evers, hoogendoorn and keulen an erp assimilation inquiry multi case-study research combining erp...

Evers, Hoogendoorn and Keulen

AN ERP ASSIMILATION INQUIRY

MULTI CASE-STUDY RESEARCH COMBINING ERP ASSIMILATION FRAMEWROK FOR PRE

AND POST ERP IMPLEMENTATION ANALYSIS

Advanced Resource Planning,

Research Paper Version III,

Tilburg University, November 2013

Evers, Jorne Mathijs, [email protected], ANR: 990774

Hoogendoorn, Marinus Sjoerd, [email protected], ANR: 700642

Keulen, Frank, [email protected], ANR: 246889

ABSTRACT

A successful ERP implementation does not necessarily translate in sustained use of the system by the em-

ployees of an organization. In order to achieve the full potential of an ERP system organizations should

pursue assimilation of the system, which should be ensured starting from adoption of the system. This re-

search evaluates three case-studies of ERP implementations according to a research framework that in-

cludes assimilation factors and describes the managerial implications in which the change management

component is also utilized.

mailto:[email protected]




1 INTRODUCTION

Completing an ERP system's implementation is not the end of the journey, a successful ERP implementa-

tion does not necessarily translate into sustained use of the system by the organization’s employees. Or-

ganizations that adopt and implement an ERP system should ensure effective assimilation of the system

in order to maximize the benefits they can reap from the ERP system.

Webster’s dictionary defines to assimilate as “to absorb into the system”. Effective assimilation in the

context of ERP systems in organizations is achieved when the system's ownership is high among the em-

ployees, and when the system has become institutionalized in the organization's processes. This implies

that assimilation occurs at the individual and organizational level.

Figure 1 plots assimilation in relation to the three main cycles that can be distinguished in the ERP

life cycle. As shown, the degree of assimilation becomes observable after the system has gone “live” but

this does not imply that it is not influenced prior to that; ERP assimilation is considered to be an essential

outcome of both the adoption and implementation efforts.

Figure 1: ERP life-cycle

Assimilation, together with factors such as routinisation and infusion influence the extent to which com-

panies can reap benefits from the implemented ERP system.

1.1 Problem Statement

From the existing IS literature we conclude that ERP assimilation is a relatively untouched subject. The

majority of IS literature focuses solely on ERP adoption and implementation rather than including the

post-implementation phase in which ERP assimilation plays an increasingly important role. Because the research subject of ERP assimilation is in early development, knowledge about ERP as-

similation is still limited, and as a result, the management is often unaware of the possibilities to positive-

ly influence this process (and the negative consequences of not taking certain measures). Many ERP case-studies and other research have used the TOE framework to investigate the influenc-

ing factors of the implementation and assimilation process, but these did not include other relevant theo-

ries such as change management to formulate their evaluations as recommendations.


1.2 Research Question

Which pre- and post implementation pitfalls should management avoid and which precautions can man-

agement take when adopting and implementing an ERP system, in order to positively influence (or accel-

erate) the assimilation process of the ERP system throughout the organization?

1.3 Purpose of the Study

The extent of ERP assimilation directly affects the degree to which an organization can benefit from the

ERP system. The goal of this study is to compare case-studies of ERP implementations in order to deter-

mine what the management could have done to accelerate the process of ERP assimilation; thus increase

the extent to which possible benefits are gained. The results of the research will be interpreted from the ERP management point of view so as to de-

scribe the managerial implications.

1.4 Objectives of the Study

Attain an understanding of ERP assimilation within the context of the ERP life-cycle

Identify the key factors that affect assimilation of an ERP system within an organization

Validate the ERP assimilation theories and recommended methods by matching them with results

from implementation case-studies

Articulate the managerial implications in order to optimize the assimilation process

1.5 Methodology

We will closely examine three ERP implementation case studies according to the TOE framework which

captures technological, organizational and environmental factors; the level of individual ERP assimila-

tion, the degree of institutionalization and what the management has done to prepare the organization for

change.

The differences and discrepancies of the case studies will be interpreted in light of the overall success

of the implementation and the extent to which possible benefits are ultimately reaped.

1.6 Procedures

The selection of case studies was done before creating the theoretical framework and reference frame-

work in order to assure the objectivity of the researchers. The data from the third case study Softdrink Co.

was collected by conducting a scripted interview first-hand. The interviews transcript including the an-

swers could be found in the appendix.


2 LITERATURE REVIEUW

This is a brief literature review containing a summary on ERP Assimilation and change management.

An elaborate explanation of models and frameworks found in literature used for ERP assimilation and

change management can be found in chapter 3: Theoretical framework. Chapter 3 also forms the basis for

the reference framework (chapter 4) in which several theories and models are combined for future re-

search on ERP assimilation.

2.1 ERP Assimilation

ERP assimilation covers the post-implementation of an ERP project. Kouki R. et al. (2006) consider as-

similation as: “the extent to which the organization has progressed from understating the ERP systems’

potential and functionalities to mastering and deploying them in their key value chain processes.” Another

consideration, by Purvis et al. (2001), is that IT assimilation is “the extent to which the use of technology

diffuses across the organizational project or work processes and become utilized in the activities of those

project and processes” (Purvis et al. 2001).

Although there has been a growing interest in the post-implementation stage, there is still a need to

investigate the different issues and aspects of this phase in the ERP’s project life cycle (Kouki R. et al.,

2007). ERP systems can generate potential benefits for a company, however this requires a large financial

commitment. With the increasing adoption of ERP systems by small and medium-sized companies, the

need to address problems arising after implementation is essential for these companies to understand the

determinants that ease ERP assimilation.

There is a high failure rate of ERP implementation project that can be largely ascribed to the com-

plexity of ERP systems. This is because, ERP systems impact on the organizational business processes,

structures and cultures. Therefore, the potential business value of ERP systems cannot be fully realized

until the system is extensively assimilated in an organization (Liang. H., 2007).

It can be concluded that research on ERP assimilation in specific and technology assimilation in gen-

eral are still evolving. Studies in this field are critical due to the significant benefits that may be derived

after the organization effectively uses the ERP in all of their business operational and decision making

processes.

2.2 Change Management

Change management is an approach to transitioning individuals, teams and organizations to a desired fu-

ture state (Kotter. J., 2011). There exists in the literature a number of change models to guide and instruct

the implementation of major change in organisations. Three of the most well known models are Kotter's

strategic eight-step model for transforming organisations, Jick's tactical ten-step model for implementing

change, and General Electric (GE)'s seven-step change acceleration process model (Dirndorfer et al.

2002). Research over the years by Kotter has proven that 70% of all major change efforts in organizations

fail. Kotter created a 8 step model so that organizations can avoid failure and become adept at change.


3 THEORETICAL FRAMEWORK

To analyze the assimilation process of ERP systems several theories and frameworks are used which are

obtained from previous ERP (assimilation) publications introduced below. In order to match and analyze

the ERP assimilation frameworks found in literature, a change management model is used. In this paper

Kotter’s eight-step model is used to validate and analyze the ERP assimilation frameworks described in

this paper. Kotter’s model can be seen in Figure 2 below.

Figure 2: Kotter’s strategic eight-step model for transforming organisations

The 8 steps of Kotter’s framework are as follows:

Create a sense of urgency

Often leaders underestimate the difficulty of driving people out of their comfort zone or simply lack the

patience which is necessary to create the required urgency. Kotter describes three levels of urgency, from

worst to best these are: complacency, false urgency and true urgency.

Creating the guiding Coalition

In order to be successful putting together the right coalition of people to lead a change initiative is critical.

This coalition must have the right composition, a shared objective and an evidential level of trust. Trust is

one-other is key, this is the glue for a good functioning team. The guiding coalition team as a whole

should reflect: Position power, Expertise, Credibility and leadership.

Developing a change vision

According to Kotter a clear vision has three important purposes: It simplifies more detailed decisions

It motivates people to take action in the right direction

It helps to coordinate the actions of people in a fast and efficient way


In order to be effective, a vision must take into account the current realities of the enterprise, but also set

forth ambitious goals. Effective visions have six key characteristics, they are imaginable, desirable, feasi-

ble, focused, flexible and communicable.

Communicating the vision for Buy-in

Kotter states that most companies under communicate their visions by at least a factor of 10. When com-

municating the vision for the transformation, the vision should be: Simple, Vivid , Repeatable and Invita-

tional.

Empowering broad based action

Many times the internal structures of companies are in conflict with the change vision. To name an exam-

ple: Companies that claim to want to increase productivity and become a low-cost producer have huge

staff groups that constantly initiate costly procedures and programs. These are the most difficult barriers

to get past, since they are in the internal structure of the company.

Generating short-term wins

When in a middle or long-term change effort, short-term wins are essential. According to Kotter running a

change effort without attention to short-term performance is extremely risky. Research shows that com-

panies that experience significant short-term wins by fourteen and twenty-six months after the change ini-

tiative begins, are much more likely to complete the transformation. Short term wins should be both visible and unambiguous in order to ensure success. Important is that

wins provide evidence that sacrifices that people make, pay off in the end. Short-term wins can build

momentum that can turn neutral people into supports, and supporters into active helpers. Short-term wins rarely simply happen. According to Kotter they are usually the result of careful plan-

ning and effort. The need to get short-term wins adds a lot of pressure to an organization in the midst of a

transformation. When done skillfully, short-wins can actually increase the sense of true urgency.

Don’t let up (Resistance and regression)

Resistance can always occur. Remissness can be very dangerous,when you let up before the job is done,

momentum will be lost and regression may follow. Kotter states that: In a successful major change initia-

tive, by step 7 you will begin to see: More projects being added

Additional people being brought in to help with the changes

Senior leadership focused on giving clarity to an aligned vision and shared purpose

Employees empowered at all levels to lead projects

Reduced interdependencies between areas

Constant effort to keep urgency high

Consistent show of proof that the new way is working

Make it stick (Organization culture change)

Organizational Culture is composed of norms of behavior and shared values. Social forces are very

strong. Every individual that joins an organization is unknowingly indoctrinated into its culture. Changes

in culture are difficult to instill, this is why cultural change comes last in Kotter’s the change management

theory. Kotter states that some general rules about cultural change include: Cultural change comes last, not first

You must be able to prove that the new way is superior to the old

The success must be visible and well communicated


You will lose some people in the process

You must reinforce new norms and values with incentives and rewards – including promotions

Reinforce the culture with every new employee

To analyze the assimilation process Kouki R. et al. (2006) used the innovation theory in combination with

the TOE framework (Figure 3).

Figure 3: TOE Framework

This framework postulates that the presence of three sets of critical success factors (organizational, tech-

nological and environmental) result in the efficient assimilation of the ERP system (Kouki, R,2010).

The TOE framework considers three aspects of the firm’s context which would determine the process

by which a firm adopts implements and assimilates technological innovations: a) the technological con-

text defined in terms of the existing and new technologies of the firm; b) the organisational context which

includes several descriptive measures such as management structure, quality of its human resources,

scope and size; c) the environmental context which refers to the external institutional environment includ-

ing its industry, competitors, dealings with government and access to resources offered by others (Tor-

natzky and Fleischer 1990, pp. 152–154).

It seems reasonable to assume that institutional forces are not only influential in the adoption and im-

plementation stage of ERP implementation, but also in the ERP assimilation stage. This raises the ques-

tion on what kind of internal and external institutional forces influence enterprises top-management in re-


lation to ERP systems assimilation in the post-implementation stage within enterprises. Liang. H., et al

(2007) concluded that institutional pressures are significant to achieving ERP assimilation.

Liu. L. et al. (2011) found that a there is a clear pattern between different ERP users and therefore us-

ers can quite naturally be divided into the three categories depicted below in Figure 4. These categories of

users correspond to the three levels of ERP knowledge and usage at the user level. This study describes a

framework for understanding the differences among ERP users and the potential migration path for these

users. It proposes an individual level ERP assimilation model that identifies key organizational and cogni-

tive factors that drive users towards higher levels of the assimilate.

Figure 4: The hierarchy pyramid of individual level ERP assimilation

Below in Table 1 is a slightly adapted excerpt of the characteristics that Liu. L. et al. (2011) attribute to

the three user types based on the subjects incorporated in that research.

ERP user type Characteristics

Transaction Use ERP applications for routine operations

Have very limited knowledge on the inner workings of an ERP system

Not concerned with how the ERP functions company-wide

Power Can solve routine technical problems for other end-users.

Can create analytical reports on an ad-hoc basis

Have proficient understanding of how the system works company-wide

VIP Have intimate knowledge of both the ERP, the business processes and how they are

linked

Was involved in the early implementation phase.

Table 1: Characteristics of the hierarchy pyramid of individual level ERP assimilation by Liu. L. et al.

(2011)

Liu. L. et al. (2011) also found that organizational level assimilation is directly related to individual level

assimilation. As such, ERP assimilation is a multi-level phenomenon, that occurs at organizational and


individual levels simultaneously (Figure 5). At the organizational level, assimilation is indicated by the

extent to which the business processes are covered by the ERP system and the degree to which the ERP is

used for decision-making. At the individual level, assimilation is indicated by the degree of understanding

of ERP systems and the ability to use ERP for non-routine tasks.

Figure 5: Relationship between individual and organizational assimilation.

Maheshwari, B. et al. (2010) researched a subject very similar to ERP assimilation process, which they

refer to as the process of (ERP) institutionalization. Following their multi-case-study research containing

30 subjects (i.e. companies), they identified four events and three stages that comprise the institutionaliza-

tion process.

Figure 6: ERP institutionalization process: events and stages

The go-live event marks the beginning of post-implementation and the technical stage; it is the first in-

stance where ERP systems are turned on in the actual production environment. The technical stage lasts


until technical stability is achieved, which is when the persistent problems left are low risk in nature and

are reduced to an acceptable level. Also, the support staff starts to develop continued day-to-day technical

support.

When technical stability is attained, the semantic stage starts. Even though there is technical stability,

a significant amount of confusion or lack of understanding about using and supporting the system(s) is

still apparent across the organization. The semantic stage lasts until support from super (or power) users

for carrying out day-to-day activities is no longer needed and persistent problems left are low risk in na-

ture. When semantic stability is attained, all users of the system can effortlessly use the system’s features

in their routine activities. Semantic stability marks the start of the effectiveness stage. At this stage, the

organization is more concerned with problems related to optimizing and improving outcomes through

continuous improvement, until the ERP system is due for replacement because of decline.

4 REFEREMCE FRAMEWORK FOR ERP ASSIMILATION

4.1 Summary

In the literature review (chapter 2) several models regarding ERP assimilation have been explained. All of

these frameworks focus on different topics within ERP assimilation: TOE Framework, VIP users and in-

stitutionalization. In this paper the fact that ERP assimilation already starts at the beginning of the ERP

implementation cycle (Figure 1) is discussed, yet none of the frameworks with regard to ERP assimilation

take the “beginning” and “during”phase of ERP assimilation into account. In order to address these phas-

es the change management model of Kotter has been integrated into this reference framework.

The main goal of this framework is to give managers and project leaders of an ERP project a detailed

list of criteria to be considered for successful ERP assimilation beforehand. For this reference framework

3 cases have been used. For a better advise towards managers on which criteria weigh stronger, more cas-

es should be studied with this framework.

4.2 Reference Framework

Framework / Model Phase of assimi-

lation Short description

Change management by

Kotter Before and during

Implementation Change management is an approach to transitioning indi-

viduals, teams and organizations to a desired future state.

Technical Factors (TOE

Framework) During and after

implementation Describes the technical factors such as the quality of the

ERP system that influence ERP assimilation

Organizational Factors

(TOE Framework) During and after

implementation Describes the organizational factors such as the absorptive

capacity that influence ERP assimilation

Environmental Factors

(TOE Framework) During and after

implementation Describes the environmental factors such as institutional

pressures that influence ERP assimilation

Individual level ERP as-

similation During and after

implementation Describes the distribution of different types of users of an

ERP system and what influence this distribution has on the

organizational support of ERP assimilation.

Institutionalization After “go-live” This framework defines the stages and phases regarding the

institutionalization of the ERP system in the organization


Table 3: Set of frameworks and models (components) that make up the reference framework

Criterium Scale Numeric

quantifier Description Change management Sense of urgen-

cy Complacency, False

urgency, True ur-

gency

n/a Kotter describes three levels of urgency, from worst

to best these are: complacency, false urgency and true

urgency. Guiding team Poor, Fair, Average,

Good, Excellent [0:1] The guiding coalition team as a whole should reflect:

Position power, Expertise, Credibility and leadership. Change of vision Poor, Fair, Average,

Good, Excellent [0:1] Effective visions have six key characteristics, they are

imaginable, desirable, feasible, focused, flexible and

communicable. Communicating

the vision Poor, Fair, Average,

Good, Excellent [0:1] When communicating the vision for the transfor-

mation, the vision should be: Simple, Vivid, Repeata-

ble and invitational. Empower action Percentage [0:1] The level of barriers which a company had to take in

order to get to the desired change with a focus how

well this process from start to change has been

achieved. Creating short

term wins Very low, Low,

Normal, High, Very

High

[0:1] Short term wins should be both visible and unambig-

uous in order to ensure success. Important is that wins

provide evidence that sacrifices that people make, pay

off in the end. TOE (Technological) ERP attributes Very low, Low,

Normal, High, Very

High

[0:1] Represents the quality of the ERP system as indicated

by: information accuracy, timeliness, reliability, re-

sponse time, completeness, output sophistication, rel-

evancy, stability, auditing and control, ease of use,

usefulness. IT expertise Poor, Fair, Average,

Good, Excellent [0:1] The level of expertise of the IT department

TOE (Organisational) Top manage-

ment champion-

ship

Poor, Fair, Average,

Good, Excellent [0:1] The extent to which top management directly and in-

directly supports and commits to continious use of the

ERP system Absorptive ca-

pacity Poor, Fair, Average,

Good, Excellent [0:1] The firm's ability to appreciate, assimilate and apply

an innovation (to new ends) Strategic align-

ment Poor, Fair, Average,

Good, Excellent [0:1] The fit of the ERP system with business strategy, IT

strategy and organisational structure User involve-

ment Poor, Fair, Average,

Good, Excellent [0:1] The extent to which users were psychologically en-

gaged with the development process and with the re-

sultant product Reward system Poor, Fair, Average,

Good, Excellent [0:1] The extent to which useful reward systems are im-

plemented such as rewarding the acquisation of new

skills and linking compensation to company profits TOE (Environmental)


Vendor support Poor, Fair, Average,

Good, Excellent [0:1] The extent to which the ERP vendor offers timely and

ongoing support Consultant ef-

fectiveness Poor, Fair, Average,

Good, Excellent [0:1] The extent to which any consultant(s) is successful in

removing impediments and providing sound advice Institutional

pressures Very Weak, Weak,

Normal, Strong,

Very Strong

[0:1]

Individual level ERP assimilation Transaction us-

ers Estimated percent-

age [0:1] Transactional users use an ERP for routine opera-

tions, they do not know anything about the inner

workings of an ERP. For them it is just a software

application they use in their daily job. Power users Estimated percent-

age [0:1] Know how the ERP system works and how parts are

linked together. Can solve routine technical problems

for other ERP users. VIP users Estimated percent-

age [0:1] Have knowledge about both the business and ERP

processes and know how these two work together.

They are able to initiate new ERP projects for the or-

ganization when changes happen in the business pro-

cesses. Institutionalization Technical stabil-

ity True/false [0|1] Technical stability is a state after go-live when all

major technical issues have been solved. Semantic stabil-

ity True/false [0|1] Semantic stability as state achieved after technical

stability when sufficient understanding of ERP sys-

tems in the organization is developed and routine us-

age is achieved. Table 4: criteria in the ERP assimilation framework

5 CASE STUDIES

A total of three case studies have been used, from which two are taken and analyzed from existing litera-

ture and for one an interview has been conducted for use in this paper. All case studies operate in a differ-

ent product industry and in all case studies the companies have either implemented an ERP system to

some extend or fully. All cases have been tested by use of the reference framework (chapter 4) in which

an elaborate explanation is given on each main component of the framework. In order to hide the companies names the cases have fictional names: Plastic Co. , Footwear Co. and

Softrdink Co.

5.1 Plastic Co. studied by Kouki R. et al.

Plastic Co. is one of the leading North American producers of plastic products. The company’s annual

sales sum to 200 million Canadian dollars. In total the company employs more than 1000 employees, in-

cluding 800 in the companies’ branches in Quebec. In total the company exists of 4 facilities in Quebec

and New Brunswich and has a network of sales offices and warehouses throughout Canada en the United

States. The company serves different industries, such as food, chemical, petrochemical, transportation

with 400 different kinds of products.

Prior to the implementation of the ERP system, Plastic Co had three separate systems, including one

main manufacturing system. Because one of these systems was out of date and updates were not support-

ed by the vendor anymore, the company decided to implement a single integrated system that covers most

of business processes.


The reason for the implementation of a single ERP system derived from a strategy to continuously

improvement in the company. This strategy increased the need to integrate the business functionalities.

The ERP implementation project started in February 2004 by the choice of the system. In December

2004, the company first switched to their current ERP system in the two Quebec plants, following a Big

Bang approach. One year later the system was implemented in the New Brunswich plant. To finalize the

project the ERP implementation was planned in the third plant in Quebec. However, this implementation

project was postponed to September 2007.

The selected system was “JDEdwards” with an Excel applications running in parallel with the ERP

system. The reason to select this specific ERP was that the system was less complex and therefore re-

quires less people for the support of the system compared with other ERP package.

5.1.1 Change management

The sense of urgency of implementing ERP was false urgency due to the fact that that the previous higher

management failed to create solid plans.

The lack of guiding from the first management team resulted in major delays. Therefore the guiding

team is rated as 0.4.

A corporate vision was already in places before the ERP implementation project was started this this

results in a high ranking of the change of vision. However, the communication of this vision leaked.

Positive about the implementation project was that the higher management empowered the middle

management with the projects. But after the change in higher management the decision making about the

project was done by the higher management. Therefore this element is rated as neutral.

The short term wins were not seen by the employees that work in the operational level of the busi-

ness. Even a part of the middle management did not saw improvement after the implementation of the

ERP package. Therefore it is assumed that Plastic Co. was insufficient in the creation of short term wins.

5.1.2 Technological, Organizational and Environmental Capabilities

Technological capabilities

Some users at Plastic co still considered the system as complex and as not tailored to their needs. This re-

sulted that these users where trying to bypass the system by using their own applications. It is supposed

that these problems occurred due to the lack of training and sufficient communication about the ERP im-

plementation. These problems had a negative influence on the rate of ERP assimilation within the com-

pany.

The IT teams’ high competence and high expertise resulted has facilitated the accumulation of ERP

system. However, given the size of the company the workload of the IT team was too heavy due to the

system and user requirements, and lot of troubleshooting, customization and maintenance. Besides the

heavy workload IT expertise can be rated as high.

Organizational capabilities

The ERP implementation project was considered as a part of a bigger enhancement project derived from a

change in strategy. However, the employees in the ERP implementation project teams were not liberated

of their daily work-load, because these tasks were seen as more important. This lack of commitment re-

sulted in major delays in the project and negative project results. After a shift in the top management the

ERP implementation project got more priority and was more influenced by the top management. Due to

this change top management championship is rated as low to average.

The absorptive capabilities of the organization could be rated as on average due to the fact that some

employees had insufficient computer knowledge and the lack of training during the ERP implementation.

The strategic alignment is rated as low. However the new top management has better education and

was more convinced about the system. The problem remains, because employees seeing the system as not

convenient and the parallel reports in excel create redundancy.


The user involvement with the ERP system within Plastic Co is still limited due to the lack of training

and awareness of the system. However the effort to better educate high rank manager about business pro-

cesses aligned with the system result in a gradual increase in user involvement. Therefore the user in-

volvement is rated as on average.

However the change of strategy within the company and the implementation of an ERP system the

reward system within the organization stayed unchanged.

Environmental

The relationship between the ERP vendor and Plastic Co. was for a short time, because the company

hired a consultancy firm for the implementation of ERP. These consultants were still used as the company

acquired more modules for the ERP system. Therefore the support of the vendor could be rank as low to

average and the consultancy support as average to high.

5.1.3 Institutionalization

At times this case study was conducted the system was technical instable indicated by the customization

and troubleshooting done by the IT department. Because there was no technical stability, semantic stabil-

ity could not be established.

5.1.4 Level of assimilation

The estimated level of transactional users in Plastic Co. is high due to the lack of training and awareness

of the ERP system capabilities. During the case study (higher) management was trained therefore the

amount of power users is estimated as 9%. Due to the customization done by the IT department the em-

ployees in this department could be considered as VIP users.

5.2 Footwear Co. studied by Motwani J. et al.

Footwear Co is a designer, manufacturer and marketer of casual shoes, work footwear, and constructed

slippers. The total number of employees is approximately 6600.

Prior to The ERP implementation, Footwear Co. sales, marketing and operational functions ran on an

AS/400 system. This system required an undesirable long time to complete a task. To obtain even the

most basic information, a process of 6 to 8 hours was necessary. Also, the inventory reports would only

show current on hand inventory unadjusted for orders already in the system. Promises were made to cus-

tomers without knowing if the gross available inventory was assigned to other customer. These major

drawbacks of the legacy system where the driving forces behind the implementation of the ERP system.

5.2.1.1 Change management

The sense of urgency of the implementation was true urgent, due to the fact that the scope of change was

to improve operational processes. The management of change by the guiding team was adequate and

therefore rated as “good”.

The change of the organizationals vision was well defined. The communication of this vision done in

an open way and of high quality therefore both variables are rated as “good” The project teams involved with the implementation were organised in such a way that it enables cross

functional cooperation. By using this project based approach for the implementation of the ERP system in

combination with change management the empowerment of action within footwear Co. was “good”.

The implementation of the ERP system and adequate change management resulted in a more efficient

operational process. This creating short term wins within the organization. Therefore this variable is rated

as “good”.



Technological

Footwear Co. had its own IT department. This department was involved with the ERP implementation.

However, the more than sufficient knowledge and skill within this department the employees involved

with the ERP implementation were not relieved from their daily tasks Therefore IT expertise is rated as

average to good. The tools and techniques used for the ERP implementation were of a high level, there-

fore the ERP attributes of Footwear Co. are rated as “good”.

Organizational

The top management had clear objectives for the ERP implementation. They were also able to communi-

cate these objectives in a successful way to the different ERP implementation project teams. However,

the top management did not make the decisions about the implementation itself at first hand. After prob-

lems occurred due to bureaucratic conflict between the different project teams the top management trans-

ferred the decision making towards the higher levels of the organization. Due to this top management

championship is rated as good.

Footwear Co. was prior to the implementation of ERP strategically reactive to their business envi-

ronment and customers’ needs. The company realized a need to reduces production lead times and to pro-

vide real time order information to their customers. The company used these strategic objectives for the

selection of the ERP system. At the end lead time was reduced significantly and the system allowed the

consumers to track their orders. Therefore the strategic alignment could be seen as good.

For the decision making during the implementation project a team-based approach was used. These

themes consisted out of top-management, middle-management and employees out of the operational level

of the organisation. The fact that the lower level of the organization participated actively within the ERP

implementation project suggested a high user involvement. However, due to bureaucratic conflicts

among the project teams the decision making needed to be transferred to the corporate-level of the com-

pany. Therefore the user involvement is rated as average to good.

Environmental

During and even after the implementation process footwear Co. allowed the ERP vendor to enter and ad-

just their ERP system using a remote access. This provided the ERP vendor to check and adjust the ERP

system without being on site . The result of this was that the vendor actively participated in the ERP im-

plementation process. On the other hand the vendor supported adjustment of the system in the post-

implementation phases of the system. Therefor the relationship with the vendor could be rated as good.

Besides the good relationship Footwear co. enjoyed with the ERP vendor, the company also had an

effective relationship with their ERP consultant. Therefore this is rated as above average to good.


As reported by Motwani J et al. the ERP system of Footwear Co. was technical and semantical stable dur-

ing the time of the case study.


In this case the level of ERP assimilation among the employees of Footwear Co were not discussed.

However, seen the other factors of the ERP implementation the assumption is made that there were less

transactional users compared with case of Plastic Co. and more power and VIP users in comparison with

the case-study of Plastic Co.


5.3 Softdrink Co. studied by Evers. J. et al. (2013, scripted interview, appendix 1)

Softdrink Co. is an Europe-wide company with several plants in the Netherlands, Belgium, France, Unit-

ed Kingdom and Scandinavia. In the Netherlands Softdrink Co. employs 850 employees.

The ERP implementation in the Netherlands is the first in a row where all European productions sites

adopt the same ERP module of SAP that deals with all processes within the maintenance departments.

The scripted interview focused on the implementation and assimilation of that ERP module within the

Dutch plant of Softdrink Co.

5.3.1 Change management

The sense of urgency related to change management is stated as true urgency. This, due to the fact that the

focus of change was on the operational level. The daily operations were not majorly affected by the im-

plementations. However, processes changed within the operational level of the department. The urgency

was that these processes should not be disturbed/delayed by the change.

During the changes within Softdrink Co. a guiding team was operational to manage the changes dur-

ing and after the ERP implementation. The team was organized in such a way that the members had dif-

ferent backgrounds. Besides that, daily open office hours were planned during and after the implementa-

tion where every employee that was affected by the changes could come in for support. Therefore the

guiding team is rated as “good”.

The vision was to standardize the maintenance processes throughout the whole company. The imple-

mentation of the ERP system only helped to accomplish this objective. Therefore the vision on change is

rated as “good”.

This vision was sufficiently communicated, however the financial department and the department in-

volved with logistics were notified a bit too late. Therefore the communication the vision of change for

Softdrink Co. is rated as “average”.

Multiple employees of the maintenance department were empowered with action of the change man-

agement. Some of them where even in the ERP implementation steering group. However, most of these

employees were not relieved from their daily tasks. Resulting in work overload for some of these employ-

ees. Therefore this variable is rated as “average”.

Quick wins due to the implementation of the ERP system where immediate noticeable for most of the

end users. Benefits where; better information integration with finance, less walking when conducting dai-

ly task, inventory cost decreased, better preventive maintenance, more consistent maintenance planning

and better insights in maintenance processes. Therefore the creation of short term wins is rated as “very

high”.


Technological

Softdrink Co. did not have a large IT department on-site. The IT department that was involved with the

ERP implementation came from the headquarters and did not have not the required knowledge on the

legacy systems that were in place. IT expertise therefore is rated as average.

Organizational

The top management was highly involved in the implementation project. Especially in the steering com-

mittee of the ERP implementation process. Therefore, top management championship is rated as “good”.

The absorptive capacity of Softdrink Co. is rated as “average to good”. This due to the fact that most of

the employees were aware about the implementation of ERP and the changes in possesses. However, old-

er employees did not want to change. This was resolved by shutting down the legacy systems so these

employees were forced to use the new ERP system. The ERP aligned with the business strategy was

good. This, due to the fact that the objectives were clear and the implementation of the ERP system re-


sulted in the reduction of the inventory of reserve material for maintenance and better maintenance budget

management. The involvement of end users was high, because even the end uses were involved in the

implementation process and some of them took part of the steering committee.

Environmental

During and after the ERP implementation process there was no direct communication/relation with the

ERP vendor. The support of the ERP vendor was indirect through the consultants that were assigned to

the ERP implementation project. The consultant effectiveness was high, due to the fact that the consult-

ants were highly involved with the implementation on side and stayed for several weeks after the imple-

mentation.


At the moment of the interview technical stability was accomplished. However, the Softdrink Co. was

still training their employees to create semantic stability on site. Therefore Semantic stability is not yet es-

tablished and is rated as “false”.


On site the ERP assimilation under transactional users was high. Only the employees involved with the

ERP implementation or change management project could be seen as power users within the particular

production plant studied in this case. However the fact that there is no VIP user on site there is a direct

communication possibility to several VIP users within the organization. Therefore the ERP assimilation

under VIP users is currently rated as 1%


6 CASE-STUDY EVALUATION

6.1 Measurement

Publication:

Plastic Co. studied by

Kouki R. et al.

Footwear Co. by Mot-

wani J. et al.

Softdrink Co. By

Evers J. et al.

Change management

Sense of urgency false urgency true urgency true urgency

Guiding team 0.4 0.7 0.8

Change of vision 0.8 0.8 0.8

Communicating the vision 0.3 0.7 0.6

Empower action 0.5 0.7 0.6

Creating short term wins 0.1 0.7 1

TOE

Technological

ERP attributes 0.3 0.8 0.8

IT expertise 0.8 0.6 0.5

Organisational

Top mngmnt championship 0.5 0.8 0.8

Absorpitive capacity 0.4 n.a. 0.6

Strategic alignment 0.3 0.8 0.8

User involvement 0.6 0.6 0.8

Reward system unchanged n.a. n.a.

Environmental

Vendor support 0.2 0.8 0.1

Consultant effectiveness 0.7 0.7 0.9

Institutional pressures n.a. n.a. n.a.

Institutionalization

Technical stability FALSE TRUE TRUE

Semantic stability FALSE TRUE FALSE

Estimated level ERP assimilation

Transaction users 0.9 [0.5;0.9] 0.94

Power users 0.09 [0.09;0.35] 0.05

VIP users 0.01 [0.01;0.15] 0.01

Table 5: Case-study measurement according to the research framework


6.2 Evaluation

6.2.1 Plastic Co.

Plastic Company failed to create a sense of true urgency; it had a clear vision but it failed to properly

communicate it. Decision-making was isolated up in the hierarchy and they really failed to create short-

term wins. Plastic CO. End-users suffered from a lack of training. Many end-users had insufficient com-

puter knowledge to begin with. Plastic Company relied only on consultants and did not make use of sup-

port by its ERP vendor. In the end technical and semantic stability were not attained in the time-frame of

this case-study. 90% of the end-users are assumed to be transaction users. A small amount of power-

users is assumed because middle management was trained in the use of the system.

6.2.2 Footwear Co.

Footwear company was able to create a sense of true urgency. The vision was well-defined and commu-

nicated widely. Cross-functional project teams were set up and the organization was able to implement

short-term wins. Footwear had its own IT department which was strong. The ERP vendor was involved

both on and off-site using remote access software, also an effective consultant was involved. In the time-

frame of this case-study , technical and semantic stability were obtained. A relatively large amount of the

end-users are assumed to have been able to reach the status of power or VIP-user.

6.2.3 Softdrink Co.

Softdrink Company’s vision was clearly communicated. It was the first in line of a series of production

sites adopting the same SAP modules. The team or steering committee was cross-functionally organized

and short-term goals were clearly established. Softdrink company is observed to have had a strong IT de-

partment coming from the HQ. Furthermore, the organization was capable and in shape to implement the

ERP system. Softdrink did not make use of vendor support but consultants were effective and involved

intensely during the implementation. In the end, only technical stability was attained. End-users were still

under-going training at the end of this case-study’s time-frame so over 90% of the users were observed to

be transaction users. Because the implementation was a quite (remotely) directed affair little power and

VIP users developed.

7 CONCLUSIONS

The objectives of this study were to to answer our research question, and:

1. Attain an understanding of ERP assimilation within the context of the ERP life-cycle

2. Identify the key factors that affect assimilation of an ERP system within an organization

3. Validate the ERP assimilation theories and recommended methods by matching them with results

from implementation case-studies

4. Articulate the managerial implications in order to optimize the assimilation process

Regarding a definition or understanding of ERP assimilation (within the ERP life-cycle) we can conclude

that ERP assimilation concerns “the extent to which the organization has progressed from understating the

ERP systems’ potential and functionalities to mastering and deploying them in their key value chain pro-

cesses”. The level of assimilation starts to develop following the adoption and implementation phases,

and can continue to do so up until retirement of the system, assuming the level of assimilation never

reaches an optimal state. Levels of assimilation can be measured both at an individual and organizational

level.

Key factors that influence individual level assimilation are: a user’s knowledge on the business pro-

cesses; knowledge on the inner workings of an ERP, and involvement in the adoption and implementation


of the ERP system. Furthermore, individual and organizational level assimilation is severely compro-

mised if there is a lack of technical stability. Semantic stability paves the way for transforming transac-

tional users to power users, and to a lesser degree, the power users to VIP users.

The amount of subjects is small, but from the case-studies we conclude that it appears to be important

to have a clear vision and to communicate this effectively with all the employees that will be affected by

the ERP system. If the steering committee or project team is able to set up short-term goals than that ap-

pears to be a sign of them handling the complexity of the implementation. If the ERP system will be im-

plemented for a multitude of sites than it seems necessary to either have effective consultants involved

throughout, or to have vendor support likewise, in order to reach technical stability as soon as possible.

Organizational factors appear to be important in building semantic stability thereby raising the power and

VIP-user population.

7.1 Limitations

The set of three case studies is too small to safely draw conclusions regarding the influence of assimi-

lation on the ability to reap benefits from an ERP system, but the depth of the individual case-studies have

allowed for evaluation of these cases according to the framework, and this offers some managerial impli-

cations.

This research does not offer validation of any of the used assimilation theories; they have been used

pragmatically in order to find out if they are possibly indicative of a successful ERP cycle, and what the

role of assimilation is in this cycle.

7.2 Opportunities for future research

As indicated, a part of the components of the research framework are simplified and are in fact more

fragmented. More specific research can be done regarding these factors and their interactions. This should

eventually increase the validity and reliability of this research.

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vol.20, p186-p200.


APPENDIX 1. TRANSCRIPT OF INTERVIEW WITH SOFTDRINK CO. INCLUDING

ANSWERS.

Transcript interview Softdrink Co.

Could you give a brief introduction in the ERP implementation process and the post implementation pro-

cess?

-The ERP system that was implemented deals with the process and tasks of the maintenance departments

of Softdrink Co. Chosen is for the SAP module PM this SAP module deals with the maintenance process-

es, the procurement of reserve components of the various machines involved in the production process. It

provides insights in the budgeting of the maintenance and the planning of preventive maintenance pro-

cesses. The module will be gradual implemented through the different maintenance departments at differ-

ent plants of Soft drink Co.

What was your function in the ERP implementation project?

-I was one of the members of the steering committee of the ERP implementation project. I was selected as

an end member of the system and involved with the onsite implementation process and change manage-

ment.

Were you a member of the ERP steering group?

-See previous question.

Did, and if yes what system, the ERP system substituted other systems?

- Yes, it substituted different systems how deals with the planning and budgeting of maintenance and the

warehouse management of the warehouse with reserve components of the machinery. These legacy sys-

tems are no longer in use. On the day of implementation these systems where set as Read Only. So em-

ployees could not bypass the current ERP system by using legacy systems to fulfill their daily tasks.

Were there IT employees of your company involved/participate in the implementation project?

- Yes, besides the fact that I participated in the steering group of the ERP systems several employees

within my team where involved with the implementation/ change management process.

What was their job?

- See previous question. Their daily job where procurement, warehouse management, operators, plan-

ners, finance and technics

Who did it, what was their quality of work?

-I would say, average due to the fact that these employees were not relieved from their daily tasks.

How was the top management involved in the implementation process?

-The top management was highly involved in the implementation project. Especially in the steering com-

mittee of the implementation process.

What was the absorptive capacity of ERP of the organization?


- Average to good. Most of the employees where about the implementation of ERP and the changes in

possesses. However, older employees did not want to change. By shutting down the legacy systems these

employees where forced to use the new ERP system.

Was the ERP aligned with the business strategy or objective of this strategy and if yes with part, if no in

what degree?

- Yes objectives where Claire. Reducing the inventory of reserve material for maintenance and better

maintenance budget management. The ERP system supported these goals in a sufficient way.

What was the involvement of end users of the system during the ERP implementation project?

- High, even end uses where involved in the implementation process and some of them took part of the

steering committee.

What is/was the relationship with the ERP vendor?

-No direct relationship with the ERP vendor. Relation/communication was indirect via the ERP consul-

tancy.

What was/is the relationship with the ERP consultants and how effective was this relationship?

- Relationship with ERP consultants was good, and very effective. They stayed for several weeks after

the ERP implementation and support adjustments in the system.

Level of assimilation

Could you give estimation how in what way users utilize the ERP system?

Transactional users: Use ERP applications for routine operations.

- 0.94

Power users: Can solve routine technical problems for other end-users.

- 0.05

VIP users: Have intimate knowledge of the ERP, the business processes and how they are linked.

- 0.01

- Not much VIP users. However multiple power users in each department, so the delay routines un-

der normal situations won’t be significantly affected due to the attendants of these Power users.

Institutionalization

Is the system technical stable, so no malfunctioning of the system?

- The system is running stable, no major malfunctioning after the implementation of the ERP system.

Is there a semantic stability, in other words, can all users of the system effortlessly use the sys-

tem’s features in their routine activities. - Not all users can uses the system effortlessly in there daily task. However, training on how to use the

ERP systems are still given. We hope to resolve this problem as quickly as possible.

Change management

What was the sense of urgency?

- Sense of urgency could be stated as true. Due to the fact that the focus was on the operational

level. Operations were not majorly affected however processes changed within the operational level of

the maintenance department

What there a guiding team and how well did they managed the change process?


- Yes, there was a guiding team including me that guided the change in processes. During and after the

implementation members of the team organized open office moments throughout the day where end users

could ask anything about the process changes and the ERP system.

What was the vision on the change, e.g. only system wise or also process wise?

- Vision was to change and standardize possesses the ERP system only helped to accomplice this vi-

sion.

How was the vision on the ERP implementation communicated?

- Sufficient, however the financial department and the department involved with transport where noti-

fied too late.

Who were empowered to guide the changes that were necessitated by the ERP implementation. And how

well was it done. For example the reduction of daily task if someone was assigned to work in an ERP

implementation project team?

- Multiple employees of the department even one in steering committee, Lake of reduction of daily

tasks

Where there short term wins created. (e.g. reduces in process time, less errors, better integration with

procurement, finance or HR)?

- For sure, quick wins where immediate noticeable for most of the end users. Better information inte-

gration with finance. Les walking when conducting daily task. Inventory cost decreased. Better preventive

maintenance and more consistent maintenance planning and better insights in maintenance processes.

evers, hoogendoorn and keulen an erp assimilation inquiry multi case-study research combining erp...

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