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Int. J. Production Economics 98 (2005) 5680


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A framework of ERP systems implementation


success in China: An empirical study
Zhe Zhanga,, Matthew K.O. Leeb, Pei Huanga, Liang Zhangb, Xiaoyuan Huangc
a
School of Management, Shanghai Jiao Tong University, Shanghai 200052, P.R. China
b
Department of Information Systems, City University of Hong Kong, Kowloon, Hong Kong, P.R. China
c
Faculty of Business Administration, Northeastern University, Shenyang 110004, P.R. China
Received 1 December 2003; accepted 18 September 2004
Available online 11 November 2004

Abstract

Enterprise resource planning (ERP) system is one of the most widely accepted choices to obtain competitive
advantage for manufacturing companies. However, the successful implementation rate is low and many rms did not
achieve intended goals in China. This study develops an ERP implementation success framework by adapting the Ives
et al. information systems (ISs) research model and DeLone and McLeans IS success model to identify both critical
success factors and success measures. Qualitative case study research methodology is used to collect data and Atlas/ti
program is used to facilitate data analysis. Discussion is made nally and suggested ERP systems implementation
methodology is given at the end.
r 2004 Elsevier B.V. All rights reserved.

Keywords: ERP; Business process reengineering; ERP systems implementation; Critical success factors; Case study

1. Introduction implementation is dened as the process that


begins with the managerial decision to install a
Kumar and Hillegersberg (2000) dened enter- computer-based organizational information sys-
prise resource planning (ERP) systems as cong- tem and is complete when the system is operating
urable information systems packages that as an integral part of the organizations informa-
integrate information and information-based pro- tion system (Burns and Turnipseed, 1991). ERP
cesses within and across-functional areas in an is probably the most rapidly growing system area
organization. In information systems (ISs) area, in operations today. Thousands of companies have
implemented or are in the process of implementing
Corresponding author. Tel.: +86 021 64482867; fax:
an ERP system. IDC predicts that ERP software
+86 021 62933262. sales in Greater China, comprising China, Hong
E-mail address: zhangz27@hotmail.com (Z. Zhang). Kong, and Taiwan, will grow at an annual rate of

0925-5273/$ - see front matter r 2004 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2004.09.004
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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 57

24.2%, up from US $84.5 million in 1998 to US Finally, the study makes a conclusion with a
$243.3 million by 2003. According to CCID summary on the study.
Report (2004), ERP sales in Mainland China
reached US $226.9 million in 2003, and will reach
US $652.8 million in 2008, at an estimated growth 2. Literature review
rate of 23.5% over the next 5 years. Signicant
benets such as improved customer service, better By comparison to ISs research and other
production scheduling, and reduced manufactur- academic elds, theories on ERP systems imple-
ing costs can accrue from successful implementa- mentation have been given less attention. Most
tion of ERP systems (Ang et al., 1995). published articles on the eld of ERP systems
However, ERP systems are expensive and time- implementation unavoidably lack theoretical sup-
consuming, and once ERP systems are implemen- port (see Appendix A). Thus, in this study ISs
ted, management should evaluate whether it is literature is reviewed in an attempt to nd theories
successful. A recent Standish Group report on that could be adapted to the ERP eld.
ERP implementation projects reveals that these
projects were, on average, 178% over budget, took 2.1. ERP systems implementation literature
2.5 times as long as intended and delivered only
30% of promised benet. Nearly 1000 companies Limited studies have been conducted to identify
in China have implemented MRP, MRP II or ERP critical factors affecting ERP systems implementa-
systems since 1980. The successful implementation tion success with many of them focused on single-
rate is extremely low at only 10% (Zhu and Ma, case study of how we implemented ERP systems
1999). The large difference of ERP systems in our company (Ang et al., 1995; Bingi et al.,
implementation success rate between Western 1999; Cox and Clark, 1984; Holland and Light,
countries and China produces a need of research 1999; Mandal and Gunasekaran, 2002; Motwani
to examine generic and unique factors that affect et al., 2002; Sum et al., 1997; Wilson et al., 1994;
ERP implementation success in China since Yusuf et al., 2004). Moreover, most studies that
foreign ERP vendors have more than 90% ERP have measured ERP implementation success used
market share (IDC, 1998) and more than 80% in only one or two surrogates of ERP implementa-
2000 (http://www.sina.com.cn) in China. Further- tion success (Ang et al., 1994, 1995, 2002; Burns
more, Chinese culture is quite different from and Turnipseed, 1991; Malbert et al., 2003; Umble
Western countries in terms of the four dimensions et al., 2003; Wilson et al., 1994).
of national culture developed by Hofstede (2001) The literature varies regarding what variables
and the dimension of uncertainty avoidance is are required for implementation success or re-
highly relevant to ISs implementation. Organiza- sponsible for failure. It suggests that problems
tional culture is imbedded within national culture with the implementation of ERP systems occur for
and it is regarded as the unique factor affecting a number of reasons. These reasons include:
ERP systems implementation success.
In Section 2, literatures on both determinants of (1) The need for business process change during
ERP systems implementation success and success the implementation of an ERP system is
measures including IS literature are reviewed to needed (Al-Mashari et al., 2003; Bingi et al.,
facilitate understanding of current research status. 1999; Burns and Turnipseed, 1991; Hong and
The proposed conceptual framework and proposi- Kim, 2002; Malbert et al., 2003; Mandal and
tions are developed in Section 3. Section 4 Gunasekaran, 2002; Motwani et al., 2002;
introduces the research methodology of multiple- Umble et al., 2003; Yusuf et al., 2004).
case study. Targeted interviewees and data collec- (2) Lack of top management support, data accu-
tion method are described in this chapter. After racy, and user involvement can attribute to
that, data analysis is conducted in Section 5 and system implementation failures (Al-Mashari
research ndings are discussed in Section 6. et al., 2003; Ang et al., 1994, 1995, 2002; Bingi
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58 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

et al., 1999; Cox and Clark, 1984; Hong and 2003; Umble et al., 2003; Yusuf et al., 2004).
Kim, 2002; Malbert et al., 2003; Sum et al., Markus et al. (2000) argue that the denition and
1997; Umble et al., 2003; Wilson et al., 1994; measurement of ERP success are thorny matters
Yusuf et al., 2004). and success depends on the point of view from
(3) Education and training are frequently under- which you measure it. From previous ERP
estimated and are given less time due to implementation success literature review (Appen-
schedule pressures, and less understanding of dix A), there are seven measures used as surrogates
cross-functional business processes are often of ERP implementation success:
reported (Al-Mashari et al., 2003; Ang et al.,
1994, 1995, 2002; Bingi et al., 1999; Cox and (1) User satisfaction (Al-Mashari et al., 2003; Ang
Clark, 1984; Malbert et al., 2003; Mandal and et al., 1994, 1995, 2002; Burns and Turnipseed,
Gunasekaran, 2002; Sum et al., 1997; Umble et 1991; Mandal and Gunasekaran, 2002; White,
al., 2003; Yusuf et al., 2004). 1984; Yusuf et al., 2004).
(4) When adopting an ERP system, there is a need (2) Intended business performance improvements
to recognize the unique Asian context con- (Al-Mashari et al., 2003; Hong and Kim,
cerning cultures while the existing business 2002; Mandal and Gunasekaran, 2002;
models typically reect Western practices (Al- Markus et al., 2000; White et al., 1982; Yusuf
Mashari et al., 2003; Hong and Kim, 2002; et al., 2004).
Motwani et al., 2002). (3) Oliver Whites ABCD Classication Scheme
(Burns and Turnipseed, 1991; Wilson et al.,
Based on Appendix A, culture factor was given 1994).
more attention only in recent 2 years (Al-Mashari (4) On time (Al-Mashari et al., 2003; Hong and
et al., 2003; Hong and Kim, 2002; Motwani et al., Kim, 2002; Malbert et al., 2003).
2002; Yusuf et al., 2004) which could be a very (5) Within budget (Al-Mashari et al., 2003; Hong
important factor when ERP systems developed in and Kim, 2002; Malbert et al., 2003).
Western countries are implemented in China (6) System acceptance and usage (Ang et al., 1994,
context since ERP systems have built-in value bias 1995, 2002; Yusuf et al., 2004).
reecting the value priorities of the culture in (7) Predetermined corporate goals (Al-Mashari et
Western countries (Kumar and Bjorn-Anderson, al., 2003; Umble et al., 2003; Yusuf et al.,
1990). There is growing evidence that failures to 2004).
adapt ERP packages to t different organizational
and national cultures leads to projects that are In the above measures of ERP system imple-
expensive and late. Moreover, Chinese culture is mentation success, Oliver Whites ABCD Classi-
far different from that of Western countries. cation is not suitable in nowadays ERP system
As for how to dene ERP systems implementa- implementation in that most rms implemented
tion success, there is no agreed measures. White ERP systems could achieve rough integration
(1984) created ABCD Checklist that classied among ERP system modules. Meanwhile, even if
ERP implementations into four categories. User ERP system implementation exceeds contracted
satisfaction is also used to serve as a surrogate for delivery time and budget, rms may still think
ERP implementation success (Al-Mashari et al., their ERP implementation is a success. While
2003; Ang et al., 1994, 1995, 2002; Burns and system acceptance and usage are inappropriate
Turnipseed, 1991; Markus et al., 2000; White et once the use of an ERP system is required. Thus,
al., 1982). White et al. (1982) dened successful only user satisfaction, intended business perfor-
ERP implementation along two dimensions: (1) mance improvements, and predetermined corpo-
improved performance and (2) user satisfaction rate goals could be used as success measures.
(White, 1984; Yusuf et al., 2004). Predetermined However, the latter two success measures could be
corporate goals were used recently to measure combined into one success measure due to their
ERP implementation results (Al-Mashari et al., predened nature.
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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 59

2.2. Information systems literature have positive or negative impact on the other. Use
and user satisfaction are direct antecedents of
A large number of studies have been conducted individual impact. Lastly, this impact on indivi-
during the past two decades to identify those dual performance should eventually affect organi-
factors that contribute to ISs success. However, zational performance.
the dependent variable of IS success is difcult to It is clear that actual use, as a measure of IS
dene and a cumulative research is not easy to success, only makes sense for voluntary or discre-
come into being. Not until 10 years ago was the tionary users as opposed to captive users Lucas
dependent variableIS success identied by De- (1978). Moreover, in an involuntary situation of
lone and McLean (1992) that has been considered using an IS, user satisfaction leads to use rather
a suitable foundation for further empirical and than use stimulating user satisfaction Baroudi and
theoretical research, and has met with general Davis (1986). Thus, for Delone and McLean
acceptance (Garrity and Sanders, 1998). (1992), when the use of IS is mandatory or
Delone and McLean (1992) conducted an required, the previous measures of system quality,
extensive literature review on 180 empirical studies information quality, and use become less useful.
published in six top IS journals and one of the That means whether the quality of the system itself
most important IS conference proceedings, classi- and the information outputs are satisfying or not,
fying dimensions of ISs success into six categories and whether users want to use the system or not,
(Fig. 1 illustrates their IS success model): there is no choice for the user, users have to accept
and use the IS. Secondly, DeLone and McLeans
(1) System quality: The desired characteristics of model has a causal and temporal relationship
an IS itself. between each stage. They claim that the causal
(2) Information quality: The desired characteristics relationships that exist between the stages of
of the product of an IS. communication also pertain to the categories of
(3) Use: The receipt consumption of the product measurement. However, this does not have to
of an IS. follow. If this were so, then one need only be
(4) User satisfaction: The receipt response to the successful at the rst stage. Furthermore, IS
use of the product of an IS. research now accepts that technical system quality
(5) Individual impact: The effect of information on is necessary but not sufcient to ensure IS success;
the behavior of a receipt. yet the DeLone and McLean model might be seen
(6) Organizational impact: The effect of informa- as suggesting that technical system quality is
tion on organizational performance. sufcient.
User satisfaction is dened as the extent to
In Fig. 1, system quality and information which users believe the information system avail-
quality singularly and jointly affect both use and able to them meets their information require-
user satisfaction. While use and user satisfaction ments (Ives et al., 1980). Many authors have

System
Use
Quality
Individual Organizational
Impact Impact
Information User
Quality Satisfaction

Fig. 1. DeLone and McLeans IS success model.


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60 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

suggested time, cost, and user specication as characteristics of the user, users organization,
success criteria. Wateridge (1998) points out that and users task. (4) IS development environment,
this implies that if projects do not meet time, which includes the development methods and
budget, and specication they will be seen as techniques, design personnel and their character-
failures, but projects can still be successful even if istics, and the organization and management of IS
they have not met timescales and budget. Thus, it development and maintenance. (5) IS operation
is not appropriate to dene IS success by time, environment, which incorporates the resources
budget, and specication. necessary for IS operations.
Based on descriptions and evaluations of ve The information subsystem represented by a
existing MIS research frameworks, Ives et al. circle is the output of the development process.
(1980) proposed a more comprehensive research The processes comprise the interactions between
model partially validated by mapping 331 MIS the IS and the environments. The classes of
Ph.D. dissertations into the framework. There are process variables are: (1) Use process, which
three IS environments, three IS processes, and the focuses on usage of the IS by the primary user
information subsystem itself, all of which exist and is usually measured by task accomplishment
within an organizational environment and an leading to an effect on productivity and decision-
external environment. In their model (Fig. 2), Ives making quality. (2) Development process, which
et al. claimed that the environmental character- yields the IS by selecting and applying organiza-
istics dene the resources and constraints, which tional resources within environmental constraints.
dictate the scope and form of each information (3) Operation process, which is the physical
subsystem (Ives et al., 1980). operation of the IS and is primarily a function of
Five classes of environmental variables were the operations resource, with interfaces at the
delineated: (1) External environment, which in- boundaries of other environments in the form of
cludes legal, social, political, cultural, economic, personal interaction. The process can be measured
educational, resource, and industry/trade consid- by resource use (e.g., time, cost), performance,
erations. (2) Organizational environment, which is quality of life and satisfaction of secondary users,
marked by the organizational goals, tasks, struc- and the service to users (e.g., turnaround time,
ture, volatility, and management philosophy/style. response time for user requests, availability, error
(3) User environment, which is described by rates).

The External Environment

The Organizational Environment

User The Use


Environment Process

The
IS
The Development Information
Development
Environment Process Subsystem
(ISS)

IS
Operations The
Environment Operation Process

Fig. 2. Ives, Hamilton, and Daviss IS research model.


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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 61

3. The conceptual research framework to this research in that IS success is measured from
different angles. Furthermore, ERP systems are
Based on the ERP literature and the IS research also one kind of ISs.
model proposed by Ives et al., factors that affect With specic objectives in this study, through
successful ERP implementation in China have combining and adapting the Ives, Hamilton, and
been identied in this research. From DeLone and Davis model with ERP and IS success literatures,
McLean IS success model the dependent variables the research framework is developed and depicted
that measure ERP implementation success are in Fig. 3. The IS development environment and the
dened. The theoretical bases for this study IS operations environment are replaced with
include Ives et al.s IS research model combined system environment and ERP vendor environ-
with prior ERP literature to serve as the basis for ment. Moreover, the three process measures of the
independent variables identication, and the use process, the development process, and the
McLean and DeLones IS success model to serve operation process are not completely suitable to
as the basis for dependent variables denition in the ERP implementation context. Almost all of
that the environmental groups are quite suitable to enterprises in China purchase off-the-shelf ERP
the ERP implementation success factors. They are packages from outside ERP vendors rather than
adapted and combined with critical success factors develop an ERP system in-house. Thus, the
identied in prior ERP studies to form critical development process is not applicable. Further,
success factors for this study. While the three the operation process is overlapping with the use
process groups used in Ives et al.s model are not process in the ERP implementation context, thus
applicable to the context of ERP system imple- these two processes are modied and combined
mentation in that Ives et al.s model focuses on with ERP success measures such as user satisfac-
development and operation processes that are the tion, individual impact, and organizational im-
next stage of ERP implementation. DeLone and pact. Moreover, the unique ERP success measure
McLeans IS success model, which is widely of intended business performance improvement is
accepted model for study of IS success, is suitable included to make the success measures complete.

Organizational Environment
Top Management Support
Company-Wide Support
Business Process Reengineering
Effective Project Management
Organizational Culture
ERP Implementation Success
User Environment
Education &Training User Satisfaction
User Involvement Individual Impact
User Characteristics Organizational Impact
Intended Business
System Environment Performance
ERP Software Suitability Improvement
Information Quality
System Quality

ERP Vendor Environment


ERP Vendor Quality

Fig. 3. Conceptual research framework.


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62 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

The interactions among these success measures are matter of changing the software systems; rather
beyond the focus of this study and not studied as a it is a matter of reengineering the company and
result. transforming the business practices to the best
In this study, since the use of an ERP system is business practices.
required, the previous measures of system quality,
information quality, and use become less useful. 3.1.2. Reengineering business processes
That means whether the quality of the system itself Business process reengineering (BPR) is dened
and the information outputs are satisfying or not, by Hammer and Champy as the fundamental
and whether users want to use the system or not, rethinking and radical redesign of business pro-
users have no choice but to accept and use the IS. cesses to achieve dramatic improvements in
The researcher proposes the following research critical, contemporary measures of performance,
propositions serving as guidelines for this research. such as cost, quality, service and speed (Hammer
and Champy, 2001). Implementing an ERP system
Proposition 1. Organizational environment is asso-
involves reengineering the existing business pro-
ciated with the ERP implementation success in
cesses to the best business process standard (Bingi
China.
et al., 1999; Burns and Turnipseed, 1991; Holland
Proposition 2. User environment is associated with and Light, 1999; Mandal and Gunasekaran, 2002;
the ERP implementation success in China. Miles and Huberman, 1994; Yusuf et al., 2004).
One of the principal reasons why ERP and other
Proposition 3. ERP system environment is asso-
large technologically sophisticated systems fail is
ciated with the ERP implementation success in
that organizations simply underestimate the extent
China.
to which they have to change and reengineering
Proposition 4. ERP vendor environment is asso- the existing business processes in order to accom-
ciated with the ERP implementation success in modate their purchase.
China.
3.1.3. Effective project management
3.1. Organizational environment According to Lock (1996), project manage-
ment has evolved in order to plan, coordinate and
Five dimensions of organizational initiative control the complex and diverse activities of
proposition are identied including top manage- modern industrial and commercial projects.
ment support, reengineering business process, ERP systems implementation is a set of complex
effective project management, company-wide sup- activities, involving all business functions and
port, and organizational culture. often requiring between 1 and 2 years of effort,
thus companies should have an effective project
3.1.1. Top management support management strategy to control the implementa-
Many studies have stressed the importance of tion process, avoiding overrun of budget and
top management support as a necessary ingredient ensuring implementation on schedule. There are
in successful ERP implementation (Al-Mashari et ve major parts of project management: (1) having
al., 2003; Ang et al., 1994, 1995, 2002; Bingi et al., a formal implementation plan, (2) a realistic time
1999; Cox and Clark, 1984; Sum et al., 1997; frame, (3) having periodic project status meetings,
Umble et al., 2003; Wilson et al., 1994; Yusuf et (4) having an effective project leader who is also a
al., 2004). Since ERP is a highly integrated IS, its champion, and (5) having project team members
design, implementation, and operation require the who are stakeholders.
complete cooperation of line and staff members
from all segments of the business. Top manage- 3.1.4. Company-wide commitment
ment support can play a useful role in settling Since ERP systems are enterprise-wide ISs that
disputes and in providing clear direction. Mean- integrate information and information-based pro-
while, implementing an ERP system is not a cesses within and across all functional areas in an
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organization, it is imperative to get support from draw a conclusion that Chinese culture is basically
all functional segments of the organization (Ang et different from that of Western countries. Accord-
al., 1994, 1995, 2002; Cox and Clark, 1984; Sum et ing to Hofstede (2001), the dimension of uncer-
al., 1997; Wilson et al., 1994; Yusuf et al., 2004). tainty avoidance concerns with use of technology
Every person and department is responsible/ most. The inclination of members of a culture to
accountable for the overall system and key users avoid uncertainty and ambiguity profoundly
from different departments are ensured to commit affects the way in which institutions are organized
to the project implementation without being called and managed. Consistent with this logic, uncer-
back to their prior functional job position tainty avoidance will also likely affect the way in
frequently. which individuals use ISs. In Western countries
with high score of uncertainty avoidance, people
3.1.5. Organizational culture are inclined to be tolerant of uncertainty, they
Densley (1999) revealed that adapting the need more clear information and tend to deploy
implementation to the prevailing cultural style ISs across departments within an organization,
was one important cause of project implementa- sharing the information to assist decision-making.
tion failures. A company who implements an ERP However, in the low score holder of uncertainty
system has to change its business processes to the avoidance such as China, people are more tolerant
ERP best-practice processes. The change both of unclear information, they are inclined to share
impacts on the customers culture and is con- information with others and reluctant to use ISs
strained by it (Krumbholz and Maiden, 2001). that require real time information entry and
Kumar and Bjorn-Anderson (1990) concludes that information sharing across different departments.
IS design methodologies have built-in value biases Cabrera et al. (2001) and Yusuf et al. (2004)
reecting the value priorities of the culture in argue that successful technological innovations
which they are developed. Since Baan IV user require that either the technology be designed to t
companies are studied only in this research and it the organizations current structure and culture or
is developed in the Netherlands and applied in that the organizations structure and culture be
China context, it is necessary to check whether reshaped to t the demands of the new technology.
cultural difference between the Netherlands and While organizational culture is embedded within
China exists or not. Based on Hofstede (2001) national culture and it is used as the unique critical
denition of national culture, four dimensions of factor that affects foreign ERP package (Baan
power distance, collectivism vs. individualism, ERP) implementation in China context.
femininity vs. masculinity, and uncertainty avoid- Culture is dened by Schein (1992) as a pattern
ance can be used to make comparisons. of shared basic assumptions that the group learned
From Table 1, we can learn that China is as it solved its problems of external adaptation and
obviously different from the other three countries internal integration, that has worked well enough
except in the dimension of masculinity. It is safe to to be considered valid and, therefore, to be taught

Table 1
International comparison data on cultural dimensions (Hofstede, 2001)

Country Power distance Individualism Masculinity Uncertainty avoidance


index score index score index score index score

USA 40 91 62 46
Germany 35 67 66 65
The Netherlands 38 80 14 53
China 80 20 66 30
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64 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

to new members as the correct way to perceive, system requires transparent information ow
think, and feel in relation to those problems. across the whole company. People within the
According to Hofstedes (2001) study, six main closed system would think they are going to be
dimensions of organizational culture are identied constrained by the ERP system, which inevitably
to nd their relationships with the implementation leads to resistance to the ERP system.
of ERP systems: (1) process vs. results orientation, Loose vs. tight control system reects the degree
(2) employee vs. job orientation, (3) parochial vs. to which organizations exert control over indivi-
professional identity, (4) open vs. closed commu- duals. Tightly controlled cultures may observe
nication system, (5) loose vs. tight control, and (6) strict meeting times and show a strong cost-saving
normative vs. pragmatic mentality. consciousness. Loose control organizations are
Process vs. result orientation refers to whether an more permissive about individuals preferences.
organization is more concerned with the means ERP system requires timely input of data, other-
and procedures that must be followed to carry out wise the output of the information about products,
the work or with the goals that are pursued with inventory level cannot be ensured accurate and
that work. Process orientation is typical of timely in that ERP system integrates every
mechanistic or bureaucratic organizations rich in department seamlessly. The deployment of ERP
rules and procedures, whereas results orientation is systems in a loosely controlled company would
typical of organic, risk-taking organizations, in produce resistance from the people.
which mistakes are well tolerated and innovation Normative vs. pragmatic mentality refers to the
is valued. extent to which organizations conform to institu-
The employee vs. job orientation reects whether tional pressures. Pragmatic organizational cultures
the organization is more concerned with the well- are more market driven and are open to ad hoc
being of the person or with getting the job done. solutions, while normative cultures are more
Groups or committees often make the important concerned with following institutional rules. Meet-
decisions in employee-oriented cultures, and an ing customer needs is a major objective in
effort is made to help new members adjust. On the pragmatic cultures while normative cultures are
contrary, job-oriented cultures tend to rely on more interested in adhering to the correct
individual, top-down decision-making. procedures as a way of obtaining legitimacy
The parochial vs. professional dimension reects (Hofstede, 2001).
the weight that is given to the occupational This study focuses on the three dimensions of
cultures of the members of the organization. In parochial vs. professional, open vs. closed system,
parochial organizations, employees identify and loose vs. tight control in that they are most
strongly with their organization, whereas in closely linked with ISs implementation.
professional cultures employees identify more with
their profession. In hiring new employees, paro- 3.2. User environment
chial organizations rely on social and family
background information, whereas professional People element is one of the most important
cultures hire on the basis of job competence alone. factors affecting organizational ISs implementa-
Sociology has long known this distinction as tion and deployment. Lack of care about stake-
local vs. cosmopolitan. The former culture holders within organizations will result in disaster.
is less concerned with external competition, which As such, lack of user education and training and
results in passive attitude toward advanced man- user involvement in the process of ERP systems
agement technique adoption such as ERP systems. implementation also leads to failure.
An open or closed system refers to the commu-
nication climate within the organization. In open 3.2.1. Education and training
system culture information ows easily through Education and training refers to the process of
the organization, whereas closed cultures are more providing management and employees with the
secretive. However, the deployment of an ERP logic and overall concepts of ERP system (Mandal
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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 65

and Gunasekaran, 2002; Sum et al., 1997; Yusuf et specic business industry and requirements. More-
al., 2004). Thus, people can have a better under- over, the maturity of the ERP system and its
standing of how their jobs are related to other internal logic as well as the systems strength and
functional areas within the company. The user is weakness should be fully understood to increase
the people who produce results and should be held the chance of success.
accountable for making the system perform to
expectations. Outside consultants/trainers have 3.3.1. ERP software suitability
more experience of implementing ERP systems Most large foreign ERP vendors have come to
and they can help users to understand expertise of Chinas ERP market include SAP, Oracle, J.D.
specic ERP systems. While in-house training is Edwards, Baan, PeopleSoft, FourthShift, QAD,
more effective in combining specic ERP system SSA, Symix, etc. They have taken up more than
features with actual operational issues in the 90% market share in Chinas market (IDC, 1998).
company. These ERP vendors use different hardware plat-
forms, databases, and operating systems. And
3.2.2. User involvement certain ERP packages are only compatible with
User involvement refers to participation in the some companies databases and operation systems.
system development and implementation processes Thus, companies should conduct requirements
by representatives of the target user groups. Some analysis rst to make sure which problems need
IS researchers suggest that user involvement in the to be solved and select the ERP systems that most
development (i.e., purchase, design, modication, t their requirements. The hardware then is
or implementation) of an IS is integral to the selected according to the specic ERP systems
success of the system (Baroudi and Davis, 1986; requirements.
Mandal and Gunasekaran, 2002; Yusuf et al., ERP packages provide generic off-the-shelf
2004). System implementation represents a threat business and software solutions to customers.
to users perceptions of control over their work More or less they cannot fully meet the companys
and a period of transition during which users must needs, especially when the business processes of
cope with differences between old and new work the company are unique. Thus, customizing the
systems. User involvement is effective because it ERP system to t the companys needs is
restores or enhances perceived control through necessary. It is important for the company to
participating the whole project plan. choose those ERP systems that are easy to
customize so that the cost and time consumed in
3.2.3. User characteristics the customization can be reduced as much as
According to the Ives et al. research model, the possible. Moreover, upgrade of the ERP system is
characteristics of different users may also affect necessary because the technical advance results
the ERP implementation success including educa- occur continuously.
tion levels, characters, technical-oriented or busi-
ness-oriented, etc. 3.3.2. Information quality
Since ERP system modules are intricately linked
3.3. System environment to one another, inaccurate data input into one
module will adversely affect the functioning of
Organizations cannot afford to neglect of other modules. Garbage in garbage out. Thus,
technical aspects of ERP systems implementation information quality is a major determinant of ERP
in the following three perspectives. ERP vendors success (Duchessi et al., 1989; Sum et al., 1997;
adopt different programming languages and focus Yusuf et al., 2004).
on different business sectors to retain their core
competence. Enterprises have to nd the most 3.3.3. System quality
suitable ERP packages in the market to ensure the System quality of a specic ERP system also
perfect match between the ERP system and their affects the implementation success. Dimensions of
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66 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

system quality include exibility of the system, tion, individual impact, organizational impact,
reliability, ease of use, usefulness of specic and intended business performance improvement
functions, response time (Bailey and Pearson, are selected as ERP systems implementation
1983; Yusuf et al., 2004). success measures (see Fig. 3) at both individual
and organizational levels. Since the objectives of
3.4. ERP vendor environment this study are to explore factors that affect the
ERP implementation success in China and vari-
Since most Chinas companies purchase ERP ables that could be used to measure and evaluate
packages from foreign ERP vendors and use whether an ERP implementation success is a
outside consultancy service, it is important to get success or a failure, the interactions among these
the vendor support. Management needs to ask success measures are not studied.
questions about the vendor, such as its market
focus (for example, midsize or large organization),
3.6.1. User satisfaction
track record with customers, vision of the future,
According to Delone and McLean (1992), user
and with whom the vendor is strategically aligned.
satisfaction describes the receipt response to the
For a foreign vendor, it is important to ensure that
use of the product of an IS. In this study of ERP
their products have been customized into Chinese
systems implementation success, user satisfaction
language and make sure the ERP vendor has the
is adapted as the receipt response to the imple-
same version of the software in all the countries
mentation and use of a certain ERP system.
the company is implementing the system. Vendor
Mostly, the use of an ERP system is required.
claims regarding global readiness may not be true,
Thus, system quality, information quality, and
and the implementation team may need to cross
system use are inappropriate for measuring ERP
check regarding the availability of the software. In
systems success. Meanwhile, even though DeLone
general, management must make sure that the
and McLean classied system quality and infor-
software vendor provides continuous support
mation quality as dependent variables in their
throughout the implementation.
model, they described the impact of these two
variables on the other dependent variables of use
3.5. ERP vendor quality
and user satisfaction. Therefore, system quality
and information quality are inappropriate to serve
Three dimensions of vendor quality are classi-
as ERP implementation success measures. In the
ed: (1) service response time of the software
context of ERP system implementation, the user
vendor; (2) qualied consultants with knowledge-
satisfaction measure concerns overall satisfaction
ability in both enterprises business processes and
and specics satisfaction with the system imple-
information technology including vendors ERP
mentation adapted from Doll and Torkzadeh
systems; and (3) participation of vendor in ERP
(1988) and Delone and McLean (1992).
implementation. It is important for the vendors
staffs to be knowledgeable in both business
processes and ERP system functions. Also, the 3.6.2. Individual impact
consultants should possess good interpersonal The individual impact variable refers to the
skills and be able to work with people. Software effect of information on the behavior of a receipt
vendors should be carefully selected since they play in DeLone and McLeans IS success model. In this
a crucial part in shaping the ultimate outcome of study, individual impact is adapted as the effect of
the implementation. the implementation and use of an ERP system on
the behavior of a receipt, i.e., an ERP user. Several
3.6. ERP implementation success measures dimensions are used to measure individual impact
including improved individual productivity, task
Based on Delone and McLeans (1992) IS performance improvement, decision effectiveness
success model and ERP literature, user satisfac- and quality, and time to make decision.
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3.6.3. Organizational impact the methodological rigor of the study through


Organizational impact concerns the effect of strengthening the precision, the validity and
information on organizational performance in stability of the ndings (Miles and Huberman,
DeLone and McLeans IS success model and in 1994). Contrary to common misconception that
this study it is adapted as the effect of the case studies provide little basis for scientic
implementation and use of an ERP system on generalization, case studies are generalizable to
organizational performance. The dimensions of theoretical propositions, not to populations or
organizational impact include the impacts of an universes (statistical generalization) (Lee, 1989;
ERP system implementation and use on the Yin, 1994). Research questions of this study
organizations operating cost, overall productivity include what, why, and how questions as
gains, customer service level, and the realization of following:
specic ERP implementation objectives.
 What are the critical factors that affect ERP
3.6.4. Intended business performance improvement systems implementation success in China?
Based on White et al.s (1982) research, intended  Why are these factors critical for successful ERP
business performance improvement could serve as implementation in China?
an ERP implementation success measure. Most  How can ERP systems be implemented success-
ERP adopters set performance objectives of the fully in China?
ERP projects which include cost reduction, busi-  How can an ERP systems implementation be
ness processes integration, time, cost, etc. Differ- measured and dened as a success or a failure in
ent enterprises have different objectives to China?
implement ERP systems.
Since a mix of measures is used to evaluate
whether an ERP system implementation is a 4.2. Validity and reliability
success, only when all the four measures are given
positive answers by the organization can we call it One advantage of using multiple sources of
a success. And when all the four measures are evidence (documents, archive records, open-ended
marked as negative, the implementation is classi- interviews, focused interviews, observations, and
ed as a failure. Otherwise, the implementation physical artifacts) lies in its capability of providing
success is difcult to determine. multiple measures of the same phenomenon in
each setting resulting in the development of
converging lines of inquiry, a process of triangula-
4. Research methodology tion. Thus, the construct validity of the case study
could be more convincing and accurate. Moreover,
4.1. Multiple-case study research design by using replication logic of the same interview
protocol in multiple-case studies, the external
A case study examines a phenomenon in its validity of the information collected can be
natural setting, employing multiple methods of obtained. To increase the reliability of the
data collection to gather information from one or information in the study, several methods or steps
a few entities (people, groups, or organizations) are taken. First, sufcient citation to the relevant
(Benbasat et al., 1987; Yin, 1994). By its denition, portions of the case study database are made by
case study research is well suited to the study of IS citing specic documents, interviews, and/or ob-
implementation, especially when context is impor- servations; second, the database would reveal the
tant and the phenomenon is contemporary, which actual evidence (herein means the interviewees
the researcher has no control over, the research is responses) and also indicate the circumstances
largely exploratory and it addresses the how and (the four ERP user rms) under which the
why questions (Benbasat et al., 1987; Yin, evidence was collected; third, these circumstances
1994). Multiple cases are suggested to increase would be consistent with the specic procedures
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68 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

and questions contained in the case study proto- proposed research model, qualitative research
col, to show that the data collection followed the involves more text work. In this research, we use
procedures stipulated in the protocol; nally, a the software of ATLAS/ti to assist data analysis.
reading of the protocol should indicate the link The four cases selected and interviewed are located
between the content of the protocol and the initial in the richest areas of Mainland China, the Pearl
study questions. Thus, the ultimate chain of River Delta area (Cases A and B) and the Yangtze
evidence is built and the reliability of the River Delta area (Cases C and D).
information in the case studies can be increased. Since the transcripts obtained from the subjects
are mainly audio les recorded and they are
4.3. Subjects of the case study repeatedly listened to ensure no omissions and
written down in paper. With coding scheme and
We dene an ERP user company as one that has codes formulated according to the research frame-
installed at least the basic modules of the three work proposed and its components on hands, they
major integral parts of Baan ERP system. These are entered into the program of Atlas/ti. After
modules are manufacturing, sales and distribution, that, the manuscripts translated into English are
and nance. Moreover, the ERP system installed typed into Atlas/ti and make correlations between
should have gone live no more than 2 years for the the sentences and the specic codes. The coding
reasons of personnel change and difculty of process is an iterative one, some codes can be
recalling past implementation process. The unit condensed into one code in this process according
of analysis is the selected ERP user company. In to interviewees responses, which leads to the
each of these ERP companies, one or two persons dimensions of the proposed framework to be
who participated their rms ERP system imple- consolidated. Meanwhile, through reviewing inter-
mentation as a major team member (CIO, project viewees responses, new dimensions can be found
manager) are interviewed. and added to the framework easily in this process
since no relevant codes can be linked to the
4.4. Data collection sentences. Atlas/ti program assists the researcher
to nish the coding process visually in an efcient
The target ERP user companies are obtained at way. After the coding process, we got the
the recommendation of Baan Company. From the preliminary tables on success factors and measures
recommended ERP user companies, we screen based on the interviewees responses and data
them and delete those companies that did not meet analysis as deliverables. These deliverables are
the criteria of the research. Finally, we focus on returned back to the relevant interviewees for their
four ERP user companies that implemented Baan conrmation via emails and post mails, and the
IV ERP package no more than 2 years. The same nal conrmed ones come into being as illustrated
company size and the same business industry in the following sections.
belonged allow the researcher to compare the ERP Table 2 illustrates the differences between the
system implementation issues. The interview pro- four rms concerning the IT infrastructure before
tocol is translated into Chinese and the transcripts implementing the ERP system. Company A
are back translated into English to be coded and developed an MRP system in-house that runs
analyzed. Both digital recorder and tape recorder quite well, but was incapable of processing large
were used to avoid contingency conditions. amount of data. Companies B and C bought an
MRP II package and ERP system, respectively.
Company B had to update its MRP II system in
5. Data analysis order to exchange data with its overseas head-
quarters and branches while Company C at-
Unlike quantitative research, which could use tempted to switch its small ERP system to a
standard statistics software to accurately analyze larger and more powerful ERP system to keep
the collected data according to the formerly competence. These three rms had very good
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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 69

Table 2
ERP implementation background comparison

Background dimensions Case A Case B Case C Case D

Industry Home appliance Electronics Electronics Home appliance


Number of staff 1000 900 400 400
Ownership State owned JV (Canadian) JV (German) State owned
Sales revenue (billions RMB) 2 2 0.8 1
IT infrastructure MRP system was MRP II system installed ERP system installed No ISs used
developed in-house
ISO certicate conditions ISO 9001 ISO 9001 ISO 9002 ISO 9002
Reasons to adopt ERP Incremental change Incremental change Top-down strategy Top-down by dictate
Implementation service provider The ERP vendor The ERP vendor The ERP vendor The vendors partner
ERP package implemented Baan IV Baan IV Baan IV Baan IV

Table 3
Cross case effects matrix

Factors effects on ERP implementation Case A Case B Case C Case D

Top management support +++ +++ +++ +


Company-wide support +++ +++ +++
Business process reengineering ++ + ++ +++
Effective project management +++ +++ +++ +++
Organizational culture + +++ +++
Education and training +++ +++ +++ +
User involvement +++ +++ +++ +
User characteristics +++ +++ +++
ERP software suitability +++ +++ +++ +++
Information quality +++ +++ +++ +++
System quality +++ +++ +++ +++
ERP vendor quality +++ +++ +++

+, Weak positive impact; ++, average positive impact; +++, strong positive impact; , weak negative impact; , average
negative impact; , strong negative impact.

IT infrastructure. However, Company D had which indicates the future problems with the
no ISs installed and computer usage was very ERP system implementation.
limited. Moreover, Companies A, B, and C Table 3 illustrates the extent to which different
recognized the importance of using ERP systems factors proposed have affected Baan IV system
to maintain their competitive advantage. The implementations in the four rms. Based on
ERP system was implemented by the ERP vendor, interviewees responses, the researchers determined
while Company Ds top management did not relationships in Table 3 rst and post mailed back
recognize the ERPs role in business and was them to all subjects for correction, nally the
forced to implement an ERP system as a trial site. above relationships were conrmed by all subjects.
Unfortunately, a third party was invited to In terms of the 12 factors impact on the Baan IV
implement the ERP system whose consultants system implementations in the four rms, no
were inexperienced with the Baan IV system, negative impact was found in Cases A, B, and C.
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70 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

In these three companies, most factors have strong tern organizational culture and ERP products
positive impacts on the Baan IV system imple- focus on open, professional, and tightly controlled
mentations except two factors, BPR and organiza- culture, which show a perfect t between the
tional culture. Cases A and C have the same organizational cultures and the ERP system
impact of BPR on the ERP implementation at the implementation requirements. Thus, organiza-
level of average positive impact since Case A is a tional culture in Companies B and C has very
state-owned enterprise that may need more BPR strong and positive effect on ERP system imple-
effort before or during the ERP program. Case C mentation. While Company A is neutral in the
is a joint venture (JV) that had installed a relatively dimension of loose vs. tight control system due to
small ERP system, FourthShift, which maybe a its management reform in past several years. This
little different from the large one, Baan IV. Thus, also affects ERP system implementation posi-
the business processes need to be changed for Baan tively.
IV implementation. Company B is a JV that had Among the four companies interviewed, only
installed the MRP II system of Baan product Company D shows negative impact on Baan IV
series, which necessitates relatively little change on system implementation. Furthermore, evidence
the current business processes to update to the shows that two signs of strong negative
ERP system of Baan Company. impact of organizational culture and ERP vendor
Based on the subjects responses (see Table 4), quality, one sign of adequate negative
Case D has parochial, closed, and loose control impact of user characteristics, and one of
system climate. According to Hofstede (2001), weak negative impact of company-wide support
these three dimensions have a negative effect on IT on the ERP system implementation. Moreover,
deployment success. Parochial culture focuses on only ve +++ signs of strong positive impact
local competition rather than external, which of effective project management, BPR, ERP soft-
means only local ERP implementation conditions ware suitability, information quality, and system
are considered. Thus, it is difcult for Case D to quality on Baan IV implementation in Company
adopt advanced technology to improve its compe- D. Three + of weak positive impact of top
tence. While the closed system discourages infor- management support, education and training, and
mation sharing among team members, people in user involvement exist.
such system regards information as proprietary. Company D is a state-owned enterprise that
While ERP operation requires high degree of relies on top managers personal experience and
information sharing across departments to ensure intuition to make decisions. Communication
inventory, production scheduling, and procure- between departments is limited and orders are
ment information updated timely as much as passed verbally, which results in low accountabil-
possible. Furthermore, ERP systems require ity recourse. People tend to be tolerant of unclear
timely data input to ensure end product of the information. The characteristics of Company Ds
system timely, useful, and accurate. culture affected the ERP system implementation
Both Companies B and C are JVs that have strongly and negatively. Since the third party was
quite advanced organizational culture. Both Wes- inexperienced with Baan IV implementation and it

Table 4
Cross case matrix on three dimensions of organizational culture

Dimensions of organizational culture concerned Case A Case B Case C Case D

Parochial vs. professional Professional Professional Professional Parochial


Open vs. closed system Open system Open system Open system Closed system
Loose vs. tight control system Neutral Tight control Tight control Loose control
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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 71

was the rst time experience with system ERP projects could be said successes in that the
implementation. The implementation service ERP system has been used as one integrated part
quality was poor and affected the ERP imple- of these rms. However, Company Ds ERP
mentation strongly and negatively. Since the IT project could be classied as a failure due to the
usage level in Company D was quite low and it is fact of its suspension of use.
difcult to nd the best key user candidates, the Moreover, only one company, Company C,
key user characteristics was another factor that developed its own success measures of a quasi-
affected the ERP project negatively. While the Oliver Whites ABCD Classication Scheme to
department heads unwillingness to provide sup- evaluate its ERP implementation result. The other
port and less attention on the ERP project three rms did not assess their ERP projects very
also posed the negative impact. Furthermore, seriously. They simply formulated ERP implemen-
education and training and user involvement tation objectives at the very beginning of the ERP
were not strongly supported by either the vendor project when analyzing their business require-
or the key users. It is the top-down dictate from ments. However, those objectives would be too
the headquarter that decides to adopt the ERP broad, immeasurable and not suitable to evaluate
system, which made the top management in the complicated ERP system implementation
Company D simply to accept the order and adopt results.
the ERP system. They did not recognize its
importance of applying an ERP system in their
company and consequently they did not give
enough support to this big project. Based on the 6. Discussion
negative responses plus nal suspension of Baan
IV system even though it successfully went live, the From above analysis, we get more detailed
implementation of Baan IV system in Company D information about ERP systems implementation
was a failure. issues in China context. This study explains and
From Appendix B we present the interviewees conrms that critical success factors identied in
opinions about the ERP implementation results. Western countries are applicable to China context
Both Companies A and C show adequate satis- and all the four propositions get support from the
faction with the ERP system implementation study (see Table 3). Meanwhile, culture as the
and the remaining B and D show weak satis- unique critical success factor has been conrmed
faction with the ERP system implementation. by this study. Based on Hofstede (2001), three
Company A shows strong evidence in the other dimensions of organizational culture including
three proposed success measures of individual parochial vs. professional, open vs. closed system,
impact, organizational impact, and intended busi- and loose vs. tight control are more closely linked
ness performance improvement. Company C with IT deployment in general and ERP imple-
shows strong evidence in organizational impact mentations in specic than the other three dimen-
and intended business performance improvement, sions. Chinese people are more tolerant to unclear
but adequate evidence in individual impact. information, relying more on personal experience,
Company B shows adequate evidence in both keeping more information among themselves than
organizational impact and intended business their Western counterparts. However, the ERP
performance improvement, but weak in user system deployment requires clear and accurate
satisfaction and individual impact. However, data/information, focuses on business processes
Company D shows weak evidence in all the four and inter-department cooperation, which is in-
proposed success measures with further suspension compatible to Chinese organizational culture.
of using the ERP system. Thus, we could draw Thus, in order to obtain ERP systems implemen-
conclusions that even though Companies A, B, tation success, Chinese enterprises should take
and C achieved different level of evidence in the their organizational culture into account and try to
proposed four areas of success measures, their change their culture to the modern management
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72 Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

requirements in terms of the three dimensions Based on the data analysis, we found that
particularly. the variables of information quality and system
Other factors that have been overlooked by quality from the DeLone and McLeans success
prior studies can be classied as critical success model should be modied greatly considering
factors in China context such as existing IT the specic condition of a large mature off-
infrastructure of the company, ownership, and the-shelf ERP package implemented in manufac-
reasons to adopt ERP systems. Among the four turing enterprise. Information quality refers to
companies, no MRP system was used in Case D product of an IS in DeLone and McLeans
only. It is the order from the headquarter to model. However, in the environment of ERP
implement an ERP system in Case D. The system, only when the input data were correct
implementation of Baan IV system in Case D can the end users get accurate output information.
was classied as a failure. Moreover, since an ERP system is used in
As for the success measures used in ERP organizations daily business, it is natural that
user rms, only Company C developed a set of the information output is timely. Thus, only the
success measures like Oliver Whites ABCD integrity of raw input data in information quality
Classication Scheme to evaluate its ERP imple- affects the ERP system implementation result.
mentation result. However, the other three com- As for the system quality in the ERP eld, it
panies did not have their own success measures. also should be modied in that ERP system
Companies A and B did not evaluate their ERP packages have been developed for many years
implementations results. Based on the fact that and used in many sites, which enable the packages
most rms in China do not have specic and to be very mature and reliable. Of course,
quantiable success measures, this study does play usefulness should be the rst must for any ERP
an important role in narrowing the gap of current package in that the ERP vendors have to update
status of success measures shortage in China their ERP packages more frequently to survive
enterprises and conrms that ERP success factors intense competition.
used in Western countries are applicable to China Organizational culture has been overlooked in
context. Furthermore, the success measures de- prior studies. However, it does affect an ERP
ned in this study are quite comprehensive on system implementation especially in a fully differ-
the one hand and concise on the other hand in ent cultural environment. Empirical evidence from
that the four success measures can be used to this study suggests that organizational culture is an
measure different aspects of an ERP system important unique factor for ERP system imple-
implementation. mentation success.
As for the success measures, system use
should be another success measure in that even
6.1. Implications for academic researchers though Company D encountered many problems
in implementing the ERP system, nally the
This study derives its theoretical foundation system went live. However, the ERP system
from the Ives, Hamilton, and Daviss IS eventually was suspended, which is denitely a
research model and the DeLone and McLeans failure case of ERP system implementations.
IS success model. An ERP implementation success System use in this context means once the ERP
framework has been developed and four proposi- system implementation has been completed it is
tions are developed based on the associations used in daily business.
between four environmental factors and ERP This study develops a conceptual framework
system implementation success. This conceptual with theoretical support from the IS eld which
research framework gets support from the above should be taken into consideration when research-
two models and the empirical results obtained ers are studying ERP implementation issues. This
from this study provide support to the four framework could be applied into other countries
propositions. to test its applicability.
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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 73

6.2. Implications for business practitioners as a success or a failure. We developed a


conceptual research framework to guide the
The implementation of a foreign ERP system research and four propositions concerning the
in Chinas rms involves the issue of orga- associations between the proposed critical factors
nizational culture, BPR, and standardization of and ERP implementation success are developed.
the enterprises operational processes. The cri- Qualitative research methodology is used in this
tical success factors identied in Western countries study due to the research question. To make
are conrmed applicable in China context and comparison possible, the researcher uses one set of
culture is an important unique factor when an case study protocol and interview questions in
ERP system is implemented in Chinese rms. studying four ERP user rms that have imple-
Meanwhile, reasons to adopt an ERP system, mented the same ERP system, Baan IV, going live
existing IT infrastructure, and company owner- no more than 2 years. Four ERP user rms were
ship should be taken into consideration in selected and interviewed based on the same size
China context. ERP vendor quality should be and business industry. The result of this research
given more attention in China context in that Case study can contribute to both the academic eld
D selected a less experienced third-party consult- and business industry.
ing rm to lead the ERP system implementation We collected much information from the four
and the ERP project in Case D was classied as a ERP user companies including interviewees
failure. responses, periodic status meeting minutes,
Once the ERP project goes live, enterprises ERP implementation plans, and ERP project
should evaluate its implementation result to proposals drafted by the Baan Company for
see what the ERP system could do to improve triangulation, however, only in Case A two
their business performance in that the ERP project interviewees cooperation is obtained and only
is a large program that involves many people, one person in the other three rms, respectively, is
money, and time investment. With correct available to accept the interview. It would be
evaluation of the ERP project, enterprises could ideal if more interviewees from different positions
nd where they should spend more time and within one rm could be available for the inter-
effort to improve and what places they succeed so view. The case study protocol could be used to
that they could elevate their rms operational study different ERP packages implementation
performance. to examine variations between different ERP
In Appendixes C and D, we recommend a systems and vendors. The conceptual framework
map to successful ERP system implementation could be used in other countries to test its
and operation in China. Three stages of an applicability by further studies. Moreover, re-
ERP project are classied and different cri- searchers could focus on more specic areas such
tical success factors should be given more atten- as people resistance or organizational culture
tion in these stages. Following this map, the impact within one rm so that more detailed and
chance to succeed in adopting and implementing in-depth information or deep-rooted failure rea-
an ERP system in China context can be improved sons could be identied.
great.

7. Conclusion
Acknowledgements
This study aims to improve understanding of
both generic and unique critical factors that The authors are very grateful to two anonymous
affect ERP implementation success in China and referees for their constructive and helpful com-
establish measures to assess the extent to which ments which helped to improve the presentation of
an ERP system implementation can be dened the paper considerably.
74
Appendix A
Concept matrix: Critical success factors and ERP success measures mentioned in the literature

Critical success factors Al-Mashari Ang et al. Bingi Burns and Cox and Hong and Malbert Theoretical
and success measures et al. (2003) (1994, 1995, et al. Turnipseed Clark Kim (2002) et al. support

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680


2002) (1999) (1991) (1984) (2003)

Top management support O O O O No


Clear goals and objectives O No
Company-wide support O O No
O O O

ARTICLE IN PRESS
Communication No
Visibility of implementation O No
Training and education O O O O O No
Vendor support O O O No
BPR O O O O O No
Suitability of hardware and O O O O No
software
Project management O O O O No
Data accuracy and integrity O O O O No
Company expertise in IT O O O No
User characteristics O O O O No
User participation O O O O No
Cultural t O O No
Success measures
User satisfaction O O O No
Intended business performance O O No
improvement
Whites ABCD Classication O No
Scheme
On time O O O No
Within budget O O O No
System acceptance and usage O No
Predetermined corporate goals O No

continued on next page


Appendix A (contd.)

Critical success factors Mandal and Motwani Markus Sum Umble White Wilson Yusuf Theoretical
and success measures Gunasekaran et al. et al. et al. et al. et al. et al. et al. support
(2002) (2002) (2000) (1997) (2003) (1982) (1994) (2004)

Top management support O O O O No


Clear goals and objectives O O No
Company-wide support O O O No
Communication O No
Visibility of implementation O No
O O O O

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680


Training and education No
Vendor support O O O No
BPR O O O O No
Suitability of hardware and O O O No
software

ARTICLE IN PRESS
Project management O O O No
Data accuracy and integrity O O No
Company expertise in IT O No
User characteristics O No
User participation O No
Cultural t O O No
Success measures
User satisfaction O O O No
Intended business performance O O O O No
improvement
Whites ABCD Classication O No
Scheme
On time No
Within budget No
System acceptance and usage O No
Predetermined corporate goals O O O No

75
76
Appendix B
ERP implementation success measures matrix

ERP implementation Case A Case B Case C Case D

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680


success measure
Strong Adequate Weak Strong Adequate Weak Strong Adequate Weak Strong Adequate Weak

User satisfaction O O O O
Individual impact O O O O

ARTICLE IN PRESS
Organizational impact O O O O
Intended business O O O O
improvement
Planned budget vs. No budget: 3 millions RMB No xed budget No xed budget N/A: 1.5 millions RMB
actual costs
(1 USD=8.3 RMB)
Planned time vs. 1:1.5 years No time frame No time frame 8:8 months
actual time
Suggested success 1. No success measures 1. Quasi-Oliver Whites 1. ERP implementation
measures 1. More efcient information were used. ABCD Classication objectives.
ow than before. 2. Inventory level did Scheme. 2. User satisfaction.
2. Top management could decrease, manufacturing 2. Inventory level 3. ERP going live
monitor organizational lead-time also lowered, account does not represent
operational performance became shorter, receivables a success.
24 h/day. and customer service decreased, and 4. The ERP system
3. Capable ERP experts level improved. manufacturing should be one of
are cultivated to maintain lead-time became the rms integrated
the ERP system. shorter, etc. parts.
Appendix C

A recommended map to successful ERP system implementation and operation in China

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

ARTICLE IN PRESS
77
78
Appendix D

Impact of critical success factors across successful ERP system implementation stages

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680

ARTICLE IN PRESS
ARTICLE IN PRESS

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 79

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