Critical success factors of enterprise resource planning systems implementation success in vietnam

MINISTRY OF EDUCATION AND TRANNING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
------------

LÊ THỊ THU CHUNG

CRITICAL SUC CESS FACTORS OF
ENTERPRISE RESOURCE PLANNING
SYSTEMS IMPLEMENTATION SUCCESS
IN VIETNAM

THESIS OF MASTER OF BUSINESS ADMINISTRATOR

HO CHI MINH CITY – 2012


MINISTRY OF EDUCATION AND TRANNING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY
------------

LE THI THU CHUNG

CRITICAL SUCCESS FACTORS OF
ENTERPRISE RESOURCE PLANNING
SYSTEMS IMPLEMENTATION SUCCESS
IN VIETNAM
Subject: Master of Business Administrator
Code: 06.34.01.02

THESIS OF MASTER OF BUSINESS ADMINISTRATOR

ADVISOR:

DR. NGUYỄN THỊ NGUYỆT QUẾ

HO CHI MINH CITY – 2012


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ACKNOWLEDGEMENT
I would like to take this opportunity to express my gratitude to all those
who have helped and supported me during the time I conducted the study.
First of all, I would like to express my deepest gratitude to my advisor,
Dr. Nguyen Thi Nguyet Que, for her generous and patient guidance to my
thesis. Her inspiring advices are extremely essential and valuable for me to
finish this thesis. The advisor is very knowledgeable, professional, and nice to
me all the time. I feel very lucky and deeply appreciate her to give a chance to
be her student.
Secondly, I would like to show sincere gratitude to faculty members for
their enthusiastic support.
Thirdly, I would like to send special thank you to my friends, members
of ERP forum, my work partners...who supportively help me so much to
finalize the questionnaire, take part in the survey for pilot test as well as the
main study.
Lastly, I would like the send the most special thanks to my family,
especially my parents who are always there for me with so much love, care
and encouragement.
Le Thi Thu Chung
Ho Chi Minh, October 2012

ii

COMMITMENT
I hereby would like to commit that the thesis, “Critical success factors
of Enterprise Resource Planning systems implementation success in Vietnam”,
was accomplished based on my independent and serious studies and
researches. The data was collected in reality and it has clear origins. In
addition to that, the data would be trust-worthily handled and it has never
been released in any menu.
Le Thi Thu Chung


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TABLE OF CONTENT
ACKNOWLEDGEMENT ........................................................................................ I
COMMITMENT ...................................................................................................... II
TABLE OF CONTENT ..........................................................................................III
LIST OF TABLE...................................................................................................... V
LIST OF FIGURE.................................................................................................. VI
ABSTRACT ...............................................................................................................1
CHAPTER 1 INTRODUCTION .............................................................................2
1.1. Research background ..................................................................................................... 2
1.2. Research questions and objectives .................................................................................. 3
1.3. Practical significances of the study................................................................................. 5
1.4. Scope and approach ........................................................................................................ 5
1.5. Research method ............................................................................................................. 5
1.6. Structure of the thesis ..................................................................................................... 6

CHAPTER 2 LITERATURE REVIEW .................................................................7
2.1. Definition of ERP ......................................................................................................................................................................7
2.2. Situation of ERP in Vietnam ............................................................................................................................................... 10
2.3. Proposed conceptual model and hypotheses ............................................................................................................ 11

CHAPTER 3 ............................................................................................................25
3.1. Research purpose ...............................................................................................25
3.2. Research design ..................................................................................................26
3.3. Questionnaire design ..........................................................................................27
3.3.1. Questionnaire development .........................................................................27
3.3.2. Questionnaire translation .............................................................................31
3.4. Research strategy ..............................................................................................32
3.4.1. Qualitative pilot study .................................................................................32
3.4.2. Quantitative pilot study ...............................................................................32
3.5. Targeted population ...........................................................................................33
3.6. Research sampling ............................................................................................33
CHAPTER 4 ............................................................................................................38
4.1. Descriptions of sample ......................................................................................38
4.2. Reliability and validity of the measurement scale ............................................40
4.3. Testing the research model and the hypotheses ................................................45


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4.3.2. Testing hypothesis ......................................................................................49
4.3.3 Testing the moderating relationship .............................................................50
4.3.4. Description of statistics of overall ERP implementation success. ..............55
4.4. Findings ..............................................................................................................56
CHAPTER 5 ............................................................................................................58
5.1. Discussion of findings ........................................................................................58

5.2. Practical implications .........................................................................................59
5.3 Contribution of the current study ........................................................................61
5.4 Limitation and future research ............................................................................61
LIST OF REFERENCE ............................................................................................63
APPENDIX 1 .......................................................................................................6973
APPENDIX 2 ...........................................................................................................73
APPENDIX 3 ............................................................................................................80
APPENDIX 4 ............................................................................................................84
APPENDIX 4 ............................................................................................................87


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LIST OF TABLE
Table 2. 1: ERP systems history ............................................................................................ 7
Table 2. 2: Unified CSFs model by Esteve & Pastor (2000) .............................................. 12
Table 2. 3: 22 CSFs proposed by Somers & Nelson (2001) ................................................ 13
Table 2. 4: seven broad categories of CSFs by Nah & Delgado (2006) .............................. 13
Table 2.5: Eleven key CSFs by Nah, Lau & Kuang (2003) ................................................ 14
Table 2. 6: Four CSFs and 1 moderator proposed by Nah et al. (2007) .............................. 15
Table 2.7: Measurement of ERP implementation success by Petroni (2002) ..................... 23
Table 3.1: Survey items in the study .................................................................................. 29
Table 4.1: Sample characteristics ....................................................................................... 39
Table 4.2: Reliability of scales .......................................................................................... 40
Table 4.3: KMO and Barlett's Test (DV) ........................................................................... 43
Table 4.4: Total variance explained .................................................................................... 43
Table 4.5: Rotated Component Matix(a) ............................................................................ 44
Table 4.6: Correlation of constructs 1 ................................................................................. 45
Table 4.7: Model sumary(b) (MRL) 1 ................................................................................. 47
Table 4.8: ANOVA (Regression) 1 ..................................................................................... 47

Table 4.9: Coefficients (Regression) 1 ................................................................................ 47
Table 4.10: Testing H1, H2, H3, H4 1 ................................................................................. 49
Table 4.11: Model Summary of H5 1 .................................................................................. 51
Table 4.12: Coefficients of H5 hierarchical regression 1 .................................................... 51
Table 4.13: Model summary of H6 1 ................................................................................... 51
Table 4.14: Coefficients of H6 hierarchical regression 1 .................................................... 52
Table 4.15: Model Summary of H7 1 .................................................................................. 52
Table 4.16: Coefficients of H7 hierarchical regression 1 .................................................... 53
Table 4.17: Model summary of H8 1 ................................................................................... 53
Table 4.18: Coefficients of H8 hierarchical regression 1 .................................................... 54
Table 4.19: Testing H5, H6, H7, H8 1 ................................................................................. 54
Table 4.20: Descriptive statistic of ERP 1 ........................................................................... 55
Table 4.21: Levels of importance of factor 1....................................................................... 56


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LIST OF FIGURE
Figure 2.1: Modules of ERP system ..................................................................................... 9
Figure 2.2: Proposed conceptual framework ...................................................................... 16
Figure 3.1: Research procedure .......................................................................................... 26
Figure 4.1: The revised research model 1 ............................................................................ 55


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ABSTRACT
Enterprise resource planning (ERP) systems with high level of integration
can help improve capability of customer service, productivity, cost reduction,
inventory turnover and provide effective supply chain management and e-commerce.

ERP has been widely adopted in many countries, but in Vietnam it is still very
limited. Trend of globalization and fierce competition push Vietnamese enterprises
into having effective management and optimize cost. However, there have been
many failed attempts in implementing ERP systems. This research aims to examine
the critical success factors of success of ERP implementation.
The study was conducted in twenty five companies in Hochiminh, Dong Nai,
and Binh Duong (out of eighty one companies throughout Vietnam) with “go live”
ERP systems. The results of the study indicate Top management support,
Teamwork, Enterprise-wide communication and Project management program as
critical success factors of ERP implementation success. The results also show that
Organizational culture is the moderator which positively moderates the relationships
between Top management support, Teamwork, Enterprise-wide communication,
Project management program and
ERP implementation success.


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CHAPTER 1
INTRODUCTION
1.1. Research background
For the last few decades, business management strongly relies on the
information. The use of Management Information system (MIS) is being proved to
lead to better planning, better decision making and better result. MIS is defined by
Davis and Olsen (1985) as an integrated user-machine system for providing
information to support information management and decision making functions in
an organization. This study will look into one of the most advanced and
sophisticated MIS, the Enterprise Planning System (ERP) and the critical success
factors for its successful implementation.
Generally, ERP systems help organizations increase level of customer

service, productivity, cost reduction, inventory turnover and provide effective
supply chain management and e-commerce. The ERP systems are designed to
develop plans and schedules so that the right resources (manpower, material,
machinery and money) are available in the right amount when needed (Wallace and
Kremzar, 2001).
In reality, ERP implementation is costly, complicated and time-consuming.
According to survey result in 2010 by Panorama Consulting Group, on average, an
ERP project takes about 18.4 months with total cost of $6.2 mil. 51.4 % of ERP
projects exceed budget, 35.5% of projects take longer than expected duration and
40% of company face with operational disruption after “go-live”. In extreme cases,
companies have even had to close because of vast ERP investments that did not go
live, an example being the FoxMeyer Drug Company that ends into bankruptcy
(Scott and Vessey, 2002).


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In developing countries in Asia, the rate of ERP adoption was very low and
several years behind advanced countries (Rajapakse & Seddon, 2005; Ngai et al.,
2008). In Vietnam, ERP systems are still new to the companies. The system just
started to be seriously considered after WTO joining. Based on the information
found on ERP forum (www.erpsolution.vn, ), there are about 81
corporate throughout Vietnam that implemented ERP systems as in Appendix 1
attached to this thesis. At present, there hasn’t been specific statistics or numeral
analysis on successful and failed projects as well as the costs which were spent to
gain an effective ERP system. However in general, the effectiveness of ERP
implementation in Vietnam hasn’t been high yet. A great number of businesses
have implemented ERP but haven’t used up capacity of the system. Most of them
only come to a halt at the level of control. These businesses can apply little of
planning feature, while it is the prominent feature of the ERP.

The difficulties and high failure rate in implementation ERP systems have
been widely attracted many researchers to discover critical success factors for ERP
adoption in the world. Through comprehensive literature review, Ngai et al. (2008)
indicate that much of the research focused on Western developed nations while
there has been lack of research on the success or failure of ERP adoption in
developing regions/countries. This study attempts to study critical success factors
(CSFs) affecting ERP systems implementation success in Vietnam.
1.2. Research questions and objectives
There’s no doubt about the benefits that ERP systems bring to organization.
However, there are still many issues relating to ERP implementation which can
become potential risks for ERP projects. The research aims to answer to the
following question:
Question 1: What are the critical success factors for the ERP implementation
success?


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Question 2: What are the levels of effects that critical success factors have on the
ERP success?
Question 3: Does organizational culture enhance the relationship between critical
success factors and ERP implementation success?
Question 4: What is the state of ERP adoption in Vietnam?
This study is conducted to identify factors influencing ERP implementation
success. It seeks to examine and understand whether factors such as top
management support, teamwork and composition, enterprise-wide communication
and project management influence success of ERP adoption. It also seeks to
examine whether organizational culture positively moderates the relationship
between these factors and ERP implementation success. The specific objectives are:
-

To examine the relationship between top management support and ERP
implementation success.

-

To examine the relationship between teamwork and ERP implementation
success.

-

To examine the relationship between enterprise-wide communication and
ERP implementation success.

-

To examine the relationship between project management program and ERP
implementation success.

-

To examine the moderating effect of organizational culture on the
relationship between top management support and ERP implementation
success.

-

To examine moderating effect of organizational culture on the relationship
between teamwork and ERP implementation success.

-

To examine moderating effect of organizational culture on the relationship
between enterprise-wide communication and ERP implementation success.

-

To examine moderating effect of organizational culture on the relationship
between project management program and ERP implementation success.

-

To examine the state of ERP adoption in Vietnam.


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1.3. Practical significances of the study
The results of the study are practically meaningful for implementation ERP
systems in Vietnam. The study helps organization to master the main factors
influencing the success of ERP implementation. The results of the study will
provide necessary measures to improve the success rate of adopting ERP systems,
which results in improvement in performance and competition capability. The study
will also enrich necessary knowledge for people who are working the field of ERP
as well as those who are implementing or will implement ERP systems.
1.4. Scope and approach
Based on the list of corporate that have implemented ERP systems, the
author attempts to conduct the study in twenty five companies in Ho Chi Minh,
Binh Duong and Dong Nai with “go live” ERP systems.
The study is conducted in 2 phase: pilot study and main study. The purpose

of pilot test is to test the content as well as the measurement of scales. Then the
main study is to test the hypotheses and research model.
1.5. Research method
The study was carried out within 2 steps relating to two different methods:
Qualitative method: The author would use the qualitative method by
carrying out group discussions with five experienced people working in the field of
ERP business. The purpose of this step is to adjust and amend the translated
questionnaire suitable with the subjects and purposes of the study.
Quantitative method: Quantitative study would be carried out based on the
data collected from the questionnaire. Quantitative study is implemented to evaluate
the scale, verify the theoretical model. The scale is preliminarily tested the
reliability and validity using Cronbach alpha and exploratory factor analysis carried


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out by the SPSS 20.0 software. Multiple linear regression analysis and hierarchical
regression would be used to test the proposed model and the hypotheses of the study.
1.6. Structure of the thesis
This study includes 5 chapters:
Chapter 1- Introduction, mentions about research background, research objectives
and research scope and approach.
Chapter 2 – Literature review, provides theoretical and empirical background
supporting for hypothesized research model.
Chapter 3 – Research methodology, is about the methodologies that author used to
conduct the research.
Chapter 4 – Data analysis and findings, discusses about the analysis that author
conduct to test hypothesis and to answer the research question.
Chapter 5 - Conclusion and implication, is about the results, implication, and
recommendation for future research.

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CHAPTER 2
LITURATURE REVIEW
This chapter presents the theories behind ERP critical success. It will also
discuss about measurement for ERP implementation success. The research
framework and hypotheses will also be proposed in this chapter.
2.1. Definition of ERP
Kumar et al (2000) define enterprise resource planning (ERP) systems as
“configurable information systems packages that integrate information and
information-based processes within and across functional areas in an organization”.
ERP systems are expensive, and once ERP systems are implemented successfully,
significant benefits such as improved customer service, better production
scheduling, and reduced manufacturing costs can be gained.
The following table shortly summarizes the history of ERP and its precedents
Table 2. 1: ERP systems history

Time

System

Description

Inventory

Inventory Management
& Control

Inventory management and control
is a combination of information
technology and business processes in
order to maintain the appropriate
ratio in a warehouse.

1970’s

Material Requirement
Planning (MRP)

Material requirements planning
(MRP) software applications used
for planning and tendering
processes. MRP plans for activities
and purchase raw materials based on
production requirements, current
inventory levels and procedures for


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each activity.

1980s

Manufacturing
Requirements Planning
(MRP II)

MRP II applications using software
to coordinate the production process,
including a range from product
planning, parts purchasing, inventory
control to shipping finished goods
and distribution.

1990s

Enterprise Resource
Planning (ERP)

In the enterprise resource planning
or ERP, software applications used
for that purpose, to improve the
performance of internal business
processes. Modern integrated ERP
business on body functions,
including planning, inventory,
purchasing, distribution, sales and
tracking orders. ERP systems may
include application modules to
support other business functions.

2000s

ERP: Business
Intelligence &
Workflow

ERP has developed further to
include powerful data processing
and reporting engines, createing real
time reporting for business users.
ERP continued to extend into
vertical industries.

( />Initially, manufacturing systems emphasized on inventory management and
control. Most of software packages were individually designed and developed to
automate inventory. Since 1970s, the software packages were developed and
extended to Material Requirement Planning (MRP and MRP II). In the early 1990s,


9

MRP II was further extended to some other areas, such as Finance, Engineering,
Human Resource, Project Management etc., and the term Enterprise Resource
Planning started to be used.
Considered as the most important development in the corporate use of
technology in the 1990s, ERP has been undertaken by many organizations.
Generally, ERP systems nowadays compose of several modules, such as human
resources, sales, marketing, finance and production, providing cross-organizational
integration of transaction-based data management throughout embedded business
processes support.

Figure 2.1: Modules of ERP system (www.abouterp.com) 1
The potential benefits of successfully implementing an ERP system is large,
and even, according to Markus et al. (2000), critical to organizational performance
and survival. ERP systems can potentially allow a company to manage its business
better with potential benefits of improved process flow, better data analysis, higher

quality data for decision-making, reduced inventories, improved coordination
throughout the supply chain, and better customer service (Gattiker and Goodhue,


10

2005; Lengnick-Hall et al., 2004; Gupta, 2000; Fan et al., 2000). Moreover, Zheng
et al. (2000) suggest that ERP systems improve the efficiency of management
decisions and plans and increase the flexibility with adjustments of functionality to
react to business needs while Huang and Palvia (2001) suggest that ERP helps a
manufacturer or a service business manage the important parts of its business. All of
the benefits can help improve profit margins (Fan et al., 2000). Businesses have
been quick to embrace ERP. Willis and Willis-Brown (2002) observe that the ERP
market is one of the fastest growing markets in the software industry and Yen et al.
(2002) and Adam and O’Doherty (2000) suggest that ERP will continue to be one
of the fastest growing and influential players in the application software industry
through to the next decade.
2.2. Situation of ERP in Vietnam
After 1990s, many companies in the world have been implementing ERP
systems to have a uniform information system in their business. In Vietnam, ERP
appeared in 1998. However, the application and construction of ERP in enterprise
was developed in 2002. The number of more than 80 enterprise companies with “go
live” ERP systems indicates that the status of ERP application in Vietnamese
enterprises is very limited. Most of businesses are still not aware of the importance
of ERP as well as their material and technical basis and financial resource are not
adequate to implement ERP. Some enterprises, which provided ERP solution,
recognized that the number of experts in this field in Vietnam is quite low.
In 2006, Oracle was the only ERP solution provider for the whole market of
small and medium enterprises in Vietnam. However, until now most of leading ERP
solution providers in the world have appeared in Vietnamese market, including

famous ones such as SAP, Tectura, Atos, Soltius, IBM ... Most ERP vendor have
partnership with Vietnamese companies in order provide ERP solution to end-users.
FPT seems be the biggest ERP provider who have partnership with most of ERP
vendor.


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Until February 2011, there were about 80 Vietnamese companies that
already adopted ERP systems, and the number was anticipated to increase
significantly. This result came from a report released on the website on
March 2011 which was attached in Appendix 1 at the end of this research.
Until the present moment, there hasn’t been detailed statistics on the success
or failure, the cost as well as effectiveness of ERP systems in Vietnam. However in
general, the effectiveness of ERP implementation in Vietnam hasn’t been high yet.
A great number of businesses have implemented ERP but haven’t used up capacity
of the system. Most of them only reach to the level of control. These businesses can
apply little of planning feature despite the fact it is the prominent feature of ERP
systems.
2.3. Proposed conceptual model and hypotheses
According to Amberg (Amberg et al, 2005), the first author who developed
the concept of critical success factors on the basis for determining information
needs of managers is Daniel (1961). Then , the idea was popularized by Rockart
(1979) and have been widely used in the information system. “CSFs are the
limited number of areas in which results, if they are satisfactory, would ensure
competitive performance for the organization. They are few key areas where things
must go right for the business to flourish” (Rockart, 1979, 85).
Implementing an ERP system is a complicated process which many factors
potentially affect on. There have been recently many research published on the
factors contributing to ERP adoption. Author will mention about several researches

used as main reference of the study.
Esteves and Pastor (2000) categorize CSFs into Organizational and
Technological, and then sub-devide them into strategic and tactical factors.


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Organizational

Table 2. 2: Unified CSFs model by Esteve & Pastor (2000)
Strategic
Tactical
 Sustained management support.
 Dedicated staff and consultants
 Effective organizational change
management

 Formalised project
plan/schedule

 Good project scope management

 Adequate training program

 Comprehensive business process
re-engineering

 Preventive trouble shooting

 Adequate project champion role

 Appropriate usage of
consultants

 User involvement and participation

 Empowered decision-makers

Technological

 Trust between partners
 Adequate ERP implementation
strategy

 Adequate software
configuration

 Avoid customization

 Legacy system knowledge

 Adequate ERP version

The organizational factors relates to organizational structure and culture and,
business process. The technological perspectives mention a particular ERP products
in terms of technical issues such as hardware and software.
Also through citations in the studies that they reviewed, Esteves and Pastor
supposed that organizational aspects are more important than technological one, and
top management seems to be the most important factor.
Somers and Nelson (2001) proposed twenty two critical success factors

which can be seen in Table 2.3


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Table 2. 3: 22 CSFs proposed by Somers & Nelson (2001)

1

Top management support

12

Dedicated resources

2

Project team competence

13

Use of steering committee

3

Interdepartmental cooperation

14

Users training on software

4

Clear goals and objectives

15

Education on new business processes

5

Project management

16

Business process reengineering

17

Minimal customization

6

Interdepartmental
communication

7

Management of expectations

18

Architecture choice

8

Project champion

19

Change management

9

Vendor support

20

Partnership with vendor

10

Careful package selection

21

Use of vendors’ tool

11

Data analysis & conversion

22

Use of consultants

These twenty two factors are evaluated across stages of ERP adoption such
as initiation, adoption, adaptation, acceptance, routinization and infusion. (i) Top
management support, (ii) project team competence, (iii) interdepartmental team
competence, (iv) clear goals and objectives, (v) project management, and (vi)
interdepartmental communication are top six factors.
Seven broad categories of critical success factors developed by Nah and
Delgado (2006) which were derived from the eleven critical success factors
identified by Nah, Lau, and Kuang (2001) is another comprehensive examination of
the critical success factors of ERP implementation.
Table 2. 4: seven broad categories of CSFs by Nah & Delgado (2006)

1.

Business plan and vision

2.

Change management

3.

Communication

14

4.

ERP team composition, skills and compensation

5.

Project management

6.

Top management support and championship

7.

System analysis, selection, and technical implementation.

Table 2.5: Eleven key CSFs by Nah, Lau & Kuang (2003)

1. Teamwork and composition
2. Change management program and culture
3. Top management support and championship
4. Business plan and vision
5. Business process reengineering with minimum customization
6. Project management
7. Monitoring and evaluation of performance
8. Effective enterprise-wide communication
9. Software development, testing, and troubleshooting
10. Project champion

11. Appropriate business and IT legacy systems.

According to a survey conducted by Nah et al (2003), Chief Information
officers of 1000 companies identify top six factors from eleven critical factors in
table 2.5 to be the most critical factors. They are: (i) Top management support and
championship, (ii) Project champion, (iii) Teamwork, (iv) Project management, (v)
Change management and culture, and (vi) Effective enterprise-wise communication.
The last comprehensive study reviewed in this chapter is four critical success
factors and one moderator model proposed by Na et al (2007).


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Table 2. 6: Four CSFs and 1 moderator proposed by Nah et al. (2007)

1. Top management support
2. Teamwork
3. Enterprise-wide communication
4. Project management program
5. Organizational culture (moderator)
The three among four factors in Nah et al (2007) (top management support,
project management and enterprise-wide communication) are the three common
factors between Nah et al (2003) and Somers and Nelson’s (2001) list of top factors.
Teamwork in Nah et al. (2007) is mentioned in Nah et al.’s (2003) list and it covers
the two factors in Somers and Nelson’s (2001) list – project team competence and
inter-departmental cooperation. For this reason, these four factors are listed in Nah
et al.’s (2007) research were chosen as independent variables for this study. This set
of

four

factors

(Top

management

support,

Teamwork,

Enterprise-wide

communication, and Project management program) is also ranked among the top
five factors in Nah and Delgado’s (2006). What is new in Nah et al. (2007) is the
presence of moderator – organizational culture which moderating the relationship
between the four independent variables and the dependent variable – ERP
implementation success.
The model proposed by Nah et al. (2007) seems the most complete which is
selected for the study.
Hypotheses from H1-H4 show the effect of the independent variables (top
management support, wide-enterprise communication, teamwork and project
management program) on the dependent variable (ERP implementation success),
whereas hypotheses H5-H8 show the moderating effect of organizational culture on
these relationships. Figure 2.2 shows the proposed conceptual framework for this
research.


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Organizational culture
Top management
support

H1

Teamwork

H2

H5

H6

H7

H8

ERP implementation
susuccess
Enterprise-wide
communication

H3

H4
Project management
program
Figure 2.2: Proposed conceptual framework 1
Independent variables: Top management support, teamwork, wide-enterprise communication,

project management program
Moderator: Organizational culture
Dependent variable: ERP implementation success

Top management Support: Many studies (Nah et al. (2007 ), Sommers and
Nelson (2004), Akkeman & van Helden (2002), Esteves & Pastor (2000), Nah et al
(2001), Al-Mashari et al (2003), Umble et al (2003), Zhang et al (2002)) have
stressed the importance of top management support as a top crucial condition in
successful ERP implementation. Sarker and Lee (2003) suggested strong and
committed leadership as necessary ingredient for ERP implementation success.
Willocks and Sykes (2000) stated that there must be public, explicit, and sincere
support for the project. ERP project needs to be publicly and explicitly identified by


17

top management as top priority (Wee, 2000). According to Holland, Light and
Gibson (1999), in order for ERP successful implementation, commitment of
valuable resources to the implementation efforts should be a must. Top management
support can be considered the most widely-studied factor in IS implementation
success (Dong, 2001). Top management support is even more important for a ERP
project since ERP is a highly integrated information system which requires
cooperation of line and staff members from all segments of the business as well as
the large scale of resources. For this reason, author hypothesizes that:
H1: Top management support increases the level of success of ERP
implementation.
Teamwork: In order to maximize the chance for ERP successful project, the
ERP team should consist of the best people in the organization (Buckout et al. 1999;
Bingi et al., 1999; Rosario, 2000). Moreover, these people should be crossfunctional and have both business and technical knowledge (Bingi et al., 1999;
Summer, 1999, Nah and Delgado., 2006). Members of ERP team have to devote

full time to the implementation (Wee, 2000, Nah et al., 2007). They even need to be
re-located for working together (Nah et al., 2007). On the other hand, according to
Wee, 2000, the ERP project members should be paid with compensation and
incentives for complementing the system successfully and on time and within the
budget. Author therefore hypothesizes that:
H2: The use of cross-functional teams that consist of people with the best
business and technical knowledge increase the level of success of ERP
implementation.
Enterprise-wide communication: Organizations are necessarily required to
have communication across different levels of functions and units (Akkermans &
van helden, 2002; Falkowski, Pedigo, Smith, & Swanson, 1998). Expectations and
goals must be effectively communicated among stakeholders and across all levels of
the organization (Al-Marshari et al., 2003). Organizations should have monthly