The Impact on the Organisational Effects of the Implementation of ERP and Selected Management Methods

Outline

• Abstract
• Keywords
• 1 Introduction
• 2 Erp Definitions
• 3 Empirical Research
• 3.1 the Coexistence of Erp and Selected Management Methods
• 3.2 the Effects of Erp Usage
• 3.3 the Effects of the Coexistence of Erp and Other Methods
• 4 Discussion and Conclusions
• Appendix
• References

Conclusions

The research proved that using ERP significantly benefits the business effects responsible for overall condition of the entire organisation (including general improvement of financial results, profitability, revenues, adaptability etc.). This result correlates with numerous literature statements (Li et al. 2008; Cebeci 2009; Aloini et al. 2012). However, there was no significant relationship between ERP implementation and more specific effects—mainly efficiency and management effects. In the literature, attention is often directed to these kinds of benefits resulting from the use of ERP (Kale 2001; Hitt et al. 2002; McAfee 2002; Stratman and Roth 2002; Al-Mashari et al. 2003; Hendricks et al. 2007). On the other hand, the coexistence of ERP and other methods allowed better effects to be achieved— not only business effects, but also efficiency, management and environmental ones. The results of the research point to the fact that the implementation of ERP together with controlling gives higher effects than for either method used separately. Among the assumptions of implementing ERP are, most of all, the increase in transparency and information relevance as well as the integration of the information resources of various enterprise functional areas (Al-Mashari et al. 2003; Hendricks et al. 2007; Aloini et al. 2012). Thus, ERP can constitute an important tool for improvement of decision-making process (Kluge and Kuz˙dowicz 2011). Furthermore, the two methods used together, give an opportunity of basing decisions on the same information. However, the findings show that controlling also supports ERP.

Operations’ coordination, which is the consequence of the use of the ERP system as well as having access to reliable information, is essential to achieve a given level of organisation efficiency in almost all conditions. However, it should be emphasised that the use of ERP in an organisation seems to support in particular the orientation process and this is the reason for the correlation with BPM. This is because, among other reasons, as claimed by Keiser and Walgenbach work in the ERP system is determined by the standard of task execution defined in the phase of process modelling, and system configuration can take place only in accordance with the adopted specifications (Kieser and Walgenbach 2003). The fundamental role that the process models play in the implementation and use of ERP systems in enterprises is stressed by Kasprzak (2005). The findings prove that ERP and BPM are complementary methods—the methods mutually support one another in achieving the organisational goals.

According to this study’s research results the use of ERP together with BSC leads to an increase in nearly all effects (business, managerial, social as well as efficiency) in relation to the use of ERP on its own—without BSC. Management in a balanced way should provide the avoidance of the defects resulting from the phenomenon of suboptimization. Thus, the decisions made by the management members should be based on the data coming from different areas of the organisation and ERP allows for the aggregation of such information. ‘Moreover, it is very important to match the ERP package objectives with business objectives’ (Cebeci 2009, p. 8902). Balanced scorecard helps to define key objectives, benefits and expectations, thus the expectations for ERP are clear (Cebeci 2009).

The use of ERP together with TQM leads to higher efficiency and business effects. In the literature there are some who suggest that ERP can be used as an enabler for the implementation of effective TQM. Moreover, Li et al. examined the relationship between TQM and ERP implementation, operations management, customer satisfaction and firm’s performance and they claim that those methods are complementary, due to the organisation of an enterprise’s processes, and they believe that ERP plays an important role in high-level management and in the coordination of procedural quality functions (Li et al. 2008). Furthermore, in the view of Schniederjans and Kim (2003), TQM gives proper ERP support—corporate culture and organisational infrastructure (after: Kowalak 2009). Laframboise and Reyes believe that a successful implementation of ERP and TQM provides a potentially complementary resource leading to the competitive advantage (Laframboise and Reyes 2005). Schniederjans and Kim (2003) argued that change methods, such as BPR, and catalysts for change methods, such as TQM, must be aligned to support the implementation of ERP (after Laframboise and Reyes 2005). Jha and Joshi (2007) emphasized the relevance of TQM for the facilitation of ERP implementation (after Movahedi and Nouri Koupaei 2011).

In the context of quality there is another method that should be mentioned— Varzandeh and Farahbod studied the role of ERP among selected industries to achieve ‘Six Sigma’ quality (Varzandeh and Farahbod 2010). The new Six Sigma is data-driven and needs a reliable source of information. Enterprise resource planning would guide the organisations and provide them with a road map to better meet customers’ needs with virtually zero dissatisfaction. The research findings prove that ERP and Six Sigma mutually support one another in achieving the business and management goals.

The analysis of the results shows that the coexistence of ERP and CRM leads to higher efficiency effects than using CRM alone. Order cycle times can be reduced, resulting in improved throughput, customer response times, and delivery speeds stemming from ERP implementation (McAfee 2002; Cotteleer and Bendoly 2006; Hendricks et al. 2007). But according to research results, ERP and CRM mutually support one another in achieving business goals. On the one hand, ERP systems provide the infrastructure that facilitates a long-term relationship with customers (Hendricks et al. 2007), on the other, it is possible that with the integration of ERP and CRM the IT system is more customer-oriented.

In the literature, ERP is often combined with KM (Bien´kowska et al. 2013). It is stressed that the integration of both methods gives special benefits (e.g. Metaxiotis 2009), that ERP implementation is a KM tool (e.g. Chan et al. 2009) or KM must be strategically and systematically incorporated into each implementation phase of ERP-implemented projects (McGinnis and Huang 2007). Pang-Lo found that the introduction of ERP and KM has a positive impact on organisational performance (Pang-Lo 2011). The research results state that implementation of ERP together with KM brings higher social effects than the use of ERP only; however, a reverse situation did not occur.

The coexistence of benchmarking and ERP leads to higher business and efficiency effects—these methods can be considered as complementary, they assist each other in achieving organisational goals. From the point of view of benchmarking (especially internal), the importance of ERP systems is enormous. They allow updated information to be generated from each functional area of the enterprise (Kowalak 2009) and from the organisational environment (Koslowski and Stru¨ker 2011). On the other hand, the designers of ERP systems, by using the effects of the benchmarking analysis, can identify the weaknesses of the implemented systems and take actions to improve the efficiency of the whole organisation.

Moreover, CBM with ERP leads to achieving higher business and management effects than for either method used separately, and ERP paired with CBM leads to better social effects than when used on its own (however, a reverse situation did not occur). In relation to the CBM, what is definitely helpful is an HRM module, which allows for the flow of current information. The research results confirm this relationship with regard to the business and efficiency effects but do not support the conjecture on the management effects. This is puzzling, since in principle ERP managers should facilitate rational decision-making (in the CBM as well). On the other hand, CBM supports ERP in the field of orientation towards the employee, and therefore the employee’s knowledge and skills. This translates to higher business, performance and management effects achieved by an organisation in which two methods coexist, rather than those achieved when only ERP is implemented (without CBM).

Contemporary organisations need to apply various management methods and concepts (Jagoda and Lichtarski 2003; Sułkowski 2004; Sobczak 2009; Szpitter 2011). The results of the research confirm this thesis—implementing two methods helps to achieve a synergistic effect, which would not be achieved if the concepts were used separately. In the view of the authors, the issues presented in the paper should be treated as an introduction to the discussion of the coexistence of ERP and other management methods. What seems to be particularly important is to indicate the methods, to determine the influence of the implementation of particular management methods on the efficiency of ERP itself and to define the model solutions in this respect. At the same time, changing perspective into more general one could bring interesting results in the field of the coexistence of contemporary management methods and, in particular, to the issue of determining the character of the relations of particular method pairs, as well as examining the order and scope of implementing the methods.

Other problems that need further investigation are the changes of the relations in time, the indication of the complementary methods, the consideration of their possible hierarchisation, the order of implementation, the possibility of the substitution use of methods (some methods can be more adjusted to the existing solutions in the organisation or to the organisational culture than others), the clear indication of which methods can be really considered contradicting, and how the character of the relations changes with time.