and working quality by offering integration, standardization and simplification of multiple business transactions. The present study seeks to introduce a conceptual framework that investigates the way that human inputs (top management, users, external consultants) are linked to communication effectiveness, conflict resolution and knowledge transfer in the ERP consulting process, as well as the effects of these factors on ERP system effective implementation. Design/methodology/approach – The examination of the proposed conceptual framework was made with the use of a newly developed questionnaire. The questionnaire was distributed to a group of 361 Greek companies that have implemented an ERP system. Information technology (IT) managers were selected as the key respondents of the questionnaire. After the completion of the four month research period (September to December 2008), 108 usable questionnaires were returned (response rate=31 percent approximately). The empirical data were analyzed using the structural equation modelling technique (Lisrel 8.74). Findings – The main findings of the empirical study can be summarized in the following categories: the assistance provided by external consultants during the ERP implementation process is essential; knowledge transfer is an extremely significant factor for ERP system success; knowledge transfer concerning technical aspects of ERP systems is more important than effective handling of communication, as well as conflict resolution among organizational members; the role of top management support seems to be of less importance that the one provided by users. Research limitations/implications – The present study is limited by the poor definition of its population (due to lack of available data) and the relatively small size of the sample. Practical implications – The paper points out areas that adopting companies should emphasize in order to successfully implement an ERP system and, therefore, harvest its potential benefits. Originality/value – The paper proposes an enhanced conceptual framework that examines vital issues concerning ERP system effective implementation, thus, providing valuable outcomes for decision makers and academics. The originality of the paper lies in its three dimensional approach.