ENTERPRISE RESOURCE PLANNING SYSTEM SUCCESS IN

CORPORATE SECTOR OF PAKISTAN: A MIXED METHODS APPROACH

By

RAB NAWAZ LODHI

A thesis submitted to Bahria University, Islamabad, Pakistan in partial

fulfillment of the requirements for the degree of Doctor of Philosophy in
Management Sciences

2016
 SUBMISSION FORM OF THESIS FOR HIGHER RESEARCH DEGREE
BAHRIA UNIVERSITY, ISLAMABAD
Candidate Name: Rab Nawaz Lodhi
I submit 03 copies of thesis for examination for the degree of PhD.
Thesis Title: Enterprise Resource Planning System Success in Corporate Sector of
Pakistan: A Mixed Methods Approach

Candidate Signature: ____________________Date: _________________________________

Certification of Principal Supervisor

I Dr. Faisal Aftab being the principal supervisor for the above student, certify that thesis is in a
form suitable for examination and that the candidate has pursued their course in accordance with
the Rules of the University.
Signature: _____________________ Date: ____________________________________

Recommendation for Examination

I recommend that the thesis be examined.
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Not Recommended for Examination
I do not recommend that the thesis be examined.
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Statement by the Dean / Head Faculty / Department

I support the submission of the thesis of the above named student for examination under the
University Rules for higher degrees.
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ii
 BAHRIA UNIVERSITY, ISLAMABAD
APPROVAL SHEET
SUBMISSION OF HIGHER RESEARCH DEGREE THESIS

Candidate’s Name: Rab Nawaz Lodhi

Discipline: Management Sciences
Faculty/Department: Department of Management Sciences

I hereby certify that the above candidate’s work, including the thesis, has been completed to my
satisfaction and that the thesis is in a format and of an editorial standard recognized by the
faculty/department as appropriate for examination.

Signature(s):

Principal Supervisor: Dr. Faisal Aftab

Date: June 16, 2015
The undersigned certify that:
1. The candidate presented at a pre-completion seminar, an overview and synthesis of major
findings of the thesis, and that the research is of a standard and extent appropriate for
submission as a thesis.
2. I have checked the candidate’s thesis and its scope, format; editorial standards are
recognized by the faculty/department as appropriate.

Signature(s):

Dean/Head of Faculty/Department:

Date:

iii
Copyright @ 2016 by Lodhi, Rab Nawaz
All rights reserved

iv
 DECLARATION OF AUTHENTICATION

I, Rab Nawaz Lodhi certify that the research work presented in this thesis is
to the best of my knowledge my own. All sources used and any help received in the
preparation of this dissertation have been acknowledged. I hereby declare that I
have not submitted this material, either in whole or in part, for any other degree at
this or any other institution.

Signature: ………………………

v
 ACKNOWLEDGEMENT

In the name of Almighty Allah the Most Benevolent and the Most Merciful … “Our

Rabb! Accept (this service) from us. Verily, You are the All-Hearing, the All-Knowing.”

(Qur’an 2:127). All praise is to Almighty Allah, the real source of knowledge, Who has enabled

me to complete my research work.

It’s a matter of pleasure for me to have been supervised by such a brilliant supervisor

from the same area of research i.e., Information System (IS). This research work would not have

been possible without the right direction, continuous guidance and support of my supervisor Dr.

Faisal Aftab, who always encouraged me to accept the new challenges during my research work.

How I can forget to pay my heartiest gratitude to my best teacher Prof. Dr. Zahid Mahmood for

his generous assistance, invaluable guidance and encouragement throughout my PhD studies,

even he sacrificed his precious time and health just for the completion of my PhD thesis.

I am thankful to Prof. Dr. Mahboob Ahmad, Dr. R. K. Malik and Dr. Ayub Siddiqui for

their guidance in applying different tools for quantitative and qualitative data analysis. I am also

thankful to worthy Rector Bahria University Vice Admiral (Retd) Tanveer Faiz; Head of

Management Science Department Dr. Nadia Tahir and coordinator PhD program Dr.

Muhammad Ismail Ramay for providing best facilities and research environment at Bahria

University, Islamabad Campus. I also appreciate the support of our librarian Mr. Sher Afzal

Khan who provided outstanding services in library and imported latest books and software for

different research tools on my request during my PhD study. I am also thankful to Prof. Dr.

Abdul Waheed, Director: COMSATS Institute of Information Technology who approved my

study leave and allowed me to complete my PhD thesis in time.

vi
 I am highly thankful to Dr. Stacie Petter, Associate Professor of Information Systems and

Quantitative Analysis at University of Nebraska Omaha and Dr. Princely Ifinedo, Associate

Professor of Management Information System at Shannon School of Business, Cape Breton

University Canada for their invaluable guidance in covering the relevant literature of past

studies. In the same lines, I appreciate the efforts of Mr. Namet Ullah (ERP Consultant), Senior

Manager at Inbox Technologies Pakistan who helped me in compiling the list of Pakistani

organizations who are using ERP systems. I also appreciate the efforts of my students in the

phase of data collection from the industry particularly the struggle of Mr. Usman Saeed is

remarkable. I am also thankful to Nishat Riaz, Director Education: British Council Pakistan for

the proof reading of my PhD thesis. I am also grateful to all participants

(respondents/interviewees) who were involved in this research study. Lastly, I wish to say thanks

to all my friends, students and colleagues who encouraged me to convert my dream into reality.

I cannot end without saying thanks to my family members especially my wife Umie

Habiba and my son Muhammad Saad for their understanding, patience and temperament during

my stay outside the city during data collection stage and long working hours during write up

stage of my dissertation. How I can forget to say thanks to my Aunty Noureen Malik and Uncle

Muhammad Sohail Ali for providing their support during my stay in Islamabad. I am also

grateful to my mother for her love and support when it was most required.

Rab Nawaz Lodhi

vii
 DEDICATION

This thesis is dedicated

to:

my great father Muhammad Shafiq Khan Lodhi (Late)

my beloved mother Nasreen Malik for her love and care

my wife Umie Habiba for her support and encouragement

my lovely son Muhammad Saad for his patience and temperament

and my newly born daughter Fatima Nawaz

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 TABLE OF CONTENTS

SUBMISSION FORM OF THESIS FOR HIGHER RESEARCH DEGREE .............................................. ii

APPROVAL SHEET ................................................................................................................................... iii
DECLARATION OF AUTHENTICATION ................................................................................................ v
ACKNOWLEDGEMENT ........................................................................................................................... vi
DEDICATION ........................................................................................................................................... viii
LIST OF TABLES ......................................................................................................................................xiv
LIST OF FIGURES .................................................................................................................................... xv
LIST OF ABBREVIATION .......................................................................................................................xvi
ABSTRACT.............................................................................................................................................. xviii
CHAPTER 1 ................................................................................................................................................. 1
INTRODUCTION ........................................................................................................................................ 1
1.1 Preface........................................................................................................................................... 1
1.2 Intellectual Background of the Study............................................................................................ 1
1.2.1. Defining ERP System ........................................................................................................... 2
1.2.2. How ERP System Works? ................................................................................................... 3
1.2.3. Worldwide Growth of ERP System ...................................................................................... 4
1.2.4. ERP Systems in Corporate Sector of Pakistan ...................................................................... 6
1.2.5. ERP Life Cycle and Stage-wise Issues ................................................................................. 7
1.2.6. ERP System Success ............................................................................................................. 8
1.2.7. ERP System Success Measurement ...................................................................................... 9
1.2.8. Factors Affecting ERP System Success .............................................................................. 11
1.3 Research Problem ....................................................................................................................... 12
1.4 Objectives of the Study ............................................................................................................... 14
1.5 Research Methodology ............................................................................................................... 15
1.6 Rationale and Contributions of the Study ................................................................................... 16
1.7 Definitions of the Key Terms ...................................................................................................... 18
1.9 Summary ..................................................................................................................................... 22
CHAPTER 2 ............................................................................................................................................... 24
LITERATURE REVIEW ........................................................................................................................... 24
2.1 Preface......................................................................................................................................... 24

ix
2.2 Enterprise Resource Planning (ERP) System: An Introduction .................................................. 25
2.3 ERP System: An Historical Perspective ..................................................................................... 25
2.3.1 Period of 1960s and 1970s– MRP....................................................................................... 27
2.3.2 Period of 1970s and 1980s– MRP II ................................................................................... 27
2.3.3 Period of 1990s and onward– ERP ..................................................................................... 28
2.4 Benefits of ERP System to Organizations .................................................................................. 30
2.4.1 Improvement in Business Efficiency .................................................................................. 31
2.4.2 Control over Business Processes......................................................................................... 31
2.4.3 Standardization in Business Processes ................................................................................ 32
2.4.4 Competitive Advantage....................................................................................................... 32
2.4.5 Reduction in Cost and Improvement in Profitability .......................................................... 33
2.4.6 Effective Inventory Management ........................................................................................ 34
2.5 ERP Growth in Pakistani Organizations ..................................................................................... 34
2.6 ERP Implementation in Organizational Settings ........................................................................ 36
2.7 Critical Success Factors (CSFs) of ERP Project Implementation ............................................... 38
2.8 ERP System Success ................................................................................................................... 41
2.9 Measurement ERP System Success ............................................................................................ 42
2.10 DeLone & McLean (D&M) Theory of Information System (IS) Success .................................. 42
2.10.1 Original D&M Model ......................................................................................................... 43
2.10.2 Criticism on D&M Original Model .................................................................................... 43
2.10.3 Updated D&M Model ......................................................................................................... 44
2.11 Constructs and Measures of D&M Model of IS Success ............................................................ 45
2.11.1 System Quality .................................................................................................................... 46
2.11.2 Information Quality............................................................................................................. 47
2.11.3 Service Quality.................................................................................................................... 48
2.11.4 System Use / Intension to Use ............................................................................................ 49
2.11.5 User Satisfaction ................................................................................................................. 49
2.11.6 Net Benefits ........................................................................................................................ 50
2.12 Application of D&M Model for ERP System Success Measurement ........................................ 52
2.13 Importance of Process Level in ERP Success Evaluation .......................................................... 55
2.14 Contextual Factors Affecting ERP System Success ................................................................... 59
2.14.1 Technological Factors and their Effect on ERP System Success........................................ 61

x
 2.14.2 Organizational Factors and Effect on ERP Success ............................................................ 62
2.14.3 Environmental Factors and their Effect on ERP Success ................................................... 64
2.14.4 Individual Factors and their Effect on ERP Success ........................................................... 65
2.15 Summary ..................................................................................................................................... 67
CHAPTER 3 ............................................................................................................................................... 69
THEORETICAL FRAMEWORK .............................................................................................................. 69
3.1 Preface......................................................................................................................................... 69
3.2 ERP System Success Measurement Model ................................................................................. 69
3.2.1 Operationalization of the Constructs ................................................................................... 74
3.2.2 Relationship between ERP System Quality and Individual Performance ........................... 75
3.2.3 Relationship between ERP Information Quality and Individual Performance ................... 76
3.2.4. Relationship between ERP Service Quality and Individual Performance .......................... 77
3.2.5 Relationship between Individual Performance and Process Performance .......................... 79
3.2.6 Relationship between Process Performance and Organizational Performance ................... 79
3.2.7 Relationship between Individual Performance and Organizational Performance ............... 80
3.3 Contextual Factors and ERP System Success: The Qualitative Stance ...................................... 81
3.3.1 Internal Organizational Factors and ERP System Success ................................................. 83
3.3.2 Technological Factors and ERP System Success................................................................ 87
3.3.3 Individual Factors and ERP System Success ...................................................................... 90
3.3.4 External Environmental Factors and ERP System Success ................................................ 92
3.4. Summary ..................................................................................................................................... 94
CHAPTER 4 ............................................................................................................................................... 95
METHODOLOGY ..................................................................................................................................... 95
4.1 Preface......................................................................................................................................... 95
4.2 Philosophical Assumptions ......................................................................................................... 96
4.2.1. Ontological Assumption ..................................................................................................... 96
4.2.2. Epistemological Assumption .............................................................................................. 97
4.2.3. Methodological Assumption ............................................................................................... 98
4.3 Research Design........................................................................................................................ 100
4.3.1. The Selection of Research Design .................................................................................... 101
4.3.2. Mixed Methods Approach ................................................................................................ 101
4.3.3. Explanatory Sequential Research Design ......................................................................... 102

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 4.3.4. Justification of the Mixed Methods Approach .................................................................. 106
4.3.5. Unit of Analysis ................................................................................................................ 107
4.3.6. Time Frame for the Collection of Data ............................................................................. 108
4.4 Quantitative Data Collection and Analytical Techniques ......................................................... 109
4.4.1. Survey Research Method .................................................................................................. 109
4.4.2. Nature of Survey ............................................................................................................... 111
4.4.3. Data Collection Technique................................................................................................ 111
4.4.4. Operationalization of the Study Variables ........................................................................ 111
4.4.5. Survey Instrument Design ................................................................................................. 117
4.4.6. Pre-Testing of the Survey Instrument ............................................................................... 119
4.4.7. Validity and Reliability of the Research Instrument ......................................................... 119
4.4.8. Sampling Process .............................................................................................................. 120
4.4.9 Quantitative Data Analytical Techniques ......................................................................... 124
4.5 Qualitative Data Collection and Analytical Techniques ........................................................... 127
4.5.1 Qualitative Data Collection Techniques ........................................................................... 127
4.5.2 Qualitative Data Analytical Techniques ........................................................................... 129
4.6 Summary ................................................................................................................................... 131
CHAPTER 5 ............................................................................................................................................. 133
FINDINGS OF THE STUDY ................................................................................................................... 133
5.1 Preface....................................................................................................................................... 133
5.2 Quantitative Findings of the Study ........................................................................................... 133
5.2.1 Assessment of Measurement Model ................................................................................. 134
5.2.2 Assessment of the Path Model .......................................................................................... 138
5.2.3 Testing Model Fit .............................................................................................................. 141
5.3 Quantitative to Qualitative Findings: A Sequential Perspective ............................................... 143
5.4 Qualitative Findings of the Study ............................................................................................. 143
5.4.1 Transcription of Video-Recorded Interviews.................................................................... 144
5.4.2 Data Coding and Identification of Themes ....................................................................... 144
5.4.3 Tree Map Analysis ............................................................................................................ 150
5.4.4 Discussion on Qualitative Findings .................................................................................. 150
5.5 Summary ................................................................................................................................... 183
CHAPTER 6 ............................................................................................................................................. 185

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DISCUSSION AND CONCLUSION ....................................................................................................... 185
6.1 Preface....................................................................................................................................... 185
6.2 Prognosis from Empirical Findings: Discussions and Suggestions .......................................... 185
6.3 Contributions to Knowledge and Implications for Practice ...................................................... 193
6.4 Limitations of the Study............................................................................................................ 196
6.5 Direction for Future Research ................................................................................................... 197
6.6 Concluding Remarks ................................................................................................................. 200
REFERENCES ......................................................................................................................................... 202
APPENDIXES .......................................................................................................................................... 233
Appendix A: Instrument for Quantitative Data Collection ............................................................. 233
Appendix B: Request Letter to SAP/Oracle ERP Partners in Pakistan .......................................... 237
Appendix C: SAP/Oracle Consultants in Pakistan ......................................................................... 238
Appendix D: List of ERP SAP/Oracle User Companies ................................................................ 240
Appendix E: Descriptive Statistics of the Responses ..................................................................... 253
Appendix F: Collinearity Statistics: VIF Values............................................................................ 255
Appendix G: Path Coefficient Histograms ..................................................................................... 257
Appendix H: Request Letter for Conducting Interviews ................................................................ 259
Appendix I: Interview protocol ..................................................................................................... 260
Appendix J: ERP End Users’ Profile who participated in In-depth Video Recorded Interviews .. 262
Appendix K: NVivo Output: Themes/Nodes Clustered on the basis of Coding Similarity............ 266
Appendix L: NVivo Output: Word Tag Clouds- 100 Most Repeated Words in Transcribed Data 267
Appendix M: NVivo Output: Word Tree of Contextual Factors Affecting ERP System Success .. 268

xiii
 LIST OF TABLES

Table 2.1 Measures of System Quality ......................................................................................... 46

Table 2.2 Measures of Information Quality.................................................................................. 47
Table 2.3 Measures of Service Quality ......................................................................................... 48
Table 2.4 Measures of System Use/Intention to Use .................................................................... 49
Table 2.5 Measures of User Satisfaction ...................................................................................... 50
Table 2.6 Measures of Individual Impact ..................................................................................... 51
Table 2.7 Measures of Organizational Impact .............................................................................. 51
Table 2.8 Measures of Process Performance ................................................................................ 58
Table 3.1 Operational Definition of the Constructs ...................................................................... 74
Table 4.1 The Operational Definitions of ERP System Quality Items ....................................... 112
Table 4.2 The Operational Definition of ERP Service Quality of Items .................................... 113
Table 4.3 The Operational Definition of ERP Information Quality Items ................................. 114
Table 4.4 The Operational Definition of Individual Performance Items .................................... 115
Table 4.5 The Operational Definition of Process Performance Items ........................................ 116
Table 4.6 The Operational Definition of Organizational Performance Items ............................ 117
Table 4.7 Summary of Profile of Respondents ........................................................................... 123
Table 4.8 Comparison of PLS-SEM and CB-SEM .................................................................... 124
Table 5.1 Factor Loading, Cross Loading, Cronbach’s Alpha & Composite Reliability ........... 136
Table 5.2 Average Variance Extracted (AVE) and Fornell-Larcker Criterion ........................... 137
Table 5.3 PLS-SEM Path Model Coefficients ............................................................................ 141
Table 6.1 Summary of Empirical Results ................................................................................... 192

xiv
 LIST OF FIGURES

Figure 1.1 Worldwide ERP Market Share 2012 ............................................................................. 5

Figure 1.2 Stages of ERP Implementation ...................................................................................... 7
Figure 1.3 Structure of the Thesis ................................................................................................. 20
Figure 2.1 Evolution of ERP System ............................................................................................ 26
Figure 2.2 Unsuccessful ERP System Implementation ................................................................ 39
Figure 2.3 D&M Original IS Success Measurement Model ......................................................... 43
Figure 2.4 D&M Updated IS Success Measurement Model......................................................... 45
Figure 2.5 Worldwide Survey Report: ERP Implementation Outcome ....................................... 60
Figure 2.6 Structure of Literature Review .................................................................................... 60
Figure 3.1 ERP System Success Measurement Model ................................................................. 73
Figure 3.2 Factors Affecting ERP System Success ...................................................................... 82
Figure 4.1 Summary of Research Design ................................................................................... 105
Figure 4.2 Summary of Survey Design....................................................................................... 110
Figure 4.3 Comparison of Reflective and Formative Models..................................................... 126
Figure 5.1 Cronbachs Alpha ....................................................................................................... 135
Figure 5.2 Composite Reliability ................................................................................................ 136
Figure 5.3 Average Variance Extracted (AVE) .......................................................................... 138
Figure 5.4 PLS-SEM Path Results .............................................................................................. 140
Figure 5.5 R Square .................................................................................................................... 142
Figure 5.6 f Square ...................................................................................................................... 142
Figure 5.7 Data Coding and Developing Tree Nodes ................................................................. 147
Figure 5.8 Model of Contextual Factors Affecting ERP System Success .................................. 148
Figure 5.9 Tree Map of Contextual Factors ................................................................................ 149

xv
 LIST OF ABBREVIATION

AVE Average Variance Extracted

CAQDAS Computer Aided Qualitative Data Analysis Software

CB-SEM Component Based – Structure Equation Modeling

CRM Customer Relationship Management

CSF Critical Success Factors

BI Business Intelligence

BOD Board of Directors

BPI Business Process Improvement

BPR Business Process Reengineering

B2B Business to Business

CFA Confirmatory Factor Analysis

D&M DeLone and McLean

E-Commerce Electronic Commerce

EIS Enterprise Information System

ERP Enterprise Resource Planning

ES Enterprise System

FA Factor Analysis

HR Human Resource

HRMS Human Resource Management System

II Individual Performance

IQ Information Quality

IT Information Technology

IS Information System

xvi
KM Knowledge Management

MCA Multiple Correlational Analysis

MIS Management Information System

MOIT Ministry of Information Technology

MRP Material Requirement Planning

MPR II Manufacturing Resource Planning

OCB Organizational Citizen Behavior

OLM Organization Learning Model

OP Organizational Performance

PLS Partial Least Square

PP Process Performance

QDA Qualitative Data Analysis

TAM Technology Acceptance Model

TOE Technology – Organization – Environment

SEM Structure Equation Modeling

SCM Supply Chain Management

SME Small and Medium Enterprise

SQ System Quality

SERVQ Service Quality

SU System Use

US User Satisfaction

xvii
 ABSTRACT

In the last few decades Information Technology (IT) has grown manifolds in Pakistan.

The dynamic organizations are continuously replacing their legacy systems with the

contemporary information systems (IS). Particularly, Enterprise Resource Planning (ERP)

systems are now becoming an integral part of the organizations to automate business processes.

This thesis empirically investigated: (1) the success of ERP system at individual, process and

organizational levels and (2) explored different contextual factors relating to organization,

technology, individual and environment that affect the level of ERP system success in corporate

sector of Pakistan. For examining ERP system success, the study applied DeLone and McLean

(1992, 2003) (D&M) ‘Theory of IS Success’. The five dimensions mentioned in the theory and

an additional dimension was incorporated in the proposed ERP system success measurement

model i.e., ERP system quality, ERP information quality, ERP service quality, individual

performance, organizational performance and process performance (added to the model). The

present study applied two phased ‘explanatory sequential’ mixed methods research design.

In the first phase of research 514 Pakistani organizations were surveyed through

structured questionnaires to investigate ERP system success. SmartPLS 3 Software was used

and Partial Least Square – Structural Equation Modeling (PLS-SEM) technique was applied for

testing the study hypotheses and assessing convergent validity, discriminant validity and internal

reliability of the constructs. The results from the first phase indicated that ERP system quality,

information quality and service quality positively influence individual performance. Similarly,

individual performance has also positive and significant relation with process performance and

xviii
organization performance. The results also revealed that process performance has positive and

significant impact on organizational performance in Pakistani organizations.

Based on the findings from the first phase, qualitative research strategy was applied in the

second phase of research to explore different contextual factors that affect the level of ERP

system success in corporate sector of Pakistan. The qualitative data was collected through in-

depth video recorded interviews of 48 ERP key users in four different organizations. NVivo 10

software was used for transcribing, coding and identifying different themes of the study. Word

Tree, Word Tag Clouds and Tree Maps techniques were applied to identify frequency of data

coding, talk pattern and significance of each contextual factor. Finally, the qualitative phase of

research explored that rewards and incentives, training, leadership, management control,

technological resources, up-gradation of technology, skills, knowledge, provision of electricity

and stakeholders’ pressure are more critical factors that influence the level of ERP system

success in Pakistani organizations. Thus, these findings suggest that organizations can enhance

the level of ERP system success by controlling these contextual factors.

Lastly, the both quantitative and qualitative results were discussed and different

theoretical and practical implications were provided. The findings of the study will serve as

changing driver of attention of the practitioners from the issues of pre-implementation or

implementation stages to the issues of post-implementation stage of ERP system. Based on

different results and discussions, practitioners will pay more attention to sustain the success of

ERP system in their organizations.

Keywords: ERP system, ERP success, DeLone and McLean Model, IT performance, Contextual

Factors

xix
 CHAPTER 1

INTRODUCTION

1.1 Preface

The first part of the chapter provides the intellectual background of the study which

covers the introduction of Enterprise Resource Planning (ERP) System, how ERP system works,

usage and growth of ERP system, ERP implementation life cycle, and critical issues of different

stages of ERP life cycle. After providing these details, the study focuses on research gap on the

critical issues in post-implementation stage of ERP system i.e., ERP system success evaluation

and different factors that affect ERP system success, particularly, in the context of Pakistan. The

next part of this chapter provides problem statement and research objectives of the study,

followed by the significance and justification of uncovering ideas of the present study. The next

section of this chapter outlines the definitions of the key terms and structure of the thesis.

Finally, the chapter ends with the summary of the chapter along with the signpost to the next

chapter.

1.2 Intellectual Background of the Study

In the last few decades Information Technology (IT) has grown all over the world,

particularly in developing countries (Madapusi, 2008). The dynamic organizations are

continuously replacing their traditional systems with the new technology of Information System

(IS) to survive in competitive world. Organizations implement different types of IS (e.g.,

Enterprise Resource Planning System, Supply Chain Management System, Customer

Relationship Management System, Knowledge Management System, Business Intelligence

System, etc.) as per their need and preferences because every type of IS has specific objectives

1
within the organization. For example, Enterprise Resource Planning (ERP) system is an

information system which integrates information, processes, ways of working and workflows

within an ‘enterprise’ (Hendricks et al., 2007; Ifinedo, 2006; Wang, et al., 2008). It attempts to

work for Management with Information Technology (IT) where organizations plan, organize,

lead and also control business through ERP system. This system is one of the fastest growing ISs

in both developed and developing countries.

1.2.1. Defining ERP System

ERP system is an organization’s management system, based on software application,

which is used to integrate and facilitate all processes and systems of the organization (Al-

Mashari, 2002). ERP modules cover all functional areas of a business to eliminate the problem of

fragmentation. In the same way, Klaus et al. (2000) defined ERP systems as:

“ERP systems usually called enterprise resource planning systems, these

comprehensive, packaged software solutions seek to integrate the complete range

of a business’s processes and functions in order to present a holistic view of the

business from a single information and IT architecture” (p. 141).

Kumar & Gupta (2011) defined ERP system as:

“Enterprise resource planning system is an iterative system for identifying,

analyzing, evaluating, testing, and monitoring the entire process of an

organization or a company (p. 57)”.

Botta-Genoulaz & Millet (2006) defined ERP system as:

“An ERP system is an integrated software package composed by a set of standard

functional modules (Production, Sales, Human Resources, Finance, etc.),

2
 developed or integrated by the vendor, which can be adapted to the specific needs

of each customer. It attempts to integrate all departments and functions across a

company onto a single computer system that can serve all those different

departments’ particular needs” (p.203).

On the basis of the above mentioned definitions, the picture is clear that ERP system is an

information system that automates internal processes and integrates all departments (such as

finance, marketing, sale, inventory/store, production and human resource department) within the

organization. It provides a holistic view of all business operations and their performance in

different types of reports to the managers and enables them to take the corrective decisions. It

provides a strong environment for the top level management to monitor and control several work

activities of different departments (Shah et al., 2011). With the help of ERP system, organization

can plan and forecast inventory, human resources, cash flows, investments, costs, sales,

production, fixed assets, liabilities, expenses etc.

1.2.2. How ERP System Works?

ERP is a multi-module software package and its structure is complex in nature. Its

modules are installed in different departments within the organization and subsequently, all

departments are linked together through a strong centralized network system. Employees (i.e.,

ERP end users) from each department can work on their related module and access the

information which is authorized by the top level management. Integrated function of ERP system

enables all departments to work inter-dependently. They work together and disseminate the

related information where output (i.e., information) from one department becomes the input for

another department.

3
 Undoubtedly, organizations enjoy different benefits after implementing EPR systems;

however, ERP system is very expensive and complex in nature. Only large organizations can

afford its cost of pre-implementation, implementation and post-implementation stages. Its

implementation is not a simple task (Markus & Tanis, 2000). In many cases a company faces

failure of ERP implementations and in case of failure of its implementation; it could destroy all

legacy systems of the organization (Amid, et al., 2012).

1.2.3. Worldwide Growth of ERP System

Usage of ERP system improves cross-functional capabilities of the organization in

integrative, effective and efficient manners (Madhavan, 2000; Hawking & Stein, 2004).

Globalization and the rapid changes worldwide have compelled organizations to opt ERP system

to make an automotive connection among their customer, suppliers and other stakeholders

strategically to maintain long-term competitive advantage (Khattak et al., 2013). Berry (2012)

believes that ERP system reduces cost and improves business processes and ultimately increases

organizational profitability.

Implementation of ERP system is increasing day by day. Over the last two decades, ERP

system has become a need for every type of industry. The reason is that every organization needs

updated information of their business activities to make strategic decisions for competing with

their rivals (Ahmed & Khan, 2013). Growing global demand, expanding specific need of

industry and increasing in use of new technologies are the key forces that are restructuring ERP

market and ERP system is becoming more dynamic (Hamerman et al., 2013).

The future of ERP system will be very vibrant and one day ERP system will break the

boundary of “organization”. For example, many other applications and technologies such as

mobile, social networks, etc. will break the conventional ERP ownership. Therefore, leading

4
ERP vendors are struggling to incorporate these changes in their potential ERP systems to gain

competitive advantage (Hamerman et al., 2011).

An industrial report showed that ERP marketing is growing with 6.9% of annual rate and

it will cross $ 50 billion by the end of 2012 (Hamerman et al., 2008). Over 500 ERP vendors are

producing different types of ERP systems Worldwide (Bosilj & Spremic, 2005) in which SAP,

Oracle and Microsoft are the top ERP vendors in ERP market (Hendricks et al., 2007; Ahmed &

Khan, 2013) where five big ERP vendors i.e., SAP, Oracle, JD Edwards, People Soft, and

BAAN cover 60% of the market share (Botta-Genoulaz, & Millet, 2006).

Each type of ERP system (e.g., SAP/Oracle/Microsoft Dynamics) has specific features

that match the need of specific industry. Organizations select an ERP system according to their

need, preferences, capacity, cost and expected benefits associated with ERP system.

Figure 1.1. Worldwide ERP Market Share 2012. Source: (Columbus, 2013)

5
 Figure 1.1 shows worldwide ERP market share in 2012. The figure shows that SAP (i.e.,

an ERP vendor) is the market leader that has 25% of market share, which is the largest market

share. The total revenue of SAP was over $6 billion in the year 2012 which shows the largest

market share of 25%. In the same way, Oracle is the company that has the second largest market

share of 13%. The total revenue of Oracle was over $ 3.12 billion in the year 2012. In the same

way, Sage, Info and Microsoft ERP vendors have 6%, 6% and 5% market shares respectively in

the year 2012, whereas other types of customized/localized ERP vendors covered 37% of the

market share in the year 2012 (Columbus, 2013).

1.2.4. ERP Systems in Corporate Sector of Pakistan

In the last decade, the key sectors of the economy (e.g., banking, telecommunication,

education and energy) have shifted from the old and complex information systems to ERP based

information systems in Pakistan (Shad, et al., 2012).

In Pakistan, a large number of organizations have successfully implemented ERP system

such as Sui Southern Gas Corporation, Pak Arab Refinery Limited (Parco), Pakistan Tobacco

Company, ICI Pakistan Limited, Pakistan State Oil (PSO), Shell Pakistan Limited, Unilever

Pakistan Limited (Nazir, 2005). Thus, most of the big Pakistani organizations have implemented

ERP system. However, many Small and Medium Enterprises (SMEs) in Pakistan are also

planning for the implementation of ERP system because they have realized that the “right” ERP

can give many advantages such as business growth and optimization in their efficiencies. ERP

experts predict that there is a huge potential and future growth of ERP markets in Pakistan

(System Limited, 2009).

Siemens, Jaffer Brothers, Systems Limited, Inbox and Abacus Consulting are the leading

ERP consultants in Pakistan (System Limited, 2009). Abacus Consulting celebrated a grand

6
ceremony on July 12, 2012 after the successful implementation of SAP-ERP in more than 100

companies in Pakistan (Abacus Consulting, 2014). Whereas, Siemens has implemented SAP-

ERP in many well reputed organizations in Pakistan such as PSO, Packages Limited, ICI, Engro

Chemicals, Orient Electronic, PTCL, KESC and NBP. Similarly, most of the textiles, food,

chemicals, pharmaceutical and electronic companies are using Oracle-ERP system in Pakistan

(Abacus Consulting, 2014).

1.2.5. ERP Life Cycle and Stage-wise Issues

There are three stages in ERP lifecycle: (1) pre-implementation, (2) implementation, and

(2) post-implementation. Figure 1.2 shows that different factors of beliefs (concepts) and

attitudes (plans) affect the behavior (perform) factors and in the same say, different behavior

(perform) factors affect the results (effectiveness/success) of ERP system. In other words, pre-

implementation stage influences the implementation stage of ERP system and similarly, the

implementation stage affects the post-implementation stage of ERP system (Yu, 2005).

Figure 1.2. Stages of ERP Implementation. Source: (Yu, 2005)

The First stage of pre-implementation of ERP system is concerned with different beliefs

(concept) and attitude (planning) towards ERP need assessment, analysis of available resources

`& firm’s compatibilities, ERP vendor/consultant and package selection, ERP package cost,

7
features and expected benefits, implementation procedure, cost, time and scope resources, time

and scope.

The second stage of ERP life cycle is implementation stage which is concerned with

different issues of actual behavior such as, ERP team composition, infrastructure development

(installation of ERP modules, networking, connectivity & testing), data conversion and

employees’ training and support. In implementation stage of ERP system, organizations address

different critical success factors (CSFs) that affect the successful implementation of ERP system

such as effective communications, management involvement, inter-departmental coordination,

monitoring of implementation progress, managing the employees’ resistance and effective

training. A number of studies (e.g., Ehie & Madsen, 2005; Ngai, et al., 2008; Nattawee &

Siriluck, 2008; Fang & Patrecia, 2009; Ijaz, et al., 2013) investigated CSFs of ERP project

implementation.

The third stage of ERP life cycle is post-implementation stage which is concerned with

results (effectiveness of ERP system after its use). After the successful implementation (after

second stage of ERP life cycle), the critical issue for the organizations is to know ERP success

(effectiveness) in terms of positive impact of ERP system on different performance levels in

organizations e.g., individual, process and organizational performance.

1.2.6. ERP System Success

Different researchers have used different terms such as, “ERP success”, “ERP

effectiveness” or “ERP post-implementation success” in their studies which means ERP system

success (Markus & Tanis, 2000; Ifinedo, et al., 2010). ERP system success is subjective

phenomenon and its measurement is also a difficult task for researchers and practitioners

8
(Kronbichler et al., 2010). In simple words, ERP system success measurement means evaluation

of the impact of ERP system on different levels of organization, for example, individual, process

and overall organizatison. The positive impact of ERP system on different performance levels

assures ERP system success within the orgnaization.

Organizations invest a huge amount on ERP system implementation worldwide (Khattak,

et al., 2012). In the same lines, in post-implementation stage (after the successful implementation

and usage of ERP system) organizations want to know the success/effectiveness of their

investment on IS/ERP system (Petter, et al., 2008).

However, it is not guaranteed that ERP system always gives good results of enhancing

performance of individuals, processes or organization. A number of organizations failed to

achieve ERP benefits in their practices (Granlund, 2011). Several organizations, all over the

world have realized that ERP system is not as effective as expected (Ho, et al., 2004; Howcroft,

et al., 2004; Trimi, et al., 2005; Wang, et al., 2008).

1.2.7. ERP System Success Measurement

ERP system success is a complex phenomenon (Kronbichler et al., 2010) and different

skills are required to measure its success/effectiveness (Gable, et al., 2008). Most of the

companies worldwide do not measure ERP system success and its benefits because of the lack of

knowledge and the required skills. The lack of knowledge creates difficulty for practitioners to

ensure ERP system success in post-implementation stage of ERP system. Seddon (1997, p. 11)

argued that:

‘‘many firms do not conduct rigorous evaluations of all their IT

investments because of their less knowledge in this area”.

9
 In the same lines, Robbins-Gioia (2006) conducted a survey in American firms to know

how organizations assess the benefits and success of ERP system and finally reported that:

‘‘46% of the participants noted that while their organization had an ERP

system in place, they did not feel their organization understood how to use the

system to improve the way they conduct business.”

Based on D&M theory of IS Success (DeLone & McLean, 1992, 2003), few studies

addressed the issues of ERP system post-implementation success measurement success (e.g.,

Sedera, et al., 2003, Sedera, et al., 2004; Ifinedo, 2006; Ifinedo & Nahar, 2007; Gable et al.,

2008, Ifinedo et al., 2010).

The D&M model consists of six information system success measurement constructs i.e.,

(1) System Quality, (2) Information Quality, (3) Service Quality, (4) System Use/Intention to

Use (5) User Satisfaction (6) Net Benefits (Individual Impact, Organizational Impact etc.)

(DeLone & McLean, 2003). All these six constructs are interdependent and interrelated. DeLone

and McLean (1992) stated that ‘‘users prefer different success measures, depending on the type

of system being evaluated” (p. 17) which means that more constructs could be added according

to the type/characteristics of the information system which is being evaluated.

On the other hand the second issue in the post-implementation stage is the influence of

different contextual factors on ERP system success which change the ERP system success within

the organization. The following section provides the detail of these contextual factors.

10
1.2.8. Factors Affecting ERP System Success

Same ERP system produces different results in different organization because of the

influence of different contextual factors on the success of ERP system. These factors vary from

context to context. Even after the successful implementation of ERP system, a number of

organizations face different challenges in post-implementation stage. Many studies reported

disappointing results of performance (i.e., failure of ERP post-implementation) after the

implementation of ERP system (Ho, et al., 2004; Howcroft, et al., 2004; Trimi, et al., 2005).

In the same lines, Petter, et al., (2008) argued that IS/ERP system success becomes more

complex and elusive, because the impact of information system influenced by different human,

organizational and environmental factors (i.e., contextual factors). In the present study these

contextual factors were categories into the following four different classes:

1. External Environmental Factors

2. Individual Factors

3. Technological Factors

4. Internal Organizational Factors

Past studies reported (as discussed in chapter 2 and chapter 3) that different factors

influence ERP system success in the post-implementation stage. However, these factors are

contextual and vary in different settings. These factors were also ignored in IS literature,

particularly, in the context of Pakistan.

11
1.3 Research Problem

Different research gaps were identified after the extensive review of the literature on

IS/ERP system success.

Research Gap 1: Literature revealed that most of the studies examined ERP system

success at individual and fewer investigated ERP success at organizational level (Sedera, et al.,

2003, Sedera, et al., 2004; Ifinedo, 2006; Ifinedo & Nahar, 2007; Gable et al., 2008, Ifinedo et

al., 2010). However, no study was found where ERP success was measured at process level.

Whereas, the measurement of ERP system success at process level is very essential because the

primary purpose of ERP system is to integrate and automate all processes. Therefore, the

evaluation of IT/ERP system is very essential at process level which was ignored in previous

studies (Klaus, et al., 2000; Dehning & Richardson, 2002; Al-Mashari, 2002; Mabert, et al.,

2003; Spathis and Constantinides, 2004; Katerrattanakul, et al., 2006; Al-Mudimigh, et al.,

2009). Therefore, evaluation of ERP system success at process level is the gap in the literature.

Research Gap 2: Unfortunately, the IS research studies conducted in Pakistan ignored

the issues relating to the post-implementation stage of ERP system i.e., (1) ERP system success

measurement and (2) factors affecting ERP system success. These studies only focused on the

issues of pre-implementation and implementation stages of ERP system for example, identifying

different critical success factors (CSFs) of ERP project implementation in Pakistani

organizations (Shah, et al., 2011; Khattak, et al., 2012; Shad, et al., 2012; Ahmed & Khan, 2013,

Ijaz, et al., 2014; Khattak, et al., 2013). In the same way, contextual factors (e.g., organizational,

individual, technological and environmental factors) that affect ERP system success were

ignored in Pakistani based research studies. Therefore, evaluation of ERP system success at

individual, process and organization level is the gap in the literature.

12
 The wide range of implementation of ERP system in corporate sector of Pakistan shows a

need to address different questions regarding the post-implementation success of ERP system

such as:

1. How does ERP system (e.g., ERP system quality, ERP information quality and ERP

service quality) influence the individual users in daily routine tasks?

2. How is process performance influenced by the performance of individuals using ERP

system?

3. How is organizational performance influenced by the performance of individuals and

processes using ERP system?

4. How do organizations assure the success of an ERP system at different levels i.e.,

individual, process and overall organization?

5. What are the contextual factors that affect the level of ERP system success?

Research Gap 3: The level of ERP system success is context-dependent and varies

across industries (O’Leary, 2004). Most of the times, companies fail to achieve its benefits in

practice because of different efficiency problems (Granlund, 2011). The findings of Poston and

Grabski’s (2000) and Wieder et al.’s (2006) findings depict that ERP system in a number of

organizations failed to produce the financial success. It is pertinent to mention that what are the

contextual factors which influence the level of ERP system success or may become the reason of

EPR failure (in inverse cases)? Although, addressing these contextual factors is very critical. The

reason is that organization can increase the level of ERP system success by controlling these

contextual factors. Unfortunately, in the context of Pakistan, no study was found where these

contextual factors were identified. These contextual factors may be classified into different

categories e.g., organizational, technological, individual and environmental contextual factors.

13
Therefore, identification of contextual factors which influence the level of ERP system success

particularly in the context of Pakistan is the gap in the literature.

All the above mentioned critical questions call IS researcher to measure ERP system

success and identify different factors affecting ERP system success. Based on these views the

specific problem statement of the present study is:

“To find the success of ERP system at individual, process and organizational
levels and to identify different factors affecting ERP system success in Pakistani
organizations.”

1.4 Objectives of the Study

The present study has two main objectives: (1) to measure ERP system success in

corporate sector of Pakistan and (2) to identify different contextual factors affecting ERP system

success in corporate sector of Pakistan. One the other hand, the contextual factors affecting the

level of ERP system success are classified into different categories e.g., organizational,

technological, individual and environmental contextual factors. Based on this discussion, the

main objectives of the present study are:

1. To examine ERP system success in corporate sector of Pakistan

2. To explore different factors affecting ERP system success in corporate sector of Pakistan

Examining ERP system success means finding the causal relationship of different

dimensions of ERP success constructs e.g., relationship between ERP system quality and

individual performance, relationship between individual performance and process performance

etc. Based on the first main objective, the sub-objective of the present study are to:

14
 i. To investigate the relationship of ERP system quality, ERP information quality and

ERP service quality with individual performance in corporate sector of Pakistan

ii. To determine the relationship of individual performance with process performance

and organizational performance in corporate sector of Pakistan

iii. To find the relationship between process performance and organizational

performance in corporate sector of Pakistan

Besides these objectives, the study also aimed to find different contextual factors relating

to organization, individual, technological and external environment that influence the level of

ERP system success. Based on the second main objective of the study the sub-objectives of the

study are to:

iv. To identify organizational contextual factors that affect the level of EPR system

success in corporate sector of Pakistan;

v. To find technological contextual factors that affect the level of EPR system success

in corporate sector of Pakistan;

vi. To determine individual contextual factors that affect the level of EPR system

success in corporate sector of Pakistan; and

vii. To explore environmental contextual factors that affect the level of EPR system

success in corporate sector of Pakistan

1.5 Research Methodology

Research methodology is a complete strategic plan of data collection and analysis. The

present study applied two phased mixed methods research design i.e., “explanatory sequential”,

where in the first phase, quantitative data was collected and analyzed. In the second phase, based

15
on quantitative findings from the first stage, the study moved towards the qualitative data

collection and analysis (Creswell & Clark, 2011).

As discussed earlier in this chapter the present study has two key objectives. The first

objective of the present study directed the quantitative approach while the second objective was

based on qualitative research approach. Therefore, both quantitative and qualitative data

collection and analysis methods were applied in a sequence and equal priority was given to both

the methods.

In the first phase of research, 514 organizations were surveyed using a valid instrument.

Partial Least Square – Structure Equation Modeling (PLS-SEM) technique was applied for

testing the study’s hypotheses and checking the validly of constructs, whereas, descriptive

statistics was applied for examining the sample characteristics. Afterward, based on quantitative

findings, qualitative research strategy was applied and data was collected through semi-

structured video recorded interviews. After that NVivo software was employed and different

themes were identified from the qualitative data. Finally, the mixing strategy was applied in

Chapter 6 (i.e., Discussions and Conclusion) where qualitative findings were linked with

quantitative results and different suggestions were provided based on empirical findings.

1.6 Rationale and Contributions of the Study

The present study focused on “post-implementation success” rather than implementation

success of ERP system. ERP implementation success shows the technical success of ERP project

implementation which means the successful installation of ERP modules in different departments

and their networking and other requirements within time, scope and budget. However, ERP post-

implementation success evaluation means the assessment of ERP system’s impact on different

16
level of organizations: individual, process and overall organization (Gable, et al., 2008; Ifinedo

et al., 2010).

Most of the researchers in IS research focused on the first two stages of ERP life cycle:

(1) pre-implementation and (2) implementation stage (e.g.,Ganesh & Mehta, 2010; Moohebat et

al., 2011; Tan, et al., 2009; Fang & Patrecia, 2009; Ngai, et al., 2008; Nattawee & Siriluck 2008;

Plant & Willcocks, 2007; Finney & Corbett, 2007; Yingjie, 2005). These studies focused to find

different critical success factors of ERP project implementation. For example selection of the

right vendor, selection of the righ ERP, ERP need assessment and awareness, training of

employees, business process reengineering etc. Therefore, IS studies igonred the issues of post-

implementation stage e.g., ERP system success/effectiveness (Ifinedo, et al., 2010). Since ERP

system success measurement is an emerging area for IS/ERP researchers (Ifinedo, 2006; Chien &

Tsaur, 2007), the present study assessed the issues of post-implementation success (i.e., ERP

system success evaluation and factors affecting ERP system success) which were ignored

previously in the literature.

Even in Pakistan, most of the studies only addressed the issues of pre-implantation and

implementation phase of ERP system e.g., critical success factors of ERP implementations

(Shah, et al., 2011; Khattak, et al., 2012; Shad, et al., 2012; Ahmed & Khan, 2013, Ijaz, et al.,

2014; Khattak, et al., 2013). The present study responded to the call made by industry and

provided a validated model for the evaluation of ERP system post-implementation success at

individual, process and organizational levels. The proposed model of the present study provides

organizations with many guidelines. Managers can use different dimensions and measures

identified in this study as diagnostic tool for the assessment of the success of their ERP systems

at several levels of analysis (i.e., individual, process and organization). Organizations may use

17
these measures periodically to get feedback from the end users of different levels of management

e.g., top, middle and lower levels. Later, managers can compare their standard or expected

performance with the actual performance of the ERP system and subsequently can take the

corrective actions for improving the ERP system, information or service quality.

In the same lines, the present study identified different contextual factors in four different

classes (i.e., organizational, technological, individual and environmental factors). The findings of

the present study also provided a road map to the organizations to increase the post-

implementation success at individual, process and organizational levels i.e., organizations can

enhance the success/effectiveness of ERP systems by controlling the contextual factor in favor of

their ERP systems.

The findings of the study will be served as changing driver of attention of the

practitioners from issues of the pre-implementation or implementation stages to the issues of

post-implementation stage of ERP system. Based on different results and discussions,

practitioners will pay more attention to sustain the success of ERP system in their organizations.

1.7 Definitions of the Key Terms

ERP System stands for “Enterprise Resource Planning”. It is an organization’s

management system based software application which is used to integrate and facilitate all

processes and systems of the organization and automate functional areas e.g., finance, sales,

inventory management, planning and controlling of human resources, production, administration

and operating units (Al-Mashari, 2002).

18
 ERP Product Performance means the goodness of the ERP application for the

organization (Wickramasinghe & Karunasekara, 2012) and it could be measured on the basis of

ERP end user’s subjective perception (Calisir & Calisir, 2004).

ERP Success Measurement means the evaluation/assessment of ERP contribution and

its impact on different organizational levels (Ifinedo, 2006).

ERP System Quality refers to the quality produced by ERP System itself which includes

reliability, ease of use, joy of use, support, accessibility and choice (Ifinedo, 2006).

ERP Information Quality reflects the timeliness, accuracy and comprehensiveness of

the information provided by ERP system (Gable, et al., 2008).

ERP Service Quality is the subjective ERP user’s judgement that the service actually

they are getting from MIS/ERP department is the service they expect. It reflects the

responsiveness, reliability, confidence, empathy, follow-up service and competence of MIS/ERP

department (Pit, et al., 1995).

ERP System Use is the frequency of the use of ERP system, time of use, number of

accesses, usage pattern, and dependency (DeLone and McLean, 2003).

ERP User Satisfaction refers to the ERP user’ feelings of pleasure that results from

gathering all the benefits that an ERP user expects to get from the use of ERP System (Gable, et

al., 2008).

Individual Performance includes task performance, job performance, productivity, job

effectiveness and job simplification after the usage of ERP system (Gable, et al., 2008).

19
 Process Performance refers the automation of process, process time and process control

after the usage of ERP system (Santa, et al., 2010).

Organizational Performance means the profitability, growth and productivity of the

organization after the usage of EPR system (Gable, et al., 2008).

1.8 Structure of the Thesis

Figure 1.3 shows structure of the thesis. The present thesis consists of six chapters. The

following sections provide the details of each chapter.

Figure 1.3. Structure of the Thesis

Chapter 1 provides the intellectual background, research gap (particularly in the context of

Pakistan), problem statement, research objectives, significance and justification of uncovering

ideas of the present study. It also outlines the definitions of the key terms and structure of the

thesis.

Chapter 2 presents literature review based on historical overview of ERP system, different

benefits of ERP system to business organization, ERP implementation and critical success

20
factors of ERP system implementation, ERP system success and its measurement, D&M theory

of IS success (original and updated models), criticism on D&M theory, constructs and measures,

application of D&M theory in ERP context, importance of process level of performance in ERP

system success evaluation and ERP system growth in Pakistan along with the need for research

particularly in the field of ERP system success in the context of Pakistan.

Chapter 3 focuses on conceptualization of theoretical framework for the present the study based

on extensive review of literature and underpinning of research gap. It provides the description of

ERP success measurement model which is the underlying theoretical foundations, the proposed

cause and effect relationships between the dependent and independent variables that lead to

testable hypotheses to answer the central research question of the present study. It also covers the

framework of contextual factors affecting ERP system success which is underlying theoretical

foundations and the key propositions of the study based on qualitative research stance.

Chapter 4 provides the description of research methodology underlying this thesis and the

techniques of data collection and analysis in order to empirically test the conceptual framework

developed in the previous chapter. The present study has followed the mixed methods research

design; therefore, quantitative and qualitative, both methodologies are discussed separately in

this chapter. The present study has employed mixed methods research design to answer the

central research questions. Therefore, chapter 4 has two sections. The first section discusses

different procedural issues in the light of quantitative approach e.g., instrument design,

quantitative data collection, target population, sampling technique, sample size, characteristics of

respondents, and data analysis method used in this study. Whereas, the second section discusses

the procedural issues of qualitative approach e.g., background of the selected organizations,

qualitative data collection and analysis methods.

21
Chapter 5 provides the empirical findings of the study that encapsulate both quantitative and

qualitative research methods. As discussed in the previous section that the present study

employed explanatory sequential research design, therefore, the first section covers the

quantitative findings of the study, whereas, the second section discusses the qualitative results.

The empirical outcomes from both quantitative and qualitative data analysis are presented

separately in chapter 5. It starts with an overview of the quantitative findings of Partial Least

Square – Structural Equation Modeling (PLS-SEM) technique that was applied for examining the

success of ERP system. Afterwards, discussion focuses on the qualitative findings which

identified different factors affecting the success of ERP system in Pakistani companies.

Chapter 6 provides extensive discussions on quantitative and qualitative findings of the study.

This discussion consists of mixing of both quantitative and qualitative results and different

suggestions based on empirical results of the study. It also covers relevant contributions to

knowledge and implications for practice drawn from empirical findings of the study. Chapter 6

also includes limitations of the present study and directions for future researchers.

1.9 Summary

ERP system is an information system (IS) that integrates different departments and

automates all internal processes within an organization. Its implementation has three different

stages: pre-implementation, implementation and post-implementation. Most of the researchers

have addressed the issues of pre-implementation and implementation stage of ERP system.

However, literature review revealed a research gap in post-implementation stage particularly in

the area of ERP post-implementation success and study of the contextual factors that affect the

level of ERP system success. Therefore, the main objective of the present study was to evaluate

ERP post-implementation success and to find different contextual factors that change the level of

22
ERP system success. The present study employed mixed methods research design to answer the

key research questions.

The study makes significant contributions in both theory and practice. The existing model

of DeLone and McLean (1992, 2003) was extended by incorporating new dimensions “process

performance” and its extendibility was validated in the context of Pakistani organizations. The

model proposed by the present study can be generalized for measuring success of different types

of information system. Moreover, the present study also identified different contextual factors

that affect ERP system success. Thus the findings of the study also help the organizations to

locate contextual factors and increase their ERP system effectiveness.

23
 CHAPTER 2

LITERATURE REVIEW

2.1 Preface

Literature review provides a clear picture about what has been done and what gaps in the

field of investigation need to be filled (Machi & McEvey, 2009). The extent of understanding

depends on capabilities of the reviewer and the presentation of logical evidence to convince the

target audience for accepting the claim. However, biases in mind, deviate the focus of reviewer

from main points to irrelevant discussions. The values also affect the pattern of review, time,

areas, and types of literature. To avoid any bias and irrelevant literature, this study has applied

different systematic techniques of literature review as suggested by Machi & McEvey (2009)

which include scanning, skimming, mapping, synthesizing, analyzing and critical writing.

This chapter begins with the extensive discussion on historical overview of ERP system

and then discussion shifts from different benefits of ERP system to business organization. The

second section of this chapter explains ERP implementation, critical success factors of ERP

system implementation, ERP system success and its measurement. The discussion then leads to

D&M theory of IS success, original model, criticism on D&M theory, updated model, constructs

and measures, application of D&M theory in ERP context. The next section of this chapter

describes the importance of process level of performance in ERP system success evaluation. The

last section presents ERP system growth in Pakistan along with lack of research, particularly in

the field of ERP system success in the context of Pakistan.

24
2.2 Enterprise Resource Planning (ERP) System: An Introduction

Based on the infrastructure shift in moving towards functional to process based,

Enterprise Resource Planning (ERP) systems have now become the widespread IT solutions in

many companies in the world (Al-Mashari, 2002). ERP systems have now become the essential

part of large organizations whether these organizations belong to public or private sector (Gable,

et al., 2003). ERP market reached to 64.8 billion USD during the early decade of twenty first

century worldwide. (Ifinedo, 2006). ERP system is a strategic tool for gain over competitors in

business operation, planning synchronizing and optimizing the key resources of the organization

(System Limited, 2009). It is a fully integrated information system covering all business interior

resources; it is a very complex software system (Behrens et al., 2005) that causes high risk along

with the requirement of huge budget (Scott & Shepherd, 2002).

Only heavy investment does not provide complete benefits of the ERP systems.

Management should use proper and definite measures after the compilation and distribution of

responsibilities to provide benefits. Moreover, the full working benefits can be achieved when IT

projects become a part of larger business strategy and vision of the organization (Alshawi, et al.

2003). This success depends on process integration, data integration, organizational integration

and application integration (Al-Mudimigh, et al., 2009). Usage of ERP system varies across

different levels of organization (Van der Veeken & Wouters, 2002).

2.3 ERP System: An Historical Perspective

History of ERP system is divided into three phases based on ERP features: (1) traditional

ERP phase, (2) extended ERP phase, and (3) ERP II phase. In first phase, ERP system was used

for material planning, accounting, distribution and order entry while in second phase companies

25
used ERP system for handling different issues of capacity planning, logistics, warehousing,

scheduling, and e-commerce. The third phase is the latest stage of ERP system available in

extended form covering broad management areas of knowledge management, human resource

management, project management, CRM, SCM, and financial management. Jacobs & Weston Jr.

(2007) discussed three different periods of ERP system development i.e., period of 1960s and

1970s, period from 1970s and 1980s and period from 1990s and onward.

Figure 2.1. Evolution of ERP System. Adapted from: (Nizamani, et al., 2014)

Figure 2.1 shows different stages of evolution of ERP system; the bottom line shows that

in 1960s inventory control packages were used; in 1970s, Material Requirement Planning (MRP)

systems were introduced in industry; in 1980s, Manufacturing Resource Planning (MRP II)

systems were incorporated, while in late 1990s ERP systems were introduced. The following

section provides the details of each evolution stage of ERP system.

26
2.3.1 Period of 1960s and 1970s– MRP

In 1960s the primary focus of the companies was on high-volume production with

minimum cost. Therefore, different tools for material planning and controlling were the need of

those manufacturing companies. In late1960s, J.I. Case (a tractor manufacturing company) took a

step to develop Material Resource Planning (MRP) with joint efforts of IBM for the planning

and control of their material and manufacturing system (Jacobs & Weston Jr., 2007). First time

MRP were created in the era of 1970’s, the basic purpose of the software to control and meet the

demand of the schedules of the productions plans for the products or the spare parts of that

products. Then in the next decade of the 1980’s the Manufacturing Resource Planning (MRP II)

was developed, which synchronized the schedule of the material and manufacturing process

according to the predicted production schedules (Rashid, et al., 2002).

Initial MRP packages were very expensive and advanced skills were required to maintain

them. In the late 1970s, companies changed their primary focus from high-volume production to

marketing and production integration. Companies became more customer and market-oriented

and they developed their target-market strategies. At that time, MRP system was fulfilling the

requirements of material forecasting, procurement, master scheduling and shop floor control.

MPR was the predecessor of MRP II and subsequently MRP II was the predecessor of ERP

(Jacobs & Weston Jr., 2007).

2.3.2 Period of 1970s and 1980s– MRP II

MRP and MRP II were for the single sector or single job because these systems had

fewer modules which restrict their application across other sectors. Consequently, it resulted in

heavy usage because these are cheap systems. These systems were widely used by even small

27
enterprises due to their cost. In mid 1970s and later, many software companies were established

and later on these companies became top leading ERP companies in the world. In 1972, SAP

Company came into existence in Germany. In 1977, J.D. Edwards and Oracle Corporation were

established to produce different software at enterprise level (later on these two companies

became leading ERP vendors). After one year in 1978, Baan Corporation was incorporated to

provide financial and management consulting services, which also became an ERP vendor later

(Jacobs & Weston Jr., 2007).

In 1978 SAP released a software SAP R/2 which was highly integrated. The term

material resource planning (MRP) had begun to be used widely. In 1980s, quality became the

main focus of the companies with the emergence of quality gurus i.e., Deming, Ishikawa, Juran

and others. MRP II systems were designed to deal with the new initiatives in overhead cost

reduction, linkages of scheduling and procurement. In 1987, a new company “People Soft” was

incorporated. After one year this company launched a new information system i.e., Human

Resource Management System (Jacobs & Weston Jr., 2007).

2.3.3 Period of 1990s and onward– ERP

In order to achieve coordination and integration among different functional departments

of the organization, ERP systems were developed in the early era of 1990s. Based on structural

foundations of MRP and MRP II integration was accomplished with the use of ERP systems.

Thus, ERP systems integrated business processes including distribution, financial, human

resource management, and accounting, manufacturing project management, inventory

management, transportation, service and maintenance by providing visibility, accessibility and

consistency to the business organization. At the end of the era of 1990s, more modules were

28
added by the vendors known as extended ERP that enhance usage of existing ERP such as to

knowledge management system (KMS), customer relationship management (CRM) and supply

chain management (SCM) (Rashid, et al., 2002).

Those ERP systems which were developed from the structural foundation of material

MRP and MRP II, aimed to encounter the practical demands of enterprises. SAP made alliances

with The Siemens Company which is a German based software company to create an

organization wide ERP system in 1987. In 1988, Dow Chemical Company installed its own

developed ERP system to achieve globalization in its processes in the corporate world (Schaaf,

1999).

Although there are other ERP vendors, SAP, IBM, J.D. Edwards, Baan, PeopleSoft and

Oracle made significant contributions in the development of today’s ERP system. The term

“ERP” or “Enterprise Resource Planning” was used in 1990s by Gartner Group (Wylie, 1990).

ERP system was developed to integrate all business processes including finance, marketing,

sales, production, HR, and others. In 1992, SAP released R/3 ERP package. By the end of 1999,

other ERP vendors such as J.D. Edwards, Oracle, PeopleSoft and Baan also developed their ERP

systems and slipped the dominance of IBM. J.D. Edwards was specialized in development of

different solutions for manufacturing, accounting and finance. However, PeopleSoft was popular

in producing human resource applications. In 2003, to compete the other ERP vendors e.g., SAP

and Oracle, both companies J.D. Edwards and PeopleSoft decided for the merger (Jacobs &

Weston Jr., 2007). Traditional and modern ERP system can be differentiated by three ways: (1)

change in the business procedures and processes, (2) customization required by the user and (3)

the user dependence upon the vendor for updates and assistance (Wu & Wang, 2005).

29
2.4 Benefits of ERP System to Organizations

Organizations are showing their interest to adopt ERP system because of different

benefits such as competitive advantage, improved customer services, high quality of product and

services and shorter lead-time (Wu & Wang, 2005). Annamalai & Ramayah (2011) identified

five types of ERP benefits:

1. Operational benefits

2. Managerial benefits

3. Strategic benefits

4. IT benefits

5. Organizational benefits

Operational benefits are the outcomes of automation of the functional processes within

the organization; managerial benefits include the results after the use of ERP data in different

areas such as planning, monitoring and controlling of financial and non-financial performance;

strategic benefits include the abilities of an ERP system to sustain the overall business growth. In

the same lines, IT benefits are the outcomes of reduction in the cost of maintenance of different

legacy systems within the organization, whereas organizational benefits include employee

satisfaction and business learning (Annamalai & Ramayah, 2011).

After the huge investment of the organization, ERP system provides many paybacks to

the organizations such as, information quality, information availability, inventory management,

profitability, customer satisfaction, standardization, on time delivery, return on investment,

competitive advantage and user satisfaction (Madapusi, 2008). Significant benefits can be

achieved only when the organization utilizes ERP system efficiently and effectively (Davenport,

30
et al., 2004). In order to obtain these benefits organizations have to plan ERP implementation

carefully. Initially organizations think that ERP system is only one time heavy investment related

to IT department. However, several ERP projects require additional funding in case of over-

budget that also causes delay in its implementation (Teltumbde, 2000). Many factors also

influence the benefit level of an ERP system such as, size of the organization. Sedera, et al.

(2003) found that big organizations gain more benefits than small enterprises. If small

organizations implement the ERP system, they are heavily dependent on these systems. The

following section provides different benefits that organizations gain after the implementation of

ERP systems:

2.4.1 Improvement in Business Efficiency

One of the reasons of popularity of ERP systems is that it improves operational efficiency

and business value of the organization (Chou & Chang, 2008). This system brings different

economic benefits which include improvement in the operating performance and user’s logistics

within the organization. ERP users companies show better performance than the non-users.

A number of studies found positive and signficant impact of ERP system on business

efficiency; for example, Banker, et al. (2006) found that ERP system has a positive impact on

plant efficiecy, product quality and operational performance of plants in manufacturing

organziations. Similarly, Karimi, et al. (2007) found that ERP system has a strong positive

association with business proccess efficiency, flexiblity and overall effectivensss.

2.4.2 Control over Business Processes

With the help of an ERP system, organizations gain complete visibility of overall

business processes (Malhotra & Temponi, 2010). ERP system visualizes an inclusive picture of

31
the entire organizations. Managers can see the reports and can take the right decisions at the right

time. Worldwide ERP system has changed the way of business such as data collection, store and

transformation (Teittinen, et al., 2013). It provides an infrastructure for management control

(Chapman, 2005) and standardizes business operations to achieve high level of performance

(Teittinen, et al., 2013).

2.4.3 Standardization in Business Processes

ERP system standardizes all business processes and integrates the data in all over the

organization (Strong & Volkoff, 2010). Organizations spent billions of dollars on ERP system

implementation and the main objective behind the huge investment is to standardize business

processes (Holsapple & Sena, 2005) and to improve operational efficiency and business efficacy

(Gattiker & Goodhue, 2005).

ERP system has different intangible benefits such as integration of business processes,

quicker response in availability of information, increased interactions of the people within the

organization (Gattiker & Goodhue, 2005). Companies also enjoy these intangible benefits of

ERP system. However, the measurement of these intangible benefits is very difficult task for the

organizations (Saatcioglu, 2009).

2.4.4 Competitive Advantage

Competitive advantage is the core process, skill or resource that arises due to uniqueness

of that process, skill or resource. It is the capability of the firm to meet the dynamic need of the

customers. If organizations are capability to encounter the challenges then it increases the value

of the firm in the market. There are thousands of modules and structures in ERP system that are

32
strategically scheduled and implemented in organizations. The compatibility of these modules

and structures in ERP system are critical in organizations. Therefore, organizations align

different activities with ERP system in the organization to attain strategic benefits and

competitive advantage (Tarafdar & Roy, 2003). Companies are committed to implement ERP

system to improve profitability, efficiency and performance of their business and ultimately gain

competitive advantage in the market (Parthasarathy and Anbazhagan, 2008).

2.4.5 Reduction in Cost and Improvement in Profitability

A number of studies found that ERP system reduces cost and lead time of the transactions

in order to improve maximum efficiency of the organization; for example, Sarkis and Sundarraj

(2003) found that response time is decreased to three second for 90 percent worldwide

transactions after implementation of ERP systems and ultimately these results are above the

expectations of the firms. Further, they found that the order management cost is reduced when

the client gets permission to all orders in real time. Similarly, Annamalai and Ramayah (2011)

also reported that Oracle and SAP ERP system reduce procurement and financial cost by 30-40%

and increase revenue and productivity by 50%.

Profitability after ERP system talks about the financial benefits of ERP system to the

organization. ERP systems reduce the costs and increase the profits of the organization.

However, these results can be attained only when all operational activities are aligned with each

other (Davenport, 1998). In the same lines, Poston & Grabski (2001) also argued that after the

successful implementation of ERP system, firms attain consistent profits in the long run;

however, it depends on its effective utilization for the organization.

33
2.4.6 Effective Inventory Management

Inventory management with ERP system includes some practices to manage the level of

inventory of the organization. These practices are efficient and helpful in reducing additional

tasks to maintain inventory levels and increase inventory turnover in order to provide a better

control over the inventories. Standardization of the inventory management processes is helpful to

reduce inventory holding, increase the inventory turnover ratio and enhance the performance of

the organization up to the industry benchmark standards (Mabert, et al., 2003).

Timely delivery is related to order management and order cycle starts efficiently as a

result of the ERP system’s implementation. This advancement in inventory improves the order

management process and ultimately makes the deliveries in time after a successful

implementation of the ERP systems. ERP system integrates the whole supply chain process of

the organization. These benefits can be increased with the effective utilization of an ERP system

(Mabert, et al., 2003).

2.5 ERP Growth in Pakistani Organizations

Considering the benefits of different information systems, information technology (IT) is

being implemented by both developed and developing countries. Similar to different companies

in developing countries, Pakistani companies are also using IT systems to improve their business

performance. IT has become the most critical area of research worldwide (Shaukat, 2009). In the

past decade people were unaware with the new systems of information technology in Pakistan.

However, in this era, the use of information technology has become very popular in both private

and government organizations in the country as both, manufacturing and banking companies are

34
the key users of information technology (Shaukat, 2009). Global Information Technology Report

(2012) shows that Pakistan is the 102nd among 144 countries in the development of Information

and Communication Technology (ICT) (Baloch, 2012).

ERP system increases management capabilities to take right decisions and create future

projection of sale and production and save resourcing from being wasted. In Pakistan many ERP

solutions are available such as Oracle’s EBS, Oracle’s JD Edwards, my SAP and Microsoft

Dynamics. Siemens, Jaffer Brothers, Inbox, Abacus and System Limited are leading ERP

implementers in Pakistan (System Limited, 2009). Abacus Consulting celebrated a grand

ceremony after the successful implementation of SAP-ERP in more than 100 companies in

Pakistan (Abacus Consulting, 2012) whereas Siemens has also implemented SAP-ERP in

different well reputed companies and institutions in Pakistan including, PSO, Packages Limited,

ICI, Engro Chemicals, Orient Electronic, PTCL, KESC and NBP. Most of the organizations in

Pakistan are using SAP and Oracle ERP systems (Rizvi, 2005).

System Limited is a well-known ERP consulting company in Pakistan. They deploy

different modules of Oracle’s JD Edwards ERP in Pakistani companies such as Financial,

Manufacturing, Supply Chain and Customer Relationship Management modules. System

Limited also deploys Microsoft Dynamics ERP system as well as industry specific customized

ERP system in different companies in Pakistan (System Limited, 2009). Super Nova Solutions is

also pioneers ERP Consulting Company in Pakistan. It implements and also provides trainings

on different modules of SAP ERP in different regions in Pakistan. Super Nova Solutions has also

deployed their own customize ERP package “ER Manager 3.0A” in different companies in

Pakistan (SuperNova, 2013). Ovex Technologies (Pvt.) Ltd is the certified partner of Microsoft

in Pakistan. Ovex Technologies also tried to introduce a module of ERP system in Lahore

35
Electric Supply Company (LESCO) i.e., “Microsoft Dynamics CRM 4.0” (Microsoft Pakistan,

2013).

However, some Pakistani textile and other companies are still hesitant to implement ERP

system due to lack of vision and awareness. Although most of the textile companies in Pakistan

have deployed customized ERP solutions from the local software companies, local software

companies in Pakistan have less experience and know-how about the industrial operations

(Ghani, 2006). Pakistani organizations are not fully utilizing the potentials of ERP system

(Akhter, 2013). Pakistan Telecommunication Limited (PTCL) faced many challenges including

high cost, huge and tough tasks for PTCL management of ERP system implementation (Malik,

2011).

2.6 ERP Implementation in Organizational Settings

ERP system implementation is very complex and difficult because of technical and

organizational complexities (Markus et al., 2000). ERP system modules consider the key internal

activities and processes such as, logistics, finance and human resources activities and processes

etc. Many organizations install all modules of an ERP system while most of them implement

only the specific modules as per their need such as, financial accounting, human resource

administration, HR controlling, HR development, logistics, inventory procurement, inventory

management, production scheduling, distribution and sales management and planning (Appelrath

& Ritter, 2000).

In ERP system implementation, database is shared through the network channel that can

be accessed by every node. This database consists of a large number of modules and each

module has several sub-modules. Each module fulfills different requirements of the organization.

36
For partial integration, firms install these modules in the limited range of business activities. On

the other hand, if firms want full integration among whole activities of the entire business, then

they choose a full range of modules and sub-modules and install them in order to get potential

benefits from the ERP system (Poston & Grabski, 2001). A number of ERP studies suggest that

single module or sub-module sometimes accrue additional benefits to the organization such as

enhanced productivity with better efficiency and effectiveness (Klaus et al., 2000; Hitt, et al.,

2002). While several other studies suggested that the organization gains benefits or enhances

them when they implement and use all modules and sub-modules of an ERP system (Mabert, et

al., 2001; Poston & Grabski, 2001).

ERP implementation is not a single time event but it comprises of a large number of up-

gradation and cyclical change in the existing ERP system (Markus, et al., 2000; O’Leary, 2000).

When initially, implementers successfully implement ERP systems then organizations have to

make further investment on the installation of additional modules such as customer relationship

management, supply chain management, advanced planner, electronic commerce, scheduler, etc.

(Madapusi, 2008). A server computer controls the whole functioning of the ERP system in order

to integrate all processes among different department of the same organization. This single server

serves the whole organization without taking any break to meet the specified needs of each user.

The working of whole organization stop, in case of any issue arises in ERP system (Davenport et

al., 2004). For achieving higher level of integration among different activities of the firm

spreading globally or with other firms, these systems are connected through high speed internet

connection (Madapusi, 2008).

37
2.7 Critical Success Factors (CSFs) of ERP Project Implementation

ERP life cycle has three stages: pre-implementation, implementation and post-

implementation stage (Yu, 2005). Most of the ERP studies focused on pre-implementation and

implementation phase of ERP life cycle ERP system and identified different critical success

factors (CSFs) of ERP system implementation (Ifinedo, et al., 2010). CSFs are those factors that

influence the successful implementation of ERP project (Ijaz, et al., 2013). Many ERP studies

(Sun, et al., 2005; Khattak, et al., 2012) used budget, time and ERP project specification/scope

as the proxies of successful implemenation of ERP system which means if organizations

implement ERP system within budget, time and scope then these indicators show ERP project

implementation success.

The rate of ERP implementation failure is very high but few failures are reported because

most of the companies conceal their failures (Garg, 2010). ERP system is a complex and costly

project and its implementation requires huge investment, time and expertise (Saatcioglu, 2007).

Budget, time and ERP project scope are considered as the measures of ERP system/project

implementation success in many studies (e.g., Sun, Yazdani & Overend, 2005; Khattak, et al.,

2012). Martin (1998) argued that approximately 90 percent of ERP implementations are reported

late or over-budget. Figure 2.2 also shows the findings of Worldwide Survey 2013 conducted by

Panorama Consulting. The report shows that over 50% of the ERP projects experienced over

budget while over 60% over-schedule and fully 60% organizations reported under half of the

expected benefits after the successful implementation of ERP systems.

38
Figure 2.2. Unsuccessful ERP System Implementation. Source: (Panorama Consulting’s Report,

2013)

Many studies identified different CSFs of ERP system implementation; for example,

Motwani, et al. (2005) applied case study approach and found that change management, network

relationships and cultural readiness positively affect the successful implementation of ERP

project. In the same lines, Ngai, et al. (2008) conducted case study research in 10 different

organizations. They explored different CSFs of ERP implementation e.g., change management

culture and program, communication, data management, project champion, appropriate business

and IT legacy systems, business process reengineering, business plan, monitoring and evaluation

of performance, ERP teamwork and composition, software development, project management,

top management support, testing and troubleshooting, ERP vendor, organizational

characteristics, ERP strategy, fit between ERP and business process and implementation

methodology. Similarly, Nattawee & Siriluck (2008) analyzed case studies of 10 Thai small and

39
medium enterprises (SMEs) to investigate the factors affecting successful implementation of

ERP project. They found that user involvement, vendor support and competence and knowledge

sharing are the key success factors of ERP implementation.

In the context of Pakistan, Shah, et al. (2011) conducted a case study research of a public

sector organization to identify different forces that change the implementation success of ERP

system. Similarly, Khattak, et al. (2012) also identifed different CSFs after the in-depth analysis

of multiple case study approach. They used “time of completion” and “ERP project budget” as

proxy for ERP project implementation success. In the same lines, Shad, et al. (2012) developed a

framework to find the impact of CSFs on ERP system performance. Based on their proposed

framework, they argued that business process reengineering (BPR) is a CSF that has an impact

on the low or the high performance of ERP system. However, Ahmed & Khan (2013) applied the

Nelson & Somers’s (2001) model on three Pakistani companies to identify the significance of 22

CSFs of ERP implementation identified in Nelson & Somers’s (2001) study. Ijaz, et al. (2013)

also identified CSFs of ERP system implementation in an electric supply company of Pakistan.

Many researchers applied survey method based on quantitative approach to investigate

impact of critical success factors on successful implementation of ERP project. Ehie & Madsen

(2005) investigated different factors influencing the success or failure of ERP system

implementation. They found that feasibility and evaluation, project management, consulting

services, business process reengineering, and cost issues have significant impact on ERP

implementation success. In the same lines, through a field survey in Finland, Yingjie (2005)

identified that top management support, education and training, effective project management

business process reengineering, suitability of software and hardware, and user involvement

influence on successful implementation of ERP system.

40
 Fang & Patrecia (2009) found that BPR, top management support, Effective

communication, and project team & change management are more critical factors that influence

the successful implementation of ERP system. Similarly, Shah, et al. (2011) identified different

technical and socio-technical factors which lead to the successful implementation of ERP system

in Pakistani companies. Using quantitative approach of survey method they collected data from

116 respondents including top level management. Khattak, et al. (2013) examined the

relationship of different critical success factors with ERP system success in Chinese companies.

They compared their findings in their similar previous study conducted in Pakistan to find the

similarities or differences in their results from both Pakistani and Chinese companies.

2.8 ERP System Success

ERP system success, ERP post-implementation success and ERP system effectiveness are

interchangeably used in ERP literature. The post-implementation success of ERP system is

assessed by evaluating both intermediate and overall benefits in post-implementation phase

(Gattiker & Goodhue, 2005). ERP “implementation success” is different from “ERP system

success”. ERP “implementation success” indicates the technical success of an ERP project

implementation in the organization. However, “ERP system success” means the positive impact

of ERP system on different levels of the organization (Ifinedo, 2006).

ERP system is a very complex information system and evaluation of ERP post-

implementation success is also a complex phenomenon (Behrens et al., 2005; Kronbichler et al.,

2010). In the same lines, Wei, et al. (2008) also argued that it is very difficult task for the

organizations to assess the value-added contributions of an ERP system with regards to

attainment of organizational goals (Wei, et al., 2008).

41
2.9 Measurement ERP System Success

Most of the companies do not measure ERP system success because of lack of knowledge

skills. Seddon (1997) argued that

‘‘Many firms do not conduct rigorous evaluations of all their IT investments

because of their less knowledge in this area” (p. 11).

Similarly, in ERP research, a number of studies (e.g., Pabedinskaite, 2010; Ganesh &

Mehta, 2010; Moohebat et al., 2011; Tan et al., 2009; Ngai et al., 2008; Plant & Willcocks,

2007; Finney & Corbett, 2007) addressed the pre-implementation and implementation stage of

ERP system in finding different critical success factors (CSFs) of ERP system. Unfortunately,

few studies addressed the issues of ERP system post-implementation stage (i.e. Sedera, Gable, &

Chan, 2004; Ifinedo, 2006; Ifinedo & Nahar, 2007; Gable et al., 2008, Ifinedo et al., 2010).

It is pertinent to note that after huge investment on any information system (IS) (ERP

system), companies show their interest to know the effectiveness of their investment (Petter, et

al., 2008). Organizations may declare ‘success’ of ERP system if ERP system has improved

performance at different levels of the organization, for example, individual, workgroup and

overall organization (Ifinedo, 2006). To evaluate the post-implementation success of ERP

system, most of the studies applied D&M theory for IS Success (e.g: Sedera, Gable, & Chan,

2004; Ifinedo, 2006; Ifinedo & Nahar, 2007; Gable et al., 2008, Ifinedo et al., 2010).

2.10 DeLone & McLean (D&M) Theory of Information System (IS) Success

D&M theory of IS success is the most cited theory in IS literature used in past research

studies for the success measurement of different types of information systems such as ERP

system, CRM system, SCM system, E-Commerce system and Knowledge Management System

(Petter et al., 2008).

42
2.10.1 Original D&M Model

William H. DeLone and Ephraim R. McLean developed a model in 1992 for the

measurement of Information System (IS) success. Their model consists of six success

measurement constructs in different phases. The first phase shows the effect of system quality

and information quality on user satisfaction and system use; the second phase shows the

interactive effect of user satisfaction and system use as well as their effect on individual impact.

The final phase shows the effect of individual impact on organizational impact. All these six

constructs are interdependent and show different dependents and independents variables

(DeLone & McLean, 1992). Figure 2.3 shows original D&M model that consists of six

dimensions of IS success. The dimensions of the model are conceptualized with the help of their

measures in the section of 2.11 in this chapter.

Figure 2.3. D&M Original IS Success Measurement Model. Adapted from: (DeLone & McLean,

1992)

2.10.2 Criticism on D&M Original Model

Several studies have criticized different dimensions of IS success measurement. Pitt, et

al. (1995) suggested that “service quality” is an essential dimension for the measurement of IS

success and it should be a part of the D&M model. Many other studies (i.e., Myers, et al., 1997;

43
Ifinedo, 2006) also suggested that “workgroup impact” should be included in IS success

measurement model. Seddon (1997) and Gable et al. (2003) also criticized on "use" dimension of

D&M model. Seddon (1997) argued that "system usefulness" is a right dimension instead of

"use" or "system usage". Seddon (1997) further argued that "system usefulness" derives from

system quality and information produced by an information system. Gable, et al. (2003) also

decided to exclude "use" dimension and developed Enterprise System (ES) success measurement

model.

Based on the critical analysis by the above mentioned authors, the conceptual and

empirical studies modified different dimensions of D&M model for IS success. In particular,

Seddon (1997) developed a new IS benefit framework and used “benefits from use for

individual” and “benefits from use for organization” dimensions instead of simple individual

impact and organizational impact dimensions used in D&M model. After in-depth analysis of

different studies based on D&M model from 1992 to 2002, Gable, et al. (2003) concluded that

different studies has changed the original number of constructs used in D&M model and various

studies employed three dimensions against the six dimensions of D&M model in their empirical

investigations. Unfortunately, none of them suggested the dimension of process performance in

IS success measurement model, whereas process is involved every kind of information system.

2.10.3 Updated D&M Model

After a period of 12 years, De Lone& McLean developed an updated IS success

measurement model (DeLone & McLean, 2003). They argued the validation of their previous

model with the evidence of more than 300 applied D&M model for IS success measurement in

different settings from the period of 1992 to 2003 in refereed journals. In reaction of the criticism

on original D&M model authors added “service quality” as new dimension of IS success model.

44
Service quality is the degree, to which a service meets the expectations of customers (Gronroos,

1982; Parasuraman et al., 1985; Reeves et al., 1994). Service quality has five dimensions and it

has been developed into an instrument. The five dimensions of service quality are tangibles,

responsiveness, reliability, empathy and assurance. (Parasuraman et al., 1988).

Figure 2.4. D&M Updated IS Success Measurement Model. Adapted from: (DeLone & McLean,
2003)

Figure 2.4 shows that DeLone & McLean (2003) retained "system use” with “perceived

use" dimension, covering both behavioral and attitude aspect of the end user. They also replaced

“individual impact” and “organizational impact” with a single construct of “Net Benefits” and

argued that “Net Benefit” dimension will cover all benefits for individual, workgroup and

organization, society or the customers. Moreover, they argued that their updated model is again

domain dependent similarly as their original model and its dimensions can be changed as per the

need of IS context (DeLone & McLean, 2003).

2.11 Constructs and Measures of D&M Model of IS Success

Although, many studies reformed and refined original and updated D&M model of IS

success, yet a number of issues still exist in the model e.g., context related issues. D&M (1992,

45
2003) encourage the other researchers to add new constructs, measures and propositions to

improve the existing model. Operationalization of different dimensions of D&M model greatly

varies between various IS studies in different settings. The following section provides the details

of different constructs of D&M model along with diversity of their validated measures:

2.11.1 System Quality

System quality demonstrates the appropriate and desirable characteristics of an

information system. It was measured in terms of functionality, ease-of-use, flexibility, reliability,

data quality, integration, portability and importance. Its measures are also reflect the picture of

other constructs for example “perceived ease-of-use” was widely used in different IS studies

based on Technology Acceptance Model (Davis, 1989).

Table 2.1
Measures of System Quality

Measure Reference
System features Sedera and Gable (2004), Gable et al. (2008)
Turnaround time Hamilton and Chervany (1981)
System accuracy Hamilton and Chervany (1981), Doll and Torkzadeh (1988), Sedera and Gable
(2004), Gable et al. (2008)
Response time Hamilton and Chervany (1981), Iivari (2005)
Sophistication Sedera and Gable (2004), Gable et al. (2008)
Reliability Hamilton and Chervany (1981), Gable et al. (2008),
Interactivity McKinney et al. (2002)
Navigation McKinney et al. (2002)
Integration Bailey and Pearson (1983), Sedera and Gable (2004b), Iivari (2005), Gable et
al. (2008)
Efficiency Gable et al. (2008)
Flexibility Bailey and Pearson (1983), Gable et al. (2008), Hamilton and Chervany
(1981), Iivari (2005), Sedera and Gable (2004)

46
Ease of learning Sedera and Gable (2004), Gable et al. (2008),
Ease of use Doll and Torkzadeh (1988), Hamilton and Chervany (1981), McKinney et al.
(2002), Sedera and Gable (2004), Gable et al. (2008)
Data currency Hamilton and Chervany (1981), Gable et al. (2008)
Customization Sedera and Gable (2004), Gable et al. (2008),
Data accuracy Gable et al. (2008)
Convenience Bailey and Pearson (1983), Iivari (2005)
Access McKinney et al. (2002), Gable et al. (2008)

2.11.2 Information Quality

Information quality demonstrates the appropriate and desirable characteristics of an

information system’s output (information). Information quality was measured in terms of

timeliness, accuracy, relevance, completeness and consistency of the information produced by an

information system.

Table 2.2
Measures of Information Quality

Measure Reference
Usability Gable et al. (2008), Sedera and Gable (2004)
Usefulness McKinney et al. (2002)
Understandability Gable et al. (2008), McKinney et al. (2002), Sedera and Gable (2004b)
Uniqueness Gable et al. (2008)
Timeliness Bailey and Pearson (1983), Gable et al. (2008), Iivari (2005), Doll and
Torkzadeh (1988), McKinney et al. (2002), Rainer and Watson (1995)
Scope McKinney et al. (2002)
Relevance Gable et al. (2008), McKinney et al. (2002), Rainer and Watson (1995),
Sedera and Gable (2004)
Reliability Bailey and Pearson (1983), McKinney et al. (2002)
Format Gable et al. (2008), Iivari (2005), Sedera and Gable (2004b)

47
Precision Bailey and Pearson (1983), Iivari (2005)
Consistency Iivari (2005)
Completeness Bailey and Pearson (1983), Iivari (2005)
Conciseness Gable et al. (2008), Rainer and Watson (1995), Sedera and Gable (2004)
Availability Gable et al. (2008), Sedera and Gable (2004b)
Accuracy Bailey and Pearson (1983), Gable et al. (2008), Iivari (2005), Rainer and
Watson (1995)
Adequacy McKinney et al. (2002)

2.11.3 Service Quality

Service quality demonstrate the appropriate and desirable help and support that the IS

users received from internal IS department or IT support personal. Initially service quality was

not the part of original D&M model of IS success. However, DeLone and McLean (2003)

accepted the suggestion of (Pitt et al. 1995) and then incorporated new dimension of service

quality in their updated model. Pitt et al. (1995) also developed measures of service quality

construct that were validated in later studies.

Table 2.3
Measures of Service Quality

Measure Reference
Responsiveness Chang and King (2005), Pitt et al. (1995)
Tangibles Pitt et al. (1995)
Reliability Pitt et al. (1995)
Intrinsic quality Chang and King (2005)
IS training Chang and King (2005)
Flexibility Chang and King (2005)
Interpersonal quality Chang and King (2005)
Assurance Pitt et al. (1995)

48
Empathy Pitt et al. (1995)

2.11.4 System Use / Intension to Use

System use dimension of IS success model demonstrates the degree and the way of usage

of an information system by its users. It was measured as frequency of use, time of use, number

of accesses, usage pattern, and dependency. System use dimension also reflects a picture of

“perceived usefulness” which measures the attitude system use proposed in Technology

Acceptance Model (TAM) (Davis, 1989). Therefore, De Lone and McLean (2003) incorporated

“intention to use” which may be considered a worthwhile alternative measure of system use.

Table 2.4
Measures of System Use/Intention to Use
Measure Reference
Navigation patterns DeLone and McLean (2003)
Nature of use DeLone and McLean (2003)
Number of site visits DeLone and McLean (2003)
Intention to use again Davis (1989), Wang (2008)
Number of transactions DeLone and McLean (2003)
Actual use Davis (1989)
Frequency of use Almutairi and Subramanian (2005), Iivari (2005)
Daily use Almutairi and Subramanian(2005), Iivari (2005)

2.11.5 User Satisfaction

User satisfaction demonstrates users’ level of satisfaction while using an information

system. In previous studies, a number of studies used “user satisfaction” as the proxy of IS

success.

49
Table 2.5
Measures of User Satisfaction

Measure Reference
Overall satisfaction Almutairi and Subramanian (2005), Gable et al. (2008), Rai et al. (2002),
Seddon and Yip (1992), Seddon and Kiew (1994)
System satisfaction Gable et al. (2008)
Enjoyment Gable et al. (2008)
Information Gable et al. (2008)
satisfaction
Efficiency Almutairi and Subramanian (2005), Seddon and Yip (1992), Seddon and
Kiew (1994)
Adequacy Almutairi and Subramanian (2005), Seddon and Yip (1992), Seddon and
Kiew (1994)
Effectiveness Almutairi and Subramanian (2005), Seddon and Yip (1992), Seddon and
Kiew (1994)

2.11.6 Net Benefits

In original model DeLone and McLean introduced two levels of IS impact in the

organization i.e., individual impact and organizational impact. However, DeLone and McLean

(2003) merged individual impact and organizational impact in their updated model and

developed “net benefit” dimension. They claimed that net benefit dimension covers different

level of IS success performance e.g., individual, organizational, societal etc. Different studies

operationalized individual and organizational impact using different indicators/measures.

Individual impact was measured in terms task performance, task innovation, job effectiveness,

decision-making performance and quality of work.

50
Table 2.6
Measures of Individual Impact/Performance

Measure Reference
Usefulness Davis (1989), Iivari (2005)
Task performance Davis (1989)
Task innovation Torkzadeh and Doll (1999)
Learning Sedera and Gable (2004b), Gable et al. (2008)
Productivity Davis (1989), Iivari (2005), Torkzadeh and Doll (1999)
Job performance Davis (1989), Iivari (2005)
Job simplification Davis (1989), Iivari (2005)
Individual productivity Gable et al. (2008), Sedera and Gable (2004)
Job effectiveness Davis (1989), Iivari (2005)
Awareness/Recall Gable et al. (2008), Sedera and Gable (2004)
Decision effectiveness Gable et al. (2008), Sedera and Gable (2004)

Table 2.7
Measures of Organizational Impact/Performance
Measure Reference
Quality improvement Sabherwal (1999)
Overall success Almutairi and Subramanian (2005), Sabherwal (1999)
Increased capacity Gable et al. (2008), Sedera and Gable (2004)
Overall productivity Gable et al. (2008), Sedera and Gable (2004)
Improved outcomes/outputs Gable et al. (2008), Sedera and Gable (2004)
Management control Torkzadeh and Doll (1999)
Improved decision making Almutairi and Subramanian (2005)
Enhancement of reputation Almutairi and Subramanian (2005)
Enhancement of internal Almutairi and Subramanian (2005), Sabherwal (1999)
operations
Enhancement of communication Almutairi and Subramanian (2005), Sabherwal (1999)
and collaboration

51
Enhancement of coordination Almutairi and Subramanian (2005)

Customer satisfaction Torkzadeh and Doll (1999)

Competitive advantage Almutairi and Subramanian (2005), Sabherwal (1999)
Cost reduction Almutairi and Subramanian (2005), Gable et al.(2008),
Sedera and Gable (2004b)
Business process change Gable et al. (2008), Sedera and Gable (2004)

2.12 Application of D&M Model for ERP System Success Measurement

The revised D&M model has been applied in a number of studies for the measurement of

ERP system success. However, most of them criticized and suggested further modifications in

the revised D&M model. Gable, et al. (2003) excluded "user satisfaction" dimension from D&M

model because of its insignificant impact found by Teo and Wong (1998). Rai, et al. (2002) also

argued that user satisfaction can also be measured through information quality, system quality.

Therefore, there is no need to use user satisfaction as a separate dimension in the model. Gable,

et al. (2003) also criticized on "organizational impact” dimension suggested Balance Scorecard

approach for the measurement of success of ERP system at organizational level. Lin, et al.

(2006) followed the suggestions of Gable, et al. (2003) and they combined D&M model items

with Balance Scorecard items to investigate the success of ERP system.

Most of the studies applied case study approach for the measurement of ERP system

success based on D&M model. Zach (2011) used multiple case study approach to explore ERP

system success dimensions in Small and Medium Enterprises (SME's) based on D&M model.

The findings of the study showed that SME’s emphasized ERP system and information quality

more as compared to individual and organizational performance. However, Zach (2011) ignored

process performance and only addressed individual organizational performance in measuring

52
ERP system success. Similarly, Häkkinen & Hilmola (2008) also conducted case study analysis

of a Finnish corporation to compare end users’ life before and after ERP system and found

insignificant differences in user satisfaction in the two phases of research. However, their study

was based on a single organization where both process and organizational level performance

were ignored.

Chien and Tsaur (2007) partially modified D&M model by adding “business value”

dimension along with “benefit of use” for the measurement of ERP system success in three

Taiwanese high-tech companies. They also ignored process level performance in measuring ERP

system success. Bernroider (2008) combined two dimensions of D&M model: user satisfaction

and system use into "intension to use" dimension and conducted survey in 1000 selected firms

from 38 European Countries.

Few studies also added “workgroup impact” in ERP system success measurement mdoel.

Myers, et al. (1997) incorporated “workgroup impact” in their conceptual model. Ifinedo (2006)

extended the model proposed by Gable, et al. (2003) after adding two constructs of

“vendor/consultant quality” and “workgroup impact” in ERP system success measurement

model. However, vendor/consultant quality is suggested as the antecedent of ERP system success

dimensions and it is not recommended to use as the part ERP success measurement model

because studies (e.g., Tsai, et al., 2011) also used vendor/consultant quality as the antecedent of

ERP of ERP system success construct. However, later on, in another study, Ifinedo et al., (2010)

replaced vendor/consultant quality with “ERP service quality” dimension. In the same lines,

“workgroup impact” dimension measures the performance of different departments or groups.

Although, process performance is the broad concept and many processes are involved within a

53
workgroup or department, process performance is an important dimension of ERP system

success which was ignored in the previous studies.

A number of studies combined different models with D&M model. Chung, et al., (2009)

combined three models: Technology Acceptance Model (TAM), critical success factor (CSF)

model and D&M model to investigate impact of critical success factors on successful

implementation of ERP system and their impact on organizational performance. Through web-

based survey they targeted 57 construction companies and applied various data analysis methods

such as correlation and factor analysis. They measured ERP success at individual and

organizational level and ignored the process level performance. Moreover, their model shows the

contextual critical success factors relating to construction companies. Sedera, et al. (2003) also

combined “firm size” with five dimensions of D&M model to examine the impact of firm size on

ERP system success at individual and organizational levels. They applied t-test to find the mean

difference of ERP success between two groups of 27 large and small organizations. Their study

found the significant differences of ERP success between groups of large and small size

organizations and concluded that organization size is one determinant of ERP system success.

Many studies reduced different constructs from D&M model particularly “system use”

and “user satisfaction” with respect to their specific contexts. Gable, et al. (2003) developed a

model of four dimensions (i.e., system quality, information quality, individual impact and

organizational impact) with 27 items for the measurement of enterprise systems (ES) success.

They examined ES success in 27 public sector Australian organization. The results of their study

showed the discriminant and convergent validity of all four constructs. However, they did not

use any construct relating to process performance in their model. Wei, et al. (2009) also

developed a conceptual model based on D&M model to examine ERP system success in SME's

54
of Malaysia. They modified D&M model and replaced user satisfaction, system use, individual

and organizational impact with "Perceived Benefits". Wu & Wang (2006) investigated ERP

success based on D&M model. They used "user satisfaction" as a proxy of ERP success. They

used multiphase methodology approach; first they developed the model from literature and then

they conducted interviews of ERP consultants to construct the instrument. The instrument was

used for the collection of data from 264 Taiwanese ERP users. Finally they concluded that user

satisfaction is a crucial part of ERP success measurement. Wickramasinghe & Karunasekara

(2012) merged all three most cited quality dimensions such as, information quality, system

quality and service quality of ERP system into one construct “ERP product performance”. They

conducted field survey Sri Lankan Companies to examine the impact of ERP product

performance on organizational performance, job discretion, cross functionality, authority &

decision rights and problem solving.

2.13 Importance of Process Level in ERP Success Evaluation

Process performance means the overall performance of the all business processes. It may

be measured through standardization, integration and automation, efficiency and effectiveness of

business processes (Chand, et al., 2005; Bosilj-Vuksic, et al., 2008). Process may be defined as

the set of interrelated activities which converts input into output is call process. Process has three

different types: (1) operational process (2) management process and (3) supporting process.

As discussed earlier in this chapter that although D&M model is a validated and most

cited model in the past research studies, researchers ignored evaluation of ERP system success at

“process level” along with individual and organizational levels. After an extensive meta-analysis

of the literature based on D&M theory of IS success, Petter, et al. (2008) reported that different

studies evaluated success of IS/ERP system either on individual or organizational levels.

55
 Evaluating ERP system success at process level is very important because the prime

purpose of ERP system is to integrate and automate different processes and ultimately improve

the performance of the all business processes (Al-Mashari, 2002; Mabert, et al., 2003). In the

same lines, Al-Mashari (2002) further argued that ERP systems have become the widespread IT

solutions based on the infrastructure shift in moving towards functional to process based. Spathis

and Constantinides (2004) also argued that ERP system increases the efficiency and

effectiveness of the business processes at all levels of the organization.

ERP system brings different economic benefits which include improvement in the

operating performance and user’s logistics within the organization. ERP users companies show

better performance than the non-users. One of the reasons of popularity of ERP systems is that it

improves operational efficiency (operational processes) and business value of the organization

(Chou & Chang, 2008).

ERP system has different intangible benefits such as integration of business processes,

quicker response in availability of information, increased interactions of the people within the

organization (Gattiker & Goodhue, 2005). Companies also enjoy these intangible benefits of

ERP system. However, the measurement of these intangible benefits is very difficult task for the

organizations (Saatcioglu, 2009). ERP system success depends on process integration, data

integration, organizational integration and application integration (Al-Mudimigh, et al., 2009).

With the help of an ERP system, organizations gain complete visibility of overall

business processes (Malhotra & Temponi, 2010). ERP system visualizes an inclusive picture of

the entire organizations. Managers can see the reports and can take the right decisions at the right

time. Worldwide ERP system has changed the way of business such as data collection, store and

56
transformation (Teittinen, et al., 2013). It provides an infrastructure for management control

(Chapman, 2005) and standardizes business operations to achieve high level of performance

(Teittinen, et al., 2013).

ERP system standardizes all business processes and integrates the data in all over the

organization (Strong & Volkoff, 2010). Organizations spent billions of dollars on ERP system

implementation and the main objective behind the huge investment is to standardize business

processes (Holsapple & Sena, 2005) and to improve operational efficiency and business efficacy

(Gattiker & Goodhue, 2005).

A number of studies found positive and signficant impact of ERP system on business

process efficiency; for example, Banker, et al. (2006) found that ERP system has a positive

impact on plant efficiecy, product quality and operational performance (process performance) of

plants in manufacturing organziations. Similarly, Karimi, et al. (2007) found that ERP system

has a strong positive association with business proccess efficiency, flexiblity and overall

effectivensss. However, none of these studies developed such a comprehensive model to evaluate

ERP system success at individual, process and organizational performance.

Unfortunately, D&M model was also not extended to measure ERP system success at

“process level” along with the other performance levels i.e., individual and organization.

However, a number of studies (e.g., Mabert, et al., 2003; Katerrattanakul, et al., 2006)

investigated the impact of ERP system on process performance without using the comprehensive

dimensions of IS success measurement as suggested by DeLone & McLean (1992, 2003).

Therefore, measuring ERP system success at process level along with other dimensions of

performance is the neglected area found in the past researches.

57
 On the other side, Dehning & Richardson’s (2002) theory of IT impact claims that

information technology has a causal relationship with process and organizational performance.

Dehning and Richardson (2002) developed a two phased model. In the first phase, the model

shows causal relationship of IT with process performance, while in the second phase, a causal

relationship was proposed between process performance and organizational performance. A

number of studies used and validated “Dehning & Richardson theory of IT impact” in ERP

context to investigate the impact of ERP on process performance. However, Dehning and

Richardson’s (2002) model does not propose IT/ERP impact on individual performance.

Moreover, the model ignores the quality dimensions of ERP system i.e., ERP system quality,

ERP information quality, ERP service quality as suggested by De Lone & McLean (1992, 2003).

Therefore, none of these studies applied such a comprehensive model to evaluate ERP system

success at “process level” along with individual and organizational levels.

Table 2.8 depicts the measures and operational connotations of process performance in

the context of ERP post-implementation success.

Table 2.8

Measures of Process Performance Items

Items Connotations
Process Process automation refers to the degree of mechanization of business
Automation processes where automatically transactions are performed with the
help of ERP system.
Process Time Process time means how much time is required to convert input into
output with the use of ERP system.
Process Control Process control is the degree of control of management over the
management with the help of ERP system.

58
Process Efficiency Process efficiency refers to the capability of business processes for
getting maximum output through minimum input resources.
Process Process effectiveness is the quality of process output.
Effectiveness
Process Fluctuation Process fluctuation refers to the process ability to react the changes.
Source Adopted: Chand, et al., (2005); Bosilj-Vuksic, et al., (2008); Axelsson & Sonesson,
2004)

2.14 Contextual Factors Affecting ERP System Success

Benefits of ERP system are context-dependent and vary across industries (O’Leary,

2004). Most of the times, companies fail to achieve its benefits in practice because of different

efficiency problems (Granlund, 2011). Keeping these views in mind, Wieder et al. (2006)

compared the performance of ERP implementers and non-implementers. They found that there is

no enough significant difference among the performance of both type of firms: ERP

implementers and non-implementers. Similarly, Poston and Grabski (2000) found that a large

number of organizations have failed to enhace their financial performance even though the

implementtion of the ERP system in the organization. Their findings implicitly reflect that owing

to some contextual problems ERP systems did not change the performance of the organization

that used them.

High failure rate of ERP implementation is the major concern for ERP adopters. Despite

the fact that many organizations successfully implement ERP system, they fail to gain the

benefits in post-implementation stage of ERP system. Its implementation success cannot give

assurance for its post-implementation success (Liang, et al., 2007). In this way, Trunick (1999)

conducted survey and reported that only 40 percent ERP systems performed with their complete

effectiveness. In the same lines, Ptak & Schragenheim (1999) argued that ranges from 60 to 90

59
percent of installed ERP systems are known to be as less effective as projected. Another report of

Panorama Consulting group showed that 30% organizations are unsure of the post-

implementation success of ERP system (Panorama Consulting, 2013)

Even after the successful implementation of ERP system, a number of organizations face

different challenges at the post-implementation stage. Many studies reported disappointing

results of performance after the implementation of ERP system (Ho, et al., 2004; Howcroft, et

al., 2004; Trimi, et al., 2005). A number of organizations have failed in achieving the full

potential benefits from ERP system (Ge & Voß 2009).

Figure 2.5 also shows the findings of World ERP Survey 2013 conducted by Panorama

Consulting. The report shows that fully 60% organizations reported under half of the expected

benefits even after the successful implementation of ERP systems. This question may arise that

what are the different factors that affect the post implementation success of ERP system.

Figure 2.5. ERP Implementation Outcome. Source: (Panorama Consulting’s Report, 2013)

Organizations believe that ERP system is an effective tool to reduce cost and increase

profit margin (Shore, 2006). However, it is very challenging taks for the organization to fully

60
utilize ERP system in order to attain the organizational goals (Zhang, et al., 2005). Many studies

reported ERP post-implemenation failure; for example, Al-Mashari (2000) and Wang, et al.,

2007) reported that 70% of ERP projects failed to deliver expected benefits to the organizations.

2.14.1 Technological Factors and their Effect on ERP System Success

This context includes internal technologies and available technologies in the market (Zhu

et al. 2002). Most of the standardized ERP systems were developed by European and US based

companies. According to the leading ERP companies such as SAP, Oracle and PeopleSoft, less

than 7% ERP implementations have been seen in developing countries in the region of Asian.

The reasons of low ERP implementation in developing countries are: high implementation cost,

low IT maturity and lack of knowledge and experience of ERP system (Rajapakse & Seddon,

2005). However, since the late 1990s and the early 2000s, ERP vendors are revolving in

developing countries such as Asia, Africa, Middle East, and South America for achieving

targeted profits by selling their latest ERP packages (Madapusi, 2008).

Organizations take risk and invest their resources to implement ERP system because of

its potential benefits (Su & Yang, 2010). However, many organizations pay little attention on

cost up-gradation and cost of ownership in post-implementation stage (Ng, et al., 2002). ERP

success also depends on process integration, data integration, organizational integration and

application integration (Al-Mudimigh, et al., 2009).

Many organizations are unaware of the discrepancies that exist between organizational

arrangements and ERP functions embedded by ERP developers. These discrepancies misalign

ERP package and business processes. Therefore, in the existence of misalignment organization

cannot gain the expected benefits from ERP system and in extreme cases organizations face

61
failure of post-implementation. A huge number of organizations have failed to achieve their

expected benefits from the use of ERP system (Soh & Sia, 2004).

2.14.2 Organizational Factors and Effect on ERP Success

Previous studies assessed the organization context in terms of firm size, the

centralization, formalization, and complexity of its managerial structure, the quality of its human

resource, and the amount of slack resources available internally (Zhu et al. 2002).

Because of potential benefits from ERP, many organizations take risk and invest their

resources to implement ERP system (Su &Yang, 2010). However, they pay little attention on the

cost of ERP upgradation and ownership in post-implementation stage (Ng, et al., 2002). Alshawi

et al. (2003) argued that it is not enough to only invest huge amount on ERP system and expect a

lot of benefits out of investment because a number of organizations have failed in achieving the

full possible benefits from ERP system.

Companies who are implementing ERP they have to define and perform apportion

responsibility to fully utilize ERP system in order to get expected benefits from the ERP system

(Ge & VoB, 2009). In the same lines, O’Leary (2004) claimed that benefits of ERP system are

context-dependent and vary across industries. The findings of the study of Wieder et al. (2006)

also implicitly indicate that some factors make an ERP system ineffective for the organizations.

Only heavy investment does not provide complete benefits of the ERP systems. Management

should use proper and defined measures after the compilation and apportioning of

responsibilities. Moreover, the full working benefits are achieved when IT projects become a

part of larger business strategy and vision of the organization (Alshawi, et al. 2003).

Optimal utilization of an ERP is another challenge for the organization because in most

of the cases, it is easy for the organizations to plan the processes of ERP system but it is difficult

62
to plan the ERP usage (Rom & Rohde, 2007). Most of the times, companies fail to achieve its

benefits in practice and ERP system does not improve the performance of the organization

(Granlund, 2011). Wieder et al. (2006) compared the performance of ERP implementers and

non-implementers. They found that there is not enough significant difference among the

performance of the both type of firms: ERP implementers and non-implementers.

A number of organizations are unaware of different discrepancies that exist between

organizational arrangements and ERP functions embedded by ERP developers. These

discrepancies misalign ERP package and business processes. Therefore, in the existence of

misalignment organization cannot gain the expected benefits from ERP system and in extreme

cases organizations face failure of their ERP in its post-implementation stage. A huge number of

organizations have failed to achieve their expected benefits from the use of ERP system (Soh &

Sia, 2004). Frequency of ERP usage is another challenge for the organization. Organizations can

plan the processes of ERP system but it is difficult to plan ERP usage (Rom & Rohde, 2007).

Many ERP post-implementation issues arise in developing countries. Companies in South

Asian region face many difficulties and most of the times they spend more financial resources

while implementing ERP systems. There are a number of reasons of harder implementation of

ERP system in these companies such as their traditional business styles, socio-economic

conditions, operating methods and particularly low currency value as compare to developed

countries. Most of the companies in developing countries implement ERP systems based on

advanced countries that do not match with their business processes. Ultimately they have to

invest more amounts to import, implement and customize ERP system even because of currency

differences; however, they bear lesser post-implementation expense because they relate to local

currency (Malik, 2011).

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2.14.3 Environmental Factors and their Effect on ERP Success

An organizations industry, competitors, access to resources, and dealings with

government are part of the environmental context (Zhu et al. 2002). A number of studies found

that enviornmental factors influence the level of ERP system success. For instance, based on

diffusion of innovation and resource-based view theory, Raman et al. (2013) conducted a web-

based survey in 558 firms of Portugal and Spain. They found that competitive pressure is an

important antecedent of “ERP use” and external collaboration has positive and significant impact

on ERP value in the both countries. Raman et al.’s (2013) findings showed that more competitive

pressure and collaboration compel the organization to use ERP system. In the same lines, Ruivo

et al. (2014) conducted web-servey 134 and found significant impact of competitive pressure on

ERP use and value. Their findings suggest that competitive pressure compel the organization to

adopt new technology of ERP system for their survival in the market.

Similarly, based on resource dependency theory, Wang (2008) investigated the

longitudinal impact of internal and external pressures on ERP Assimilation in 1000 companies.

Assimilation means the extent of acceptance and use; where the use of new technology becomes

the part of the routine activities of the end users (Purvis, et al., 2001). They found the external

pressures because of external dependency influences ERP assimilation.

On the other hand, Conflict with stakeholders is another external environmental factor

that negatively affects ERP system success. For example, Jääskeläinen & Pau (2009) analyzed

case studies of three ERP projects in Finland using both qualitative and quantitative techniques.

They found significant negative impact of different conflicts of internal and external stakeholders

on ERP project outcomes.

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 External support of vendor also affects ERP system success positively. For example, Tsai

et al. (2006) used organizational learning model (OLM) and found strong effect of vendor

assistance on ERP information quality. Tsai et al. (2006) found that external support of vendors

also play an important role in improving information quality of ERP system. ERP information

quality is an important construct of ERP system success model used in previous studies (Ifinedo,

2006, 2007; Chien & Tsaur, 2007; Ifinedo et al., 2010).

2.14.4 Individual Factors and their Effect on ERP Success

End-users of ERP system are the key stakeholders in those organizations who use ERP

systems. These individuals have different charactristics/personal factors (knowledge and skills,

attitude, capability, willingness, personal innovativeness, learning etc.) and a number of studies

investigated the relationships of different indiviudal factors on ERP succss.

Hsu & Weng (2006) found that computer anxiety and user participation have a significant

relationship with three dimensions of ERP success i.e., ERP user satisfaction, individual and

organizational impact of ERP system. Their findings showed computer anxiety reduces the user

satisfaction, individual and organizational performance while more participation of ERP end

users in ERP system increases not only end users’ satisfaction but also their performance.

Whereas, computer efficacy shows the confidence of the end users that they have ability,

knowledge and skills to use computer system. Scott & Walczak (2009) found that computer

efficacy has significant and positive impact on ERP perceived usefulness and perceived easy to

use ERP system.

User satisfaction is also an individual factor that influences the level of EPR system

success. For example, Wu & Wang (2006) conducted field survey in 264 Taiwanese companies

65
and found a significant relationship of “ERP product, knowledge and involvement satisfaction”

with overall satisfaction of the end users.

Kwahk & Lee (2008) argued that many ERP projects fail because of employees'

resistance, however, readiness to change can reduce resistance of employees. They found

significant impact of readiness to change and computer self-efficacy on ERP perceived ease of

use and ERP perceived usefulness in Korean companies. Their study clearly indicated that

employees’ willingness to work and their ability to change as per requirements of ERP system

(readiness) and self-efficacy increase the level of ERP success. Another study by Scott and

Walczak (2009) found the positive impact of computer-efficacy on the perceived use and

perceived usefulness. In the same way, Chou & Chen (2009) collected data from 305 ERP end

users and found significant impact of computer self-efficacy on ERP user satisfaction.

Personal innovativeness is also a contextual individual factor that affects the ERP system

success. For example, Hwang (2014) found positive and significant impact of personal

innovativeness in IT on perceived enjoyment, perceived ease of use and perceived usefulness of

ERP system. They also compared their findings with low and high experience groups and finally

reported that in group, high experienced personal innovativeness in IT has more influence on

these three outcomes.

Learning is a continuous process. Even after implementation of ERP system, end users

continuously learn the new updates, commands and methods of ERP system. Different studies

proved that their learning at the post-implementation stage of ERP increases the level of post-

implementation success of ERP system. For example, Chou et al. (2014) collected data from 659

ERP end users in different Taiwanese companies and found that post-implementation learning

improves ERP usage.

66
 ERP knowledge capability is another individual factor that affects the level of ERP

system success. Candra (2012) conducted web-based survey of 150 ERP end users from top level

management and found significant impact of knowledge capability on ERP system success. His

findings show that more knowledge capability of ERP end users increases the chances of ERP

system success at the post-implementation stage. Similarly, Sternad and Bobek (2013) collected

data from 293 ERP end users in 44 organizations in Slovenia and found significant impact of

personal characteristics on ERP ease of use.

Yoon (2009) examined the impact of organizational citizenship behavior (OCB)

dimensions on ERP system success. The study was based on collecting data from 152 ERP end

users. The results highlighted the positive and significant impact of altruism, conscientiousness,

sportsmanship on ERP information quality. Their findings showed different dimensions of OCB

i.e., selflessness (altruism), carefulness (conscientiousness), revealing absence of any negative

behavior of the employees even in difficult or frustrating situation (sportsmanship), which

increases the level of ERP system success.

2.15 Summary

In a PhD thesis, researcher must contribute in three different kinds of knowledge i.e.,

research, practice and theoretical knowledge. Without finding gaps no one can contribute in the

existing body of knowledge. Therefore, in present study, research problem and key assumptions

of the study have been developed after conducting extensive review of literature.

ERP system is an information system that integrates the key functional areas of the

organization and automates their related processes. ERP system is a very complex in nature and

evaluation of ERP post-implementation success is also a complex phenomenon. However,

67
literature revealed that most the studies applied DeLone and McLean (D&M) theory of IS

success for the measurement of ERP system success. However, they ignored to measure ERP

system success at the process level. Different studies criticized the different dimensions of D&M

theory and they incorporated the necessary changes in D&M original and updated model.

Moreover, literature also revealed that different contextual factors (i.e., organizational,

technological, individual and environmental factors) affect the level of ERP system. However,

these factors are context dependent.

ERP System and Its Neglected Area of

Implementation Neglected Area of Research (Gap)
Discovery of Argument
Research (Gap)
Historical Perspective of ERP system success Contextual Factors
ERP System Process Performance as Affecting ERP system
Dominant Views ERP system success success
Benefits of ERP system DeLone and McLean Dimension
1. Organizational
Critical Success Factors Theory of Information Dehning & Richardson
of ERP system system success 2. Technological
theory of IT Impact
implementation Current Controversies 3. Individual
Advocacy of Argument
3. Environmental

Al-Mashari, 2002; Scott & O’Leary, 2004 Granlund,

DeLone & McLean, 1992,
Shepherd, 2002; Behrens 2011 Wieder et al. (2006)
2003; Myers, et al., 1997; Dehning & Richardson,
et al., 2005; Alshawi, et Liang, et al., 2007 Shore,
Petter et al., 2008; Sedera, 2002; Al-Mashari, 2002;
al. 2003; Al-Mudimigh, et 2006 Zhang, et al., 2005
et al., 2004; Ifinedo, 2006, Mabert, et al., 2003;
al., 2009 Van der Veeken Rajapakse & Seddon, 2005
2007, 2010; Nahar, 2007; Spathis and Constantinides,
& Wouters, 2002 Van der Madapusi, 2008 Su &
Gable et al., 2008, Ifinedo et 2004; Al-Mudimigh, et al.,
Veeken & Wouters, 2002 Yang, 2010 Al-Mudimigh,
al., 2010;, Häkkinen & 2009; Petter, et al., 2008;
Wu & Wang, 2005 et al., 2009 Su &Yang,
Hilmola, 2008; Wu & Wang Katerrattanakul, et al.,
Annamalai & Ramayah, 2010 Raman et al.’s (2013)
2006; Zach, 2011; Lee & Lee 2006; ----------
2011; Madapusi, 2008;---- Ruivo et al. (2014) ----------
(2012) ---------------------
-- -----

Figure 2.6. Structure of the Literature Review

68
 CHAPTER 3

THEORETICAL FRAMEWORK

3.1 Preface

This chapter is based on extensive review of the literature that guides to conceptualize a

theoretical framework of ERP system success in the context of corporate sector of Pakistan. The

first section (i.e., section 3.2) provides the description of ERP success measurement model with

its underlying theoretical foundations, and the proposed cause and effect relationships between

the dependent and independent variables that lead to the testable hypotheses to answer the central

research question of the present study. The second section (i.e., section 3.2) presents the

framework of contextual factors affecting ERP system success which is the underlying

theoretical foundation and the key propositions of the study based on qualitative research stance.

The final section of this chapter presents the summary and signpost to the next chapter.

3.2 ERP System Success Measurement Model

The proposed ERP success measurement model of this study is based on different

Information Systems (IS) theories (i.e., D&M theory of IS, Dehning & Richardson theory of IT

impact). It is mainly focused on D&M theory of IS success to examine the success of ERP

system in the context of Pakistani service and manufacturing organization (DeLone & McLean,

1992, 2003). The reason for choosing D&M theory is its validity and generalizability in a

number of significant empirical studies. Latest meta-analysis has shown the wide acceptability of

D&M model in IS communities because of its theoretical and empirical support (Petter, et al.,

2008). A number of empirical investigations based on D&M model in a wide spectrum of

69
contexts show that D&M theory has become the most dominant theory of IS success

measurement (Petter, et al., 2008).

DeLone and McLean (1992, p. 88) claimed that “This success model clearly needs

further development and validation before it could serve as a basis for the selection of

appropriate IS measures”. In another place they stated that “no single variable is intrinsically

better than another, so the choice of success variables is often a function of the objective of the

study, the organizational context . . . etc.” (ibid). Based on their statements, the present study

also made the following modifications in D&M model:

1. The current study incorporated process level of performance to examine ERP system

success at individual, process and organizational levels in corporate sector of

Pakistan. The previous chapter clearly discussed that all studies based on D&M

model examined success of different IS systems either at individual or organizational

levels of performance (Pitter et al., 2008) and they ignored IS/ERP success evaluation

at process level. Specifically in ERP context, different studies also examined ERP

system success at individual and organization levels (e.g., Sedara et al., 2004; Ifinedo,

2006, 2007, 2010) yet; no study was found where ERP system success was

investigated at “process level”. Whereas, Dehning & Richardson theory of IT impact

claims that IT system also influences “process level”. Therefore, based on Dehning &

Richardson’s (2002) views, a new dimension of ERP system success was

incorporated.

2. In the present study, based on the detailed literature review (in Chapter 2) “system

use” and “user satisfaction” both dimensions were excluded from D&M model of IS

success. The reason of eliminating both dimensions was different pieces of empirical

70
 evidence where these two dimensions were found misleading for measuring IS

success. Keen (1980, p. 9) stated that “surrogate variables like user satisfaction or

hours of usage would continue to mislead researchers and evade the information

theory issue”. Seddon (1997) argued that “system use” shows behavior of the end

user which is not the adequate dimension of IS success model. Later on, Sedera et al.

(2004) conducted exploratory study in the context of Enterprise Systems (ES) and

empirically excluded the “system use” and “user satisfaction” from the IS success

model. Gable et al. (2008) and Sedera et al. (2004) further argued that “system use” is

the antecedent of IS success and it is not the part of IS success measurement model.

Rai, et al. (2002) also excluded “user satisfaction” in D&M success model in their

empirical study. They argued that “user satisfaction” may be measured through other

dimensions of success measurement model i.e., information quality and system

quality and there is no need to use a separate dimension of “user satisfaction” in IS

success model.

Figure 3.1 shows proposed ERP system success measurement model based on different

theoretical stances and research gaps, discussed in the previous chapters. The model consists of

six dimensions in the following two categories:

1. Quality Dimensions of ERP – ERP system quality, ERP information quality, ERP

service quality.

2. Performance Dimensions– Individual performance, process performance and

organizational performance.

71
 Quality dimensions of ERP indicate the “impact of ERP system” while performance

dimensions show the outcome of ERP impact at different levels within the organizational setting.

Six (6) different hypotheses show the proposed positive causal relationships among different

dimensions of ERP success model in the following manner:

1. ERP system quality, ERP information quality and ERP service quality influence

individual performance positively.

2. Individual performance influences process performance and then process

performance influences organizational performance positively.

3. Individual performance also influences organizational performance positively and

directly.

72
ERP System Success Dimensions

Quality Dimensions of ERP Performance Dimensions

ERP System Quality

H1 (+) H4 (+) H5 (+)

Individual Process Organizational

ERP Information H2 (+)
Performance Performance Performance
Quality

H3 (+)
ERP Service Quality
H6 (+)

Figure 3.1. ERP System Success Measurement Model

73
3.2.1 Operationalization of the Constructs

Table 3.1 shows operational definitions of each construct of the proposed model of

the present study. There are six constructs in the model: ERP system quality, ERP service

quality, ERP information quality, individual performance, process performance and

organizational performance.

Table 3.1

Operational Definition of the Constructs

Constructs Operational Definitions References

ERP System ERP system quality is the performance of ERP system in (Gable, et al.,
Quality connection with reliability, efficiency, accuracy and ease 2008), (Ifinedo, et
of use of ERP system. al., 2010)
ERP Service ERP service quality is the subjective ERP user’s (Parasuraman, et
Quality judgement that the service actually they are getting from al., 1988), (Pitt, et
MIS/ERP department is the service they expect. It reflects al., 1995)
the responsiveness, reliability, confidence, empathy,
follow-up service and competence of MIS/ERP department
ERP Information ERP information quality reflects the characteristics of ERP (Gable, et al.,
Quality output (information) with regard to timeliness, 2008), Ifinedo, et
understandability, availability and relevance of the al., 2010)
information offered by ERP System.
Individual Individual performance includes task performance, job (Gable, et al.,
Performance performance, productivity, job effectiveness, job 2008), Ifinedo, et
simplification, usefulness, decision making, and learning. al., 2010)
Process performance is the overall performance of business (Chand, et al.,
Process processes. It may be measured through standardization, 2005), (Bosilj-
Performance integration and automation, efficiency and effectiveness of Vuksic, et al.,
business processes. 2008)
Organizational Organizational performance means organizational (Gable, et al.,
Performance productivity, profitability, communication and 2008), Ifinedo, et
organizational growth. al., 2010)

74
3.2.2 Relationship between ERP System Quality and Individual Performance

A number of studies empirically examined and found positive causal relationship of

system quality and individual performance. Bharati & Berg (2003) employed mixed methods

approach using case study and survey methods to find the success of information system used

in electric unity firms in America. They found positive and significant impact of system

quality on employee performance. Sørum, et al. (2012) also found positive and significant

impact of system quality on net benefits to IS users (individual performance) in the context of

public sector organizations of Denmark and Norway.

Several studies claimed, based on their conceptual models, that ERP system quality

increases performance of individuals (ERP end users). Pishdad, et al. (2012) developed an

"ERP institutionalization framework" to show initiation, adoption and post-implementation

stages of ERP system. They emphasized "ERP assimilation" which represents that the use of

ERP system becomes a daily routine activity and employees feel incompletion in their tasks

without the use of ERP. Tan & Sedera (2007) also argued that appropriate ERP structure

increases the interaction and individual performance within the organization.

Petter, et al., (2008) conducted meta-analysis of IS literature based on IS success

evaluations (including different studies in ERP context). They reported that a number of

studies (e.g., Venkatesh & Morris, 2000; Hong, et al., 2002; Rai, et al., 2002; Wixom &

Todd, 2005; Hsieh & Wang, 2007) found positive and significant relationship of system

quality with net benefits at individual level (individual performance).

In ERP context, Ifinedo (2006) conducted two studies, one in Estonia and the other in

Finland and found positive and significant impact of ERP system quality and individual

impact. In another study, Ifinedo et al. (2010) conducted cross-sectional field survey in 109

firms in two European countries to assess ERP system success. They found positive and

significant impact of ERP system quality and individual impact (performance). Tan & Sedera

75
(2007) also argued that appropriate ERP structure increases the individual performance

within the organization. On the basis of this discussion, the testable hypothesis is:

Hypothesis 1: ERP system quality is positively associated with individual

performance in corporate sector of Pakistan

3.2.3 Relationship between ERP Information Quality and Individual Performance

ERP end users need complete information which covers the scope of their routines

matters and that can help in resolving different issues. If information produced by ERP

system is understandable and useful as per their perceived level of acceptance then users feel

confidence and enjoy while working on ERP system (Ifinedo, 2006).

Yoon (2009) examined the impact of organizational citizenship behavior dimensions

on ERP system success. Data was collected from 152 ERP end users and SEM-PLS

technique was applied for the analysis of quantitative data. They found positive and

significant impact of ERP information quality with work performance (individual

performance).

Several studies found that ERP information quality influences learning level of

individuals and supports them in decision making. Carton & Adam (2005) argued that ERP

system influences decision making process by providing accurate and timely information.

Numerous studies used “system usefulness” dimension as individual performance and they

examined the impact of ERP information on “system usefulness” that was interchangeably

used with individual performance in IS research because of their common construct items

(Ifinedo, 2006; Ifindeo, 2007; Petter, et al., 2008; Ifinedo, et al. 2010).

Sørum, et al. (2012) conducted an on-line survey in public companies of Denmark

and Norway and found positive and significant impact of information quality with net

benefits to IS users (individual performance). Similarly, Bharati & Berg (2003) employed

mixed methods approach using case study and survey methods to find the success of specific

76
type of information system used in electric unity firms in America. They also found positive

and significant impact of information quality on employee performance.

Petter, et al. (2008) also reported in their meta-analysis on IS success measurement

that a number of studies (e.g. Rai, et al., 2002; Wu & Wang, 2006) in different IS settings

found significant relationship of information quality and net benefits at individual levels.

They also reported that a number of studies used attitude constructs “perceived usefulness”

rather than behavioral construct “usefulness” to represent IS (ERP in this context) benefits to

individuals e.g., Wu and Wang (2006) and Hwang and Xu (2008) found positive and

significant relationship of perceived information quality with perceived usefulness (perceived

level of benefits to individuals). Rai, et al. (2002) also found positive relation of information

quality and perceived usefulness.

Particularly in the context of ERP system, many studies empirically tested the

relationship of ERP information quality and performance of ERP end-users. Kositanurit, et

al. (2006) and Ifinedo (2007) found positive and significant impact of ERP information

quality and individual impact (performance). On the basis of the above discussion, the

present study constitutes the second hypothesis as:

Hypothesis 2: ERP information quality is positively associated with individual

performance in corporate sector of Pakistan

3.2.4. Relationship between ERP Service Quality and Individual Performance

ERP service quality might be measured through the quality of service and support that

an organization receives from ERP service providers (Ifinedo et al., 2010). ERP support and

service, in our context means the service and support by internal ERP team or the support of

internal Management Information System (MIS) department to the organization. Most of the

companies have established their own internal MIS departments in order to provide services

and support to ERP end users; however, several organizations hire services from external

77
ERP consultants. ERP end users face many difficulties in understanding entirely new

procedures of handling their matters on ERP system. ERP internal department (MIS

department in most of the cases) provides services and support to the end users and enable

them to accept the challenging tasks and resolve many issues in their routine jobs.

One of the most popular instruments of service quality is SERVQUAL instrument

which was developed by Parasuraman, et al. (1985, 1988). Service quality construct was

initially operationalized with ten different dimensions, which includes: reliability,

understanding, competence, courtesy, access, credibility, communication, security, tangibility

and responsiveness. In 1988, after an eclectic debate, SERVQUAL model was reduced to five

dimensions i.e., reliability, assurance, responsiveness, tangibility and empathy (Parasuraman

et al., 1988). In ERP system success measurement context, service quality can be measured

through reliability, assurance, responsiveness, tangibility, and empathy of MIS department or

internal ERP team in providing their services to the ERP end users. Sedera, et al., (2003)

argued that employees get more benefits after the use of ERP system, if service providers are

committed to provide their services and support the end users.

Different empirical studies examined the relationship of ERP service quality with

individual. Tsai, et al. (2011) developed an integrated model, based on different models such

as project management, SERVQUAL model and information system theory. They applied

their integrated model and examined the success of ERP system. They found the significant

relationship of service quality of vendor and consultant with individual performance. Masrek,

et al. (2007) also found that service quality has a significant and positive causal relationship

with individual performance. In the same lines, Sørum, et al. (2012) conducted online survey

of the webmasters of the websites of public sector of Denmark and Norway to the

relationship of information system success dimensions. They found that service quality is

positively associated with net benefits to IS users (individual performance).

78
 Emerging from the literature review discussion, the study by Petter, et al. (2008) on

meta-analysis also reported that Agarwal & Prasad (1999) and Gefen & Keil (1998) found

significant impact of service quality and net benefits at individual level performance. In ERP

context, Ifinedo, et al. (2010) conducted cross-sectional field survey on 109 firms in two

European countries to assess ERP system success. They also found positive and significant

impact of ERP service quality on individual impact (performance). On the basis of this

discussion, the testable hypothesis number 3 is derived as:

Hypothesis 3: ERP service quality is positively associated with individual

performance in corporate sector of Pakistan

3.2.5 Relationship between Individual Performance and Process Performance

Indvidual performance of the end users may be judged through evaluation of timely

and effective decision making, productivity, learning & growth and improvement in daily

routine activities of the ERP end users. Lin, et al. (2006) argued that individual performance

improves business processes first, then it improves the organizational effectiveness. They

conducted field survey in 257 companies in Taiwan to evaluate ERP system success using

balance scorecard dimensions. They found postive and significat causal relationship of

individual impact (performance) and internal business processes (balance scorecard item). On

the basis of this discussion, the fourth hypothesis is constituted as:

Hypothesis 4: Individual performance is positively related with process

performance in corporate sector of Pakistan

3.2.6 Relationship between Process Performance and Organizational Performance

Different studies claimed that improved business processes increase overall

organizational performance. Dehning & Richardson’s (2002) theory of IT impact proposed

the causal relationship of business processes and organizational performance. Based on their

theory, Velcu (2010) conducted a comprehensive survey in 1121 organizations and found

79
positive and significant impact of internal process efficiency on different dimensions of

organizational performance i.e., customer (β=.74, p<0.05) and financial benefits (β=.60,

p<0.05).

Similarly, Elbashir, et al. (2008) also found significant and positive impact of process

performance on organizational performance (β=.72, p<0.05) in the context of business

intelligence system.

Law & Ngai (2007) conducted field survey in 1000 listed firms in Hong Kong and

found positive and significant causal relationship of business process improvement (BPI)

with organizational performance. On the basis of the above discussion the present study

postulates its fifth hypothesis as:

Hypothesis 5: Process performance is positively related with organizational

performance in corporate sector of Pakistan

3.2.7 Relationship between Individual Performance and Organizational Performance

A number of studies empircally evaluate ERP system success and found that

improved individual performance increases performance of organization. Hwang and Xu

(2008) found positive causal relationship between individual and organizational performance.

Ifinedo, et al. (2010) conducted cross-sectional field survey in 109 firms in two European

countries to assess ERP system success. They found positive and significant impact of

individual performance on organizational performance. Lin, et al. (2006) also conducted field

survey in 257 companies in Taiwan to evaluate ERP system success based on D&M model

and balance scorecard approach. They found positive and significant causal relationship of

individual performance with organizational financial performance. Lee & Lee (2012)

conducted field survey to investigate success of Enterprise Information System (EIS). They

found also positive and significant impact of individual net benefits (individual performance

80
after the use of EIS) on organizational net benefits (organizational performance after the use

of EIS). On the basis of this discussion, the sixth hypothesis is established as:

Hypothesis 6: Individual performance is positively related with organizational

performance in in corporate sector of Pakistan

Based on the pragmatic stance of the whole research, the next section of this chapter

addresses the second portion of the studies where the different propositions attained from the

quantitative research and outcomes are explored further through the qualitative research

methods.

3.3 Contextual Factors and ERP System Success: The Qualitative Stance

This section provides different propositions of the study to propose the relationship of

these three types of contextual factors with level of ERP system success. After successful

implementation of ERP project, many organizations fail in its effective use and outcomes

because of different factors (Boudreau, 2003). Based on a conceptual model, Masrek, et al.

(2007) argued that different organizational, technological and individual factors affect the

success of information system.

The following section provides the existing theoretical stance based on past empirical

evidence where different studies examined the relationshiops of different contextual factors

on ERP system success. Based on the review of literature, these contextual factors are

classified into four different categories i.e., internal organizational, technological, individual

and external environmental factors.

81
 Contextual Factors

Internal Organizational P1
ERP System Success Dimensions
Factors
Technological Factors P2 ERP  ERP System Quality
System  ERP Information Quality
 ERP Service Quality
Individual Factors P3 Success
 Individual Performance
 Process Performance
P4  Organizational Performance
External Environmental
 Other Dimensions
Factors

Figure 3.2. Factors Affecting ERP System Success

Figure 3.2 shows the proposed model of factors affecting ERP system success on

different theoretical stances and research gaps, discussed in the previous chapters. The model

consists of the following four categories of contextual factors:

1. Internal Organizational Factors

2. Technological Factors

3. Individual Factors

4. External Environmental Factors

Figure 3.2 also shows different dimensions of EPR system success. Four (4) different

propositions show the proposed relationships of different contextual factors with ERP system

success in the following manner:

1. Internal organizational factors affecting the level of ERP system success

2. Technological factors affecting the level of ERP system success

3. Individual factors affecting the level of ERP system success

4. External environmental factors affecting the level of ERP system success

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3.3.1 Internal Organizational Factors and ERP System Success

Literature revealed that different studies empirically examined and found that

different contextual organizational factors affect the level of ERP success e.g., top

management support and committent, organizaitonal culture, effective communication,

training, rewards and incentives, leadership, organizational structure, readiness, resources etc.

Madapusi (2008) conducted a comprehesive field survey in 900 Indian firms and

found that different critical factors such as, top management support, user support, training,

learning, organizational culture and communication affect the level of ERP system success.

Similarly, Nwankpa and Roumani (2014) collected data from 520 ERP-SAP end users

through web survey. They found significant and positive impact of managerial commitment

on ERP user satisfaction.

A field survey by Ram, et al. (2013) in 217 Australian organizations showed that

different organizational factors influence ERP system success. They used “competiveness

advantage after the use of ERP” as the proxy of ERP success. They found that training and

education has a positive and significant impact on post-implementation success of ERP

system. Their findings showed that if an organization arranges more training for the

employees it will raise the level of acceptance of ERP end users and ultimately the company

will enjoy the competitive advantage of using ERP system across the industry. In the same

way, web-based survey conducted in 134 organizations by Ruivo, et al., (2014) also revealed

significant and postive impact of training on ERP use and value. However, the method of

training and ERP instructor quality is also critical in ERP post-implemenation success. For

example, Wang, et al. (2011) found significant relation of learner interface, instructor attitude

and ways of interaction on ERP end user satisfaction. The study clearly indicates that good

learner interface, good instructor attitude, and good ways of interaction increase the level of

acceptance of ERP system among the end users.

83
 According to Alshawi, et al. (2003), the full working benefits may be achieved when

IT projects become the part of larger businesses strategy and vision of the organization.

Adjustment of an organizaiton within ERP standardized enviorment is very critical. Van Stijn

& Wensley (2001) argued that because of memory mismatch organizations cannot fully

utilize ERP system. Based on cognitive dissonance theory, they introduced the concept of

memory mismatch which means there is discrepancy of knowledge embedded in ERP system

and other medians such as processes, culture or in the mind of individuals. They further

argued that their study also extended the meaning of dissonance because dissonance also

exists where information is missing in single side memory in organizational context and this

dissonance influences the effectiveness of ERP system. Their findings showed that some

factors such as memory mismatch negatively influence the level of ERP success. Therefore,

adjustment of the organization within ERP standardized environment is the key factor for

increasing the success of EPR system.

Different organizational strategies also influence the level of ERP system success. For

example, the findings of a study by Rezvani, et al., (2012) show that more rewards and

incentives increase the level of satisfaction of the end users and perceived usefulness of ERP

system. They developed a framework to examine how rewards and incentives influence ERP

user satisfaction, perceived usefulness and ERP behavior intension. They found transactional

leadership based on contingent rewards as an effective technique for changing ERP user

perception and behavior. They also found significant relationship of contingent rewards and

ERP user satisfaction with ERP continues usage. Similarly, Ellis (2008) also investigated the

influence of personal, behavioral and environmental factors on ERP end user’s behavior.

They found positive and significant impact of procedural justice, ERP leadership and

perceived organizational support on employee's commitment and involvement in ERP

project. According to both studies (i.e., Rezvani et al., 2012; Ellis, 2008), organization should

84
adopt an effective leadership style and provide support to ERP end users for increasing the

level of ERP success.

Hsu & Weng (2006) identified different organizational factors influencing ERP user

satisfaction and individual and organizational impact such as, top management support,

centralization and formalization. Their findings indicate that organization should adopt an

effective organizational style (i.e., centralized/decentralized, less/more formularized) for

gaining success of an ERP otherwise, many conflict and controversies may arise. Another

study of Ju & Wang (2010) applied social shaping view of technology to identify the

controversies and conflicts between ERP standards and social groups within the organization.

They argued that these conflicts change the level of EPR outcomes. Based on case study

approach, they investigated the time of these conflicts.

Similary, knowledge transfer is also an organizational factor that influnces the level of

ERP system success. For example, Wang et al,. (2007) conducted a field survey in 500

Taiwanese firms and found that knowledge transfer plays a vital role to fit ERP system with

all business processes while user support, consultant quality and top level management

commitment positively influence the level of success of ERP project. They argued that most

of the cases, ERP system does not match the business processes and organizational culture

that creates misfit between ERP system and organizational systems. Therefore, organizations

try to change their operations or customize the ERP as per the requirements of business

processes. Similarly, Nwankpa & Roumani (2014) web survey of 520 ERP-SAP end users

found significant impact of three different dimensions of organizational learning capacity i.e.,

system perspective, openness and experimentation and transfer and integration on ERP user

satisfaction. Their findings illustrate that more knowledge sharing capacity of the

organization assures the post-implementation success of the ERP. They also found that

85
managerial commitment influence also influence ERP users satisfaction. They described

three dimensions of organizational learning capacity in the following way:

1. System perspective – shows that everyone in the organization has knowledge (shared

vision) and that how they can contribute to achieve the system objectives.

2. Openness and experimentation – means that an organization is open to accept new

ideas and suggestions and encourages new experiments for the improvement of the

business

3. Transfer and integration – demonstrations the ability of the organization as to how

the organization can transfer the information across the organization through an

integrated fashion.

Similarly, an IT capability of the organization assures the post-implementation

success of ERP system. Bernroider, et al., (2014) collected data from 57 companies in

Australia and found the significant impact of IT (ERP) capabilities on IT (ERP) enabled

business capabilities (organizational performance). In the same lines, the characteristics of

the organizational processes also influence the success of ERP system. For example, Sternad

and Bobek (2013) collected data from 293 ERP end users in 44 organizations in Slovenia and

found the significant impact of organizational-process characteristic on ERP usefulness.

Organizational readiness is another factor that affects the level of ERP system

success. For example, Zhu, et al., (2010) conducted a field survey based on Technology–

Organization–Environment (TOE) theory in 100 retailers in China. They found positive and

significant impact of organizational readiness on ERP post-implementation success. Their

findings indicate that if organization has both, capacity to utilize ERP system and willingness

to utilize ERP system then it will raise the post-implementation success of ERP system within

the organization.

86
 Organizational resources also influence the level of post-implementation success of

ERP system. Hsu (2013) conducted a survey in 150 US manufacturing companies and found

significant and positive impact of organizational resources on ERP business integration.

Hsu’s findings showed that if organization has more resources then they can integrate and

automate all business processes in an efficient manner.

These above mentioned studies show that different organizational factors influence

the level of ERP system success in different settings. Someone may ask why these factors are

critical for ERP system success and why organizations should identify them. The answer is

that through identification and control of these factors, organizations can increase the level of

ERP success. On the basis of the above discussion, it is proposed:

Proposition 1: Different organizational factors affect the level of ERP system

success in corporate sector of Pakistan

3.3.2 Technological Factors and ERP System Success

Different studies empirically examined and found that different contextual indiviudal

factors affect the level of ERP success, for example, top management support and

committent, organizaitonal culture, effective communication, training, rewards and

incentives, leadership, organizational structure, readiness, resources, etc.

A number of empirical studies revealed that different contextual technological factors

are very critical at the post-implementation success of success such as IT/Technological

resources, IT skills, IT staff, technology upgradation, ERP implementation qaulity, IT

capabilities, e-Business technologies, extent of ERP implementation, system integration,

complexity, etc.

Nicolaou & Bhattacharya (2006) examined the impact of ERP-post implementation

technological changes (i.e., enhancement/up-gradation of ERP, installation of additional ERP

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modules) in 83 firms. They found significant and positive impact of post-implementation

changes in ERP system on financial performance of these firms. Their findings showed that

up-gradation in existing ERP system model or installation of more modules increase the level

of ERP system success in term of financial performance.

Similarly, ERP implementation quality (i.e., standardized ERP project

implementation) also influences the post-implementation success of ERP system. For

example, Zhu, et al. (2010) conducted a field survey based on Technology–Organization–

Environment (TOE) theory in 100 retailers in China. They found positive and significant

impact of ERP implementation quality on ERP post-implementation success. The findings

indicated that if organization assures success of ERP in pre-implementation and

implementation stage then this implementation quality influences the post-implementation

success of ERP system. On the other hand, if organization fails to maintain the quality of

ERP implementation then at the post-implementation phase ERP system fails to give the

required results to the organization. Similarly, Ram, et al. (2013) conducted field survey in

217 Australian organizations and found system integration and successful ERP

implementation on the post-implementation success of ERP system.

More implementation of technology also assures the post-implementation success of

ERP system. For example, Madapusi (2008) conducted field survey in 900 Indian firms and

found that more implementation of ERP modules increases the firm performance which

means organization performance can be increased by deploying more modules across the

organization in order to extend the scope of ERP implementation. Similarly, Hsu (2103)

found positive and significant impact of ERP modules, e-business technologies and ERP & e-

Business interaction on business values in term of cost efficiency, differentiation and

intangible benefits to organization.

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 Availability of IT resources also influences the level of post-implementation success

of ERP system. Hsu (2013) also found significant relationship of IT resources on business

integration in 150 US manufacturing companies. Their findings suggested that organizations

must have sufficient IT resources (e.g., computer systems, IT infrastructure, network system,

printers etc.) for assuring post-implementation success of ERP system. In the same lines,

Shang & Wu (2004) developed a framework based on resource based theory and argued that

different ERP resources such as IT infrastructure, resources and expertise affect ERP benefits

to organization.

ERP system integration is also a technological factor which means the connectivity of

all modules of ERP system across the organization through a network system. Literature

revealed the evidence of relationship between system integration and ERP success. For

example, Ram, et al. (2014) conducted a field survey in 217 Australian organizations to find

the factors affecting the success of ERP system. They found that system integration has a

positive and significant impact on post-implementation success of ERP system.

Different charactristics of technolgoy (i.e., complexity of ERP technology, best

practices and efficiency of technoogy) also influence the post-implementation success of EPR

system. Ruivo, et al. (2014) conducted web-servey in 134 organizations and found significant

impact of complexity best practices and efficiency on ERP system use. Their findings showed

that complexity in technology negatively affects the usage of ERP system. Whereas, best

practices and efficiency in technology encourage ERP end users to use EPR technology more

in their daily routine jobs. Similarly, Hsu & Weng (2006) identified different technological

characteristics (i.e., compatibility, complexity, observability and trialability) influencing user

satisfaction, individual and organizational impact of ERP system. Similarly, Sternad & Bobek

(2013) collected data from 293 ERP end users in 44 organizations in Slovenia and found

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significant impact of technological characteristics on ERP ease of use. On the basis of the

above detailed discussion, it is proposed:

Proposition 2: Different technological factors affect the level of ERP system

success in corporate sector of Pakistan

3.3.3 Individual Factors and ERP System Success

End-users of ERP system are the key stakeholders in those organizations who use

ERP systems. These individuals have different charactristics/personal factors (knowledge and

skills, attitude, capability, willingness, personal innovativeness, learning etc.) and a number

of studies investigated the relationships of different indiviudal factors on ERP succss.

Hsu & Wang (2006) found that computer anxiety and user participation has a

significant relationship with three dimensions of ERP success i.e., ERP user satisfaction,

individual and organizational impact of ERP system. Their findings showed computer anxiety

reduces the user satisfaction, individual and organizational performance while more

participation of ERP end users in ERP system increases not only end users satisfaction but

also their performance. Whereas, computer efficacy shows the confidence of the end users

that they have ability, knowledge and skills to use computer system. Scott & Walczak (2009)

found that computer efficacy has significant and positive impact on ERP perceived usefulness

and perceived easy to use ERP system.

User satisfaciton is also an individual factor that influences the level of EPR system

success. For eample, Wu & Wang (2006) conducted a field survey in 264 Taiwanese

companies found the significant relationship of “ERP product, knowledge and involvement

satisfaction” with overall satisfaction of the end users. Their study revealed more satisfaction

over ERP product.

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 Kwahk & Lee (2008) argued that many ERP projects fail because of employees'

resistance, however, readiness to change can reduce resistance of employees. They found

significant impact of readiness to change and computer self-efficacy on ERP perceived ease

of use and ERP perceived usefulness in Korean companies. Their study clearly indicated that

those employees’ willing to work and their ability to change as per requirements of ERP

system (readiness) and self-efficacy increases the level of ERP success. Another study by

Scott and Walczak (2009) found the positive impact of computer-efficacy on the perceived

useand perceived usefulness. In the same way, Chou & Chen (2009) collected data from 305

ERP end users and found significant impact of computer self-efficacy on ERP user

satisfaction.

Personal innovativeness is also a contextual individual factor that affects the ERP

system success. For example, Hwang (2014) found positive and significant impact of

personal innovativeness in IT on perceived enjoyment, perceived ease of use and perceived

usefulness of ERP system. They also compared their findings with low and high experience

groups and finally reported that in group high experienced personal innovativeness in IT has

more influence on these three outcomes.

Learning is a continuous process. Even after implementation of ERP system, end

users continuously learn the new updates, commands and methods of ERP system. Different

studies proved that their learning at the post-implementation stage of ERP increases the level

of post-implementation success of ERP system. For example, Chou et al. (2014) collected

data from 659 ERP end users in different Taiwanese companies and found that post-

implementation learning improves ERP usage.

ERP knowledge capability is another individual factor that affects the level of ERP

system success. Candra (2012) conducted web-based survey of 150 ERP end users from top

level management and found significant impact of knowledge capability on ERP system

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success. His findings showed that more knowledge capability of ERP end users increases the

chances of ERP system success at the post-implementation stage. Similarly, Sternad and

Bobek (2013) collected data from 293 ERP end users in 44 organizations in Slovenia and

found significant impact of personal characteristics on ERP ease of use.

Yoon (2009) examined the impact of organizational citizenship behavior (OCB)

dimensions on ERP system success. Author collected from 152 ERP end users and found

positive and significant impact of altruism, conscientiousness, sportsmanship on ERP

information quality. Their findings showed that different dimensions of OCB i.e., selflessness

(altruism), carefulness (conscientiousness) and showing no negative behave of the employees

even in difficult or frustrating situation (sportsmanship) increase the level of ERP system

success. These discussions show that different individual factors influence the level of ERP

system success in different settings. On the basis of the above discussion, it is proposed:

Proposition 3: Different individual factors affect the level of ERP system

success in corporate sector of Pakistan

3.3.4 External Environmental Factors and ERP System Success

Different studies empirically investigated the impact of different external factors on

ERP system success e.g., external partnership, stakeholders’ network, competitive pressure,

external dependency, vendor support, etc.).

Based on diffusion of innovation and resource-based view theory, Raman, et al.

(2013) conducted a web-based survey in 558 firms of Portugal and Spain. They found that

competitive pressure is an important antecedent of “ERP use” and external collaboration has

positive and significant impact on ERP value in the both countries. Raman’s et al. (2013)

findings showed that more competitive pressure and collaboration compel the organization to

use ERP system. In the same lines, Ruivo, et al. (2014) conducted web-servey 134 and found

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significant impact of competitive pressure on ERP use and value. Their findings suggest that

competitive pressure compel the organization to adopt new technology of ERP system for

their survival in the market.

Based on resource dependency theory, Wang (2008) investigated the longitudinal

impact of internal and external pressures on ERP Assimilation in 1000 companies.

Assimilation means the extent of acceptance and use where the use of new technology

becomes a part of routine activities of the end users (Purvis, et al., 2001). They found that

external pressure because of external dependency influences ERP assimilation.

On the other hand, conflict with stakeholders is another external environmental factor

that negatively affects ERP system success. For example, Jääskeläinen & Pau (2009)

analyzed case studies of three ERP projects in Finland using both qualitative and quantitative

techniques. They found significant negative impact of different conflicts of internal and

external stakeholders on ERP project outcomes.

External support of vendor also affects ERP system success positively. For example,

Tsai, et al. (2006) used organizational learning model (OLM) and found strong effect of

vendor assistance on ERP information quality. They found that external support of vendors

also play an important role in improving information quality of ERP system. ERP

information quality is an important construct of ERP system success model used in previous

studies (Ifinedo, 2006, 2007; Chien & Tsaur, 2007; Ifinedo et al., 2010). On the basis of the

above detailed discussion, it is proposed:

Proposition 4: Different external environmental factors affect the level of ERP

system success in corporate sector of Pakistan

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3.4. Summary

The theoretical framework of the present study is supported the views of DeLone and

McLean (D&M) theory of IS success and many other theoretical foundations regarding

different factors that affect the level of ERP system success. The reason for choosing D&M

theory is its validity and generalizability in a number of significant empirical studies for

measuring the success of different information systems including ERP. However, all these

empirical studies ignored the measurement of ERP system success at the process level. Thus,

the present study incorporated process performance dimension in the proposed model.

Moreover, with the strong empirical evidences in the literature two dimensions of D&M

model i.e., ‘system use’ and ‘user satisfaction’ were excluded in the proposed model of the

present study.

In this way, the proposed model consists of six dimensions i.e., ERP system quality,

ERP information quality and ERP service quality, individual performance, process

performance and organizational performance. Based on different evidences in the previous

studies, six (6) different hypotheses were developed to show the proposed causal

relationships among different dimensions of ERP success model. On the other side, based on

qualitative stance of the study four different propositions were developed to show that

different organizational, technological, individual and environmental factors affect the level

of EPR system success.

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 CHAPTER 4

METHODOLOGY

4.1 Preface

This chapter provides the description of research methodology underlying this thesis

and the techniques of data collection and analysis in order to empirically test the conceptual

framework developed in the previous chapter. The present study has followed the mixed

methods research therefore, quantitative and qualitative, both methodologies are discussed

separately in this chapter. The chapter begins with the discussions on philosophical

assumptions, methodology employed to answer the central research questions of the present

study. Then the discussion moves towards the research design covering the procedure for data

collection and analysis to achieve the set objectives. The present study investigates ERP

system success at individual, process and organizational levels and identifies different

contextual factors affecting the level of ERP success in different organizational settings.

Therefore, research design of the present study comprises two sections:

1. Qualitative data collection and analysis techniques, and

2. Quantitative data collection and analysis techniques

The first section discusses different procedural issues in the light of quantitative

approach e.g., instrument design, quantitative data collection, target population, sampling

technique, sample size, characteristics of respondents, and data analysis method used in this

study. Whereas, the second section discusses the procedural issues of qualitative approach,

for example, background of the selected organizations, qualitative data collection and

analysis methods. The last part of this chapter presents summary of the chapter along with

signpost for the next chapter.

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4.2 Philosophical Assumptions

In broad terms, research is the process of knowing “reality”. There are different

schools of thought on the nature, knowledge and methods to know the reality. These schools

of thought are known paradigms which hold their own basic belief systems or worldviews

about the phenomenon that guides the investigators (Guba and Lincoln, 1994). A paradigm is

a cluster of beliefs and dictates which for scientists in a particular discipline influence what

should be studied (Kuhn, 1970). In the area of business and management research paradigm

means the progress of scientific practice based on researcher’s philosophy and assumption

about the reality (ontology) and the nature of knowledge (epistemology) and how the

empirical investigation might be conducted (methodology).

Philosophical ideas of researchers remain largely hidden in the field of inquiry,

influencing the practice of investigation and need to be identified (Slife & William, 1997).

Creswell (2011) identified different paradigms i.e., Positivism, Interpretivism and

Pragmatism. The following section provides the detail of these paradigms and philosophical

assumptions i.e., ontology, epistemology and methodology with reference to the present

study.

4.2.1. Ontological Assumption

The ontological assumption concerns the nature of “reality” as to what is real and

what is not, what is fundamental and what is derivative (Sobh & Perry, 2006). “Positivist

paradigm believes that reality is fundamentalist, objective in nature and has singular

meanings (Morgan and Smircich, 1980). Whereas, “interpretivist” paradigm rejects the

views of “positivist paradigm” and believes that reality is a socially and historically

constructed phenomenon which has multiple meanings and reality is derivative and

subjective in nature (Morgan and Smircich, 1980). This school of thought claims that reality

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is a contextual filed of information and it is projected through human imagination. The third

paradigm “pragmatism” accepts the views of both “positivism” and “interpretivism”

paradigms and believes that reality may be subjective or objective in nature. In the context of

present study, there are two key objectives which aim to:

(1) find the ERP system success at individual, process and organizational levels, and

(2) identify different contextual factors affect ERP system success level in manufacturing and

service sectors in Pakistan.

The ontological position of the present study is to investigate the reality of ERP

system “success” at individual, process and organizational levels and to explore the

contextual factors that affect the ERP system success in manufacturing and service sectors of

Pakistan. The ERP system success, in the present study, means evaluation of ERP system

impact on individual, process and organizational performance. The meaning of ERP system

success is limiting only on ERP impact on three different levels within the organization i.e.,

individual, process and organizational levels. Therefore, according to the first objective of the

present study, the ERP system success is fundamentalist (i.e., reality is objective) which has

singular meaning and the study will not go beyond the above mentioned meaning of ERP

system success. However, the second objective of the present study indicates exploring

different contextual factors affecting level of ERP success, is derivative (reality has multiple

meanings) because contextual factors have different meanings and different level of

significance in different settings. Therefore, the present study takes position between the

objective and subjective nature of reality.

4.2.2. Epistemological Assumption

Ontology is about “what we may know”, and epistemology is about “how we come to

know, what we know”. In other words, Cresswell and Clark (2011) believe that epistemology

is the study of the relationship between the researchers and that being researched.

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Researchers may have two types of relationships with that being researched: (1) distance and

impartiality, and (2) closeness.

The epistemological assumption is the result of ontological position which guides

about the best ways of inquiring into the nature of reality. The positivist paradigm believes

that researcher is independent and impartial from that being researched and may collect data

objectively through different instruments. However, interpretivist paradigm believes on the

closeness of researcher and that being researched where researcher visits participants at their

sites to collect the data (Cresswell and Clark, 2011).

In the present study, both kinds of relationship i.e., closeness and distance exist

between the researcher and that being researched. The data were collected objectively

through instrument as well as subjectively through personal interaction of researcher with

participants of the study at their sites.

4.2.3. Methodological Assumption

Methodology is the procedures used by the researcher to dig out the particular reality

(Sobh & Perry, 2006). Collis, et al. (2003) defined research methodology as:

“the overall approach to the research process, from the theoretical

underpinning to the collection and analysis of the data” (p. 55).

As discussed earlier, ontological and epistemological assumptions lead

methodological choices (Collis, et al., 2003). There are three methodologies based on

dominant paradigms.

1. Quantitative Research Methods– where reality is objective and researcher is apart

from that being researched

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 2. Qualitative Research Methods– where reality is subjective and researcher seems

very close to that being researched

3. Mixed Methods Research– where both objective and subjective realities exist and

researcher has both close and distant relationship to that being researched.

The objective ontology and epistemology guide to use quantitative research

methodology. Quantitative research methodology looks at the development of hypothesis and

test of theory based on deductive approach. It focuses on the relationship between research

and the theory. Data is gathered from large sample to generalize the findings of the research

over the whole population (Collis, et al., 2003; Bryman, 2004). There are different research

designs of quantitative research including survey research design and experimental design.

Rubin and Babbie (1993) state:

“Quantitative research methods emphasize the production of precise and

generalizable statistical findings. They believe that there is certain objectivity
about reality, which is quantifiable. The data which are collected by positivists
tend to be numerical and are open to interpretation by use of statistics: thus
the data are said to be quantitative. When we want to verify, whether a cause
produces an effect, we are likely to use quantitative methods” (p.30).

On the other hand, the opposing views of subjective ontology and epistemology guide to

apply qualitative research methodology. Instead of testing existing theories, qualitative research

methodology is applied to generate theory based on inductive approach to emphasize how

individuals interpret the social world (Bryman, 2004).

“Two and two are four. Sometimes two and two are five. Sometimes they are three.
Sometimes they are all of them at once” (George Orwell, 1984).

The above mentioned statement is showing base of qualitative research which is

social and historical perspective of reality. The qualitative approach focuses on small sample

and bulk data in subjective form (Collis, et al., 2003). There are different research designs of

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qualitative research approach e.g., case study, grounded theory, ethnography,

phenomenology, participatory action and narrative research. Van Maanen (1983) states:

“The label qualitative methods has no precise meaning in any of the social
sciences. It is at best an umbrella term covering any array of interpretive
techniques which seek to describe, decode, translate, and otherwise come to
terms with the meaning, not the frequency, of certain more or less naturally
occurring phenomena in the social world. To operate in a qualitative mode is
to trade in linguistic symbols and, by so doing, attempt to reduce the distance
between indicated and indicator, between theory and data, between context
and action” (p. 9).

The third type of methodology is known as mixed methods research where both

quantitative and qualitative methods are applied for theory building as well as theory testing

based on both deductive and inductive approaches of research. The most critical issue in

mixed methods research is how to mix the two extreme schools of thought. Creswell & Clark

(2011) identified different methods of conducting mixed methods research and mixing

quantitative and qualitative approaches e.g., convergent triangulation, exploratory sequential,

explanatory sequential, embedded and multi-phased mixed methods research designs.

The present study takes stance to cover both i.e., objective ontology and objective

epistemology to attain the first objective of the study and on the other hand, subjective

ontology and subjective epistemology to accomplish the second objective of the study.

However, the second objective of the present study is based on the outcome of first objective.

Therefore, based on this discussion the mixed methods research is appropriate to answer the

central research question of the present study. The following sections provide the complete

explanation of methodology used in the present study.

4.3 Research Design

Research design, in fact, may guide to answer the “how” question of the subject of

investigation. In other words research design is a complete strategic plan of data collection

and analysis. This section provides an overview of the of research design in the context of

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present study, and the rationale of considering that mixed methods research design is

appropriate for the present study.

4.3.1. The Selection of Research Design

Rubin and Babbie (1989) defined research design as: “the plan of procedures for data

collection and analysis that are undertaken to evaluate a particular theoretical perspective”

(p.70). Kerlinger (1986) described research design in the following words:

“the plan and structure of investigation so conceived as to obtain answers to

research questions” (p.279).

The above view point clearly indicates that research design is the plan of conducting

research in which researcher clearly sets the procedures of data collection and its analysis

with the aim to answer the central research questions of his/her study. Through in quantitative

research designs, numbers and large sample size is used to test the theories. On the other

hand, researchers build theories with the help of words and develop their meaning based on

smaller sample size in qualitative research designs (Sobh & Perry, 2006). Whereas, the third

type of research design is mixed research design which means the integration of both

quantitative and qualitative methods for the purpose of theory building as well as its testing in

a particular context.

4.3.2. Mixed Methods Approach

Mixed methods approach is a methodological design where both qualitative and

quantitative approaches are applied to gain a comprehensive understanding over the subject

of investigation (Creswell & Clark, 2011). Patton (1990) defined mixed methods research as:

“it is likely that quantitative methods and qualitative methods will eventually
answer questions that do not easily come together to provide a single, well-
integrated picture of the situation” (p. 464-5).

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 Creswell & Clark (2007) defined mixed methods research and support the above

mentioned views of Patton (1990):

“Mixed methods research is a research design with philosophical assumptions as

well as methods of inquiry. As a methodology, it involves philosophical assumptions
that guide the direction of the collection and analysis and the mixture of qualitative
and quantitative approaches in many phases of the research process. As a method, it
focuses on collecting, analyzing, and mixing both quantitative and qualitative data
in a single study or series of studies. Its central premise is that the use of
quantitative and qualitative approaches, in combination, provides a better
understanding of research problems than either approach alone” (p. 5).
The application of mixed methods research appears in a wide range of disciplines in

social sciences (Creswell &Clark, 2011) to know the reality by applying two opposite

approaches on the subject of investigation. Greene and Caracelli (1997) argued that mixed

methods research raise the contradictory ideas and contested argument. These contradictions,

tensions and oppositions reflect different ways of knowing and valuing social world.

Tashakkori and Teddlie (2003) suggested the mixed methods as the “best” research design

because it gives a comprehensive understanding of knowing the truth from different angles.

4.3.3. Explanatory Sequential Research Design

‘Explanatory sequential research design’ is a well-known mixed methods research

design that removes the personality biases that are associated when researchers apply single

method, either quantitative or qualitative. In this design, both qualitative and quantitative

techniques are applied in sequence. In the first phase, quantitative methodology is applied.

Thereafter, on the basis of quantitative findings, in the second phase, qualitative methodology

is applied to gain in-depth information associated with the subject of investigation. Creswell

& Clark (2011) discussed explanatory sequential design in the following words:

“The explanatory sequential design occurs in two distinct interactive phases.

This design starts with the collection and analysis of quantitative data, which
has the priority for addressing the study’s questions. The first phase is
followed by the subsequent collection and analysis of qualitative data. The
second qualitative phase of the study is designed so that it follows from the

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 results of the first, quantitate phase. The researcher interprets how the
qualitative results helps to explain the initial quantitative results” (p.71).

The explanatory sequential research design is not new in mixed methods approaches

of research. Different names of this design have been used in the history of mixed method

research: sequential model (Tashakkori & Teddlie, 2009), sequential triangulation (Morse,

1991), and iteration design (Greene, 2008). As discussed earlier in this chapter that the

present study has two key objectives:

1. to examine ERP system success at individual, process and organizational levels

2. to explore different contextual factors affecting the level of ERP system success

The first objective leads towards quantitative approach while the second objective is

based on qualitative research methods. In the present study, quantitative and qualitative

methods for data collection and analysis are applied in a sequence and equal priority is given

to both methods. After the data analysis, mixing strategy is applied and both results from

quantitative and qualitative strands are converged to answer that how contextual factors

(relating to qualitative strand) affecting level of success of ERP system at individual, process

and organizational levels (relating to quantitative strand).

Figure 4.1 shows summary of research design of the present study. Both quantitative

and qualitative approaches were applied in a sequence to answer the key questions of the

present study. In the first phase of research, survey research method was applied for defining

sample and different aspects of quantitative data collection such as instrument design,

validity of instrument, pretesting, and strategy for the collection of data. Different

quantitative techniques were applied such as Partial Least Square (PLS) for testing the study

hypotheses and for checking the construct validly through Confirmatory Factor Analysis

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(CFA); whereas, Cronbatch Alpha and Composite reliability tests were applied for reliability

of the scale and descriptive statistics were applied for examining the sample characteristics.

While, in the second phase of research, qualitative research strategy was applied and

qualitative data was collected through semi-structured video/audio recorded interviews. For

qualitative data analysis NVivo software was used for finding different study related themes.

After the qualitative data collection and analysis, interpretation takes place where both

qualitative and quantitative results are interpreted and then mixing strategies are applied to

converge both quantitative and qualitative findings. Based on the findings of the study,

different recommendations are provided to increase the level of success of ERP system and to

avoid its failures.

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Research Question 1: Is ERP system successful at individual, process Research Question2: What are the contextual factors affecting the
and organizational levels? level of ERP system success?
Quantitative Approach Qualitative Approach
Approach Deductive Approach Inductive
Strategy Survey Research Method Strategy Exploratory In-depth Analysis through Interviews

Quantitative Data Collection Qualitative Data Collection

Population All Service and Manufacturing Companies having SAP or Data Collection Technique Video/Audio Recorded Semi-Structured Interviews
Oracle ERP System in Pakistan Participant Selection Criteria Minimum Two year of experience on ERP System
Sample Size 514 Service and Manufacturing Companies Organizations “4” (1 Manufacturing and 1 Service with SAP ERP + 1
Response Collection from 403 Service and Manufacturing Companies Manufacturing and 1 Service with ORACLE ERP System
Data Collection Technique Questionnaire Total Participants “48 ERP users” (12 participants from each company)
Time Frame April to October 2014 (6-7 Months)

Quantitative Data Analysis Qualitative Data Analysis

Sample Characteristics Descriptive Statistics using SPSS Preparing Data for Analysis Data organizations and transcription
Construct Validity and Partial Least Square – Structural Equation Modeling (PLS- Exploring the Data Data Coding using NVivo Software
Hypothesis Testing SEM) using SmartPLS 3 Software Analyzing the Data Thematic Analysis (Exploring Themes)
Reliability Analysis Cronbach Alpha and Composite Reliability Analysis Tools Word Tree Maps, Tag Clouds, Tree Maps, Charts
Interpretation of Results Factor Loading, Discriminant and Convergent Validity
Interpretation of Results Conceptualizing Contextual Factors and their
Tests, Beta Coefficients, Model Fit Criteria
Significant impact on level of ERP system success

Research Question 4: What are the recommendations to increase

the level of ERP success and to avoid its failures?
Outcome: Quantitative Findings of the Study
ERP System Post-Implementation “Success” or Implication of Research/Recommendations for:
“Failure” in Service and Manufacturing  Companies that use ERP systems
 ERP Consultants/Vendors
Organizations in Pakistan

Figure 4.1 Summary of Research Design

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4.3.4. Justification of the Mixed Methods Approach

The present study is based on pragmatism paradigm which is also termed as “umbrella”

paradigm (Creswell & Clark, 2011) because this paradigm provides shelter to cover two

extremes: positivism and interpretivism schools of thought (Creswell, 2011). The present study is

based on pragmatism paradigm as sole quantitative or qualitative method is not sufficient to

answer the central research question of the subject of investigation. Therefore, mixed methods

research design is used that might be more appropriate to test the proposed framework to answer

the main research questions and to accomplish the set objectives. Cresswell and Clark (2011)

argued that mixed method approach is used when:

“One type of evidence (either quantitative or qualitative) may not tell the
complete story, or the researcher may lack confidence in the ability of one type of
evidence to address the problem” (p. 8).

Further, they argued that:

“Mixed methods research helps answer questions that cannot be answered by

quantitative or qualitative approaches alone” (p. 12).

The key research questions posed in the present study are:

(1) Is ERP system successful at individual, process and organizational levels in

manufacturing and service organizations in Pakistan?

(2) If ERP system is successful then what are the contextual factors affecting on level of ERP

success in manufacturing and service organizations in Pakistan?

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 The methodological choice in the present study is determined by these two above

mentioned research questions. The first research question of the present study is based on

quantitative research approach while the second research question leads the qualitative research

approach. Therefore, either quantitative or qualitative methodology alone is not adequate and

mixed methods research design is considered more appropriate in the following ways:

 The quantitative techniques are used to examine ERP system success at individual,

process and organizational performance.

 The qualitative techniques are used to explore different contextual factors affecting the

level of ERP system success.

Based on the above discussion, it can be stated that mixed methods research is considered

more appropriate to apply both quantitative and qualitative techniques.

4.3.5. Unit of Analysis

The unit of analysis means “what” or “who” is being studied. In the social science

research, unit of analysis may be individuals, groups, organizations, communities, countries and

schools (Rubin and Babbie, 1989).

The purpose of the present study is to examine ERP system success in service and

manufacturing organizations in the context of Pakistan. Therefore, the unit of analysis for the

present study is “organization” that uses ERP system. .

Moreover, these service and manufacturing companies could be both under Government

and private ownership in the region of Pakistan where ERP systems have been successfully

implemented. More precisely both types of organizations are defined in the context of present

study as:

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  Service companies provide intangible products to the customers. In other words, they

provide different services according to the need and satisfaction of their customer (Botta-

Genoulaz, & Millet, 2006).

 Manufacturing companies buy raw materials and through specific process convert them

into finished product and after that sell to the customers (Botta-Genoulaz, & Millet,

2006).

4.3.6. Time Frame for the Collection of Data

The time frame of the present study provides the detail of time for the collection and

analysis of quantitative and qualitative data. The optimum results might be achieved if time is

managed properly for the collection and analysis of data. For quantitative survey, questionnaires

were distributed in 514 service and manufacturing organizations in Pakistan and almost in the

period of six months (i.e., April 2014 to October 2014) 403 responses were received. After the

collection of quantitative data, all data from questionnaires were transferred into SPSS software

and then SEM-PLS technique was applied on quantitative data for analysis purposes.

After that, video/audio recorded interviews were conducted for the collection of

qualitative data in the period of two and half months (i.e., October to December 2014). The

qualitative data collection takes more time because of the setting of interview schedule with the

participants and then interview itself takes time. It is recommended that the researcher should

take only one interview in a day. Transcription of a video/audio recorded interviews is another

time-consuming task that takes 1-2 days for the transcription of a 30-40 minute interview into

textual form. After transcription of all interviews NVivo software was applied for the analysis of

qualitative data.

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4.4 Quantitative Data Collection and Analytical Techniques

This section provides the detail of survey method, quantitative data collection techniques,

sampling process, operationalization of key concepts of the study, instrument design, reliability

and validity issues, and quantitative data analysis techniques and their validity.

4.4.1. Survey Research Method

In survey research method, questionnaire or interviews are used as to gain primary

information from different groups in order to enable the researcher to review different

characteristics of the respondents or objects and to know their opinions and attitude toward a

specific issue (Ary, Jacobs, & Razavieh, 2002). Mathiyazhagan and Nandan (2010) defined

survey research as:

Survey research is also defined as a method of descriptive research used for

collecting primary data based on verbal or written communication with a
representative sample of individuals or respondents from the target population”
(p. 34).

The survey method is usually known as a quantitative technique of data gathering and

covering issues of sampling and procedure for quantitative data analysis. It is a systematic

method which provides impartial unbiased first hand primary information from respondents of

the study. The results from survey methods might be replicated in different context to validate

different theories. However, survey has different challenges such as low compliance rate, lack of

interest in giving response etc.

In the present study, survey research method is used and an instrument is developed to

gather data from service and manufacturing organizations of Pakistan in order to quantitatively

examine ERP system success at individual, process and organizational levels. The survey

research is time and cost saving strategy as compare to qualitative techniques and huge data from

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wide range of participants can be easily collected using this research strategy. The results from

survey methods can be generalized at the large sized population.

Figure 4.2, starts from the operationalization of the ERP system success measurement

model, where each operational definition of each construct is defined along with its relevant

items details. Then discussion then leads towards the survey instrument design where many

issues are handled, such as wording of the survey items, selection of appropriate scale for their

measurement. In the next step, a small part is selected from the sample for pilot testing of the

instrument to identify the potential problems in wording, sequence or in required information.

The next step is relating to the conduct and administers the survey. Then quantitative data is

collected and prepared for the analysis in order to classify the respondents and companies and

apply descriptive statistics on the survey items.

Operationalize Model

Design Instrument

Incorporation of
Pre-testing of Instrument
Required
Changes
Administrate Survey

Prepared Data

Analyze Data

Report Findings

Figure 4.2. Summary of Survey Design

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4.4.2. Nature of Survey

In the present study, the nature of survey is ‘cross sectional’ because the aim of the study

is to examine ERP system success at individual, process and organizational levels in a real time

period from different service and manufacturing organizations in Pakistan rather than the

longitudinal/time series data collection in different periods of time.

4.4.3. Data Collection Technique

In order to answer the questions of the study, the data are gathered through the field

questionnaire. Questionnaire is the best technique in this scenario because of its advantages over

other methods for data collection. Firstly, through questionnaire we can collect data from a large

size sample within a short period of time and spending less cost as compared to other methods

such as interviews. Moreover, data from questionnaire can be entered in a quick way in statistical

analysis software.

4.4.4. Operationalization of the Study Variables

The following sections provide operational definitions of the key variables of the study

i.e., theorized in the conceptual framework of the present study. A five (5) point likert scale is

used where the range of the answer is from 1-5 against each question in the instrument and 1-5

values in the scale represent the following responses:

 Strongly Disagree 1
 Disagree 2
 Neutral 3
 Agree 4
 Strongly Agree 5

In the above mentioned 5 point likert scale, lower value of the scale represents “strongly

disagree” and highest value represents “strongly agree” against each question in the instrument.

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Each of the following section provides operational definition of the variable along with valid

measures (items) with the support of literature.

4.4.4.1 Operational Definition of ERP System Quality (SQ)

ERP system quality in the context of present study is defined as the characteristics of

ERP system itself which satisfy the ERP end users. If ERP system has accurate data, flexibility,

ease of use, ease of learning, reliability, efficiency, customization, integration of data and

integration with other IS systems and has ability to meet end user’s requirements then these

characteristics of ERP system show the existence of ERP system quality (Gable, et al., 2008;

Sedera, et al., 2003).

Table 4.1

The Operational Definitions of ERP System Quality Items

Items Connotations in the Context of Present Study

Data Accuracy Data accuracy refers to the truthfulness of data of the ERP system which
means that end user’s trust on data in ERP system
Flexibility Flexibility of ERP system means the elasticity or flexibility in ERP
systems features.
Ease of Use Ease of use refers to the extent simplicity, uncomplicatedness and
conformableness in the use of ERP system.
Ease of Learning Ease of learning means simplicity of ERP system so that ERP end users
can easily understand how to use ERP system.
Reliability Reliability refers to the consistency in ERP system.
Data Integration Data integration means the competency of ERP system in integrating
different type of data.
Efficiency Efficiency means the competency of ERP system in handling huge data
and execution of command in minimum time.
Customization Customization refers to the ability of modification of ERP system as per

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 the requirement of the end users.
Database Database content refers to all components of form and sheets in rows,
Content columns and other form.
Integration with Integration of with other systems refers to the ERP ability to jointly
other system work with other information systems.
Fulfilling Users’ Its mean that ERP system is useful and it fulfills all requirements of the
Need end user.
Adopted from: Gable, et al. (2008); Sedera, et al. (2003, 2004)

4.4.4.2 Operational Definition of ERP Service Quality (SQ)

ERP service quality refers to the quality of service and support that ERP end user

receives from internal ERP/MIS department. The reason for acquiring services is that in most of

the cases, ERP end users face many difficulties in understanding entirely new procedures of

handling their matters on ERP system. SERVQUAL model was developed by Parasuramanet, et

al., (1985-1988) for the measurement of “service quality”, which has been validated in different

settings. According to SERVQUAL model ERP service quality can be measured through

reliability, assurance, responsiveness, tangibles and empathy in services of ERP/MIS team.

Table 4.2

The Operational Definition of ERP Service Quality of Items

Items Connotations in the Context of Present Study

Reliability Reliability means when end users have a problem, ERP/MIS
department/team shows a sincere interest in solving it.
Assurance Assurance means ERP end users feel safe in their transactions with
ERP/MIS department/team employees.
Responsiveness Responsiveness means ERP/MIS department/team gives prompt service
to ERP end users
Tangibles Tangibles means ERP/MIS department/team has up-to-date hardware

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 and software.
Empathy Empathy means ERP/MIS department has employees who give personal
attention to ERP end users
Source Adopted: Parasuramanet, et al. (1988), Pitt, et al., (1995)

4.4.4.3 Operational Definition of ERP Information Quality (IQ)

ERP information quality means the quality of output (information) produced by an ERP

system. ERP Information quality has certain characteristics i.e., information should be

understandable, important, brief, relevant, usable and available (Gable, et al., 2008; Sedera, et

al., 2003).

Table 4.3

The Operational Definition of ERP Information Quality Items

Items Connotations in the Context of Present Study

Timely Timely information means that all information produced by an ERP
Information system is timely entered, displayed and used
Understandable Understandable means that information produced by an ERP system
should be comprehensive and complete
Important Important denotes that information should be important for the end user
in their daily routines matters for example decision making
Brief Brief means that information produced by an ERP system should be
concise and summarized
Relevant Relevant means that information produced by an ERP system should be
appropriate and relevant to end user
Usable Usable means that information should be usable for the end users in
resolving their daily routines issues
Available Available mean that information is convenient to access in ERP system
Adopted from: Gable, et al. (2008); Sedera, et al. (2003, 2004)

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4.4.4.4 Operational Definition of Individual Performance (IP)

Individual performance means the performance of ERP end user after the use of ERP

system that can be measured through individual creativity, learning, productivity, benefits in

individual’s tasks, quality of decision making and saving of time in duties and tasks (Gable, et

al., 2008; Sedera, et al., 2003).

Table 4.4

The Operational Definition of Individual Performance Items

Items Connotations in the Context of Present Study

Individual Individual creativity refers to ERP end user’s ability to introduced new
Creativity methods to resolve their daily routines issues in their tasks.
Learning Learning means the awareness and education of ERP end users about the
efficient use of organizational resources for their tasks effectiveness
Productivity Productivity is the output or contributions by an individual ERP end
user.
Benefits in Benefits in individual tasks means improvement of individual daily
Individual’s routines tasks because of the use of ERP system.
tasks
Quality of Quality of decision making means the excellence and success of ERP
Decision Making users’ decisions
Saving of Time Saving of time in task and duties denotes the ERP end user’s efficiency
in Tasks and on spending minimum time and performing many duties and working on
Duties a number of tasks because of the use of ERP system.
Adopted from: Gable, et al., (2008); Sedera, et al., (2003, 2004)

4.4.4.5 Operational Definition of Process Performance (PP)

As discussed erlier that process performance is the overall performance of business

processes after the use of an ERP system. Business process performance migh be measured

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through evaluation of automation of process, process time, process control and level of input to

business process and level of output from business process.

Every system may have three main components: input, process and output. An efficient

process can utilize minimum inputs and give the maximum outputs.

Table 4.5

The Operational Definition of Process Performance Items

Items Connotations in the Context of Present Study

Process Process automation refers to the degree of mechanization of business
Automation processes where automatically transactions are performed with the help
of ERP system.
Process Time Process time means how much time is required to convert input into
output with the use of ERP system.
Process Control Process control is the degree of control of management over the
management with the help of ERP system.
Process Process efficiency refers to the capability of business processes for
Efficiency getting maximum output through minimum input resources.
Process Process effectiveness is the quality of process output.
Effectiveness
Process Process fluctuation refers to the process ability to react the changes.
Fluctuation
Source Adopted: Chand, et al., (2005); Bosilj-Vuksic, et al., (2008); Axelsson & Sonesson,
2004)

4.4.4.6 Operational Definition of Organizational Performance (OP)

Organizational performance means the overall performance of the organization with

respect to cost efficiency, profitability, productivity, competiveness and ability to utilize

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organizational resources. In ERP context, it is very important to evaluate whether ERP system is

improving organizational performance or not (Gable, et al., 2008; Sedera, et al., 2003).

Table 4.6

The Operational Definition of Organizational Performance Items

Items Connotations in the Context of Present Study

Organizational Organizational cost means the ability of organization to reduce the cost
Cost Reduction after the efficient utilization of ERP system
Overall Overall productivity means the organizational output towards the
Productivity achievement of organizational goals the use of ERP system.
E-Business/E- E-Business/E-Commerce progress refers to organizational advancements
Commerce in utilization of E-Resources for conducting business activities with the
progress help of ERP system
Competitive Competitive advantage means that organization has ERP system
Advantage advantage over its competitors because of its processes and integration
Customer Customer satisfaction means organization’s customer is satisfied with
Satisfaction delivering order, in time response, and customer services because of the
efficient use of ERP system in organization.
Business Process Business Process Change refers to the organizational ability to change
Change business process by efficient utilization of ERP system.
Decision Making Decision making support means organization can take right decision on
Support the right time with the support of ERP system
Better use of It refers to the organization ability to utilize data resources of the
Data Resources organization with the help of ERP system.
Adopted from: Gable, et al. (2008); Sedera, et al. (2003, 2004)

4.4.5. Survey Instrument Design

Assigning the appropriate wording to the survey items is very critical and important step

in survey design. In this stage, different issues are addressed such as identifying the appropriate

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survey items, number of survey times for each construct, wording of the survey items etc. While

designing survey instrument many steps are performed such as adding the demographic

information, making the sequence of the sections and formatting the instrument as per need of

the survey.

Demographic data relating to the respondent and company are very important while

analyzing demographics. In the instrument of the present study, information relating to ERP

system type, Employee’s experience on ERP system, Gender, Company’s experience on ERP

system, education of employee etc, is taken into account.

The first page of the instrument provides the information regarding purpose of the survey,

definitions of the key terms used in the instrument and issues regarding privacy and

confidentiality of the data. The next section provides the instructions regarding how to fill the

questionnaire. Then instrument starts, the questions regarding demographic information relating

to individual respondent and also about his/her company. Then the different questions relating to

the constructs and their items are mentioned along with their scale of measurement. A five (5)

point likert scale is used where the range of the answer is from 1-5 against each question in the

instrument and 1-5 values in the scale represent different responses e.g., 1 for strongly disagree

and 5 for strongly agree. Appendix A illustrates the instrument of the present study. After all

close-ended questions, a single open-ended question is mentioned regarding the success of ERP

system. The last section of the instrument provides the thanking remarks to respondent for

his/her time for the successful completion of questionnaire.

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4.4.6. Pre-Testing of the Survey Instrument

After the development of survey instrument, the most important step is to assess the

content and face validity of the instrument through pilot testing. However, convergent and

discriminate validity is usually conducted after the collection of quantitative data (see the next

chapter). Pilot testing of the instrument provides the relevancy of the items of each relevant

construct and it also confirms the ease of the instrument for the respondent and ultimately

increases the response rate in the survey.

In the first round of the pilot test, instrument was given to 11 senior PhD faculty

members and 6 PhD scholars at Bahria University, Kohat University of Science and Technology,

FAST-NU and University of the Punjab Lahore, who were familiar with the fundamentals of

ERP systems. Then all suggested changes were incorporated in the instrument. After that the

second round of the pilot test, instrument was emailed to 8 ERP experts in both service and

manufacturing companies in Pakistan. After piloting, instrument is modified as per the important

concerns regarding wording and sequence of questions, addition of open-ended questions and

additional demographic information in the instrument.

4.4.7. Validity and Reliability of the Research Instrument

Validity means the extent to which the researcher is measuring what is intended to be

measured (Christensen, 1991; and Rubin and Babbie, 1989), and reliability means the extent to

which the same results are obtained when the same technique is repeated again and again in

different periods of time (Christensen, 1991; and Rubin and Babbie, 1989). Both reliability and

validity of research instrument are important in the field of inquiry.

Completely new and untested instrument adoption is only the last resort (DeLone &

McLean, 2004). Therefore, in the present study the structured questionnaire is developed based

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on different validated items used in previous studies (Sedera, et al., 2003; Gable, et al., 2008,

Chand, et al., 2005; Bosilj-Vuksic, et al., 2008; Axelsson & Sonesson, 2004; Balaban, Belić &

Gudelj, 2011).

4.4.8. Sampling Process

Sampling is the process of selecting small object from the whole population for the test

and analyses purposes. The selected sample must have characteristics of the population from

where it is selected. The following section provides details of the sampling population, sampling

unit, sample size, sampling technique and justification of choosing sampling technique.

4.4.8.1 Study Population

The first stage of sampling process starts from defining the population of the study

(Creswell, 2011). Groves, et al. (2004) describes the target population as a “set of units to be

studied” (p. 44). The study population is all Pakistani service and manufacturing organizations

that use ERP systems (SAP or Oracle EBS). Most of the organizations in Pakistan are using SAP

and Oracle ERP systems (Rizvi, 2005). Botta-Genoulaz & Millet (2006) argued that initially

ERP system was implemented in manufacturing organizations but now service organizations are

also investing a huge amount on ERP system implementations.

SAP is a German based and Oracle is American multinational companies providing ERP

system worldwide. Both companies have different local-partners in Pakistan. Therefore, a

request letter (see appendix-B) was sent to local partners of SAP and Oracle for getting list of

those manufacturing and service companies where they have successfully implemented ERP

system. Many local-partners of SAP and Oracle provided the list of companies on the basis of

different personal references and also on personal visit 3-4 times (in most of the cases) and

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through several follow-up emails and phone calls; however, some of them referred to their

website for details of these companies where they have implemented ERP system, while some of

them replied that they are in the developing stage and they implement ERP system with the

collaboration of other ERP consultants. Few local partners were reluctant to give information

because of their internal policy of keeping their client list secret.

4.4.8.2 The Sampling Unit and Sample Size of the Study

The sampling unit of the study was ‘organization’ (manufacturing or service) where ERP

system (SAP or Oracle EBS) has been implemented. Data was collected through questionnaire

from a respondent from each company who was working on managerial position and experience

on ERP system. Several researchers of IS (e.g., Sedera, et al., 2004; Ifinedo, 2007) argued that

for the assessment of success of information systems (ERP system in the context of present

study), employees at managerial levels are appropriate informants. These studies suggested that

impact of ERP systems on individuals and organizations can be conceptualized in terms of

individual users’ perceptions and beliefs about the changes that occur after the implementation of

ERP system in individual or organizational performance.

The purpose of sampling is to generalize the results of the sample over the population.

Therefore, the study covered the maximum portion of population to minimize the sampling

errors and generalize the study results. Structured questionnaires were sent to all 514 (Food

industry, textile, electronic, electrical, automobile, chemicals, banking etc.) companies in

Pakistan. However, after the period of six months, only 403 questionnaires were returned back

and the response rate was 78.4%.

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4.4.8.3 Procedure of Data Collection

Different methods of collection were applied for the collection of data such as (1) self-

administrative questionnaire - printed questionnaires were filled through face – face meetings;

(2) web-based survey: online survey was conducted through Survey Monkey©. Different head

offices, area/branch offices and factories were visited for the personal face-to-face meeting for

filling of self-administrative questionnaires. In several companies, front-desk officer collected

the questionnaires and transferred to their HR officer or related IT/MIS/ERP department for the

verification and then transfer to the appropriate person for the response. The second method, data

collection through web-based survey was proved very effective. It was started from getting the

contact information (telephone land line, cell phone numbers and emails) from the website of

each company. In the next step, telephone calls were made to request the ERP related person/end

user to provide his/her email address. Then a list was prepared.

As mentioned earlier that only service and manufacturing companies are included in the

study population, therefore, all trading ERP user companies (SAP or Oracle EBS ERP system

users) were excluded from the list of study population. Final list of the targeted sample revealed

a total of 514 manufacturing and service companies in Pakistan that used ERP system (SAP or

Oracle EBS). However, after the period of six months, only 403 questionnaires were returned

back and the response rate was 78.4%.

Sampling techniques are categorized into two different types: probability and non-

probability sampling. In probability sampling technique, equal chance of being selected is given

to all units in the sample frame. In case of non-probability sampling, data is gathered on

convenient basis.

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 In the present study all possible ways were used to collect the actual list of ERP user

companies in Pakistan. At last, a list of 514 service and manufacturing organization was

compiled and then questionnaire were sent to all 514 organizations (i.e., complete target

population). After a lot of efforts (follow up telephone calls, personal visits and emails) in the

period of 7 months 403 responses were received. Table 4.7 shows the profile of the respondents

and organizations from where the data was collected.

Table 4.7
Summary of Profile of Respondents
Measure Frequency Percent (%)
ERP type
Oracle 227 56.3
SAP 176 43.7
Type of Business Organization
Service 182 45.2
Manufacturing 221 54.8
Employee Position
Lower Level Management 107 26.6
Middle Level Management 257 63.8
Top Level Management 39 9.7
Gender of Respondent
Male 357 88.6
Female 46 11.4
Respondent’s ERP Experience
Less than 1 Year 43 10.7
1 – 3 Years 147 36.5
4 – 6 Years 115 28.5
More than 6 Years 98 24.3
Organization’s ERP Experience
Less than 1 Year 21 5.2
1 – 3 Years 80 19.9
4 – 6 Years 126 31.3
More than 6 Years 176 43.7
Respondent’s Education Level
Intermediate 6 1.5
Graduation 79 19.6
Master 267 66.3
MS/MPhil/PhD 51 12.7

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 Respondents were given a covering letter along with the questionnaire that also contains

the instructions for completing the survey instrument under the aegis of Bahria University

Islamabad, Pakistan.

4.4.9 Quantitative Data Analytical Techniques

In the present study, component based partial least square - structural equation modeling

(PLS-SEM) technique was applied for testing the quantitative hypotheses of the study. SmartPLS

3, the latest version has been used for applying PLS-SEM technique (Ringle, et al., 2014).

PLS-SEM introduced by Herman World in 1974 and covariance-based SEM (CB-SEM)

established by Jöreskog (1978, 1982). LISREL software is based on CB-SEM technique;

whereas, for PLS-SEM analysis, Chin’s (1998, 2003) introduced a graphical interphase based

software “PLS Graph” for PLS-SEM analysis. Later on, Ringle, et al., (2005) also introduced

Smart PLS software for PLS-SEM analysis.

Table 4.8
Comparison of PLS-SEM and CB-SEM

Adapted from: (Chin and Newsted, 1999)

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 PLS-SEM has many advantages over CB-SEM technique (Chin and Newsted’s, 1999).

Table 4.2 shows the comparison of PLS-SEM and CB-SEM techniques. PLS-SEM is variance

based technique whereas; CB-SEM is the covariance technique. There are different advantages

of PLS-SEM technique over CB-SEM technique of data analysis. Firstly, data must be normal

distributed in CB-SEM analysis. However, PLS-SEM technique can be applied on non-normal

distributed data. Secondly, CB-SEM technique is applied normally for finding the relationship

between reflective constructs; however, PLS-SEM covers models for both formative and

reflective indicators. PLS-SEM technique can be applied on sample of small data set; whereas,

CB-SEM can handle and give the appropriate results in only situation where large sample is used

for the data analysis. PLS-SEM technique is also unique because it can handle more complex

models of 100 constructs with 1000 indicators; whereas, CB-SEM technique can handle

moderate complex models of less than 100 constructs (Chin and Newsted, 1999).

PLS-SEM has become a popular technique for testing the relationship of the latent

variables in path models in different disciplines of social sciences (e.g., Hair, et al., 2012; Peng

and Lai, 2012; Ringle, et al., 2012). Latest studies e.g., Binz Astracan, et al., 2014; Sarstedt, et

al., 2014) also applied PLS-SEM in the field of family business research. Long Run Planning

(journal) published many research papers on different debates on PLS-SEM technique. In IS

research, technology acceptance model (Davis, 1989) was widely tested in different settings

through PLS-SEM technique. PLS-SEM technique can handle both reflective and formative

models (Chin and Newsted, 1999).

In reflective models direction of causality is shown from construct to measure; whereas,

in formative model, it is opposite i.e., direction of causality from measure to construct. Secondly,

in reflective models, internal consistency is calculated based on the assumption that measures

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should correlated and possess internal consistency; while, in formative model there is no reason

to expect internal consistency in the measures. Formative constructs are more complex as

compare to reflective constructs because by dropping indicators from the measurement model of

may cause the alteration of the meanings of the formative construct. However, in case of

reflective models the meanings of the construct remain same even if we drop the indicators from

the construct. In formative constructs measurement error is taken into account at construct level

but in reflective constructs measurement error is taken into account at item level (Jarvis, et al.,

2003).

Figure 4.3 Comparison of Reflective and Formative Models

Source: Jarvis, et al. (2003).

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4.5 Qualitative Data Collection and Analytical Techniques

The following section provides the detail of qualitative phase of research based on in-

depth interview method. This section also provides the qualitative data collection and analysis

strategies in the present study.

4.5.1 Qualitative Data Collection Techniques

The qualitative data collection is an important phase in qualitative research design. There

are different data collection methods in qualitative research such as observation, semi-structured

or unstructured interviews, archival documents review, focus group discussions etc. The present

study employs interviews (audio/video) as the strategy for qualitative data collection. Interview

is an effective method for the collection of qualitative in-depth information. It has many

advantages over other data collection techniques. Through interview researchers may understand

the changes of emotions, feelings and behavior of participants. Interview helps researchers in

exploring contextual realities relating to the social world. Moreover, respondents are given

proper time to express what they know about reality.

In the present study, 48 participants were selected from the following four (4) different

companies (12 participants from each company) for the in-depth interviews:

Company-A Service with Oracle-EBS ERP System

Company-B Manufacturing with Oracle-EBS ERP System

Company-C Service with SAP ERP System

Company-D Manufacturing with SAP ERP System

The length of each interview varies from 30-50 minutes. The preliminary criteria for selection of

the present study are as follow:

1. Employment Status: Regular employee of the company

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 2. Have extensive knowledge of ERP system

3. Minimum Qualification: Graduation

4. More than two (2) years of working on ERP system (SAP-ERP or Oracle-ERP)

5. Prior appointment and consent for interview

The interview protocol covers the following research questions (RQs) for the in-depth

interview of the respondents:

 RQ1: What are the internal organizational contextual factors affecting the level of ERP system

success?

o RQ1 (a) How does your company control internal organizational factors to increase the

level of ERP system success?

 RQ2: What are the technological contextual factors affecting the level of ERP system success?

o RQ2 (a) How does your company control technological factors to increase the level of

ERP system success?

 RQ3: What are the external environmental contextual factors affecting the level of ERP system

success?

o RQ3 (a) How does your company control environmental factors to increase the level of

ERP system success?

 RQ4: What are the external individual factors affecting the level of ERP system success?

o RQ4 (a) How does your company control individual factors to increase the level of ERP

system success?

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4.5.2 Qualitative Data Analytical Techniques

This section provides the details of how audio/video recorded interviews are transcribed,

application of computer aided qualitative data analysis software (CAQDAS), method of data

coding and exploring study themes and applying different scientific tools using CAQDAS.

In the present study, “NVivo 10” software is used for qualitative data analysis. There are

many software packages (CAQDAS) for qualitative data analysis such as NU*DIST, ATLAS,

XSIGHT, Weft QDA, MaxQDA. However, NVivo software has many advantages over the other

CAQDAS for example: (a) all folders can be organized according to their types and it enables the

researchers to arrange to arrange all information in different folders; (b) NVivo has inherent

ability to handle audio or video recorded data as the data source; (c) the easy methods of

applying queries and extracting information in NVivo regarding the phenomenon, satisfies the

researchers; (d) coding comparison ability of the NVivo enables researchers to determine the

reliability of the coding process (Ishak & Bakar, 2012).

Certain steps are performed for finding study themes. In first step, all video/audio

recorded interviews are loaded into NVivo software and then interviews are transcribed which

means the conversion of audio/video data into textual form. In the next step, textual is coded and

different “Nodes” are developed. A “node” in NVivo software is an object which is developed

through data coding and shows a theme relating to qualitative study. When all nodes are

developed then “classification” is developed to provide the information regarding age,

qualification, department, employment status, total job experience, experience on ERP system

etc. of each participant of the present study. After performing all the above mentioned steps, the

following queries are applied to get results from NVivo software:

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4.5.2.1 The Text Search Query

It may search a specific word using “text search query” and NVivo software displays

“Word Tree” to provide the pattern of talk of the participants in their interviews about the

specific word which is being searched.

4.5.2.2 The Word Frequency Query

This query displays frequency of all words used in textual data. NVivo software displays

“Word Tag Clouds” to provide a holistic view of the words in different sizes. Those words

repeating more times in the data, are shown in big size; however, words having less frequency in

the data, are shown in small size. By using words frequency query, it may apply funneling

approach and perform different steps. In the first step all unrelated words are added into “word

stop list”; in the second step “Word Tag Clouds” are displayed. However, those words, which

may stop in first step, are not shown while displaying “Words Tag Clouds” in the second step.

The same process is repeated until we succeed in exploring the exact themes of the study.

4.5.2.3 The Coding Query

Coding query is the most important query while conducting thematic analysis based on

text coding method. It may apply this query on a specific “node” (theme) to display all textual

data which has been coded in that particular “node”. This query also displays references of

participants’ interviews (or other source of data collection). By using “coding query”, it can add

textual data (views of participants) in inverted commas in our study to give weightage to

individual views. Those participants’ views which indicate the existence of theme of the study

are also strong evidences to support the claim.

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4.5.2.4 The Matrix Coding Query

The matrix coding query displays items in rows for the purpose of comparing two groups

time. By using matrix coding query we can display different nodes (themes) on rows and

participants on columns to compare the rating of themes by each participants of the subject of

investigation.

4.5.2.5 The Tree Map

After applying different queries in the present study, other techniques of qualitative data

analysis such as “Tree Map” and different charts are also displayed. Tree map shows the

significance of each theme in a colored region. Those themes which cover big region in “Tree

Map” are most critical themes of the study. On the other hand, themes with small region in tree

map are the less critical themes. The qualitative objective of the present study is to explore

different contextual factors affecting the level of ERP system success. Therefore, using “tree

map” the significance of the different contextual factors are shown in tree map.

4.5.2.6 The Charts for Demographic Information

Along with all these above mentioned techniques and tables, different charts are also

drawn to show the demographic information of the participants such as age, qualification,

department, employment status, total job experience, experience on ERP system etc.

4.6 Summary

This chapter outlines quantitative and qualitative techniques for the data collection and

analysis based on ontological, epistemological and methodological assumptions of the present

study. The present study employed both quantitative and qualitative approaches to answer the

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central research question and to achieve the set objectives. Therefore, mixed methods research

design has been selected as the main research design and convergent triangulation design type is

used to define the pattern of the collection and analysis of both quantitative and qualitative data

and mixing strategies of both research findings. The quantitative data has been collected though

structured questionnaire based on valid items of the each variable of the present study. The

Structural Equation Modeling (SEM) techniques have been applied for quantitative data analysis.

On the other hand, in-depth video and audio semi-structured interviews have been conducted for

the collection of qualitative data. All interviews have been transcribed and subsequently different

qualitative data analysis techniques have been applied for the purpose of answering the

qualitative question of the present study.

Based on the methodology chapter, the next chapter describes both quantitative and

qualitative findings of the present study. For quantitative findings different charts show

demographic information of the study respondents and different tables and path diagrams show

SEM result. Similarly, different diagrams i.e., tree map, tag clouds, coding and themes charts

show qualitative findings in the next chapter. The mixing strategies are also discussed in the next

chapter focusing on how qualitative findings converge with quantitative findings and vice versa.

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 CHAPTER 5

FINDINGS OF THE STUDY

5.1 Preface

This chapter provides the empirical findings of the study that encapsulate both

quantitative and qualitative research methods. As discussed in the previous chapter, the present

study employed explanatory sequential research design, therefore the first section of the current

chapter covers the quantitative findings of the study whereas, the second section of this chapter

discusses the qualitative results. The empirical outcomes from both quantitative and qualitative

data analysis are presented separately in this chapter. This chapter starts with an overview of the

quantitative findings of Partial Least Square – Structural Equation Modeling (PLS-SEM)

technique that was applied for examining the success of ERP system, followed by discussion of

the qualitative findings which identified different factors affecting the success of ERP system in

Pakistani companies. Then the last part of this chapter presents summary of the chapter along

with signpost for the next chapter.

5.2 Quantitative Findings of the Study

This study has applied component based partial least square - structural equation

modeling (PLS-SEM) technique for testing the quantitative hypotheses of the study. Smart PLS

3, the latest version has been used for applying PLS-SEM technique (Ringle, et al., 2014). The

use of PLS technique is widely acceptable for the development or refinement of theories. PLS

technique has less severe assumptions as compared to other techniques on structure equation

modeling using AMOS and LISREL. Even with small data set, PLS technique produces unbiased

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estimates of the parameters which cannot be possible with other modeling with AMOS or

LISREL (Robins, 2012).

This section provides details of different steps of PLS-SEM techniques along with the

empirical results from each step. In the first step, the psychometric properties of the

measurement model are examined to find discriminant and convergent validity of the constructs

as well as to confirm the construct and indicators reliability for further analysis. In the second

step, as recommended, bootstrapping with 500 subsamples procedure is applied through Smart

PLS 3 to show the significance levels of the path coefficients and each of the item loading with t-

values because only PLS algorithm does not show the t statistics, standard errors and p values

(Chin, 1998).

5.2.1 Assessment of Measurement Model

The study examines the psychometric properties of the measurement model through

SEM-PLS by assessing convergent validity, discriminant validity, and internal reliability of the

constructs as well indicators reliability. Table 5.1 shows the factor loading, cross loading,

Cronbach’s alpha and values of composite reliability of the each construct of the model. The

value of Cronbatch’s alpha of the each construct is more than 0.70 of required threshold

(Nunnally, 1978) (see Figure 5.1). Cronbatch’s alpha for ERP system quality (SQ), ERP

information quality (IQ), ERP service quality (SERVQ), individual performance (IP), process

performance (PP) and organizational performance (OP) are 0.805, 0.897, 0.856, 0.890 and 0.894

respectively. Values of composite reliability are also shown in table 5.1 which are also greater

than 0.70 of the acceptable level of construct reliability (Barclay, et al., 1995) (see Figure 5.2).

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 Hair et al. (2013) mentioned the reason of applying composite reality along with

Cronbach Alpha in the following words:

“Cronbach's alpha is sensitive to the number of items in the scale and generally

tends to underestimate the internal consistency reliability. As such, it may be used

as a conservative measure of internal consistency reliability. Due to Cronbach

alpha's limitations in the population, it is more appropriate to apply a different

measure of internal consistency reliability, which is referred to as composite

reliability (p. 101)”

Table 5.1 also shows that factor loading values (λ) of the each constructs are greater than

0.70 and also significant at p-value< 0.001 in all the item loadings which is the good sign for the

existence of indicators reliability. Some items are dropped for further analysis because their

values are less than 0.70 of the required threshold i.e., IQ4 (0.681), OP1 (0.651), SQ1 (λ=0.578),

SQ2 (λ=0.611), SQ3 (λ=0.489), SQ4 (λ=0.561), SQ6 (λ=0.663) and SQ10 (λ=0.625) (Hair, et

al., 2013). Discriminant validity examined through cross loading values. The results show no

construct shows the significant cross loading values which verify the discriminant validity of the

each construct.

Figure 5.1. Cronbachs Alpha

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 Figure 5.2. Composite Reliability

Table 5.1
Factor Loading, Cross Loading, Cronbach’s Alpha & Composite Reliability

IP IQ OP PP SERVQ SQ
IP1 0.734 0.335 0.445 0.426 0.404 0.419
IP2 0.733 0.400 0.515 0.487 0.497 0.462
IP3 0.776 0.425 0.511 0.480 0.463 0.456
IP4 0.801 0.535 0.490 0.519 0.453 0.502
IP5 0.761 0.435 0.559 0.500 0.371 0.481
IP6 0.767 0.457 0.560 0.500 0.375 0.486
IQ1 0.451 0.760 0.462 0.429 0.451 0.579
IQ2 0.428 0.739 0.502 0.424 0.438 0.522
IQ3 0.393 0.772 0.452 0.446 0.469 0.531
IQ5 0.474 0.787 0.493 0.444 0.456 0.553
IQ6 0.430 0.822 0.534 0.491 0.462 0.554
IQ7 0.492 0.829 0.485 0.526 0.486 0.578
OP2 0.574 0.534 0.779 0.645 0.482 0.536
OP3 0.430 0.347 0.716 0.492 0.384 0.356
OP4 0.534 0.542 0.836 0.637 0.503 0.545
OP5 0.479 0.443 0.782 0.554 0.495 0.487
OP6 0.539 0.500 0.797 0.655 0.536 0.523
OP7 0.583 0.456 0.789 0.595 0.453 0.469
OP8 0.541 0.552 0.775 0.595 0.488 0.555
PP1 0.433 0.430 0.514 0.747 0.484 0.496
PP2 0.587 0.567 0.648 0.815 0.531 0.562
PP3 0.490 0.449 0.608 0.795 0.529 0.473
PP4 0.563 0.504 0.673 0.865 0.541 0.531

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PP5 0.520 0.506 0.668 0.840 0.504 0.477
PP6 0.465 0.349 0.560 0.752 0.449 0.440
SERVQ1 0.442 0.466 0.504 0.479 0.746 0.490
SERVQ2 0.456 0.498 0.501 0.533 0.880 0.476
SERVQ3 0.461 0.495 0.500 0.569 0.867 0.470
SERVQ4 0.528 0.516 0.569 0.562 0.874 0.519
SERVQ5 0.465 0.489 0.498 0.509 0.837 0.453
SQ11 0.501 0.553 0.494 0.484 0.425 0.769
SQ5 0.435 0.566 0.456 0.400 0.412 0.740
SQ7 0.480 0.524 0.525 0.485 0.445 0.725
SQ8 0.429 0.424 0.448 0.495 0.409 0.710
SQ9 0.398 0.515 0.405 0.416 0.437 0.736
Cronbach’s
alpha 0.856 0.876 0.894 0.890 0.897 0.805
Composite 0.893 0.906 0.917 0.916 0.924 0.865
Reliability

Table 5.2 and Figure 5.3 show the value of Average Variance Extracted (AVE) which is

greater than 0.5 of cutoff point to show the existence of convergent validity (Hair et al., 2013).

Table 5.2 also shows the square root value of AVE for each construct which is larger than the

values in off-diagonal form i.e., correlations between constructs to show the discriminant validity

as per the defined criteria of Fornell and Larcker (1981).

Table 5.2
Average Variance Extracted (AVE) and Fornell-Larcker Criterion

AVE IP IQ OP PP SERVQ SQ
IP 0.581 0.762
IQ 0.617 0.569 0.786
OP 0.613 0.675 0.621 0.783
PP 0.645 0.639 0.587 0.766 0.803
SERVQ 0.710 0.561 0.586 0.612 0.631 0.842
SQ 0.525 0.615 0.705 0.638 0.619 0.573 0.724

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 Figure 5.3. Average Variance Extracted (AVE)

5.2.2 Assessment of the Path Model

As recommended, bootstrapping with 500 subsamples procedure is applied through

Smart PLS 3 to show the significance levels of the path coefficients and loading of each item

with t-values because only PLS algorithm does not show the values of t-statistics, standard errors

and p-values (Chin, 1998). Figure 5.4 and Table 5.3 shows that all three dimensions of ERP

quality (i.e., system quality, information and service quality) have positive and significant

impact on individual performance (β=0.318**, β=0.192* and β=0.267** respectively). Thus, H1,

H2 and H3 are accepted.

The results reveal that if other factors remain the same, with the one unit increase in ERP

system quality (SQ), it will bring the change in individual performance (IP) by 0.318 units. In the

same lines, one unit positive change in ERP information quality (IQ) brings the change in

individual performance (IP) by 0.192 units. Similarly, coefficient value (β=0.267**) shows the

magnitude of the relationship between ERP service quality (SERVQ) and individual

performance (IP) which means if other factors remain constant and there is one unit change in

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ERP service quality, it will bring the positive change in individual performance (IP) by 0.267

units.

Figure 5.4 and Table 5.3 also show the positive and significant causal relationship of

individual performance (IP) with process performance (PP) and organizational performance (OP)

(β=0.639** and β=0.315** respectively) which means one unit increase in individual

performance could increase process performance by 0.639 units and organizational performance

by 0.315 units. Results also reveal that process performance (PP) has positive and significant

impact on organizational performance (OP) (β=0.565**) which means one unit positive change

in process performance increases organizational performance by 0.565 units. Moreover,

significance direct and indirect effect of individual performance on organizational performance

also depicts the evidence of partial mediation in this case. The existence of partial mediation

shows that infidel performance directly and indirectly influences the organizational performance.

In all the cases other factors (unexplained variables in the models) must be constant. Thus, H4,

H5 and H6 are accepted.

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 R2 R2

R2

Figure 5.4. PLS-SEM Path Results

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Table 5.3
PLS-SEM Path Model Coefficients

Coefficients (β) Standard Error T Statistics P Values

IP  OP 0.315** 0.051 6.147 0.000
IP  PP 0.639** 0.034 18.553 0.000
IQ  IP 0.192* 0.068 2.824 0.005
PP  OP 0.565** 0.050 11.406 0.000
SERVQ  IP 0.267** 0.056 4.797 0.000
SQ  IP 0.318** 0.054 5.867 0.000
Hypotheses Supported: H1, H2, H3, H4, H5, H6
**p<0.001; *p<0.01
(two-tailed significance at p<0.05)

5.2.3 Testing Model Fit

Table 5.4 also shows that the values of t-statistics are greater than 1.96 and shows the

significant relationship of each exogenous variable on endogenous variable in each case. In the

same lines, Figure 5.5 shows R2 value of the each path which is the essential criterion of the

goodness of the fit of the model in PLS-SEM technique. In all the cases, coefficients of

determination (R2) values are greater than 0.40 (see Figure 5.5) which confirm the validity of the

structural model and show the appropriate predictive power explained by the exogenous

variables on the endogenous variables.

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 Figure 5.5. R Square

The effect size of different paths is examined through the values of f2. There are three

levels of effect size (low if f2 =.02, moderate if f2 =0.35, and high if f2 >= 0.50). Figure 5.6 shows

the values of f2. The effect size (f2) of the relationship of information quality, service quality and

system quality with individual performance are 0.031, 0.079 and 0.089 respectively. In the same

line, the effect size (f2) of the relationship of individual performance and organizational

performance are 0.165 and 0.689 respectively. Similarly, the value of f2 is 0.533 for the impact

of process performance on organizational performance.

Figure 5.6. f Square

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5.3 Quantitative to Qualitative Findings: A Sequential Perspective

The above-mentioned quantitative findings of the study empirically proved that all three

quality dimensions of ERP system positively influence individual performance and subsequently

individual performance also has a positive and significant impact on process and organizational

performance which ensured the post-implementation success of ERP system in service and

manufacturing organization in Pakistan. Someone may ask if ERP system is successful in post-

implementation stage then what are the contextual factors behind this success that influence the

level of ERP success in these service and manufacturing organizations in Pakistan. To answer

this question, the present study conducted qualitative in-depth study and reported the qualitative

findings:

5.4 Qualitative Findings of the Study

Based on the quantitative findings, this research has attempted exploration from an

under-utilized qualitative perspective. The key findings of the thesis include an adequate critical

discussion of different contextual factors affecting the ERP system success. The findings discuss

many improvements of the existing utilization of ERP system.

As discussed in Chapter 4 that for the second stage of qualitative research, data was

collected through video-recorded interviews of the ERP end users in different companies. The

present study followed the step by step approach of data analysis with NVivo as suggested by

Buchanan & Jones (2010) in the following way:

1. Inserting Video Data Files in NVivo 10 Software

2. Defining Demographic Information/Classifications of the Participants

3. Transcription and Translation (in case of non-English) of Video Recorded Interviews

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 4. Data Coding, Finding Themes and Developing “Nodes”

5. Exploring “Tree Maps” and Charts

6. Applying the following queries:

a. Text Search Query for exploring “Word Trees” for each theme

b. Word Frequency Query for exploring “Tag Clouds” based on word frequency

c. Coding Query for exploring the “textual data coded in each theme” of the study.

The following sections provide the detail of these steps of qualitative data analysis with NVivo

software.

5.4.1 Transcription of Video-Recorded Interviews

English is the dominant language and most of the research papers, theses and projects are

written in English language (Kushner, 2003). However, if participants have non-English native

language then their interviews can be translated into English language before applying further

analysis (Van Nes, et al., 2010). In the present study all video-recorded interviews were

transcribed into textual form and some of them were translated from Urdu to English language

before transcribing.

5.4.2 Data Coding and Identification of Themes

After transcribing all video recorded interviews, different themes (contextual factors)

were identified out of the textual data and subsequently different “nodes” were developed to

indicate different themes of the study. Every single node represented a contextual factor. As

discussed earlier that the purpose of the qualitative investigation in the present study was to

identify different contextual factors affecting the success of ERP system. Reading line by line

textual data has indicated the related evidence of the existence of different contextual factors.

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Each related textual data was coded into each related “node/theme”. Then all nodes/themes were

classified into the following four categories:

1. External Environmental Factors (Parent Node)

2. Individual Factors (Parent Node)

3. Organizational Factors (Parent Node)

4. Technological Factors (Parent Node)

Figure 5.7 shows both coding from Sources (S) and References (R) against each theme

identified. Sources and references are defined as follow:

 Sources (S) – it shows the frequency (numbers) of the participants (sources) who talked

about the particular theme and their discussions were coded in that particular theme.

 References (R) – it shows the total numbers of coding of a theme. References (R) are

shown usually equal to or more than the number of sources (S). The reason is that if one

participant discusses about the particular theme twice in his interview then we code the

theme twice which means two times coding (R=2) from a single source (single

participant) (S=1).

Figure 5.7 primarily indicates contextual factors model to show all contextual factors

identified in this study that affect the ERP system post-implementation success. Parent nodes

were developed to show each category of the factors affecting the success of ERP system. After

that, all related nodes/themes were placed under the each related parent node. For example,

figure 1 shows that economic conditions (S=4, R=4), external coalition/partnership (S=7, R=7),

provision of electricity (S=14, R=17) and stakeholder pressure (S=9, R=12) are the child nodes

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of external environmental factors. Similarly the study found different individual factors: attitude

towards acceptance (S=20, R=26), interest (S=24, R=28), learning capacity (S=11, R=13) and

skills and knowledge (S=30, R=44). In the same lines, the study found different organizational

factors affecting on ERP system success such as: conflict of Interest (S=5, R=5), culture (S=22,

R=29), hiring of IT personnel (S=14, R=19), inter-departmental coordination (S=20, R=21),

knowledge sharing (S=17, R=23), leadership (S=35, R=47), management commitment (S=12,

R=12), management control (S=27, R=38), management support (S=26, R=35), organizational

size (S=19, R=24), organizational structure (S=11, R=13), rewards and incentives (S=37, R=52),

selection of power users (S=10, R=13) and training (S=43, R=81). In the same way,

technological factors have been identified that affect the ERP post-implementation success such

as ERP implementation success (S=5, R=7), IT budget (S=18, R=20), range of ERP

implementation (S=14, R=16), system customization (S=9, R=11), technological resources

(S=37, R=55) and up-gradation of technology (S=35, R=51).

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Figure 5.7. Data Coding and Developing Tree Nodes

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Figure 5.8. Model of Contextual Factors Affecting ERP System Success

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Figure 5.9. Tree Map of Contextual Factors

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5.4.3 Tree Map Analysis

Tree Map shows the significance and the worth of each theme of the study (Ijaz, et al.,

2013). Figure 5.9 shows Tree Map of the all contextual factors (individual, organizational,

technological and external environmental factors) that affect the success of ERP system. The

factors falling in the big regions have more significant influence on ERP system success as

compare to those contextual exist in the small area of the ‘Tree Map’.

The study found (see figure 5.9) that in external environmental factors, provision of

electricity and stakeholders’ pressures are the more critical factors as compared to external

collusion/partnerships and economic conditions. Similarly, in individual factors, skills and

knowledge and interest have been found more critical as compared to attitude towards

acceptance and learning capacity. The study also found that technological resources and up-

gradation of technology are more critical factors as compare to IT budget, range of ERP

implementation, system customization and ERP implementation success. In the same lines,

training, leadership, rewards and incentives, management control, culture inter-departmental

coordination and organizational size are more critical organizational factors that affect ERP

system success as compared to knowledge sharing, management commitment, organizational

structure, hiring or IT personnel, selection of power users and conflict of interest that have less

regions in tree map.

5.4.4 Discussion on Qualitative Findings

Based on empirical evidence, the following section provides a detailed discussion on

different themes identified in this study. This discussion focuses on four main categories of

factors affecting the level of ERP system success i.e., external environmental, technological,

organizational and individual factors.

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5.4.4.1 External Environmental Factors Affecting ERP System Success

The following section provides discussion on different environmental factors identified in

this study that influence the level of ERP system success in Pakistani organizations.

5.4.4.1.1 Supportive Economic Conditions and ERP System Success

Competitive, environment and economic pressure compel the organizations to implement

ERP system for the purpose of improving efficiency and core competencies (Peng & Nunes,

2010). Different countries have their own issues such as cultures, government regulations, and

economic environments regarding ERP system implementation and its effective usage (Ngai, et

al., 2008). Economic growth of the country supports the companies to make sufficient profit and

ultimately invest more on advanced technologies such as EPR system.

Government of Pakistan aims to spend a huge amount of 4.6 billion PKR on different IT

projects, during fiscal year 2012-2013 (Express Tribune, 2012). Government of Pakistan

established Ministry of Information Technology (MoIT) to initiate and launch information

technology projects and programs with the aim of economic development (MoIT, 2013). One of

the participants mentioned:

“…if economy is moving good, then organizations will be able to make profits,
reinvest in terms of technology.. So, the good economic times definitely make
difference (B-P2)”.

The above mentioned statement clearly indicates that good economic growth enables the

organizations to earn more profit and ultimately investment more on the implementation and

usage of ERP system to improve the quality of products and other operations within the

organization. Therefore, economic conditions affect ERP system at the post-implementation

stage. If economic conditions of countries are bad, it adversely affects the industry and ultimately

organizations will be unable to utilize ERP system.

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5.4.4.1.2 External Partnerships and ERP System Success

External partnerships mean the external linkages with other stakeholders of ERP system.

Vendor-customer partnerships are extremely important for ERP system success (Stackpole,

1999). Companies can better utilize ERP system through strong partnerships with customers,

dealers and vendors. If customers or vendors have the same ERP system then they can make

coalitions in term of sharing and understanding different standardized documents produced on

the same format. Standardized ERP reports which are required to the dealers/customers also

strengthen their relationships and ultimately increase organizational efficiency. Sometimes, an

organization has to make some extra reports, as discussed by a participant while sharing his

experiences:

“We work through dealership and software does not cover these things. You have
to make a separate report like the gate pass. It is not the part of any standard in
the software (B-P1)”.

In organizations, they are facing the problem that when they deal with two or more than

two dealers they make their separate reports for each and system does not include these things in

it to cover more than one dealer. Support from all business partners and stakeholders will play an

important role to give the feedback of implemented system. Another participant talked about the

importance of external partnerships with different business partners for the success of ERP

system. Stakeholders are actually the co-partner of the business and organizations have to take

care of their needs and interest.

In Pakistan, business is dependent on stakeholders, customers and suppliers. People do

not believe on technology; they like manual work. So, the organizations deal with different types

of partners, those who like manual working and those who prefer to work with technological
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advancement. When customer and vendor work on the same ERP system then different options

can be utilized ultimately organizational performance is improved. Electronic Data Interchange

(EDI) option can be enabled which provide handiness for both the organizations. One of the

participants stated that:

“Some SAP (ERP) statements are not easily understandable by most of the
customers but for big corporate sectors such as Colgate, Nishat,
nestle….statements are easily understandable (D-P5)”.

Through collaborations and business partnerships particularly large organizations can

easily understand different reports on the similar nature of ERP system. Organizations (both

customer and vendor) can make transactions easily and quickly through online connectivity and

ultimately increase the effectiveness of ERP system if both have same type of ERP system. The

effectiveness of ERP is increasing day by day after enabling the online connectivity in order to

share the data among different organizations.

5.4.4.1.3 Provision of Electricity and ERP System Success

In Pakistan, different public sector organizations such as Water and Power Development

Authority (WAPDA), Faisalabad Electric Supply Company (FESCO), Hub electricity Power

Company, Hyderabad Electric Supply Company (HEPCO), Sukkur Electric Power Company

(SEPCO), Islamabad Electric Supply Company (IESCO), Karachi Electric Supply Company

(KESCO), Kot Addu Power Company (KAPCO), Lahore Electric Supply Company (LESCO),

Multan Electric Power Company (MEPCO), Peshawar Electric Power Company (PESCO),

Quetta Electric Supply Company (QEPCO), Tribal Electric Supply Company (TESCO) and

Gujranwala Electric Power Company (GEPCO) are providing electricity to domestic and

industrial customers. However, the people of Pakistan have seen worse power-outages because

of electricity shortage in last few years.

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After the successful implementation of EPR system, the main issue is power-outages

which influence the ERP system success. Electricity shortage in Pakistan was the worse

condition which directly affected the success of ERP system in Pakistani Industries. However,

with the availability of different alternative resources, such as generator, UPS and solar system

the issue of power-outages in many large organizations is resolved to a certain extent. Only

large organizations who have sufficient financial resources can afford the implementation and

post-implementation cost of ERP system. Therefore, they have sufficient internal resources to

resolve the issue of electricity shortage in Pakistan. One of the participants said that:

“Our organization has provided UPS systems in order to avoid any disturbance
in the work (A-P10)”.

Government of Pakistan has also taken steps for launching new power projects. Now the

duration of power-outages has been reduced as compared to the previous conditions where the

duration of power-outages was 12-18 hours daily. Now ERP users are utilizing EPR system in a

better way as compared to the previous conditions in Pakistan.

5.4.4.1.4 Stakeholder Pressure and ERP System Success

Pressure from different stakeholders such as competitor, customer, vendor and

Government agencies also influence the organization to utilize ERP system. In most of the cases

competition encourage the urge of the companies to improve their existing systems, upgrade the

existing systems with the new technological advancements and better utilize the resources in for

gaining competitive advantage in industry. Organizations attempt to utilize ERP system in a

better way than their competitors.

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Benders, et al., (2006) claimed that organizations adopt ERP system to bear the pressure

from their business partners and meet quality standards that expand formal industry standards.

More social and institutional pressure is related with a higher tendency to adopt ERP systems.

Pakistani organizations are also updating their system because of pressure of competition. As

suggested by the participant:

“If there is a problem, the new update suggests more effective solutions….. Then,
you should upgrade… organization using ERP solution is always going to have
one step up in a competition and in the market (C-P6)”.

Organizations have to keep their line of action one step ahead of their competitors for

gaining more market share and surviving for the long period of time. In the same lines,

Government agencies also influence the effectiveness of ERP system in public sector

organizations in Pakistan. The reason is that these organizations are working under the

supervision of Government of Pakistan where Government makes different policy decisions for

the implementation, utilization and evaluation of ERP systems.

“If we talk about the duration between 2003 and 2007 in Pakistan, governmental
setup was automated and when processes and systems are being automated that
helps the overall acceptability of that system in society and organization (B-P2)”.

Pakistani Government promotes latest technologies in these organizations by providing

funds for the effective utilization and up-gradation of technologies such as ERP system. On the

other hand, Government imposes different policies to stop further hiring of staff (even IT staff)

which influences the implementation and post-implementation of ERP system.

Government wants to make automated systems to increase the control over the

organizations. In the same lines, customer is also an effective stakeholder for the Pakistani

organizations. They generate standardized reports from ERP system for the customers as per
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their requirements. The pressure from your customer also influences the performance of an ERP

system. One of the participants said that:

“Customer wants advanced technology. So, in order to cater your needs you have
to upgrade yourselves but if you have those partners and stakeholders who do not
take technology as a helping tool then you will have no pressure (D-P2)”.

Customers are the valuable assets of the organization and they influence different

business policies and procedures. Organizations try to provide timely and customized reports

using ERP system as per the demands of their customers.

5.4.4.2 Individual Factors Affecting ERP Success

The following section provides discussion on different individual factors identified in this study

that influence the level of ERP system success in Pakistani organizations.

5.4.4.2.1. Attitude towards Acceptance and ERP System Success

Sometimes, employees do not happily accept ERP technology even after successful

implementation of ERP system. They are reluctant to work on ERP system and show mental

dissatisfaction and ultimately their acceptance level influences the success of ERP system.

Addinnour, et al., (2002) found that many beliefs in pre-implementation of ERP system may

influence many attitudes and then such attitudes may affect the certain executing behaviors and

post implementation success of ERP system. However, findings of the present study show that in

Pakistani companies, employees accept ERP system whole-heartedly and learn new updates in

ERP day by day, they also feel better while working on EPR system; ultimately their level of

acceptance positively influences the success of ERP system. One of the participants said that:

“When I joined this organization, I continuously consult different team members

in MIS department to know the things on ERP system. I was self-motivated to
learn this system” (A-P7).
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Employees’ attitude towards acceptance of ERP system has great impact on ERP system

success because when employees get ready to accept the new technological changes such as ERP

system it means they get ready to accept different challenges associated with those new

technologies. However, in the public sector organizations, employees do not accept the big

change of ERP technology. There are many reasons, for example, employees are untrained, less

educated, low motivated and rigid in accepting the change in organization. Many employees in

public organizations show their positive attitude towards acceptance of ERP system while some

people accept it reluctantly. One of the participants said that:

“In public sector organizations people hesitate even when they try to catch
mouse….if we do not change our attitude we cannot go for the success of ERP
system” (A-P5).

Sometimes, initially employees show their negative attitude toward the acceptance of

ERP technology. However, with the passage of time they realize that we cannot survive without

the new technology ERP system and thus, ERP system become their part and parcel of their daily

routine jobs which influence positively the level of effective utilization (success) of ERP system.

5.4.4.2.2. Interest of Employees and EPR System Success

Interest of employees to work on ERP system plays an important role for assuring the

success of ERP system in organization. In Pakistani organizations, employees show more interest

in learning and utilizing the new technology of ERP system. They personally explore the usage

of new commands and methods in ERP system and ultimately they apply them in resolving their

daily routine issues. Therefore, interest of working on ERP system is important for learning and

ultimately for utilizing ERP technology in a better way. One of the young participants shared his

experience in these words:

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“It is my personal experience…..when i joined this company; I had no idea of

ERP… Basically I was given the responsibility of the system, modules… Then I
started self-learning with the help of internet (B-P1)”.

Lee et al. (2002) found that personal innovation leads to the perceived usefulness of
information system (e.g., ERP system). Young employees show more interest in exploring new
commands and methods of ERP system as compared to old age employees in Pakistani
organizations. In Public sector organizations in Pakistan, many old age employees think that they
are just going to retire in the near future, so why they should waste their time and energy on
working on the entirely new technology of ERP. Therefore, they do not take interest in learning
and using ERP system. Thus, even in public sector organizations, young generation is being
recruited who has interest to work on ERP technology. One of the participants said that:
“If any individual like me is keen to know new things, ERP system, it will increase
overall productivity of company. So, if an individual who is interested; who is
very much keen to know technology, which will help ERP system success” (B-P8).

5.4.4.2.3. Learning Capacity of Employees and ERP System Success

Employees are the key stakeholders of ERP system and their learning capacity influences

the level of success of ERP system. While a number of factors influence the learning capacity of

employees who work on ERP system such as basic qualification, computer literacy and age of

employees. In most of the cases, less learning capacity is seen in less educated, over-aged and

less computer literate people. A person might be unable to learn the new system or technology

because of his.her learning capacity even if he/she is very interested to learn and work on it.

Therefore, organizations have to put more resources to train such types of employees who have

less learning capacity. On the other hand, those who have sufficient capacity of learning ERP

system, are trained on less spending of the company and ultimately they utilize ERP system in a

better way. Zahra & George (2002) found that the intake capacity increases as one of the

participants said that:

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“Without capabilities, training is wastage of time. So, you have to select right
people for the right job. Modern and highly integrated ERPs can work if you
select and train right people for that (C-P12)”.

If employees do not have the capability of learning the things sharply then training is just

wastage of time for them. Therefore, organizations hire skilled workforce, who operate ERP

system efficiently. One participant said:

“Newcomers are using this system in better way but old age colleagues cannot
even login this system (A-P12)”.

In Pakistani organizations, more learning capacity is seen in youngsters as compared to old

existing employees. Young employees work devotedly to make their place in the new

organization; their background, experience and IT knowledge multiply their knowledge capacity

which ultimately influences the success of ERP system.

5.4.4.2.4. Skills and Knowledge of Employees and ERP System Success

Skills and knowledge are the key elements which determine the competency of

employees. ERP system is a technological information system where a great deal of technical

skills and knowledge is required to operate the system smoothly. Therefore, organizations try to

hire competent employees who must have ERP knowledge and skills because many employees

update their knowledge and skills through self-learning strategies and training courses. Yu

(2005) found that end users of system across the organization must be educated from the

commencement of ERP implementation. Because education is a corner-stone of ERP

implementation and the user training is basically rely basic knowledge of ERP system.

In Pakistan organizations, those employees who have IT background, for example, those

who have a bachelor or a master’s degree in IT related discipline utilize ERP system more
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efficiently and ultimately produce effective results. On the other contrary, employees with less

IT knowledge and skills face many difficulties to operate ERP system. Young employees have

more knowledge about operating ERP system as compared to old age employees because of their

prior non-IT background in term of IT knowledge and skills. One of the participants said that:

“But the very important thing is that… end users should have sufficient ERP
knowledge. User cannot meet… without his/her required level of knowledge. ERP
system is user-friendly for only those who have knowledge of ERP system (A-
P5)”.

“ERP system is user-friendly for only those who have (sufficient) knowledge of ERP

system” which clearly indicates that without ERP knowledge, employees cannot use ERP system

and ultimately fail to produce the required results. Incompetent people request their colleagues to

help them out and also suffer the ineffectiveness in their work if their colleagues make mistakes

intentionally or unintentionally. A participant shared his experience in these words:

“One of my colleagues from commercial department was not capable…..he

requested different persons to work on his behalf. The persons made blunders in
his work and finally this case was highlighted (A-P4)”.

For the success of ERP system employees must have sufficient knowledge and skills of ERP

system. In most of the professional degree programs in Pakistan different courses of computer

applications are taught which build base of students in IT technology. Ultimately when they join

organizations, they feel comfortable with ERP technology.

ERP is a vast information system and sufficient knowledge and skills is required for its

success in the organization. It is wrong thought that if employees have know-how of internet

browsing then they can work on ERP system. Skilled manpower is treated as an asset for the

organization that is the reason of making success of ERP system in the organization. One of the

participants said that:

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“IT specialist and expertise are the real assets for the success of ERP system
during post implementation process (C-P2)”.

The present study also found that ERP trainings are also useful for those who have already

sufficient IT knowledge and have more learning capacity and understanding. Organizations have

to put little efforts to teach them the basic of the ERP systems to those who are already familiar

with computers and IT gadgets. However, those who lack adequate IT knowledge and skills, fail

to produce required result from ERP system. Therefore, placement of right people with sufficient

ERP skills increases the level of ERP system success.

5.4.4.3 Organizational Factors and ERP System Success

The following section provides discussion on different organizational factors identified in this

study that influence the level of ERP system success in Pakistani organizations.

5.4.4.3.1 Organizational Culture and ERP System Success

Organizational culture means shared values, traditions, principles, norms and ways of

doing within the organization. In Pakistani organizations, strong or weak culture of the

organization influences the level of ERP system success. Similarly, flexibility and rigidity in

organizational culture also matters in assuring EPR success. More shared values, customs and

principles realize the employees that they are part of the organization and their success are

actually successes of the company. Socialization is cultural dimension which makes the

employees very open to discuss their problems for finding the possible solutions. Davison (2002)

and Sheu, et al., (2003) found that language, culture, nation and politics also influence ERP

system success. One of the participants said that:

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“Our company is having a very open culture, People love to sit together and
discuss things, so we never had a problem in communication or sharing up and
down (B-P12)”.

Organizational culture significantly changes the level of success of ERP system. It makes

strong employee commitment towards the effective utilization of ERP system. Fever rigid rules

and procedures, widespread empowerment of employees and role charity of employees make

ERP system more successful within the organization. For example more flexible organizations

tolerate their employees on different errors while working on ERP system. Readiness in

organization culture also encourages ERP system success which includes

adaptability/willingness and ability to utilize ERP technology. Participants said that:

“If your culture has adoptability to change with the dynamics of the market,
system and technology… This is also associated with HR mind-sets as fwell….
Culture influences ERP success (C-P1)”.

“The readiness to change is important. The reluctance to go for IT based culture

is prominent. Young generation is good learner. They accept IT based changes
like ERP system (B-P10)”.

In Pakistan, old organizations with old employees show unwillingness to accept the new

technological system. However, newly established companies where youngsters are working

have more adoptability of new technologies. Even in old Pakistani organizations, new IT staff

has been recruited with strong IT background and new departments have been developed after

ERP system implementation.

5.4.4.3.2 Hiring of IT Personnel and ERP System Success

Originations hire more IT staff in implementation and post-implementation stage of ERP

system. It is a wrong perception that after the implementation of ERP system human resource is

reduced. ERP systems are developed on the best practices principle. For better utilization of

ERP, organizations have to utilize the necessary modules as per their requirements of
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transactions. Each module of ERP system has several functions. Therefore, Pakistani

organizations hire more IT staff to fulfill different skills which are required in several functions

of ERP system. On the other hand, these organizations also conduct training sessions to train the

existing staff. However, particularly in public sector organizations in Pakistan, existing staff has

less IT knowledge and skills and they have lesser learning capacity as compare to the new

youngsters. To increase the ERP system effectiveness organizations hire more skilled workforce

and experts of ERP systems.

“More (software) engineers should be deputed to SAP (ERP) systems to enhance

its effectiveness through modifications. They can easily handle SAP and its
modification process (D-P12)”.

In public sector organization, hiring of new staff is a big issue. They have to get

permission from the ministry for hiring new IT staff. Organizations lose the effectiveness of ERP

system in case of huge work load on existing staff in these public sector organizations. One of

the participants said that:

“We have less manpower….we cannot put the load of ten people on only 2-3
persons…. then the efficiency cannot be increased. If we have 10 persons then
efficiency level will be automatically increased (A-P4)”.

The quality of new staff is also critical for the implementation and post-implementation

success of EPR system. Increasing the number of employees or hiring more staff does not

guarantee improvement in the success of ERP system. Capable employees with strong ERP

skills, knowledge and experience assure ERP system success within organization. If an

organization hires more people who have less IT background, then it will badly influence the

effectiveness of an ERP.

5.4.4.3.3 Inter-departmental Coordination and ERP System Success

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ERP system is implemented in integrated fashion in order to integrate and automate

different functions of different departments within the organization. All departments work inter-

dependently in an ERP environment. They work together and disseminate the related information

where output information from one department becomes the input for another department.

Gattiker & Goodhue (2004) found that greater interrelationship among organizational sub-units

allow them to get greater benefits from ERP system. The present study found that inter-

departmental coordination is the critical element for assuring the effectiveness of ERP system in

Pakistani organizations.

In case, if one department delays in sending or updating the information in ERP system,

it will affect the performance of other departments. All departments have to provide information

in time to make the other department ready to pursue the necessary actions. Coordination among

all departments is very important which influences the level of post-implementation success of

ERP system and the chain between departments remains in flow as harmony is very important

between departments. One of the participants said that:

“Every department is linked with other departments. If departments are not

interlinked with proper communication channels, ERP will fail. Next departments
will suffer from late retrieval of updated information produced from previous
department (D-P1)”.

ERP system also enables all connected departments to resolve their issues on the single

platform. However, for the effective utilization of ERP system all departments make good

relation in sharing timely, complete, consider and relevant information ultimately for assuring

ERP system success in the organization.

5.4.4.3.4 Knowledge Sharing and ERP System Success

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Knowledge sharing promotes efficiency of new and less experienced employees within

organization. Sharing experiences among employees helps resolve several issues and ultimately

mitigate conflict and promote work ethics. ERP system is knowledge-based information system

which produces the knowledge necessary for organizational decisions. Working on ERP system

is just like gaining knowledge of ERP. It enables the end users to make knowledge-sharing

environment. More knowledge sharing improves the effectiveness of ERP system in Pakistani

companies. Knowledge sharing enables the employees in these companies to resolve many issues

quickly and work more efficiently. One of the participants said that:

“If there is knowledge sharing among employees they will resolve the issue in
time. If the organization has culture not to deliver to any other then definitely the
effectiveness of the ERP system as low as your target (A-P11)”.

Young employees are seen happy in providing support and sharing their knowledge as

compared to old age employees in Pakistani organizations. Knowledge sharing also creates a

good relationship among employees, where employees sit together, sharing their knowledge and

resolve the issues. Ultimately it affects ERP success because through effective knowledge

sharing, people share their experiences of resolving many issues arise while working on ERP

system.

Knowledge sharing is necessary for an organization to complete its tasks. Many

organizations share their knowledge with other organizations to build a good relation. In the

same lines many departments within the organization share knowledge and discussing many

reports to resolve many issues. On the other hand lack of knowledge sharing gives the bad effect

on post-implementation success of ERP system. If ERP consultants make any changes in the

system or update the existing system then they have to share the information about changes.

5.4.4.3.5 Leadership and ERP System Success

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Leader is one who influences others and ultimately brings a positive change in an

organization for the attainment of organizational objectives. Leadership is the backbone in the

structure of an organization. Hence, leadership plays an important role for assuring ERP

implementation and post-implementation success. ERP project leader must have different traits

such as the desire to lead, self-confidence, honesty, integrity, intelligence and ERP related

knowledge. Leaders with more conceptual, operational and technical skills can guide their

members more effectively and resolve their daily routine problems on ERP system. One of the

participants said that:

“Leadership has an important role in implementing the ERP system. If they

periodically monitor motivate the people it has effect on the success of ERP
system. Our former Finance Director was helping and motivating people. He has
had vast experience (A-P3)”.

Effective leadership increases the level of ERP system success in Pakistani organizations.

The present study found that leadership is not only important while ERP system is implemented

but leadership is also important to sustain the effective utilization of ERP system in each

department. In these organizations, departmental head plays the role of a leader, who guides,

supports and motivates the subordinates to use ERP system in effective manners. Employees face

different problems while they work on ERP system and leaders find solutions and support their

members to make the system successful. They give the right direction to the members and also

provide trainings for their development. One of the participants said that:

“We were newcomers, when we joined this organization in 2010; we showed

aggressiveness towards this system, but our boss supported us, who was the real
team leader (A-P4)”.

Higher level management is responsible for supporting, guiding and leading the

newcomers. Every new employee needs the instructions of the supervisors who lead for working
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on ERP system. One of the participants shared his experience in these words:

Thus, without the guidance of the leader, employees cannot utilize ERP system in an

effective manner. EPR implementation and sustainability at the post-implementation stage

depends on the vision of the leaders. Then, a leader can share clear goals and objectives with

members regarding ERP system in the origination.

“CEOs are leaders. Being a leader, if i want to improve my department, I have to

motivation employees to an extent positively or negatively. Punishment is
required if one employee is not working seriously, otherwise remaining forty
employees will not work too (D-P1)”.

Leaders motivate their members and boost up their confidence level. Employees with

higher level of motivation always try to show their best task performance. Positive attitude of

leader always motivate the employees.

5.4.4.3.6 Top Level Management Commitment and ERP System Success

Top level management commitment means the participation by the highest level

management in some specific program in term of setting objectives, rules and policies; arranging

trainings for employees; providing resources; implementing and evaluating the particular

program. Top level commitment plays an important role in making ERP system more successful

because they select ERP system, hire IT staff, and hire resources, assign and coordinate work

activities. On the other hand, to sustain the success of ERP system in post-implementation stage,

management commitment plays its effective role. More committed mangers always set the target

and make the necessary actions to achieve the targeted goals. If the higher management is not

interested in utilizing ERP technology then this flow transfers to middle and lower level

management and ultimately organization cannot sustain the success of ERP system. On the other
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hand, if management is not committed to utilize ERP system effectively then they will not

provide any support to the employees and ultimately ERP success will suffer. One of the

participants said that:

“If management is not committed to transparent system, they will not release
funds for implementation of system and for the training of people (D-P1)”.

Top level management makes policies and procedures regarding implementation and

post-implementation of ERP system. Their commitment is reflected through their policies and

practices. In Pakistani companies top level management commitment influences the ERP system

success. Employees’ level of commitment depends on the top level management commitment. If

top management of organization is willing to use ERP system effectively then middle and lower

level employees will also use ERP system in an effective manner.

5.4.4.3.7 Management Control and ERP System Success

Management control means measuring the actual performance, comparing the actual

performance with the standard performance and taking the corrective actions. Top level

management take strategic decisions and control at the strategic levels while middle and lower

level management control operational level activities within the organization. ERP system is a

complete information system which also needs Standardized Operating Procedures (SOPs) for

the smooth implementation and post-implementation usage. Management of the organization set

rules, regulations and policies for working on ERP system, generating standardized reports,

making management decisions etc. The set plans and goals of the organization provide a

platform to control the activities of the end-users over the ERP system and also to evaluate the

performance of ERP system within organization.

In Pakistani organizations management control influences the ERP system success.

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Management control enables the management to check the performance of both ERP system and

end user. In these organizations top management monitors the transactions of ERP end users

prevents from the wrong transactions in ERP system. Similarly, different reports execution is

restricted at end user level. Only top level management has access to executive management

reports. In the same lines, by setting deadlines in EPR, organization bounds the end users to

submit their reports in time. Management also sets options in ERP that after the deadlines the

reports will be submitted through their bosses who have access to submit reports after the

deadlines. One of the participants said that:

“Some persons have been deputed who monitor the working of employees on ERP
system and a time schedule has been also communicated for the submission of
their relevant reports in the head office (A-P3)”.

In Pakistani organizations, management gives rights on ERP system to end users step by

step to reduce the chances of errors. In case of any change of transaction or report, end users

have to contact their higher authorities who have rights to change the information in ERP system.

Undue restrictions also reduce the effectiveness of ERP system. Therefore, organizations give

the rights step by step after assuring less chances of error. Management also arranges meetings

with employees to discuss the problems on ERP system to find their solutions. Meeting is also an

effective strategy for management control which enables the management to collect first-hand

information from the employees. In regular meetings, organizations measure the periodical

performance and compare it with the targeted performance; in case of variances they take the

corrective actions. One of the participants said that:

“Organization should arrange regular meetings for hearing the issues from lower
level managements. On every Monday CFO conducts a meeting with employees
which reduce the gaps and increase the coordination among employees. When we
are here in our offices, we work just like a team to resolve the issues (A-P8)”.

Regular meetings in these organizations make special contact of managers with their
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subordinates and allow them to plan and evaluate the performance of ERP system and end users.

Management control also allows management to take the immediate and basic corrective actions

as per the situations. If end users face problems in ERP system then management takes the

corrective actions to resolve the problems in these Pakistani organizations.

5.4.4.3.8 Management Support and ERP System

Management support means the helping attitude of the management for their employees.

Through different ways organizations can provide their support to the ERP end users e.g.,

encouraging their work on ERP, removing obstacles of working on ERP system, supporting in

daily work activities and providing sufficient technological resources for their development.

Management gets feedback and suggestions from employees and also allows them to participate

in ERP policy decisions. Organization support encourages the end users to attach with the ERP

goals of the organization. Implementation of ERP system cannot be accessible and credible

without the support of management. In the same way, management support plays a vital role at

the time of post-implementation of ERP system.

Top management support is necessary to develop confidence and interest between the

workers who operate ERP system. Supervisor’s support is an initiative measure of the intensity

of encouragement (Kulkarni et al. 2007). In Pakistani organizations, management provides

support to ERP end users. Higher authorities pay attention on the day to day issues arising on

ERP of different end users. Organizations allow them to get proper trainings. A manager during

his interview said that:

“The software has complex system of financials as compare to other software. We

have to accommodate employees….means if an employee comes to us and says
that he needs training. We sign the document without any argument. As we know
that he is going to payback. He'll solve all the problems related to the system (B-
P1)”.
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Management support in term of trust and appreciation also encourages employees to fully

utilize ERP system. Trust of management on their employees encourages them to perform their

work activities on ERP system openly. Employees also demands appreciation on their work

performance. Efficient work environment also enhances the performance of end users on ERP

system e.g., technological equipment and best related facilities.

5.4.4.3.9 Organizational Size and ERP System Success

ERP systems are costly and specifically designed for the large size organizations.

However, some small and medium size organizations also implement and use ERP systems.

Sedera, et al., (2003) found that big organizations gain more benefits than small enterprises.

Large organizations with sufficient resources can bear implementation and post-implementation

cost of ERP system. They can implement efficient ERP modules in more departments as per the

needs through a number of skilled employees and other technological resources. Therefore, the

large organizations utilize ERP system in more efficient manners. One of the participants said

that:

“Yes size of the organization is definitely mattered during implementation of ERP

system. Big organizations have excessive resources, then definitely ERP system
or any other modern techniques works well as contrast to small or medium size
organizations (B-P3)”.

Large size organizations can handle day to day problems on EPR system through their

different resources. However, small size organizations suffer many difficulties while

implementing and later on utilizing an EPR system. However, smaller organization implements

ERP system in short period of time and start immediately their work activities on EPR system as

compare to large size organizations.

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5.4.4.3.10 Organizational Structure and ERP System Success

Organizational structure means arranging the work activities in such a way that goals of

the organizations can be accomplished. There are different elements of an organizational

structure e.g., departmentalization, specialization, span of control, chain of commands,

formulization, centralization or decentralization. Supportive structure of the organization also

plays an important role for the success of ERP system in Pakistani organizations. Clear role of

employees, their powers, work specialization and departmentalization are very important for

making EPR system successful. In these organizations power is delegated among employees and

each department is performing the specific role in utilization of EPR system within the

organization. One of the participants said that:

“Post implementation success depends more on lower level rather than upper
level. As the lower operational level has to perform all the transactions, reports
are derived and the intermediate level, and presented to the top level. So, top level
must have the capability to derive reports. Lower and intermediate level people
must know how to derive these reports and how should we enter the data related
to this particular thing. I think responsibility level of lower level is much higher
than the higher level (D-P3)”.

More people from the top level management are involved in pre-implementation and during the

phase of implementation. In post-implementation stage more end users are engaged in daily

routine activities on ERP system. Therefore, ERP post-implementation success depends more on

the powers, responsibilities and performance of the end users.

More centralization in organizational structure restricts the employees to work openly on ERP

system. Organizational structure can be divided into centralized and decentralized phases.

Organizational design is designed on the basis of organizational requirements. Centralized

structure refers the condition under which top level management makes the centralized decisions.
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While decentralized system refers to the condition under which powers are delegated and

employees from middle and lower level management can participate in the decision making,

ERP system is more successful in decentralized structure because employee have right to take

decision and save time instead of asking information regarding their reports and approvals from

the top level management.

5.4.4.3.11 Rewards/Incentives and ERP System Success

Rewards and incentives are given on best performance of employees to promote and

recognize their efforts for the organization. ERP system is a complex information system and

most of the employees do not accept the entirely new system which changes their daily working

style particularly those who work on manual systems. Rewards and incentives motivate them to

get themselves trained in ERP and maximum utilize it for resolving their daily routine job related

issues.

Kulkarni, et al., (2007) claimed that an incentive introduces a formal appraisal and

recognition of efforts by knowledge workers for encouraging their efforts for ERP system. When

an organization gives rewards and incentives to the employees , it boosts their morale and they

show their devotion to make the ERP system successful in post-implementation stage. One of the

participants said that:

“Our organization gives reward to employees on annual basis to increase the

performance of employees. Employees are showing their performance and fulfill
their assigned tasks on the given deadlines but they have not accepted happily (A-
P10)”.

Pakistani organizations also give reward and incentive to those employees who have

performed well on ERP system. Rewards include both, financial and non-financial benefits that

have great influence on implementation and post-implementation success of ERP system.

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Organizations give increments to ERP experts who contribute to make the ERP system more

successful within the organization.

After getting knowledge of ERP system, employees also expect more incentives and

promotions in the organization. They think that they are now more skillful and are able to

perform their duty better as compared to previous non-ERP conditions. Therefore, they demand

financial and non-financial rewards on their work performance to sustain the high level of their

efforts on ERP system. ERP system itself is a big reward for the employees. Employees also

realize that organization has implemented ERP system for their welfare to make the work

activities easier. Employees also realize that ERP system has enhanced their knowledge and

boosted up their career positions.

Reward and incentives are considered a tool to retain the employees with their

organizations. Organizations give bonus, rewards and incentives to their employees not only to

boost their performance in ERP but also to retain them for a long period of time. Effective usage

of a costly information system such as an ERP is not possible on less salary of employees

without rewards and incentives.

5.4.4.3.12 Selection of Power Users and ERP System Success

Power users of ERP system are those internal employees who are selected from each

department and organizations put maximum resources to train the advanced features of ERP

system. Later on they test, train and provide first-tier support of ERP system to other users of

their related departments.

In Pakistani organizations, power users are selected on the basis of their prior IT

knowledge, experience and interest of working on ERP system. They are providing the key role

to sustain the post-implementation success of ERP system. Organizations provide them special
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training from ERP vendors/consultants to enable them to resolve the first hand issues of ERP

system of the other users within the department in order to save time and avoid more complaints

to IT/ERP department. Some of the Pakistani organizations reduce their original job related work

and only assign them the task to support the other end users within their departments. After

successful implementation and usage of an ERP system in one department, power users may be

sent to other departments to increase the extent of ERP implementation. However, organizations

should retain them in their original departments to sustain the post-implementation success of an

ERP. One of the participants said that:

“Some of our employees are the key end users who were involved in the
implementation of ERP system and different trainings to employees, other
departments need our team of key end users to implement ERP system in their
departments. In my opinion organization should stop to transfer the key end users
to the other department to sustain ERP system success in that particular
department. Yes, if their substitutes are available in particular department then
the person can be transferred; otherwise, the new hired persons will be trained
from zero point (A-P1)”.

These Pakistani organizations have MIS/ERP department and they are providing their

service and support to ERP end users. However, it is a more effective policy of the organization

to select the competent people for advanced ERP training and afterwards give the task to train

and support the other staff members. Permanent employees work for a long period of time as

compared to the ERP consultants or those contractual employees who are hired for the

implementation of ERP system. These ERP consultants and contractual employees may leave the

organization upon the completion of their tasks. Therefore, organizations give preference to the

power users to sustain the success of ERP system.

5.4.4.3.13 Continuous Training and Success of ERP System

Continuous training through the process of teaching and educating the end users, the
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specific ERP knowledge and skill in implementation and post-implementation stages of ERP

system increases. Organizations conduct continuous training programs to train their employees

and enable them to utilize the features of ERP system in daily routine jobs. Training not only

plays an effective role at the time of ERP implementation but at the post-implementation stage of

ERP system when a lot of changes occur in existing ERP system, organizations implant the

required competency in their employees through time to time continuous training programs.

Dezdar, et al., (2009) and Stratman & Roth (2002) found that training increases the effectiveness

of ERP system.

Pakistani organizations conduct different training sessions including in-house training,

workshops and one-to-one training sessions depending on the training need assessments.

Moreover, these organizations assess the performance of their employees on ERP system and

incase of ineffective performance in producing the required results from the ERP, they arrange

trainings for their employees. One of the participants shared his experience:

“First, couple of years; it was difficult in the sense that we did not have the
required manpower which should be at the standard to understand the system but
for the years (now), regular training programs allowed our employees to use the
system efficiently and smoothly. People are capable of using the system. It helped
to get out of early resistance. Very sensitive training programs are in place that
turn out the people to use it (B-P12)”.

Organizations hire IT skilled manpower for the efficient usage of ERP system and they

also arrange training programs for the new hiring. Therefore, training plays an important role to

make both existing and new employees capable enough to utilize ERP features in their daily

routine tasks effectively. ERP system changes the work style of the employees and continuous

training programs also reduce the resistance of employees to accept the change in their work

style and create interest of working with ERP system. In initial training sessions at the time of
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implementation, employees understand the basic commands for working on an ERP system.

Regular training sessions at ERP post-implementation stage, make them expert of ERP system

and enable them to utilize its features more efficiently.

5.4.4.4 Technological Factors

The following section provides discussion on different technological factors identified in this

study that influence the level of ERP system success in Pakistani organizations.

5.4.4.4.1 Success in Implementation Stage and ERP System Success

ERP implementation has three different stages i.e., pre-implementation, implementation

and post-implementation stage. In this section, the present study reported the factors affecting

post-implementation success of ERP system in service and manufacturing organizations in

Pakistan. Success in pre-implementation stage positively influence the success in implementation

stage and in the same lines, success in implementation stage also leads the post-implementation

success of ERP system.

In pre-implementation an organization makes a team for the ERP need assessment,

assessment of organizational resources and afterward, selection of the best suitable ERP system

which could fulfill the needs of the organization. After that, in implementation stage organization

hire (1) physical IT resources (e.g., computers, printers, network system/devices), (1) human

resources (e.g., ERP consultants/implementers, new IT staff), financial resources (e.g., required

amount for the implementation of ERP system). Afterward organizations implement the change

management plan and organize trainings for their employees and reduce their resistance. If

organization successfully arrange human, physical and financial resources, organize trainings

and successfully implement ERP system then this stage (i.e., ERP implementation) affects the

post-implementation stage of ERP system (i.e., ERP positive impact in term of high individual,
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process and organizational performance. In Pakistan, organizations if they are successful in

implementation stage then they can ensure success in post-implementation stage of ERP system.

One of the participants clearly stated that:

“The system is more supportive. But the post implementation success is dependent
completely on its implementation stage. The plans, the need of system, need of
management and operational managers, etc. is important (in pre-implementation
and in implementation stage) (D-P3)”.

Many organizations in Pakistan, first implement ERP system as a pilot project in few

department to ensure the success of ERP implementation. After that, they implement it in more

departments if they get good result from those departments where they have successfully

implemented it.

5.4.4.4.2 IT Budget and ERP System Success

Budget is a financial planning and forecasting tool. Organizations have to plan their

financial resources in each stage of ERP system implementation. In pre-implementations stage,

an accumulated budget is developed where the estimated cost of ERP implementation is decided.

Similarly, in post-implementation stage organizations sets their IT budgets for the allocation of

their funds in (1) continuous ERP training to staff, (2) purchase of IT equipment (3) up-gradation

of existing ERP technology etc. IT budget plays an important role for assuring ERP system

success in Pakistani organizations. One of the participants said that:

“Our MIS department look after the annual budget on ERP system that in the next
financial year how many computers, scanners, printers, UPS, Servers and other
hardware devices we shall need. They submit the complete budget and then
higher authorities give approvals (A-P10)”.

Organizations make IT budgets periodically to anticipate the required equipment,

trainings and necessary up-gradation in a particular period of time. Afterward, higher authorities
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approved financial spending. They sanction the budget and authorize the MIS/ERP department to

spend budget within the specified time frame.

ERP system is a costly information system and only large organizations can afford its

implementation cost. Similarly, its training is too costly. Handsome IT budget allows the IT/ERP

department to organize the training of their employees. It also allows them to upgrade the system

as per their need and future need of extensions. With sufficient IT budget, organizations replace

their existing IT gadgets with the new advanced devices with innovative features. In the same

way, IT budget is also important for hiring new staff to sustain the success of ERP system.

5.4.4.4.3 Extent of ERP implementation and ERP System Success

The core function of ERP system is to integrate all departments and automate all business

processes within the organization. It helps create the links between different departments

enhance efficiency of end users, reduce frauds and errors, save time and increase work

efficiency. At the time of ERP implementation, organizations analyze which department has a

link with other department and how they can be connected with each other. In most of the cases

in Pakistani organizations, they implement ERP system in few departments; after ensuring its

importance they further take decisions to increase the extent (range) of implementation of ERP

system by installing more modules in the remaining departments. They reported that ERP

implementation increases the overall effectiveness (success) of the ERP system. One of the

participants said that:

“Here in our company the organizational factors are lesser as per their
requirements. Because we have four modules Finance, HR, MM and Billing
Module at present none has been properly implemented. One pending because of
some reasons. If the whole modules are applied then ERP position in our
organization will be improved (A-P3)”.
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Implementation of ERP modules in all necessary departments of the organization creates

linkages and good relationship among employees and it ultimately enhances organizational

performance within a short time span. Departments can access the related information from the

other departments and timely take the right decisions. More automation of ERP system reduces

time and increases work efficiency. ERP provides full information about performance level of all

departments at a single click. If organization implements a system in few departments then

departments will give manual work. So, data compiling problem may arise and ultimately

decisions suffer. Therefore, more implementation of ERP system increases the overall success of

ERP system.

5.4.4.4.4 System Customization and ERP System Success

Standardized ERP systems such as SAP, Oracle EBS, and Microsoft Dynamics are

developed in advanced countries on the basis of best practices principles. When these ERP

systems are implemented in developing countries such as Pakistan then organizations customize

them as per their business processes. SAP ERP system has a lot of options and standardized

reports. However, all options and reports are not utilized in Pakistani organizations. There are lot

of reasons e.g., infrastructure, business transactions, employees capability and stakeholders

expectations influence the organizations to customize their ERP system make it fit within its

structure and the people. After implementation of ERP system, time to time, organizations need

new reports and options in ERP system and they customize their ERP systems. One of the

participants said that:

“We initially implement ERP system then after that day we need a new
requirement, a new application or a new report in our ERP system. To fulfill
these changes, authority has hired a consultancy firm and their employees are
working on this line when our employees tells the consultants that our reports
should be in this way and this betterment is needed then they work accordingly.
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They make the changes and develop new reports. When any new application or
changes come in the system, organization conveys in the relevant department, a
special training is conducted (A-P10)”.

ERP system and the organization where it is implemented both are dependent on each

other. After implementation of ERP system, the success of smooth business process depends on

the success of ERP system and the success of ERP system depends on the success of smooth

operations of the business. If business processes are not compatible with the ERP system or ERP

system is not compatible with the business operations then organizations cannot achieve their

goals of high performance level after implementation of ERP system. Therefore, ERP systems

are customized as per the need of the business to create harmony. On the other hand, business

processes are revised as per the standardized best practices on which ERP systems are

developed. Customization of system also allows the end users to work more efficiently without

creating any resistance.

5.4.4.4.5 Technological Resources and ERP System Success

Organizations with more technological resources such as advanced computer systems,

printers, internet connections and network system can utilize ERP system more efficiently. In

last few decades, technology has become the need of the organization for their survival in a very

competitive environment. In pre-implementation stage of ERP system organizations conduct

technology need assessment to assess the need of the ERP system for the organization. They

define their technological resources associated with ERP system. Similarly, during

implementation and in post-implementation of ERP system, to meet the demands of the

departments day by day, they need more technological equipment. If more employees are

dependent on single computer system then organization cannot sustain post-implementation

success of ERP system. Therefore, strong IT structure with sufficient computer system, internet
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connection and strong network system is very important for the success of ERP system in

Pakistani organizations.

From the last few years, organizations are facing the worse condition of load-shedding

(power outages) in Pakistan. Power outage from 12 to 20 hours has badly affected both industrial

and domestic consumers (Lodhi, et al., 2013). Therefore, most of the organizations have

arranged alternative power systems such as UPS, generator and solar systems to ensure the post-

implementation success of ERP system. The following excerpt from the interview script

demonstrates that companies have alternative resources to tackle the problem of electricity

shortage:

“I do not think that because every company is connected with UPS and we are
using laptops, I do not think that electricity should matter at all. It is matter of
budget, if company is profitable, it does not have headache (B-P7)”.

Lack of technological resources creates problems for the organization. The shortage of

electricity in Pakistan affects the system’s performance but now organizations have alternatives

resources such as UPS and generators. Similarly, technological back up is also mandatory for the

success of ERP system. Those organizations take huge risk of data if they are without centralized

back up of the data in centralized/mainframe computer even they have best ERP solutions.

Therefore, to minimize their risk factor they have to maintain the backup system to save their

data.

5.4.4.4.6 Up-gradation of Technology and ERP System Success

ERP system is IT based technology and IT systems are open to change. Many

organizations in Pakistan initially implement ERP system in few departments. However, with the

passage of time they have to upgrade their existing system to make the system more effective as

per their future need of extension. They also upgrade their existing technology to compete with
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their competitors. Many organizations in Pakistan have upgraded their SAP ERP from B1 to A1.

Similarly, they have hired more IT staff along with advanced technological equipment to sustain

the success of EPR system. They provided their employees laptop computers initially who were

working on desktop computers. One of the participants said that:

“ERP is upgraded timely but if i wish to operate it on P1 or P2.it cannot work. If

you are using ERP, you need to upgrade your own technology of using it (D-P6)”.

Up-gradation of ERP system means to make the system more efficient and more

effective. Existing ERP system were also modified by adding new applications to system as per

the change in business styles e.g., change in mode of payments and receipts, e-business support,

knowledge management etc. Therefore, organizations have to upgrade their existing ERP system

along with other gadgets to get maximum benefits from ERP system.

5.5 Summary

As discussed in the previous chapter that the present study has applied explanatory

sequential research design. In the first phase of research, partial least square - structural equation

modeling (PLS-SEM) technique was applied for testing the quantitative hypotheses of the study

as well as convergent validity, discriminant validity, and internal reliability of the constructs. All

six hypotheses were accepted based on coefficient (β) values which showed the magnitude of the

relationship between the variables. The study found that ERP system quality, ERP information

quality and ERP service quality positively influence the individual performance. In the same line

individual performance and process performance positively influence the organization

performance and individual performance has also positive and direct relationship with

organizational performance.
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On the basis of quantitative findings of the study, qualitative data was collected through

in-depth interviews and finally analyzed through transcriptions and data coding for identification

of different themes of the study. The qualitative findings reported 14 organizational, 4 individual,

4 environmental and 6 technological factors that affect the level of ERP system success in

Pakistani organizations.
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CHAPTER 6

DISCUSSION AND CONCLUSION

6.1 Preface

This chapter begins with the extensive discussions on quantitative and qualitative

findings of the study. This discussion consists of mixing of both quantitative and qualitative

results and different suggestions based on empirical results of the study. Then both quantitative

and qualitative results are summarized into a table. The discussion then leads to relevant

contributions to knowledge and implications for practice drawn from empirical findings of the

study. The chapter finally ends with the limitations of the present study and directions for the

future researchers along with concluding remarks and the summary of the chapter.

6.2 Prognosis from Empirical Findings: Discussions and Suggestions

In the first phase of quantitative research, the present study examined ERP system

success in corporate sector of Pakistan. Structured questionnaires were used for the collection of

data surveying 514 manufacturing and service organizations in Pakistan. Partial Least Square –

Structural Equation Modeling (PLS-SEM) technique was used for testing hypotheses. Based on

the quantitative findings of the present study, the following up qualitative approach was applied

and in-depth purposeful interviews of 48 end-users of ERP systems were conducted to identify

different contextual factors affecting the ERP system success. NVivo 10 software was applied

for the analysis of qualitative data i.e., reading the transcripts and coding the data by

labeling/identifying the themes. The cross-case thematic analysis was performed to find the

frequency of coded data against each theme of the study. Finally contextual factors were
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identified that affect ERP system success in four selected organizations in the context of

Pakistan. The following sections provide the discussions on both quantitative and qualitative

findings of the study:

1. The empirical results of quantitative work showed the positive relationships

between ERP system quality and individual performance in corporate sector of

Pakistan (i.e., Hypothesis 1). The findings of the study are consistent with

empirical results of Bharati & Berg (2003), Sørum, et al., (2012), Pishdad et al.,

(2012), Tan & Sedera (2007), Ifinedo (2006, 2007) and Ifinedo, et al, (2010).

There is enough theoretical and empirical evidence for believing that ERP system

improves individual and organizational performance. Companies with high

quality ERP systems in Pakistan are enjoying the benefits of ERP system in terms

of improved individual, process and organizational performance. Thus, the

organizations can increase the performance of their employees by improving the

reliability, accuracy, efficiency and ease of use of their ERP systems. On the other

hand, qualitative phase of the present study found that ERP system customization

increases the level of success of ERP system. Standardized ERP systems such as

SAP and Oracle EBS are developed in advanced countries on the basis of their

best practices. Thus, they can increase ERP system quality (i.e., efficiency,

reliability and ease of use) by customizing their EPR systems according to their

needs and preferences. Organizations should modified their existing EPR systems

by adding new applications to system as per the change in business styles e.g.,

change in mode of payments and receipts, e-business support, knowledge

management etc. In the same lines, qualitative study found that availability of
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more technological resources and their up-gradation increase the efficiency of

ERP system. Therefore, organizations should upgrade their existing ERP systems

along with other gadgets to make them more reliable, efficient and easy for the

individual end user.

2. The result of Hypothesis 2 showed the significant and positive impact of ERP

information quality on individual performance. Thus, the study confirmed the

findings of Ifinedo (2006), Carton & Adam (2005), Sørum, et al., (2012), Bharati

& Berg (2003) and Wu & Wang (2006). More brief, important, relevant,

understandable and available information produced by an ERP system (i.e., ERP

information quality) increases individual performance in Pakistani organizations.

As mentioned, in previous section that customization of ERP system is very

critical to make an EPR successful. Therefore, organizations should customize the

format of different reports, charts and tables to make them easier to understand.

Similarly, qualitative phase of the study found that continuous training on

different upcoming changes in ERP system also improves the understanding of

ERP end users on quality of different types of ERP output (i.e., ERP information

quality). Thus, organizations should arrange continuous training for their

employees to increase the level of their understanding.

3. The present study also found positive impact of ERP service quality on individual

performance which means better support from ERP/MIS department increases the

performance of individual end user (i.e., Hypothesis 3). The results are consistent

with the findings of Tsai et al., (2011), Masrek et al. (2007), Sørum et al. (2012)

and Ifinedo et al. (2010). More reliable, assured, responsiveness, tangible and
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empathetic service of ERP/MIS department increases the performance of

individual end user in corporate sector of Pakistan. Therefore, MIS/ERP

departments should support the employees in daily work activities by providing

them sufficient technological resources and their services. On the other hand, the

qualitative phase of the study found that availability of technological resources

and hiring of new IT staff increase ERP system success in Pakistani

organizations. Availability of more technological resources e.g., laptops, wireless

devices and other IT gadgets are not only important for general ERP end users but

they also enable ERP/MIS department to provide better support and service to the

employees who work on ERP systems. Similarly, hiring of IT personal play an

important role in enhancing the effectiveness of EPR system. Therefore,

organizations should hire competent, skilled, knowledgeable, responsible and

enthusiastic employees for the purpose of providing help and support to the end

users.

4. Hypothesis 4 is also confirmed positive and significant impact of individual

performance on process performance in Pakistani organizations that used ERP

systems. Thus, the results supported the findings of Lin et al., (2006) who found

that individual performance of ERP end users increases the performance of

different internal processes. Thus, organizations should enhance the performance

of their employees for getting better results from ERP systems in their businesss

processes. On the other side, qualitative stage of the present study found that

continous training, leadership, rewards and incentives encourage the employees

and enhance their performance. Therefore, organizations should arrange proper

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training sessions and give them handsome rewards and incentives to motivate

them in showing better work performance ERP system. Simiarly, leaders (bosses,

top level management) should give right directions and soultions of the problems

to their subordinates who work on ERP system. The qualitative stage of the

present study also found that large organization size, organizational structure,

management control, and increasing the extent of ERP implementation (i.e.,

installing more modules of ERP system in different departments) increase the

success of ERP system. Theforefore, organizations should expand their size,

departmentalize their functions and increase the range of ERP implementation in

more departments in order to fully utilize the features of ERP system (i.e.,

integration and automation in interal business processes). Similarly, based on

qualitative findings (i.e., management control), organizations should define rules,

regulations and policies to control all internal processes.

5. The empirical results of Hypothesis 5 also demonstrated positive and significant

impact of process performance on organizational performance which means that

more efficient and effective internal process increases the productivity and

profitability in Pakistani organizations that used ERP systems. The findings of the

present study supported the findings of Velcu (2010), Elbashir, et al., (2008) and

Law & Ngai (2007). Based on this finding, it is suggested that organizations

should enhance the performance internal processes to ensure the results of ERP

system on organization performance. On the other hand, qualitative stage of the

study demonstrated that inter-departmental coordination increases ERP system

success (efficiency and effectiveness of internal processes). Most of the

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departments in organizations work inter-dependently in an ERP environment

where output information from one department becomes the input for another

department. Therefore, organizations should assure the coordination and

cooperation among all departments to increase the performance of internal

processes. Similarly, qualitative findings showed that external partnerships and

the pressure from stakeholders e.g., vendors/suppliers, customers also influence

the effectiveness of ERP system in Pakistani organizations. Partnerships with

customers and vendors encourage the companies to customize their reports (e.g.,

invoices, purchase orders, sales orders etc.) and harmonize them on the same level

of understanding. This understating also strengthens and fastens internal processes

within the organization (e.g., work order, sale orders placements). In same way,

qualitative stage of the study showed that provision of electricity (no disruption)

also increases the level of ERP system success. Government of Pakistan has taken

steps for launching new power projects. The duration of power-outages was

reduced as compare to the previous conditions where the duration of power-

outages was 12-18 hours daily. However, in case of power-outages, organizations

should arrange alternative resources of electricity (e.g., Generator, UPS and Solar

System) to sustain the flow of ERP end users and save the data from any risk of

distraction which will ultimately sustain the performance of internal processes and

productivity of the organizations.

6. The results of Hypotheis 6 showed that indvidual performance (ERP end user

performance) increases organizational performance in corporate sector of Pakistan

which means more individual’s creativity, learning and quality of decision

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making increase the overall productivity and profitablity of the orgnizations in

Pakistan that used ERP systems. The results are consistent with the findings of

Ifinedo, et al., (2010), Hwang and Xu (2008), Lin, et al. (2006), Lee & Lee

(2012). Thus, the companies should enhance the performance of ERP end users to

increase the performance of overall organization. On the other hand, qualitative

stage of the present study found that ERP end users’ attitude, learning capacity,

interest, skills and knowledge influence the success of ERP system in Pakistani

organizations. Therefore, organizations should give handsome rewards and

incentives to their employees to increase the level of their motivation and interest.

They should also arrange continuous training programs to enhance the level of

their knowledge, skills and attitude for acceptance of ERP system. Ultimately,

organizations will get better results in overall organizational productivity,

profitability and growth. Similarly, qualitative stage of the study reported that

supportive, flexible, and strong organizational culture also increase the level of

ERP system success. Fever rigid rules and procedures, widespread empowerment

and role charity of employees make them more productive for achieving the

organizational goals and objectives (i.e., organizational performance).

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Table 6.1
Summary of Empirical Results

Serial No. Hypothesis/Proposition Empirical Result

Hypothesis 1 ERP system quality is positively associated with Supported
individual performance in manufacturing and (β=0.318**)
service sectors of Pakistan.
Hypothesis 2 ERP service quality is positively associated Supported
with individual performance in (β=0.267**)
manufacturing and service sectors of
Pakistan.
Hypothesis 3 ERP information quality is positively associated Supported
with individual performance in manufacturing and (β=0.192*)
service sectors of Pakistan.
Hypothesis 4 Individual performance is positively related with Supported
process performance in manufacturing and service (β=0.639**)
sectors of Pakistan where ERP system is functional.
Hypothesis 5 Process performance is positively related with Supported
organizational performance in corporate sector of (β=0.565**)
Pakistan where ERP system is functional.
Hypothesis 6 Individual performance is positively related with Supported
organizational performance in corporate sector of (β=0.315**)
Pakistan where ERP system is functional.
Proposition 1 Different organizational factors affect the level of Supported
ERP system success in manufacturing and service (14 organizational
sectors of Pakistan factors were identified)
Proposition 2 Different external environment factors affect the Supported
level of ERP system success in manufacturing and (4 environmental factors
service sectors of Pakistan were identified)
Proposition 3 Different technological factors affect the level of Supported
ERP system success in manufacturing and service 6 technological factors
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sectors of Pakistan were identified

Proposition 4 Different individual factors affect the level of ERP Supported
system success in manufacturing and service sectors 4 Individual Factors
of Pakistan were identified

Table 6.1 shows the summary of the hypotheses and their empirical support from the

present study. Hypotheses 1, 2, 3, 4, 5 and 6 were supported and their β values range from 0.192

to 0.639. The relationship between ERP information quality and individual performance was

positive (and significant (β=0.192*) while the following relationships were positive and highly

significant:

1. Relationship between ERP system quality and individual performance (β=0.318**)

2. Relationship between ERP service quality and individual performance (β=0.267**)

3. Relationship between individual performance and process performance (β=0.639**)

4. Relationship between process performance and organizational performance (β=0.565**)

5. Relationship between individual performance and organizational performance

(β=0.315**)

In the same lines, Table 6.1 also shows the summary of qualitative findings of the present

study. All four propositions were supported and different contextual factors were identified in the

phase. The present study found 14 organizational, 4 individual, 4 environmental and 6

technological factors that affect the level of ERP system success in Pakistani organizations.

6.3 Contributions to Knowledge and Implications for Practice

The present study provided the following noteworthy contributions to information system

research:
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1. First, the study contributed validated model of ERP system success evaluation at multiple

levels.

2. Second, the present study responded to the call made by De Lone and McLean (1992,

2003) for the extension of their theory of IS Success by incorporating “process

performance” dimension which is pertinent for the evaluation of ERP system success at

process level. Rigorously the extension in the model was validated in the context of

Pakistani organizations. The findings of the study contributed rigorous knowledge not

only for theory but also for different policy decisions for evaluating and assuring ERP

system success.

3. Third, the study examined ERP system success in Pakistani organizations and statistically

discovered the positive and significant relationships of individual performance with

process performance and similarly, process performance with organizational performance

which was ignored in previous EPR system success evaluation models.

4. Forth, the present study explored different contextual factors affecting the level of ERP

system success. These contextual factors were categorized into four different classes i.e.,

organizational factors, technological factors, individual factors and environmental

factors. These contextual variables provided understanding of the impacts of different

internal and external forces on the level of ERP system success.

The present study has also made significant contributions for implications for future

practice. Usage of ERP system is growing day by day in Pakistani organizations (Shad, et al.,

2012). A wide range of ERP implementation and usage, called IS researchers to:

(1) provide a model for the evaluation of ERP post-implementation success at

different levels of the organizations, and;

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(2) identify different contextual factors affecting ERP post-implementation system

Unfortunately, most of the studies in Pakistan only addressed the issues of pre-

implantation and implementation phase of ERP system e.g., critical success factors of ERP

implementations (Shah, et al., 2011; Khattak, et al., 2012; Shad, et al., 2012; Ahmed & Khan,

2013, Ijaz, et al., 2014; Shah, et al., 2011; Khattak, et al., 2013). The present study responded to

the call made by industry and provided a validated model for the evaluation of ERP system post-

implementation success at individual, process and organizational levels. The proposed model of

the present study provides organizations with many guidelines. Managers can use different

dimensions and measures identified in this study as diagnostic tool for the assessment of the

success of their ERP systems at several levels of analysis (i.e., individual, process and

organization). Organizations may use these measures periodically to get feedback from the end

users of different levels of management e.g., top, middle and lower levels. Later, managers can

compare their standard or expected performance with the actual performance of the ERP system

and subsequently they can take the corrective actions for improving the ERP system, information

or service quality.

In the same lines, the present study identified different contextual factors in four different

classes (i.e., organizational, technological, individual and environmental factors). The findings of

the present study also provided a road map to the organizations to increase the post-

implementation success at individual, process and organizational levels i.e., organizations can

enhance the success/effectiveness of ERP systems by controlling the contextual factor in favor of

their ERP systems.

 196

The findings of the study will be served as changing driver of attention of the

practitioners from issues of the pre-implementation or implementation stages to the issues of

post-implementation stage of ERP system. Based on different results and discussions,

practitioners will pay more attention to sustain the success of ERP system in their organizations.

6.4 Limitations of the Study

Despite the substantial contributions, the present study has some limitations. The study

used only six dimensions in the model of ERP system success evaluation i.e., ERP system

quality, ERP service quality, ERP information quality, individual performance, process

performance and organizational performance. However, more dimensions of the ERP system

success evaluation could be incorporated e.g., ERP vendor/consultant quality.

Besides this, the study examined ERP system success at individual, process and

organizational levels and ignored the other levels such as workgroup, societal and customer

levels.

The study is also limited in the sense that it applied qualitative techniques for identifying

different contextual variables that affect the success of EPR system (i.e., organizational,

individual, technological and external environmental variables). However, the study ignored to

test the causal relationship of these above mentioned contextual factors with different dimensions

of ERP system success. Moreover, it examined ERP system success in only manufacturing and

service organizations and it ignored to examine the success of “trading” organizations in

Pakistan.

Although both quantitative and qualitative data were collected in this study from

Pakistani based organization within the boundary of Pakistan, it ignored comparative analysis of
 197

ERP system success in organizations from two or more countries. The present study also ignored

the comparative analysis of success of different types of ERP system i.e., SAP and Oracle EBS.

It used behavior measures in ERP system success measurement model and ignored the measures

of attitude e.g., “perceived ERP system quality”, “perceived ERP information quality”,

“perceived ERP service quality”, “perceived individual performance”, perceived process

performance”, “perceived organizational performance”.

Yet another limitation of the study is that it identified only four categories of contextual

factors (i.e., organizational, individual, technological and external environmental factors) and in

qualitative phase of research small sample size was used which restricts the generalizability of

the qualitative findings of the study over all the manufacturing and service organizations in

Pakistan.

6.5 Direction for Future Research

The findings of the study undoubtedly raised more questions on different unidentified

issues in post-implementation success of ERP system. Continuous efforts are needed to explore

different contextual factors in different organizational settings. This study suggests some fruitful

areas for future research : (1) uncovering the extent of relationships of different contextual

factors on the each ERP success dimension i.e., ERP system quality, ERP service quality, ERP

information quality, individual performance, process performance and organizational

performance; (2) addition of new dimensions in the ERP system success measurement construct

such as vendor/consultant quality; (3) ERP system success measurement in the trading

organizations; (4) inter-country comparison of the organizations in ERP system success; (5)

development of the model to measure “perceived” ERP system success; (6) application of the

proposed model of the present study for the measurement of success of different specialized
 198

information systems other than ERP i.e., Supply Chain Management (SCM) System, Customer

Relationship Management (CRM) System, Knowledge Management (KM) system, E-Commerce

system etc.; (7) investigation of different contextual factors other than individual, organizational,

technological and external environmental factors (8) comparative analysis of success of different

types of ERP system e.g., SAP ERP and Oracle ERP, Microsoft Dynamics. The following

section provides the details of each future research direction:

1. The present study applied qualitative methods to identify different factors relating to four

different categories (i.e., organizational, technological, external environmental and

individual factors) that affect the level of ERP system success. The future studies may

select any separate category of contextual factors and may apply quantitative techniques

for examining the causal relationships of contextual factors with different dimensions of

ERP system success model. For example, future studies may find the impact of external

environmental factors identified in this study (i.e., economic conditions, external

coalition/partnership, provision of electricity and stakeholder pressure) on ERP system

quality. In the same lines, future studies may quantitatively find the causal relationship of

individual factors (i.e., attitude towards acceptance, interest, learning capacity and skills

and knowledge) with any dimension of ERP system success construct. They may also

investigate the causal relationship of technological factors (i.e., ERP implementation

success, IT budget, range of ERP implementation, system customization, technological

resources, and up-gradation of technology) with one or more dimension (s) of ERP

system success model.

2. The present study incorporated process performance and finally used six dimensions (i.e.,

ERP system quality, ERP service quality, ERP information quality, individual
 199

performance, process performance and organizational performance) in ERP system

success measurement model. The proposed model could be further extended by

incorporating the new dimensions, for example, ERP vendor quality or society impact of

ERP system in future research.

3. Only service and manufacturing organizations were targeted for the field survey in the

present study. However, the study ignored those “trading” organizations of Pakistan who

also use ERP system. The future research studies may also target the trading

organizations of Pakistan for examining ERP system success.

4. In the present study, all qualitative and quantitative data were collected from different

Pakistani based organizations within the boundary of Pakistan. However, the future

research studies could be conducted to compare the ERP system success organizations

from different countries. Similarly, a study may be conducted to compare the post-

implementation success of ERP system in developing and developed countries.

5. The present study used behavioral measures of performance for the measurement of ERP

post-implementation success such as ERP system quality, ERP information quality or

ERP service quality. The future research studies could use some attitude measures such

as “Perceived ERP system quality”, “Perceived ERP information quality” or “Perceived

ERP service quality” to measure the perceived effectiveness/success of the ERP system.

6. This study was conducted for the measurement of post-implementation success of ERP

system. Data was collected only from those organizations that were using “ERP system”

(i.e., an information system). However, the proposed model of the study could be applied

in future studies to measure the success of other type of information systems such as

customer relationship management (CRM) system, supply chain management (SCM)

 200

system, knowledge management system (KMS), business intelligence system (BIS), E-

Commerce system etc.

7. The present study employed qualitative methodology to identify different contextual

factors in four different categories that affect the level of ERP system success. These

factors include:

a. Individual Factors;

b. Internal Organizational Factors;

c. Technological Factors; and

d. External Environmental Factors

Some other factors could be identified in the future studies that also affect the post-

implementation success of ERP system.

8. The future research could be conducted on comparative analysis of ERP system success

of SAP and Oracle ERP system to know the level of success of ERP system and give

suggestion to the organizations that which type of ERP system showed more success in

industry. Therefore, it will help the organizations in selecting the right type of ERP

system.

6.6 Concluding Remarks

Implementation of ERP system is growing day by day in Pakistani organizations with the

aim of increasing the performance of individuals, business processes and overall organizations.

To deepen the understanding of ERP system success, this study investigated ERP system success

in corporate sector of Pakistan. Furthermore, based on quantitative findings of the study, it was

also intended to identify different contextual factors affecting ERP system success. The study
 201

applied explanatory sequential two-phase research design where the research started from

quantitative phase and ended on qualitative phase (Creswell & Clark, 2011).

The results in the first phase of quantitative research corroborated that all three quality

dimensions of ERP system (i.e., ERP system quality, ERP information quality and ERP service

quality) are fundamental in enhancing the individual performance of ERP end users in corporate

sector of Pakistan. The study also found that individual performance increases the process and

organizational performance and similarly, process performance has significant impact on

organizational performance. Thus, quantitative findings of the study confirmed the validity of all

six dimensions of ERP system success dimensions and their proposed interrelationships in the

context of Pakistani organizations which showed that organizations in ERP system is beneficial

and favorable for the corporate sector of Pakistan and companies can improve the performance

of their individuals employees, internal business processes and overall performance of the

organizations by enhancing the quality of their ERP systems.

Similarly, in Pakistani organizations, different organizational, individual, technological

and environmental factors affect the success of ERP system. The findings of the study provided

the answer to the critical question that how to increase the effectiveness of ERP systems in

Pakistani organizations. Thus, organizations can enhance the success/effectiveness of ERP

systems by controlling the contextual factor (identified in this study) in favor of their ERP

systems.
 202

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APPENDIXES

Appendix A: Instrument for Quantitative Data Collection

Bahria University
Islamabad Campus, Pakistan

Department of Management Sciences,

Bahria University, Shangrila Road,
Sector E-8, Islamabad, Pakistan
Tel: 051 – 9260002 (Ext. 260)

Spring 2014

ERP System Success in Your Organization

We would like your help in this study which deals with ERP System Success in
Corporate Sector of Pakistan. We have approached your organization because of
its experience with ERP system. We request you to fill out the attached
questionnaire.

If for any reason you feel that you are unable to answer the asked questions,
please feel free to return the unanswered questionnaire.
Thank you for your assistance

This study aims to evaluate ERP system success in different organizations in

Pakistan. The investigation of ERP system success is critical issue and there is
Islamabad Campus
need to conduct evidence based study in the context of Pakistani organizations.
E-8 Sector, Islamabad This survey consists of a single relatively simple questionnaire which is
UAN: 051-111-111-028 attached. We estimate it will take 10 - 15 minutes to complete in most
Ph. +92-51-9260002 circumstances.
We realize that your time is very scarce resource and would like to appreciate
Lahore Campus your cooperation for the completion of this study.
47-C Johar Town, Lahore We assure you that neither your name nor the name of your organization will be
UAN: 051-111-111-028 revealed in reporting the findings of this research. Your responses will remain
Ph. +92-42-35401408-15 strictly confidential and will not be used for anywhere other than his study. If
you have any question or concerns regarding this matter, please call the
undersigned.
Karachi Campus
Thank you for your attention and your cooperation.
13, National Stadium Yours Sincerely,
Road, Karachi
UAN: 021-111-111-028
Ph. +92-51-99240002-6 Rab Nawaz Lodhi Dr. Faisal Aftab
Doctoral Candidate Supervisor
Website +92 333 4093460 051 – 9260002
www.bahria.edu.pk rabnawazlodhi@uet.edu.pk faftab@bahria.edu.pk
 234

Before you begin, please take few moments to read the following terms:

We think it is important to give our contextual definitions of the key concepts used in the study
and the attached questionnaire is driven from these concepts. Of course people in your
organization may use different terms associated with ERP system in ways peculiar to your
organization or industry sector. For this reason it is very important that we have tried to make
clear what we mean in this study by these terms. As we have seen it, in this study:
1. ERP System Quality
The ERP system quality in the context of present study is defined as the characteristics of ERP
system itself which satisfy the ERP end users.
2. ERP Information Quality
The ERP information quality reflects the characteristics of ERP output (information) with regard
to timeliness, understandability, availability and relevance of the information offered by ERP
System.
3. ERP Service Quality
The ERP service quality refers in the context of present study the quality of service and support
that ERP end user receives from internal ERP/MIS department.
4. Individual Performance
An individual performance includes task performance, job performance, productivity, job
effectiveness, job simplification, usefulness, decision making, and learning.
5. Process Performance
The business process performance in the context of present study is referred the evaluation of
automation of process, process time, process control and the level of input and output from the
business process.
6. Organizational Performance
An organizational performance means in the present study the overall performance of the
organization with respect to cost efficiency, productivity, competiveness and ability to utilize the
organizational resources in most productive manners.
Your Opinion about your organization
In answering the questions, you may be unsure about which part or parts of your organization
focus on. We would like to ask you to choose the answers for that part or parts you know best.
At the end we ask you to tell us to what part you were referring. This study is NOT concerned
with what your organization claims about ERP system success. Rather YOUR PERSONAL
VIEWS regarding the ERP system success in your organization. Please feel free to “tell it as you
see it”. Your answers are given the confidence and anonymous.
 235

Questionnaire FOR OFFICE USE ONLY

Please provide your answer by using the tick () mark.

1. Type of Business of your organization  Service  Manufacturing
2. Which ERP system do you have?  SAP  Oracle
 Top Level Management
3. Your Position in you Organization  Middle Level Management
 Lower Level Management
4. Gender  Male  Female
5. Your Experience working on the ERP  Less than 1 Year  1-3 Years
system  4-6 Years  More than 6 years
 Intermediate  Graduation
6. Your Educational Level
 Master  MPhil/PhD
7. How long your company is using ERP  Less than 1 Year  1-3 Years
system?  4-6 Years  More than 6 years

To what extent do you agree or disagree with the statements given below. Please answer each
question by using the tick () mark between the range of 1 to 5. The given scale represents the
following values:
 Strongly Disagree (SD) 1 
 Disagree (D) 2 
 Neutral (N) 3 
 Agree (A) 4 
 Strongly Agree (SA) 5 
A. How do you think that the “ERP System Quality” in your organization satisfy the end user needs?
Our ERP has accurate data 1 2 3 4 5
Our ERP is flexible 1 2 3 4 5
Our ERP is easy to use 1 2 3 4 5
Our ERP is easy to learn 1 2 3 4 5
Our ERP is reliable 1 2 3 4 5
Our ERP allows data integration 1 2 3 4 5
Our ERP is efficient 1 2 3 4 5
Our ERP allows for customization 1 2 3 4 5
Our ERP database content is good 1 2 3 4 5
Our ERP allows for integration with other information systems 1 2 3 4 5
Our ERP meets users’ requirements 1 2 3 4 5
B. How do you think that the “ERP Information Quality” in your organization satisfy the end user
needs?
Our ERP has timely information 1 2 3 4 5
The information on our ERP is understandable 1 2 3 4 5
The information on our ERP is important 1 2 3 4 5
The information on our ERP is brief/concise 1 2 3 4 5
The information on our ERP is relevant 1 2 3 4 5
The information on our ERP is usable 1 2 3 4 5
 236

The information on our ERP is available 1 2 3 4 5

C. How do you think that the “ERP Service Quality” in your organization satisfy the end user
needs?
Our ERP department/team has up-to-date required hardware and software to 1 2 3 4 5
satisfy the end user need.
Our ERP department/team put hard efforts and take interest to resolve user related 1 2 3 4 5
problems
Our ERP department/team always gives their prompt service to the ERP users. 1 2 3 4 5
Our ERP department/team is well equipped and knowledgeable to understand 1 2 3 4 5
their job and perform it in a professional manners
Our ERP department/team always gives personal attention on ERP users’ 1 2 3 4 5
problems.
D. How do you think that the ERP system impact the “Individual Performance” within the
organization?
Our ERP enhances individual creativity 1 2 3 4 5
Our ERP enhances organizational learning and recall for individual worker 1 2 3 4 5
Our ERP improves individual productivity 1 2 3 4 5
Our ERP is beneficial for individual’s tasks 1 2 3 4 5
Our ERP enhances higher-quality of decision making 1 2 3 4 5
Our ERP saves time for individual tasks/duties 1 2 3 4 5
E. How do you think that the ERP system impact the “Process Performance” within the organization?
Our ERP system automates our all business processes 1 2 3 4 5
Our ERP system make the different business businesses more productive 1 2 3 4 5
Our ERP system provides a good admin and technical control on the all business 1 2 3 4 5
processes
Our ERP system increases the efficiency of all the business processes 1 2 3 4 5
Our ERP system increases the effectiveness of all the business processes 1 2 3 4 5
Our ERP system enable the user to control the fluctuations of all the business 1 2 3 4 5
processes
F. How do you think that the ERP system impact the “Overall Organizational Performance”?
Our ERP reduces organizational costs 1 2 3 4 5
Our ERP improves overall productivity 1 2 3 4 5
Our ERP enables e-business/e-commerce 1 2 3 4 5
Our ERP provides us with competitive advantage 1 2 3 4 5
Our ERP increases customer service/satisfaction 1 2 3 4 5
Our ERP facilitates business process change 1 2 3 4 5
Our ERP supports decision making 1 2 3 4 5
Our ERP allows for better use of organizational data resource 1 2 3 4 5

THANKS FOR YOUR COOPERATION

Many, many sincere thanks for your assistance and cooperation in completing this questionnaire.
 237

Appendix B: Request Letter to SAP/Oracle ERP Partners in Pakistan

Subject: Request for the List of ERP (SAP/Oracle) User Companies

Respected Sir,

I am a PhD Scholar in Department of Management Sciences of Bahria University, Islamabad

Campus. The title of his PhD thesis is “ERP System Success in Corporate Sector of Pakistan: A
Mixed Methods Approach".
It is pertinent to mention at this stage, I am collecting data through online questionnaire in
various organizations where your company has implemented ERP system (SAP/Oracle). I am
writing a request to your good office to please provide the list of these companies.
Your organization always supports different students in their research works considering the
moral and social responsibility and also provides a great privilege for industry-academia
linkages in this regard.
Please do not hesitate to contact me on the address and telephone number listed below for any
further information which you may require.
Thank you for your kind consideration. Your cooperation will be highly appreciated.

Yours Truly,

Rab Nawaz Lodhi

Doctoral Student
Department of Management Sciences,
Bahria University Islamabad, Pakistan
Email: rabnawazlodhi@uet.edu.pk
Cell: +92 333 4093460
 238

Appendix C: SAP/Oracle Consultants in Pakistan

SAP Consultants in Pakistan

Abacus Consulting Technology (Pvt.) Limited

Siemens Pakistan Engineering Co. Limited

IBM Italia SaA (Pakistan)

Excellence Delivered ExD (Pvt.) Limited

Yassir Distributor (Pvt.) Limited

Sidat Hyder Morshed Associates (Pvt.) Limited

Hussain Chaudhury Consulting

Information Architects

BI Solutions

Oracle Consultants in Pakistan

eSys Pakistan (Pvt.) Ltd.

InfoTech (Pvt) Ltd.

TechAccess Pakistan (Pvt.) Ltd.

Huawei Technologies Pakistan (Pvt) Ltd

KPMG Taseer Hadi And Co

Asia TA (Pvt.) Ltd.

Sungard Ambit Pakistan (Pvt.) Ltd.

Teamsun Technology Pakistan(Pvt) Ltd

Multilynx

Jaffer Brothers Pvt Ltd

Synergy Computers (Pvt) Limited

ERICSSON PAKISTAN
 239

Inbox Business Technologies (Pvt) Ltd

Sapphire Consulting Services (Private) Limited

Techlogix Pakistan (Pvt.) Ltd.

Abacus Consulting Technology Pvt Ltd

AbbuSys PVT Limited

ABMs Info Tech (Pvt.) Ltd.

Accountancy Outsourcing Services Ltd.

Addvantum Innovative Technologies .

AGCN Pakistan Pvt. Ltd

Alhamdsoft (Pvt) Limited

DWP Technologies (pvt) Ltd

Excellence Delivered

Sidat Hyder Morshed Associates (Private) Limited

Systems Limited

Ora-Tech Systems (Pvt) Ltd

 240

Appendix D: List of ERP SAP/Oracle User Companies

Serial No. Company Name ERP Nature of

Type Business
1 Abbot Laboratories SAP Manufacturing
2 A.A. Joy Land SAP Services
3 AB AMPERE (PVT) LIMITED Oracle Manufacturing
4 Abacus Consulting Lahore SAP Services
5 Adamjee Insurance Company Limited Oracle Services
6 AEG Pakistan Pvt. Ltd. Oracle Services
7 AFRO ASIAN INTERNAIONAL (PVT) LTD SAP Services
8 Aga Khan University Hospital Oracle Services
9 AGFA Gevaert Pakistan Pvt. Ltd. Oracle Manufacturing
10 AGP Pharmaceuticals SAP Manufacturing
11 Agri Auto Industries SAP Manufacturing
12 Agritech Limited Oracle Manufacturing
13 Ahmad Manufacturing Corporation Pvt. Ltd. Oracle Manufacturing
14 Aisha Steel Mills SAP Manufacturing
15 Akram Cotton Mills Limited SAP Manufacturing
16 Al Aziz Packaging and Printing SAP Manufacturing
17 Al Badar Engineering Compnay Oracle Manufacturing
18 Al Catel Pakistan Limited Oracle Services
19 Al Hafiz Crystoplast (Pvt) Limited SAP Manufacturing
20 Al Mutlaq Group Oracle Manufacturing
21 Al Noor MDF (Lasani Wood) SAP Manufacturing
22 Al Noor Sugar Mills SAP Manufacturing
23 Al Razi Healthcare (Pvt.) Limited Oracle Services
24 Alam Cotton Mills Pvt Ltd Oracle Manufacturing
25 Al-Aziz Packaging SAP Manufacturing
26 Albaraka Bank Oracle Services
27 Alcatel Lucent Pakistan SAP Services
28 Ali Gohar Pharma SAP Manufacturing
29 ALIAKBAR GROUP PAKISTAN Oracle Manufacturing
30 Alka(pvt.)Ltd SAP Manufacturing
31 Al-karam Textile Oracle Manufacturing
32 Alkaram Textiles Oracle Manufacturing
33 Allied Bank Limited Oracle Manufacturing
34 Allied Oils & Energy (Pvt.) Ltd SAP Manufacturing
35 American Express Bank Limited Oracle Services
36 AMTEX Oracle Manufacturing
37 APTECH Limited SAP Manufacturing
38 Aquafina Pakistan SAP Services
 241

39 Arif Habib Investment Oracle Services

40 Artistic Milliners Pvt. Ltd Oracle Manufacturing
41 Arwentech Pvt. Ltd. Oracle Services
42 Arysta LifeScience SAP Services
43 Asia Steel SAP Manufacturing
44 Asian Foods SAP Manufacturing
45 Askari Guard Pvt Ltd Oracle Services
46 ASKRI BANK Oracle Services
47 Atlas Batteries Limited Oracle Manufacturing
48 Atlas Engineering Limited SAP Manufacturing
49 Atlas Honda Limited SAP Manufacturing
50 Attock Cement Pakistan Limited. Oracle Manufacturing
51 Attock Information Technology Services (Pvt) Ltd Oracle Services
52 Attock Petroleum Limited Oracle Manufacturing
53 Attock Refinery Limited Oracle Manufacturing
54 Auditor General of Pakistan PIFRA SAP Services
55 Automobile Corporation of Pakistan (Pvt.) Ltd. SAP Manufacturing
56 B. Buran SAP Services
57 Bank Al Habib Ltd. Oracle Services
58 Bank Alfalah Ltd Oracle Services
59 Bank Of Khyber Oracle Services
60 BankIslami Pakistan Ltd Oracle Services
61 Banu Mukhtar Group (Formerly Izhar (Pvt.) SAP Services
Limited,
62 Barclays Bank, SAP Services
63 BASF Karachi SAP Manufacturing
64 Bayer Pakistan SAP Services
65 Beltexco SAP Services
66 Berger Paint Pakistan Limited Oracle Manufacturing
67 Bestway Cement. Oracle Manufacturing
68 BHP Oracle Services
69 Biafo Industries Limited Oracle Manufacturing
70 Bosicor Refinery Limited SAP Manufacturing
71 Brigstocke Eduljee & Co Oracle Services
72 British American Tobacco SAP Manufacturing
73 British Petroleum Pakistan SAP Manufacturing
74 Brooke Hospital for Animal SAP Services
75 BYCO Petroleum Pakistan SAP Manufacturing
76 Cadbury Pakistan SAP Manufacturing
77 Caltex Oil Pakistan Ltd. Oracle Manufacturing
78 Causeway International SAP Services
79 Central Depository Company Oracle Services
80 Century Insurance Company Limited Oracle Services
 242

81 Century Paper & Board Mills Limited Oracle Manufacturing

82 Chemi Chloride Industries Limited SAP Manufacturing
83 Cherat Cement Company Ltd Oracle Manufacturing
84 Cherat Papersack SAP Manufacturing
85 CHT Chemicals SAP Manufacturing
86 Cinepax Limited SAP Services
87 Citi Bank Oracle Services
88 Civil Aviation Authority CAA Oracle Services
89 CMDO SAP Services
90 Coca-Cola Beverages Pakistan Ltd SAP Manufacturing
91 Colgate Palmolive SAP Manufacturing
92 Combined Miltary Hospital CMH SAP Services
93 Confiz ltd SAP Services
94 Continental Biscuits Limited (CBL) SAP Manufacturing
95 Converge Technologies (Pvt.) Ltd. Oracle Services
96 Cotton Web Pvt Ltd Oracle Manufacturing
97 Crescent Bahuman Limited Oracle Manufacturing
98 Crescent Group Services (Pvt.) Ltd. Oracle Services
99 Crescent Steel and Allied Products Limtied Oracle Manufacturing
100 Crowe Horwath Pakistan SAP Services
101 CSH Pharmaceutical SAP Manufacturing
102 Cybernet Karachi SAP Services
103 D Tech Pvt Ltd SAP Services
104 D.G. Khan Cement Oracle Manufacturing
105 Dabur Amla SAP Manufacturing
106 Dadabhoy Cement Industries Limited Oracle Manufacturing
107 Dadex Eternit Ltd Karachi SAP Manufacturing
108 DaiNippon Inks & Chemicals Pakistan Ltd Lahore SAP Manufacturing
109 Dalda SAP Manufacturing
110 Dancom, Oracle Services
111 Dawlance Oracle Manufacturing
112 Dawn Bread SAP Manufacturing
113 Dawood Corporation Ltd. Oracle Services
114 Dawood Engineering SAP Manufacturing
115 Dawood Lawrancepur Limited Oracle Services
116 Defence Housing Authority Oracle Services
117 Delta Insurance Co. Ltd. Oracle Services
118 Delta Shipping (Pvt) Ltd. Oracle Services
119 Descon Chemicals Pvt Ltd Oracle Manufacturing
120 Descon Engineering Limited SAP Manufacturing
121 Dewan Group of Companies SAP Services
122 DHL Oracle Services
123 Diamond Paints SAP Manufacturing
 243

124 DIC Pakistan SAP Manufacturing

125 DIN Leather Pvt Ltd SAP Manufacturing
126 Dolar Industries (pvt.) Limited Oracle Manufacturing
127 Dow Agro Sciences SAP Manufacturing
128 Dow Chemicals Karachi SAP Manufacturing
129 Dr. Ziauddin Hospital Oracle Services
130 Dubai Islamic Bank Pakistan Oracle Services
131 Ebryx Oracle Services
132 Educational Services Pvt Ltd Oracle Services
133 EFU General Insurance Limited Oracle Services
134 EFU Life Insurance Oracle Services
135 Engro Chemical Pakistan Limited SAP Manufacturing
136 Engro Energy SAP Manufacturing
137 Engro Eximp Agriproducts Pvt Ltd SAP Services
138 Engro Eximp Pvt Ltd SAP Manufacturing
139 Engro Fertilizers Limited SAP Manufacturing
140 Engro Foods Limited SAP Manufacturing
141 Engro Polymers Ltd SAP Manufacturing
142 ENI Oil & Gas SAP Services
143 Excellence Deleivered ExD SAP Services
144 ExD (Excellent Delivered Services) SAP Services
145 Exide Batteries Limited SAP Manufacturing
146 Eye Television Network Limited Oracle Services
147 F Keraoraz textile industries, Oracle Manufacturing
148 Farmall Technology SAP Manufacturing
149 Faruque (Pvt) Ltd. SAP Services
150 Fateh Textile Mills Limited Oracle Manufacturing
151 Fatima Fertilizers Oracle Manufacturing
152 Fatima Sugar Mills Oracle Manufacturing
153 Fauji Cement Company Limited Oracle Manufacturing
154 Fauji Fertilizer Bin Qasim Limited SAP Manufacturing
155 Fauji Fertilizer Ltd Oracle Manufacturing
156 Faysal Bank Ltd Oracle Services
157 Fazal Cloth Mills Ltd Oracle Manufacturing
158 Fazal Rehman Fabrics Oracle Manufacturing
159 Fazal Textile Mills Ltd. Oracle Manufacturing
160 Feroze Textile Industries Limited Oracle Manufacturing
161 Fidelity Investment Bank Ltd. Oracle Services
162 First Credit & Investment Bank Oracle Services
163 First Grindlays Modaraba Oracle Services
164 First Inter Fund Modaraba Oracle Services
165 First UDL Modraba Oracle Services
166 First Women Bank Limited Oracle Services
 244

167 Forbes Forbes Campbell & Co Pvt Ltd Oracle Manufacturing

168 Gatron Industries Limited Oracle Services
169 General Electric International Inc. Oracle Services
170 Getz Pharma SAP Manufacturing
171 GFC Fans SAP Manufacturing
172 Ghulam Farooque Group, SAP Manufacturing
173 GIA Associates Oracle Services
174 Glaxo Welcome Pakistan Pvt Ltd Oracle Manufacturing
175 Global System Oracle Services
176 Great Bear Int’l (Diallog Telecom) Oracle Services
177 Greaves Airconditioning Pvt Ltd SAP Services
178 Greaves Engineering Pvt Limited SAP Services
179 Greenstar Social Marketing Pakistan Oracle Services
180 GSK Pakistan SAP Manufacturing
181 Gujranwala Food Industries Pvt. Ltd. SAP Manufacturing
182 Gul Ahmed Textile Mills Limited Oracle Manufacturing
183 Gulfnet Palistan(Pvt.) Ltd. SAP Services
184 Gulistan Group of Companies Oracle Manufacturing
185 Gulistan Textile Oracle Manufacturing
186 Habib Bank Limited Oracle Services
187 Habib Oil, SAP Manufacturing
188 Haier SAP Manufacturing
189 Haleeb Foods Limited (CDL) Oracle Manufacturing
190 Hamdard Laboratories (Waqf) Pakistan Oracle Manufacturing
191 harbion pharma Oracle Services
192 Haroon Oil Ltd. Oracle Manufacturing
193 Haseen Habib Corporation SAP Manufacturing
194 Heavy Mechanical Complex Oracle Manufacturing
195 HEC SAP Services
196 Herbion Oracle Manufacturing
197 Highnoon Laboratories Limited SAP Manufacturing
198 Hilal Confectionary Pvt Ltd Oracle Manufacturing
199 Hilton Pharma SAP Manufacturing
200 Hinopak Motors Limited Oracle Manufacturing
201 Hoechst Marion roussel (Pakistan) Limited Oracle Manufacturing
202 HOTEL ONE Pvt. LTD Oracle Services
203 Hub Power Company Limited (HUBCO) Oracle Manufacturing
204 HUBCO Oracle Manufacturing
205 HUB-PAK Salt Refinery SAP Manufacturing
206 Hussain Chaudhury Consulting SAP Services
207 Hussain Textile Mills Multan Oracle Manufacturing
208 HY Enterprises SAP Services
209 HY Print & Design SAP Manufacturing
 245

210 IACS Oracle Services

211 IBL Ops (Pvt) Ltd. Oracle Services
212 IBM Pakistan Oracle Services
213 Ibrahim Group, Oracle Manufacturing
214 ICI Pakistan SAP Manufacturing
215 Ideal Industries Ltd. Oracle Manufacturing
216 IFL Oracle Manufacturing
217 IGI Income Fund SAP Services
218 Ikan Engineering SAP Services
219 IKAN Engineering Services (Pvt) Limited SAP Manufacturing
220 Image Garments Oracle Manufacturing
221 Imanami Oracle Services
222 Imperial Electric Company SAP Manufacturing
223 Inbox Oracle Services
224 Indus Dyeing & Mfg Co Ltd Oracle Manufacturing
225 Indus Motors Limited SAP Manufacturing
226 Indus Pharma SAP Manufacturing
227 Innovation Inn Oracle Services
228 Institute of Business Management Karachi IOBM Oracle Services
229 International Brands Limited - IBL Oracle Manufacturing
230 international fabrication company Oracle Manufacturing
231 International Industries Ltd Oracle Manufacturing
232 International Petrochemicals(Pvt.) Ltd Oracle Services
233 International Textile HFZ Spinning Mills Ltd Oracle Manufacturing
234 Islamic Investment Bank Oracle Services
235 Ittehad Chemicals Limited SAP Manufacturing
236 Jaffer Brothers Pvt Ltd Oracle Services
237 Jinnah Post Graduate College Oracle Services
238 Johnson & Johnson Pakistan SAP Manufacturing
239 JS Bank Oracle Services
240 JSCL Oracle Services
241 Junaid Jamshaid SAP Manufacturing
242 K.S. Sulemanji & Esmailji & Sons Pvt. Ltd. Oracle Manufacturing
243 Kamal Limited Faisalabad Oracle Manufacturing
244 Karachi Electric Supply Co , SAP Services
245 Karachi International Container Terminal (KICT Oracle Services
246 Karachi Port Trust KPT Oracle Services
247 Karachi Stock Exchange, Oracle Services
248 KASB securities , Oracle Services
249 KASHF Foundation Oracle Services
250 KFC SAP Manufacturing
251 Khas Group SAP Manufacturing
252 Khawaja Spinning Mills SAP Manufacturing
 246

253 Kings food Oracle Manufacturing

254 Kissan Engineering SAP Manufacturing
255 Kohinoor textile Mills Limited Oracle Manufacturing
256 Kolson Oracle Manufacturing
257 Kortech Auto Industries SAP Manufacturing
258 KPMG PEAT MARWICK ASSOCIATES (PVT) Oracle Services
LTD.
259 KSB Pumps Company, Ltd. Pakistan SAP Manufacturing
260 KSB PUMPS SAP Manufacturing
261 Lady Dufferin Hospital Oracle Services
262 Lahore Stock Exchange (Guarantee) Limited Oracle Services
263 Lahore Textile and General Mills Limited Oracle manufacturing
264 Lakson Investment Limited Oracle Services
265 Lakson Tobacco SAP Manufacturing
266 Landirenzo Pakistan SAP Services
267 LESCO Oracle Services
268 Loads Limited SAP Manufacturing
269 Looptex Pvt Ltd Oracle Manufacturing
270 Lotte Pakistan PTA Ltd Oracle Services
271 Lucky Cement Limited Oracle Manufacturing
272 Lucky Textile mills, Oracle Manufacturing
273 LUMS SAP Services
274 Lyra Pvt Ltd SAP Manufacturing
275 Macter Pharma SAP Manufacturing
276 Madinatul Hikmat Oracle Services
277 Mainetti Group SAP Manufacturing
278 Mari Gas Company Ltd SAP Services
279 Marie Adelaide Leprosy Centre Oracle Services
280 Masood Fabrics Limited Oracle Manufacturing
281 Masood Spinning Mills Ltd Oracle Manufacturing
282 Masood Textile Mills Ltd. Oracle Manufacturing
283 Master Celeste (pvt) Limited Oracle Manufacturing
284 Master Moltyfoam Oracle Manufacturing
285 Master Textiles Oracle Manufacturing
286 Mayfair Textiles SAP Manufacturing
287 Mazars Oracle Services
288 MCB Oracle Services
289 Medical Devices Sialkot Oracle Manufacturing
290 Medigen Biotech Private Limited SAP Manufacturing
291 MEDIPAK LIMITED SAP Manufacturing
292 Medipak Pharmaceuticals SAP Manufacturing
293 Meezan Bank Limited Oracle Services
294 Mehmood Textiles Mills Ltd Oracle Manufacturing
 247

295 mehran spices & rice processing Oracle Manufacturing

296 MEPCO SAP Services
297 Mezino Pakistan LTD Oracle Services
298 Mezino Technology SAP Services
299 MGA Auto Industries SAP Manufacturing
300 Millat Oracle Services
301 Millat Equipments Oracle Manufacturing
302 Millat Tractors Ltd Oracle Manufacturing
303 Millennium Cables SAP Manufacturing
304 Mirpurkhas Sugar Mills Oracle Manufacturing
305 MITS-Lahore SAP Services
306 mobil askri lubricants limited Oracle Manufacturing
307 Mobilink Oracle Services
308 Monnoo Group Lahore Oracle Manufacturing
309 Montgomery ITS Oracle Services
310 Muhammad Farooq Textile Mill Limited Oracle Manufacturing
311 Muller and phipps pakistan Oracle Manufacturing
312 Multan Spinning Mills Oracle Manufacturing
313 NADRA Oracle Services
314 National Bank of Pakistan SAP Services
315 National Development Financial Corporation Oracle Services
316 National Foods, SAP Manufacturing
317 National Institutional Facilitation Technologies Oracle Services
(Pvt) Ltd. (NIFT)
318 National Refinery Limited SAP Manufacturing
319 National Telecommunication Corporation SAP Services
320 Naubhar Bottling Co. (Pvt) Ltd. SAP Manufacturing
321 Naveena Textile , Oracle Manufacturing
322 NCR Corporation Oracle Services
323 Nestle Pakistan SAP Manufacturing
324 Netracon Technologies SAP Manufacturing
325 Netsol SAP Services
326 New Jublee Insurance Oracle Services
327 NIB Bank Oracle Services
328 NIMIR Chemicals Pakistan Ltd SAP Manufacturing
329 Nina Industries Ltd. Oracle Manufacturing
330 Nishat Chunian Oracle Manufacturing
331 Nishat Textiles Limited Oracle Manufacturing
332 NJ Autos Pvt Limited SAP Manufacturing
333 NLC Oracle Services
334 NTL Pvt.Ltd. Oracle Services
335 OBS Healthcare & Pharma Oracle Manufacturing
336 Ocean Pakistan Limited (OPL) Oracle Manufacturing
 248

337 OGDCL Oracle Services

338 OGEC Cracow Limited SAP Services
339 Omer Group Oracle Manufacturing
340 OMV Maurice Energy Limited Oracle Manufacturing
341 OMV Pakistan SAP Manufacturing
342 Orascom group(Mobilink gsm) Oracle Services
343 Orasoft Training Institute Oracle Services
344 Oregano Chicken & Pizza SAP Manufacturing
345 Organon Oracle Manufacturing
346 Orient Electronics SAP Manufacturing
347 Orient Group of Companies SAP Manufacturing
348 Orix Leasing Pakistan Ltd, Oracle Services
349 Otsuka Pakistan Ltd SAP Manufacturing
350 Oxford University Press SAP Manufacturing
351 P & G Pakistan SAP Manufacturing
352 Pacific Pharmaceuticals Ltd SAP Manufacturing
353 Packages Limited SAP Manufacturing
354 Pak Arab Fertilizers, Oracle Manufacturing
355 Pak Qatar Takaful Group SAP Services
356 Pak Telecom Mobile Ltd Oracle Services
357 Pak-Arab Pipeline Co. Ltd (PAPCO) Oracle Services
358 Pak-Arab Refinery Limited SAP Manufacturing
359 Pakistan Automobiles Corporation Limited Oracle Manufacturing
360 Pakistan Banking & Finance Services Oracle Services
361 Pakistan Beverage Limited SAP Manufacturing
362 Pakistan Burma Oil Mills Ltd Oracle Manufacturing
363 Pakistan Gum & Chemicals Limited Oracle Manufacturing
364 Pakistan Institute of Fashion & Design SAP Services
365 Pakistan Insurance Corporation Oracle Services
366 Pakistan Mercantile Exchange Limited. SAP Services
367 Pakistan Mobile Number Portability Database Oracle Services
(Guarantee) Limited(MNP)
368 Pakistan Oil Fields Limited Oracle Manufacturing
369 Pakistan Petroleum Limited SAP Services
370 Pakistan Red Crescent Society SAP Services
371 Pakistan Refinery Ltd. SAP Manufacturing
372 Pakistan Security Printing Corporation Oracle Services
373 Pakistan State Oil SAP Manufacturing
374 Pakistan Steel Mills Oracle Manufacturing
375 Pakistan Telecommunication Corporation Limited SAP Services
376 Pakland Cement SAP Manufacturing
377 Pakola Products Limited SAP Manufacturing
378 Paragon Constructors SAP Services
 249

379 Parazellesus Pakistan Oracle Services

380 PEL Pakistan Oracle Manufacturing
381 People Steel Mills Ltd. Oracle Manufacturing
382 PEPSI SAP Manufacturing
383 Pfizer Laboratories Ltd. Oracle Services
384 Philip Morris Pakistan SAP Manufacturing
385 Pilot Sites SAP Services
386 Pioneer Spinning Mills Ltd Oracle Manufacturing
387 PORT QASIM AUTHORITY Oracle Services
388 Powersoft19 SAP Services
389 PRAL-FBR SAP Services
390 Professional Lubes Oracle Services
391 Prudential Capital Management Pvt. Ltd Oracle Services
392 PTC Welfare Association Oracle Services
393 Pulcra Chemicals SAP Manufacturing
394 Punjab Agriculture SAP Services
395 Punjab Beverages SAP Manufacturing
396 Punjab Group of Colleges Oracle Services
397 Punjab Land Development Corporation (Ashiana SAP Services
HS)
398 Punjab Skills Development Fund SAP Services
399 Qasim Intl. Container Terminal Oracle Services
400 Quadri Group of Companies Oracle Manufacturing
401 Rafhan SAP Manufacturing
402 Rafi Peer Group SAP Services
403 Rehunuma FPAP SAP Services
404 Reliance Weaving Mills Oracle Manufacturing
405 Remington Pharmaceuticals (PVT) LTD. SAP Manufacturing
406 Renfro Crescent (Pvt) Limited Oracle Services
407 Rhodes & Schwarz Pakistan SAP Services
408 Royal Exchange Assurance Oracle Services
409 Saadi Cement Ltd. SAP Manufacturing
410 Salalah Methanol Company Ltd SAP Manufacturing
411 Samba Bank Limited Oracle Services
412 Samin Textiles Lahore SAP Manufacturing
413 Sanofi Pakistan SAP Manufacturing
414 Sapphire Textile Mills Ltd Oracle Manufacturing
415 Saudi Pak Industrial and Agricultural Investment Oracle Services
Company Ltd.
416 SCC International Services SAP Services
417 SECP Oracle Services
418 Sefam SAP Manufacturing
419 SEFAN Pvt. Ltd Oracle Manufacturing
 250

420 Serena Textile SAP Manufacturing

421 Servis Industries Oracle Manufacturing
422 Shabbir Tiles & Ceramics Limited SAP Manufacturing
423 Shaheen Air International Ltd Oracle Services
424 Shaheen Insurance Oracle Services
425 Shaigan Pharmaceuticals (Pvt.) Ltd. SAP Manufacturing
426 Shakarganj Mills Limited Oracle Manufacturing
427 Shalimar Foods Oracle Manufacturing
428 Shan Foods SAP Manufacturing
429 Shandy Cola Pakistan SAP Manufacturing
430 Sharif Trust SAP Services
431 Shaukat Khanum Memorial Cancer Hospital and Oracle Services
Research Centre
432 Shell Pakistan SAP Manufacturing
433 Shifa International Hospital Oracle Services
434 Shirazi Investment Limited SAP Services
435 Siemens (Pakistan) Engineering Co. Ltd. SAP Manufacturing
436 Siemens Pakistan Ltd Karachi SAP Services
437 Silk Bank Oracle Services
438 Singer Pakistan Limited Oracle Manufacturing
439 Sitara Chemicals Ltd SAP Manufacturing
440 Soorty Enterprises Oracle Manufacturing
441 Soorty Textile Oracle Manufacturing
442 Standard Chartered Bank Oracle Services
443 Standard Chartered Modaraba Oracle Services
444 State Bank of Pakistan Oracle Services
445 State Life Insurance Oracle Services
446 Student Baryani SAP Services
447 Style Textiles Lahore SAP Manufacturing
448 Stylo Shoes Lahore Oracle Manufacturing
449 Sui Northern Gas Pipeline Oracle Services
450 Sui Southern Gas Co Oracle Services
451 Summit Bank Oracle Services
452 Sunny Steel Industry Karachi Oracle Manufacturing
453 SUPERNET LIMITED Oracle Services
454 SuperTech Autoparts (PVT) LTD SAP Manufacturing
455 Suraj Cotton Mills Oracle Manufacturing
456 SVA Plastics SAP Manufacturing
457 SVA Ruba SAP Manufacturing
458 Swisstex Chemicals Private Limited Oracle Manufacturing
459 systems Innovation ltd. Oracle Services
460 Tapal Tea Private Limited Oracle Manufacturing
461 Tata textile, Oracle Manufacturing
 251

462 TCS Oracle Services

463 Tech Access Pakistan Oracle Services
464 Technovision (PVT) LTD SAP Services
465 TechX Oracle Services
466 Telenor Oracle Services
467 Tetra Pak Lahore SAP Manufacturing
468 Thal Jute Mills SAP Manufacturing
469 Thal Limited SAP Manufacturing
470 Thatta Cement Ltd Oracle Manufacturing
471 The Fulers Pvt Ltd SAP Services
472 The Resource Group SAP Services
473 TNT Oracle Services
474 Total Parco SAP Manufacturing
475 Toyota Garden Motors SAP Services
476 Toyota Indus Motors SAP Manufacturing
477 TOYOTA Pakistan Oracle Manufacturing
478 TPL Holdings Oracle Services
479 TPL Trakker Limited, Oracle Services
480 Tradenet Logistic Supliers SAP Services
481 TransAsia Refinery Limited Oracle Manufacturing
482 Tri-Pack Films SAP Manufacturing
483 TU Plastic SAP Manufacturing
484 UBL Fund Manager Oracle Services
485 Ufone SAP Services
486 Umar Group Lahore Oracle Manufacturing
487 Unicol Limited , Oracle Manufacturing
488 Unilever Pakistan SAP Manufacturing
489 Uniplan Trade International Private Limited SAP Services
490 United Bank Limited Oracle Services
491 United Energy Oracle Manufacturing
492 United industries limited faisalabad Oracle Manufacturing
493 University of Central Punjab Oracle Services
494 US Apparel Oracle Manufacturing
495 US Deniam, Oracle Manufacturing
496 US Denim Mills (Pvt) Ltd. Oracle Manufacturing
497 Vendevo Oracle Services
498 Vita Bread SAP Manufacturing
499 VITA Pakistan Ltd Oracle Manufacturing
500 Vizrt Pakistan Oracle Services
501 VMS SAP Manufacturing
502 Warid Oracle Services
503 Wateen Telecom Oracle Services
504 Wi-Tribe Oracle Services
 252

505 Women Empowerment Group SAP Services

506 Workman Furnitures SAP Manufacturing
507 World Call Oracle Services
508 Xavor Pakistan Ltd SAP Services
509 Xinhua Mall SAP Servises
510 Yassir Fruit Juice SAP Manufacturing
511 Young Foods, Oracle Manufacturing
512 Z & J Hygienic Products (PVT) LTD. SAP Services
513 ZahidJee Textile Mills Faisalabad Oracle Manufacturing
514 Zong Oracle Services
 253

Appendix E: Descriptive Statistics of the Responses

Mean Median Min Max Standard Excess Skewness

deviation Kurtosis
Business Type 1.437 1.000 1.000 2.000 0.496 -1.944 0.256
ERP Type 1.491 1.000 1.000 2.000 0.500 -2.009 0.035
Position Level 1.831 2.000 1.000 3.000 0.578 -0.225 0.026
Gender 1.114 1.000 1.000 2.000 0.318 3.953 2.436
ERP Experience 2.665 3.000 1.000 4.000 0.960 -1.039 -0.012
Company ERP 3.134 3.000 1.000 4.000 0.909 -0.565 -0.686
Experience
Educational Level 2.906 3.000 1.000 5.000 0.619 0.822 -0.252
SQ1 4.228 4.000 1.000 5.000 0.861 2.723 -1.440
SQ2 3.801 4.000 1.000 5.000 0.945 0.167 -0.744
SQ3 3.804 4.000 1.000 5.000 0.874 0.946 -0.819
SQ4 3.916 4.000 1.000 5.000 0.881 0.161 -0.707
SQ5 4.191 4.000 1.000 5.000 0.775 1.887 -1.083
SQ6 4.074 4.000 1.000 5.000 0.809 1.121 -0.842
SQ7 4.079 4.000 1.000 5.000 0.796 0.864 -0.765
SQ8 3.963 4.000 1.000 5.000 0.906 0.484 -0.852
SQ9 3.998 4.000 1.000 5.000 0.734 1.550 -0.828
SQ10 3.720 4.000 1.000 5.000 0.904 0.364 -0.611
SQ11 4.055 4.000 1.000 5.000 0.727 1.608 -0.824
IQ1 4.169 4.000 1.000 5.000 0.798 1.666 -1.078
IQ2 4.156 4.000 1.000 5.000 0.731 1.331 -0.865
IQ3 4.308 4.000 1.000 5.000 0.742 3.013 -1.296
IQ4 3.923 4.000 1.000 5.000 0.822 0.536 -0.716
IQ5 4.124 4.000 1.000 5.000 0.758 1.401 -0.897
IQ6 4.161 4.000 1.000 5.000 0.723 2.522 -1.046
IQ7 4.189 4.000 1.000 5.000 0.755 1.485 -0.953
 254

SERVQ1 3.821 4.000 1.000 5.000 0.978 0.174 -0.723

SERVQ2 3.998 4.000 1.000 5.000 0.870 0.989 -0.926
SERVQ3 3.970 4.000 1.000 5.000 0.848 0.495 -0.728
SERVQ4 3.970 4.000 1.000 5.000 0.857 0.323 -0.728
SERVQ5 3.881 4.000 1.000 5.000 0.959 0.201 -0.744
IP1 3.663 4.000 1.000 5.000 0.996 -0.302 -0.537
IP2 3.871 4.000 1.000 5.000 0.802 0.501 -0.631
IP3 3.973 4.000 1.000 5.000 0.820 1.035 -0.872
IP4 4.015 4.000 1.000 5.000 0.809 0.326 -0.619
IP5 3.943 4.000 1.000 5.000 0.868 0.000 -0.597
IP6 4.020 4.000 1.000 5.000 0.918 0.197 -0.811
PP1 3.839 4.000 1.000 5.000 0.881 0.827 -0.817
PP2 3.888 4.000 1.000 5.000 0.825 0.329 -0.616
PP3 3.896 4.000 1.000 5.000 0.899 0.148 -0.699
PP4 3.913 4.000 1.000 5.000 0.866 0.377 -0.661
PP5 3.993 4.000 1.000 5.000 0.802 0.643 -0.712
PP6 3.787 4.000 1.000 5.000 0.885 0.013 -0.496
OP1 3.658 4.000 1.000 5.000 0.967 -0.148 -0.542
OP2 3.968 4.000 1.000 5.000 0.795 1.156 -0.835
OP3 3.707 4.000 1.000 5.000 0.973 -0.207 -0.538
OP4 3.916 4.000 1.000 5.000 0.879 0.396 -0.716
OP5 3.762 4.000 1.000 5.000 0.923 0.363 -0.689
OP6 3.841 4.000 1.000 5.000 0.848 0.747 -0.744
OP7 3.998 4.000 1.000 5.000 0.844 0.531 -0.741
OP8 4.144 4.000 1.000 5.000 0.768 1.931 -1.044
 255

Appendix F: Collinearity Statistics: VIF Values

Outer VIF Values

IP IQ OP PP SERVQ SQ
IP 1.689 1.000
IQ 2.140
OP
PP 1.689
SERVQ 1.652
SQ 2.074

Collinearity Statistics: Outer VIF Values

Items VIF
IP1 1.804
IP2 1.715
IP3 2.025
IP4 2.166
IP5 1.922
IP6 2.000
IQ1 1.858
IQ2 1.766
IQ3 1.870
IQ5 1.978
IQ6 2.339
IQ7 2.302
OP2 1.900
OP3 1.907
OP4 2.555
OP5 2.090
 256

OP6 2.070
OP7 2.057
OP8 2.044
PP1 1.868
PP2 2.180
PP3 1.974
PP4 2.940
PP5 2.617
PP6 1.797
SERVQ1 1.707
SERVQ2 2.934
SERVQ3 2.746
SERVQ4 2.632
SERVQ5 2.428
SQ11 1.574
SQ5 1.530
SQ7 1.445
SQ8 1.571
SQ9 1.661
 257

Appendix G: Path Coefficient Histograms

258
 259

Appendix H: Request Letter for Conducting Interviews

 260

Appendix I: Interview protocol

Introduction of University and the Purpose of the Study

Bahria University (‫ بحریہ یونیورسٹی‬is a (public research university primarily

located in Islamabad, Pakistan, established by the Pakistan Navy. The
university maintains campuses in Karachi and Lahore. It offers
programmes in undergraduate, post-graduate, and doctoral studies. The
university is one of the top institutions of higher learning in the country
and secured its ranking in among country's top ten and most notable
universities in "general category" by the Higher Education Commission
(HEC) of Pakistan, as of 2013.

The purpose of this doctoral study is to investigate ERP system success in corporate sector of
Pakistan. In other words, the study aims to find that how ERP system affects the individual,
process and organizational performance and what are the contextual factors affecting the ERP
system success in corporate sector in Pakistan. To find the in-depth information about the
different contextual factors affecting ERP system success, interviews are being recorded.

Introduction of Researcher and Purpose of the Interview

Rab Nawaz Lodhi, The purpose of the interview is to identify different contextual
Doctoral Candidate, factors affecting the ERP System Success. The study divides
Department of these contextual factors into three categories: (1) Internal
Management Sciences, Organizational Factors, (2) Technological Factors and (3)
Bahria University,
Individual Factors (4) External Environmental Factors.
Islamabad, Pakistan

Information of the Company and Participant

Company Name
Industry Type
Number of Employees
Established in:
ERP System Type
Company’s Experience on ERP System

Information of the Participant

Designation
Department
Date and Time of Interview
Highest Education
Experience on ERP System

Q.1 How do you think that INTERNAL ORGANIZATIONAL FACTORS are influencing the
success of ERP system in your organization?
 261

Q.2. How do you think that TECHNOLOGICAL FACTORS are influencing the success of
ERP system in your organization?

Q.3 How do you think EXTERNAL ENVIRONMENTAL FACTORS are influencing the
success of ERP system?

Q. 4 How do you think INDIVIDUAL FACTORS are influencing the success of ERP system?

Q.4 Can you recall any strategy that your organization has used to increase the success of ERP
SYSTEM?

Q. 5 How your organization controls INTERNAL ORGANIZATIONAL FACTORS to

increase the success of ERP system?

Q. 6 How your organization controls TECHNOLOGICAL FACTORS to increase the success

of ERP system?

Q. 7 How your organization controls EXTERNAL ENVIRONMENTAL FACTORS to

increase the success of ERP system?

Q. 8 How your organization controls INDIVIDUAL FACTORS to increase the success of ERP
system?

Q. 9 Any other information regarding the success of ERP system in your organization.

THANKS FOR YOUR COOPERATION

 262

Appendix J: ERP End Users’ Profile who participated in In-depth

Video Recorded Interviews

Company-A

Participants Department/ Total ERP Designation Qualification Age

Section Experience Experience
A-P1 Banking 8 Years 5 Years Accounts B.Com 33 y
Assistant
A-P2 Banking 4 Years 4 Years Accounts B.Com 23 y
Assistant
A-P3 Finance 25 Years 7 Years Assistant MBA 48 y
Manager
Accounts
A-P4 Consolidation 8 Years 4 Years Accounts B.Com 30 y
Assistant
A-P5 Banking 5 Years 5 Years Accounts B.Com 29 y
Assistant
A-P6 Consolidation 22 Years 7 Years Assistant MBA 45 y
Manager
Accounts
A-P7 Banking 2 Years 2 Years Accounts ACMA inter 26 y
Assistant
A-P8 Cash 22 Years 5 Years Additional MBA, 46 y
Deputy M.Com
Manager
A-P9 IT/ERP 12 Years 8 Years Oracle MBA, MCS, 33 y
Financial CMA
Specialist
A-P10 HR Manager 22 Years 6 Years HR MSc 48 y
Manager
A-P11 Customer 14 Years 2 Years Revenue MBA 39 y
Service Officer
A-P12 Consolidation 14 Years 7 Years Accounts MA, ACMA 38 y
Assistant Inter

Company-B

Participants Department/ Total ERP Designation Qualification Age

Section Experience Experience
B-P1 Accounting 10 Years 5 Years Deputy CA finalist 30 y
& Finance Manager
Accounts
 263

B-P2 Audit 15 Years 9 Years Head of CA, ACCA 40 y

internal audit
B-P3 Accounting 10 Years 8 Years Sr. Manager CA 38 y
& Finance Accounts &
Taxation
B-P4 Accounting 19 Years 5 Years Manager M.Com 45 y
& Finance Accounts
B-P5 Purchase 12 Years 10 Manager MBE 35 y
Purchase
B-P6 MIS & 17 Years 7 Years Sr. Manager FCMA 42 y
Finance (MIS)
B-P7 MIS/ERP 24 Years 12 Years Sr. Manager MS 47 y
– ICT (Software
Project
Management)
B-P8 Marketing & 8 Years 4 Years Deputy MBA 32 y
Sale Manager
Marketing
B-P9 Marketing & 5 Years 4 Years Assistant MBA 28 y
Sale Manager
Marketing
B-P10 MIS/ERP 10 Years 4 Years Sr. MPhil 38 y
Application (Software
Developers Engineering)
(ERP)
B-P11 Marketing & 20 Years 4 Years Manager MSc. 53 y
Sale Marketing
(International
Sale)
B-P12 Commercial 36 Years 14 Years General BSc. 61 y
Manager- Engineering
Commercial

Company-C

Participants Department/ Total ERP Designation Qualification Age

Section Experience Experience
C-P1 Wireless 16Years 8Years Sr. Manager PhD, MBA, 40 y
Core – Wireless MS (CE),
Core MBA- ITM
C-P2 Accounts 7Years 5Years Financial ACMA 31 y
&Financial Analyst –
Reporting Accounts
C-P3 Procurement 17Years 7Years Manager MSc (IT) 40 y
Regional
 264

Procurement
& Vendor
Relations
C-P4 Supply Chain 24Years 6Years Procurement MSc (CS) 43 y
& Logistics Executive
C-P5 Project 25Years 7Years Manager MSc (CS) 50 y
Planning & Project
Capitalization Support
System
C-P6 Wireless 14Years 2Years Senior MS 37 y
Core Engg.
Wireless
Core
Operations
C-P7 HR 12Years 6Years Manager MCS 36 y
HRIS
C-P8 ERP/IT 21Years 6Years Technical MA (Eco), 50 y
Officer (IT) MCS
C-P9 ERP/IT 7Years 7Years Manager MBA (HRM) 28 y
HCM
C-P10 ERP/IT 14Years 14Years Sr. Manager MBA 38 y
CRM &
ERP
C-P11 Finance ERP 17Years 7Years Manager CA (Finalist), 46 y
Finance ICMA
ERP (Finalist)
C-P12 Accounts 4Years 4Years Accounts Graduation 28 y
Officer

Company-D

Participants Department/ Total ERP Designation Qualification Age

Section Experience Experience
D-P1 Store 24 Years 14 Years Manager MPA 45 y
Store &
Inventory
D-P2 Logistics 6 Years 6 Years Manager MBA 28 y
Logistics
D-P3 Purchase 24 Years 14 Years Manager BSc. 50 y
Purchase Engineering,
MBA
D-P4 Production 17 Years 14 Years Planning BA 37 y
Planning Executive
D-P5 Marketing & 32 Years 13 Years Regional MA (Eco) 52 y
Sale Sales
 265

Manager –
Center
D-P6 Supply Chain 5 Years 5 Years Assistant MBA 33 y
Management Manager (Marketing)
Supply
Chain
Management
D-P7 Finishing 15 Years 14 Years Process DAE 35 y
House Specialist (Mech.), BE
D-P8 Finishing 10 Years 8 Years Team Lead BS (Hons.) 28 y
House (Mech.)
D-P9 Production 10 Years 2 Years Assistant BSc. 32 y
Planning Manager (Engineering)
Planning
D-P10 Mechanical 26 Years 12 Years Maintenance DAE 48 y
Maintenance Executive (Mech.), MA
(Eco)
D-P11 Commercial 24 Years 14 Years Manager MBA 48 y
Purchase
(Indirect
Material)
D-P12 Production 17 Years 14 Years Assistant MBA 45 y
Planning Manager (Marketing)
Planning
 266

Appendix K: NVivo Output: Themes/Nodes Clustered on the basis of

Coding Similarity
 267

Appendix L: NVivo Output: Word Tag Clouds - 100 Most Repeated

Words in Transcribed Data

The above mentioned “Word Tag Clouds” shows 100 most repeated words from the textual
transcribed data. Words with big size means they have more repeated values as compare to
words in smaller size. Different themes were highlighted such as budget (i.e., IT budget),
computer (i.e., technological resources), culture (i.e., organizational culture), department (i.e.,
inter-departmental coordination), effectiveness (i.e., success of ERP system), employees (i.e.,
ERP end users), erp (i.e., ERP system), external (i.e., external environmental factors), individual
(i.e., individual performance), implementation (i.e., ERP implementation), incentives (i.e.,
rewards and incentives to employees), interest (i.e., individual interest in ERP system),
knowledge (i.e., knowledge and skills of the ERP end users), management (i.e., management
control/support), leadership (i.e., leadership at the post-implementation stage of EPR system),
learn (i.e., learning ability of ERP end users), rewards (i.e., rewards and incentives to
employees), success (i.e., ERP system post-implementation success/effectiveness), system (ERP
system), technology (i.e., technological up-gradation, technological resources, technological
factors).
 268

Appendix M: NVivo Output: Word Tree of Contextual Factors Affecting

ERP System Success

Word Tree: Economic Condition

Word Tree: Provision of Electricity

 269

Word Tree: Stakeholders’/External Pressure

Word Tree: End User’s Attitude towards Acceptance

Word Tree: Hiring of IT Personnel

 270

Word Tree: Interest of End User

 271

Word Tree: Learning and Education

Word Tree: End User Skills

 272

Word Tree: Organizational Culture

 273

Word Tree: Inter-Departmental Coordination

Word Tree: Knowledge Sharing

 274

Word Tree: Leadership

 275

Word Tree: Management Commitment

Word Tree: Management Control

 276

Word Tree: Management Support

 277

Word Tree: Organizational Size

 278

Word Tree: Organizational Structure

Word Tree: Organizational Structure

 279

Word Tree: Rewards

 280

Word Tree: Incentives

 281

Word Tree: Key End Users/Power Users

 282

Word Tree: IT Budget

 283

Word Tree: Organizational Resources