Change management is necessary if its ERP implementation is to be successful and is considered to be the sole responsibility of the human resources, organizational development or corporate communications function. The key is the integration of all disciplines involved in the business transformation process. (ref 3)
KEY FINDINGS
IMPORTANCE OF THE STUDY TO THE INFORMATION SYSTEMS
The operation and management of organizations are heavily dependent on Information Systems (IS) that make virtual organizations more successful, because the communication and collaboration among dispersed business partners is key to making it happen (Turban et.al, 2000). ERP is a part of IS that automate and provide the ease of use of business process, customization, control and automation. (Glory, 2000).
ERP and e-business integration defines the new IS structure for organizations, which can be described as ERP based e-business (Turban et.al, 2000). An ERP coordinates all resource of IS and it is based on a common database and modular software design and IS integrates the data of ERP implementation. The IS can significantly improve business performance by strengthening the linkages in the value chain between businesses, and between a business and the ultimate customer. (Glory, 2000) IS provides a common platform that many users at different organizational levels can benefit.
ERP is a finest expression of inseparability of business and IS. If used accordingly that leads to positive user evaluation and positive performance impact.
The IS literature so far has been physiological factor that predicts attitudes and behaviors such as usage and acceptance (ref 7).
For better understanding of IS usage following model has been identified.
The theory used in this report is technology acceptance model (TAM) and TFB. The variables of readiness for change names as: perceived personal competence, organizational commitment, attitude toward behavior (readiness for change) and two process outcome variables (perceived usefulness (PU) and perceived ease of use (PEU)) for ERP successful implementation. That is the primary reason why TAM and TFB has been used is to enhance the understandability of IS usage as major factors of a successful ERP project.
THEORETICAL ARGUMENT OF THE PAPER
The importance of IS is to understand the value of TFB model, especially the role of subjective norm as a determinant of IS which use is still unclear. Authors point that “it does not explain individual attitude and behavior” and “prior research has indicated the need for a better understanding of key determinants and suggested that TAM should be integrated in to a broader model with variables related to human and organizational dimensions” TAM theory says that perceived usefulness (PU) and perceived ease of use (PEU) of IT are major determinants of its usage (ref 7) PU and PEU are important predictors; they do not explain individual attitude and behavior. The determinant of TAM theory says that perceived usefulness (PU) and perceived ease of use (PEU) are of prime relevance in explaining the behavioral intention to use IS. TAM was specifically applied for creating user acceptance of IS with the aim of explaining the behavioral intention to use the system.
Another author P.Legris (2003, pp191-204) agrees with that statement and states “TPB is difficult to apply across diverse user contexts”[2]. Behavioral intention (BT) depends on attitude, subject norm (SN) and perceived behavioral control (PBC) [3].
So the main arguments aspects in article are:
- To identify two organizational factors for successful ERP implementation and name two factors, which are perceived personal competence and organizational commitment.
- To design and create models relevant to enterprise-wide initiatives.
- Identify not only PU and PEU but also perceived behavioral control and attitude toward behavior affect REP successfully.
The author analyzed the limited and shortage of traditional theory about the factors toward ERP implementation and IT usage from human and organizational dimensions. For instance, the method of TPB is limited to use in the diverse user with different background, and rarely accounts for the level of user’s behavior control. Therefore, they new model has been proposed, which is more relevant to corporation –perceived behavioral control and attitude toward behavior as major factors to evaluate ERP project. This model will be more objective to judge whether a system is successful.
In the analysis of organization factors for successful ERP implementation, the authors focus on the group of employees who hold the positive attitude for the change of new ERP system implement. They believe that the new system will be benefit for both corporation and individual and they are likely to make readiness of change rather than resist the change of situation.
THEORY AND HYPOTHESES
Push and pull theory has been used to identify that the need for change can be a major push factor so managers and experts are pushing workers towards the change. It is likely to produce positive perception and they appear to be more willing to try out a system. They tend to have less doubt about the technical changes. There has to be a pull factor existent as well. It can be achieved by focusing on user readiness for change and identifying the circumstance under which users are positive about it. Davis defined perceived usefulness as ‘‘the degree to which a person believes that using a particular system would enhance his or her job performance’’ and defined perceived ease of use as” the degree to which a person believes that using a particular system would be free of effort.’’(ref 8)
Based on that author of the main article have examined 6 hypotheses and how the link with each and create relationships among the six parts, that include of perceived personal competence, organizational commitment, readiness for change, perceived usefulness, perceived ease of use and usage intention.
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H1-Perceived usefulness- is the positive attitude towards change, if the ERP systems are found to be beneficial for the future of the organization and individual.
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H2-Perceived ease of use- creates positive attitude for workers who hand skills by the past working experience and be confidence to operate the new system.
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H3-Perceived Personal Competence- explains us that the more organizational committed; effort putting and innovative individuals would like the new system to be tested. Based on this hypothesis author linked following hypothesis:
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H4- Organizational Commitment- concerned with the technological usefulness of ERP systems. This hypothesis links and closes the relationship with other two hypotheses.
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H5- Perceived Usefulness of the system affects the Usage intention of ERP system
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H6- Perceived Ease of use affects the usage intention.
The 6 hypotheses show us that the readiness of change links and coordinates with each other and readiness for change plays the central part.
RESEARCH METHOD AND RESULTS
Many authors (e.g. Carter and Dresner 2001); recommend the use of more quantitative approaches including questionnaire or to develop valid and reliable measures that can be used in future research. On the other hand (Hartley et al. 2006) quantitative approaches are less flexible and primarily collect highly standardized (hence quantitative) data (ref 10)
Research model and hypotheses are main function to do research. Analysis on instrument development has been conducted and according to collected data analysis sample builds up both measurement model and structural model.
Article tested already implemented an enterprise-wide EPR system on Korean organization, which had installed the ERP system recently. The majority of them implemented were more than two ERP modules. A total of 350 questionnaires were distributed, responses were obtained, and representing a response rate of 81% and non-response was low. This study was only a convenience sample (respondents are selected in the convenience of the author).
The respondents represent an average age of 29.2 years and 4.7-7 years of work experience.
The reliability and validity of the measurement instrument was carried out using reliability and factor analysis (Table 3 of the Appendix), which were very reliable for this type of research.
Factor analysis was carried out to examine validity, which is considered to be satisfactory when factor loading is high on their factors. All of the loading factors were greater than 0.70, the reliability were in the acceptable range of more than 0.70. As shown in (Table 3 of the Appendix), all items had high loading on their respective factors.
The responder’s job is very much relevant to the ERP system, which makes data valid and reliable for the search.
However, in the responder characteristics classification there was some problems, for example, the section of Tenure are not exact. They classify this option as the years of persons working for the corporation without being specific whether the employee’s work and field is relevant to system of ERP since they started working in this corporation. So the article should mention the position in the company. Therefore we think that the data is less reliable for the research.
There should be a section to collect the information about how many modules the company currently use. That section is the reflection about the level of ERP usage in the company. Generally, speaking, the more modules the company uses, the more probability that the employee’s knowledge will be more in depth so that is an important data to compare in the research.
The best method of testing the effect on the readiness of change is compare to two groups. One of group consists of the employees who are not ready for new ERP system implementation. The other group consist of the staffs have been ready for the change though the training or other ways. And compare the data collected in this testing. The analysis of result from this research is more valid and convincible, rather than the present questionnaire in the article.
CONTRIBUTIONS/ORIGINALITY OF STUDY
This article makes three important contributions to the information systems research literature.
- Firstly a framework was developed to explain how positive attitude about readiness for change could be affected through behavioral intention to use ERP.
- Secondly the report makes important contributions to IS research as it focuses on a particular kind of technology called ERP systems, and examines potential benefits of the systems
- Thirdly, it has contributed by investigating and testing existing IS theory in a new IT context: the implementation of ERP systems. Unlike many IT systems, ERP systems are very complex in nature and require simultaneous changes in business processes and information sharing, the use and training.
- Additionally we found that both the PU and the PEU had a positive effect on the use of ERP systems
This paper will help the future managers and researchers to better understand the role that ERP systems and influence the formation of beliefs that affect attitude, which in turn affects behavioral intention. Managers can influence the formation of beliefs regarding the perceived usefulness of the ERP system.
The knowledge contribution supports the author that that ERP systems have to be use properly and any changes, if not used correctly will generate some further issues, therefore the network, computer facilities and existing IS should match with new ERP system perfectly.
There are no significant contributions with regards to data collection. The system used was data collected from users of ERP systems in Korea, which means survey was performed few years ago and to contribute to the knowledge better the article should contain the more up to date survey.
This report this highlights the disadvantage of ERP, which is the resistance of the end-user to change and that is the major reason for failure of EPR system implementation. Authors’ points are “creating readiness for change has been proposed as a major prescription for reducing resistance” [1]. And in this article, authors examined relationship between readiness of change and perceived value of the system to increase intention via ERP.
LIMITATIONS
The study concentrates on the positive factors of readiness for change and not on the negative therefore we have found that an important limitation.
The model used in the article lacks in information about TAM.
TAM is the one of major measure to evaluate implementation success.
K-Y. Kwahk and J-N.Lee states the limitations are:
- Gathering measures of all constructs were performed at the same time and measurement of all constructs was through the same instrument.
- When attempting to incorporate computer self-efficiency into the model, other factors may affect the technological attributes of the system.
- Incomplete representative of all kinds of IT-driven change.
Organizational investments in technology must take into account more than the financial cost; they must be sensitive to user characteristics. Subsequently, the leadership of an organization should address and strategically plan for individual differences like an individual's readiness for change when implementing a new technology.
3.6.2 RECOMMENDATIONS
The most significant obstacle to change is organizational resistance to change. Readiness for change represents an aptitude for transforming the organization into something new. “Unfreezing” the organization and move it into new paradigm and then “”refreezing” these process may result a resource strain (Levin, 1952; Schein, 1985). The organizations should be prepared for a change by having the skills and recourses to operate effectively under the new operational paradigm; readiness for change becomes a critical asset to help companies to transform more quickly and efficiently.
In the article, author states clearly that readiness for the change is important. Two suggestions have been proposed:
- Involve the staffs to participate in change-process [5].
If the end-users (staff) have not participated in the new system design and implementation process (DIP) at beginning, they would be confused by new system running at last. End-users participating in DIP could be a solution to save resource wasting and shortage of recognition period, and that presents state of readiness of change.
- Training after implementation
Most of companies believe training is wasting time and resources. In fact training is another way of preparing for a change and it takes irreplaceable role in changing process. It is fundamental part of new system implementation [6]. If all staffs were trained at just basic level before implementation, they would spend half the time to complete extra tasks. As a summary training makes the ERP system implementation easier, smoother and it is more effective by saving resources.
CONCLUSION.
Our report commented on the important of the role of readiness for change in ERP implementation in IS field. ERP implementation is a long process and requires restructuring and reengineering, to match the capabilities of the software. This means not only traditional project management has to be changed but it also involves multiple stakeholders, spread all around the world.
The managers should pay attention while system implementation and make sure that in-depth training before and after implementation is conducted.
This research indicates this major prescription for reducing resistance is to create readiness for change. We found significant support that shared beliefs that behavioral intention (PU and PEU) of ERP system can indirectly affect readiness for change and had direct impact on organizational commitment and perceived personal competence.
Using data gathered from the implementation of an ERP system, the author proves that employees are ready for change, if the use of the technology is easy to understand.
To summarize readiness for change requires effective leadership and positively influencing workers that there is a need for change in an organization
REFERENCES:
[1] S.K Piderit, Rethinking resistance and recognizing ambivalence: a multidimensional view of attitudes toward an organizational change, Academy of Management Review 23 (4), 2000, pp.783-794
[2] P.Legris, J.Ingham, P.Collerette, why do people use information technology? a critical review of the techonology acceptance model information an management 40, 2003, pp. 191-204
[3] I. Ajzen. The theory of planned behavior, Organizational Behavior and Human Decision Process 50, 1991, pp. 179-211
[4] Esteves, J., and Pastor, J., Enterprise Resource Planning Systems Research: An Annotated Bibliography, Communications of AIS, 7(8) pp. 2-54
[5] Paul Bocij and Simon ,Hickie Business information systems, pp. 495
[6] Paul Bocij and Simon ,Hickie Business information systems, pp. 497
(7) Kee-Young Kwak, Jae-Nam Lee, the role of readiness for change in ERP implementations: theoretical bases and empirical validation, 2008, pp.474-481
(Turban et.al, 2000).
(Glory, 2000)
ref8
ref 10
this is very important article
