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JEIM
25,1
60
Received 27 August 2010
Revised 27 September 2010
Accepted 23 March 2011
Journal of Enterprise Information
Management
Vol. 25 No. 1, 2012
pp. 60-78
q Emerald Group Publishing
Limited 1741-0398
DOI 10.1108/17410391211192161
Factors affecting ERP system
implementation effectiveness
Dimitrios Maditinos
Department of Business Administration,
Technological Educational Institute of Kavala, Kavala, Greece
Dimitrios Chatzoudes
Department of Production and Management Engineering,
Democritus University of Thrace, Xanthi, Greece, and
Charalampos Tsairidis
Department of Social Administration, Democritus University of Thrace,
Komotini, Greece
Abstract
Purpose – Enterprise resource planning (ERP) systems enhance productivity and working quality by
offering integration, standardization and simplification of multiple business transactions. The present
study seeks to introduce a conceptual framework that investigates the way that human inputs (top
management, users, external consultants) are linked to communication effectiveness, conflict
resolution and knowledge transfer in the ERP consulting process, as well as the effects of these
factors on ERP system effective implementation.
Design/methodology/approach – The examination of the proposed conceptual framework was made
with the use of a newly developed questionnaire. The questionnaire was distributed to a group of 361
Greek companies that have implemented an ERP system. Information technology (IT) managers were
selected as the key respondents of the questionnaire. After the completion of the four month research
period (September to December 2008), 108 usable questionnaires were returned (response rate ¼ 31
percent approximately). The empirical data were analyzed using the structural equation modelling
technique (Lisrel 8.74).
Findings – The main findings of the empirical study can be summarized in the following categories:
the assistance provided by external consultants during the ERP implementation process is essential;
knowledge transfer is an extremely significant factor for ERP system success; knowledge transfer
concerning technical aspects of ERP systems is more important than effective handling of
communication, as well as conflict resolution among organizational members; the role of top
management support seems to be of less importance that the one provided by users.
Research limitations/implications – The present study is limited by the poor definition of its
population (due to lack of available data) and the relatively small size of the sample.
Practical implications – The paper points out areas that adopting companies should emphasize in
order to successfully implement an ERP system and, therefore, harvest its potential benefits.
Originality/value – The paper proposes an enhanced conceptual framework that examines vital issues
concerning ERP system effective implementation, thus, providing valuable outcomes for decision
makers and academics. The originality of the paper lies in its three dimensional approach.
Keywords Enterprise resource planning, Internal support, External support,
ERP system effective implementation, Linear structure equation modelling, Cost
effectiveness, Resource efficiency
Paper type Research paper
1. Introduction Factors affecting
Individuals, companies and managers often face difficulties in comprehending the full effectiveness
spectrum of capabilities and attributes of ERP systems, due to the system’s
complicated nature (Finney and Corbett, 2007; Markus and Tanis, 2000; Somers and
Nelson, 2004). Marnewick and Labuschagne (2005) argue that an ERP system should
not only be regarded as an information system (IS), but also, in order to be effectively
implemented should be regarded as an integrated business system that surrounds all 61
business functions. The same scientists define ERP as a software package that
combines both business processes and information technology (IT) features.
Nowadays, ERP systems are being increasingly adopted by organizations of any
kind and size, in order to avoid technical obsolesce and create sustainable competitive
advantages (Al-Mashari et al., 2003; Willis and Willis-Brown, 2002). Dillard and
Yuthas (2006) note that most multinational firms are using ERP software packages
and even more small and midsize companies are on the route of adopting them.
ERP system acquisition and implementation generally enhance productivity and
working quality, since the system offers standardization and simplification in
multiple, complicated operational procedures across the company (Nah et al., 2001).
Moreover, information can easily be transferred, shared and exchanged among users
who are working at different business divisions (Amoako-Gyampah, 2007; Kemp and
Low, 2008). In general, the literature has identified the following potential benefits of
ERP system implementation (Al-Mashari et al., 2003; Amoako-Gyampah, 2007;
Chang, 2004; King, 2005; Scott and Kaindl, 2000; Umble et al., 2003):
.improved coordination across functional departments; .
increased efficiency in doing business;
. reduced operating costs (lower inventory control cost, lower production costs,
lower marketing costs, lower help desk support costs);
. facilitation of day-to-day management;
. rapid access to information for decision making and managerial control; and
. support of strategic planning (through the planning of available resources).

Despite the attributes and major advantages provided by ERP systems, the
implementation of such systems is not always effective. Most enterprises are not able
to fully justify their investments in ERP software, since the bulk of ERP benefits
remain hidden. In their survey, Marnewick and Labuschagne (2005) reported that 25
percent of ERP installations exceed the initial cost and about 20 percent cannot be
completed. Moreover, ERP systems often fail to meet organizational goals soon after
their implementation. The cause of the general disappointment regarding ERP system
effectiveness lies in a number of reasons, including a misconception about the
system’s potential (Bradford and Florin, 2003; Hong and Kim, 2002; Marnewick and
Labuschagne, 2005; Motwani et al., 2005).
The present study aims to develop a conceptual framework that incorporates the main
factors leading in the effective implementation of an ERP system. Motivated by the
theoretical importance of ERP systems and the empirical failure in fully harvesting their
potential, the proposed conceptual framework includes variables that, according to the best
of our knowledge, have never been collectively examined before.
JEIM Built on the argument that the success of most ERP systems is decided during the
25,1 initial steps of their implementation (Gargeya and Brady, 2005; Hong and Kim, 2002)
and significantly depends on the cooperation with an external consulting group
(Akkermans and van Helden, 2002), the present study develops an “ERP
implementation process model” that investigates the impact of internal and external
human inputs on ERP implementation effectiveness (see Figure 1).
62 The need to fully incorporate the role of external consulting support in the proposed
conceptual framework is imposed by its wide accepted significance in the ERP
implementation process (Wang and Chen, 2006). On the other hand, the influence of
internal stakeholders (top management and users) in the ERP consulting process is equally
important, since they are the ones that must understand and learn to use what

Figure 1.
ERP implementation
process model
 (6) knowledge
is embedded in the system. By including both internal and external support, the transfer
present paper takes account of all the critical entities that could significantly (ERP
impact the process and outcome of an ERP system implementation (Reimers, consulting
2003).
process);
More analytically, the proposed “ERP implementation process model” and
investigates whether external and internal human inputs affect the consulting
implementation process related to effective communication, conflict resolution (7) ERP
and knowledge transfer and whether these factors lead to ERP system effective system
implementation. Such an integrative approach has never been attempted in the effective
literature before and is expected to yield significant findings for companies that implement
are about to adopt ERP systems. In general, it is argued that the proposed ation
conceptual framework adopts a holistic approach to ERP system implementation, (consequen
sheds light in areas rarely investigated and leads to interesting practical ce).
implications.
The present study makes two contributions to the ERP implementation
literature. First, it develops a conceptual framework that places the centre of
attention on the ERP consulting process, arguing that the success of most ERP
systems is decided upon their initial implementation and depends significantly on
external consultation. Second, the study highlights the contribution of “people”
(top management, users, external consultants) to the process of ERP
implementation, based on the concept that most ERP systems, however how
intelligent, need to be thoroughly adjusted to every business environment in order
to be crystallized into workable ERP solutions.
The following section includes the presentation of the proposed conceptual
framework of the study. In the third and fourth section, the research methodology
and the results are being presented. The conclusions and the impact of the research
are discussed in sections 5 and 6 respectively and, finally, section 7 includes study
limitations and proposals for future research.

2. The conceptual framework of the study

The present study introduces a newly developed conceptual framework that places
the ERP consulting process on the center of attention. According to Wang and
Chen (2006, p. 1031), “one key to a successful ERP implementation is to maintain
an effective and smooth consulting process”. The proposed “ERP implementation
process model” consists of three dimensions (see Figure 1): human inputs; ERP
consulting process; and consequence. The human input dimension includes
variables about internal and external support; the ERP consulting process
dimension includes variables that are likely to affect the ERP consulting process;
while the consequence is the effectiveness of the implemented ERP, as it is
perceived by its actual users.
The aim of the study is to examine the causal relationships between seven
research variables that belong to these three dimensions:
(1) top management support (human input . internal support);
(2) user support (human input . internal support);
(3) consultant support (human input . external support);
(4) communication effectiveness (ERP consulting process);
(5) conflict resolution (ERP consulting process);
Factors affecting effectiveness

63
JEIM The proposed conceptual framework is based on previous studies by Wang and Chen
25,1 (2006), Wang et al. (2007) and Thong (2001). The hypotheses of the study are
presented below.

2.1 ERP consulting process

The consulting process that takes place during and after the implementation of an ERP
64 system is of vital significance for every company (Wang and Chen, 2006). The
following paragraphs discuss the three main factors that relate to the ERP consulting
process: communication effectiveness (Bloomfield and Danieli, 1995; Wang and
Chen, 2006); conflict resolution (King, 2005; Robey et al., 1993; Wang and Chen,
2006); and knowledge transfer (Wang et al., 2007), as well as their effect on ERP
system effective implementation.
2.1.1 Communication effectiveness. Effective communication is a strong
foundation of a trustworthy relationship between external consultants and
organizational members (Attewell, 1992). The more consultants and users understand
each other, the more effective the communication becomes during the consulting
process. Insufficient communication of users’ needs, goals and aspirations to the
consultants may undermine the implementation of the ERP system (Fleck, 1993;
Wang and Chen, 2006). Thus, we hypothesize that:
H1. A positive relationship exists between communication effectiveness and ERP
system effective implementation.
The consulting process is an undertaking that, in order to be effective, constant
communication with the client is needed (Lee and Kim, 1999). With effective
communication, information can be transferred and exchanged easier between both parties
who realize, in that way, that sustaining this relationship is at their best interest. Such
relationship, accordingly, generates trust between the client company and the consultant
company. As a result, the two companies become allies in a common effort to minimize
conflicts that may arise in their cooperation (Lee and Kim, 1999; Morgan and Hunt, 1994;
Wang and Chen, 2006). Thus, we hypothesize that:
H2. A positive relationship exists between communication effectiveness and
conflict resolution.
2.1.2 Conflict resolution. The implementation of an ERP system is a time-consuming
process. During that process certain conflicts may occur between users and consultants
(King, 2005). Such conflicts will possibly affect in an adverse way the output of the
consultant-client relationship (McGivern, 1983). However, the emergence of
disagreements during the implementation period should not be considered as a negative
turn in the cooperation, but rather as a common incident during a long-lasting
collaboration (Green, 1998). Effective management of conflicts may lead in an enhanced
level of information exchange and group work, thus, improving the implementation of the
ERP system (Scott and Kaindl, 2000). Thus, we hypothesize that:
H3. A positive relationship exists between conflict resolution and ERP system
effective implementation.
2.1.3 Knowledge transfer. Knowledge transfer in the ERP consulting process can be
described as a gradual procedure in which knowledge is being transferred from
external consultants and vendors to the internal environment of the company (Wang Factors affecting
et al., 2007). An increased level of knowledge concerning the ERP system will enable effectiveness
the company to exploit the new technology to its full potential and continue to
achieve benefits from the use of the system in the future. Thus, we hypothesize that:
H4. A positive relationship exists between knowledge transfer and ERP system
effective implementation. 65
2.2 External consultant support
Consultants play a major part in the ERP implementation challenge, since they have
the technical knowledge and expertise to assist users in filling the unavoidable
knowledge gab that derives from implementing a new ERP system. Under that logic,
the consulting process becomes a necessity for any company that is willing to
implement an ERP system (Freeman and Dart, 1993; Wang and Chen, 2006). The
solutions that consultants offer during and after the configuration of the ERP system
directly influence the effectiveness of the implemented ERP, independent of their
interactions with their client (Wang and Chen, 2006). Thus, we hypothesize that:
H5. A positive relationship exists between consultant support and ERP system
effective implementation.
In order to achieve high-level communication with each client and be able to resolve
conflicts that may probably arise, a consultant should be particularly skilled
(McLachlin, 1999). A successful consultant possesses both sufficient technical
background, as well as the ability to communicate knowledge and experience, in a way
that he gains the client’s trust (McGivern, 1983; Wang and Chen, 2006). Only in such a
case, the client feels safe and, as a consequence, a good level of communication and an
effective negotiation procedure during the whole implementation process is achieved
(Wang and Chen, 2006). Therefore, we hypothesize that:
H6. A positive relationship exists between consultant support and communication
effectiveness.
H7. A positive relationship exists between consultant support and conflict resolution.
ERP systems are complex in their nature, as well as in their implementation. Therefore,
each company must acquire the adequate know-how and understanding of the system
in order to fully exploit its potential. Consultant support from specialists who know in
detail the ERP system and have the experience of how the system operates is crucial in
order to achieve the required knowledge transfer to the company. The more extended
the consultant support is, the more successful the transfer of knowledge to the
adopting company will be (Bessant and Rush, 1995; Wang et al., 2007). Therefore, we
hypothesize that:
H8. A positive relationship exists between consultant support and knowledge
transfer.
2.3 Internal consultant support

However competent a consultant may be, ERP implementation will not run smoothly
unless the members of the client organization (top management and users) are
committed to the adoption and the use of the ERP system (Wang and Chen, 2006).
JEIM 2.3.1 Top management support. Top management support describes the extent to
25,1 which executive managers of the adopting firm provide the attention, resources, and
authority required for ERP implementation (Wang and Chen, 2006). Top management
support is a prerequisite for the successful ERP system implementation. Top managers
supervise the whole implementation procedure, enable resource distribution, and support
conflict management (Wang and Chen, 2006). Moreover, top management has the
66 responsibility to align the new ERP system with the current business practices and prepare
the employees for the change brought by the new technology. When top management
works closely with various ERP users in the direction of the successful implementation of
the ERP system, the communication between business groups is being enhanced and
conflict resolution becomes attainable (Thong et al., 1996; Thong,
2001). Thus, we hypothesize that:
H9. A positive relationship exists between top management support and
communication effectiveness.
H10. A positive relationship exists between top management support and conflict
resolution.
Moreover, we hypothesize that a strong support from the top management towards the
implemented ERP system will lead to enhanced knowledge transfer inside the
adopting organization (Boynton et al., 1994; Cohen and Levinthal, 1990):
H11. A positive relationship exists between top management support and
knowledge transfer.
2.3.2 User support. User support refers to the psychological state of business users
toward the changes caused by the implemented ERP system, as well as toward the use
of the system for performing their tasks (Wang and Chen, 2006). The users of an ERP
system are usually the ones required to adjust their daily working practices to the new
system’s requirements. Apparently, becoming familiar with a new ERP system is not
an easy task and involves hard working and patience from the part of users
(McLachlin, 1999; Soh et al., 2000; Wang and Chen, 2006).
In order to favorably affect users’ perceptions about new technology, the real benefits
and advantages of using the ERP system need to be continuously reminded (Umble et al.,
2003). Otherwise, users are not motivated to support the ERP system in that they are not
willing to cooperate with the consultants and assimilate the knowledge transferred to them.
This situation provokes conflicts in the consultant-client relationship and hinders
communication (Wang and Chen, 2006). Therefore, we hypothesize that a high degree of
user support will strengthen communication effectiveness and conflict resolution:
H12. A positive relationship exists between user support and communication
effectiveness.
H13. A positive relationship exists between user support and conflict resolution.
Finally, we hypothesize, with alignment to H11, that a strong user support towards the
implemented ERP system will lead to enhanced knowledge transfer inside the
adopting organization (Boynton et al., 1994; Cohen and Levinthal, 1990):
H14. A positive relationship exists between user support and knowledge transfer.
Figure 1 summarizes all the above hypotheses, thus, presenting the proposed Factors affecting
conceptual framework of the study. effectiveness
3. Research methodology
3.1 Sample of the study
The conceptual framework of the present study was tested with the use of a newly
developed questionnaire on a sample of Greek companies that have implemented an 67
ERP system. Data concerning companies that could possibly be included in the
sample of the study were obtained via the web sites of the leading ERP system
providers that operate in Greece (e.g. Sap Hellas, Oracle Hellas, Synergy Hellas).
Since no other database including companies using ERP systems exists, the use of the
certain method was the only one able to provide usable information. Totally, 517
companies that have implemented an ERP system were identified.

3.2 Measures
The questionnaire of the present study is based on items (questions) that have been
used by various previous researchers (Davison, 1997; Freeman and Dart, 1993; Jiang
et al., 2000; Lee and Kim, 1992; Shin and Lee, 1996; Simonin, 1999; Sussman and
Guinan, 1999; Wang and Chen, 2006; Wang et al., 2007). All questions were
translated to Greek and then back to English by another person, so the detection and
consequent improvement of any discrepancies was possible. The five-point Likert
scale was used for the measurement of all variables (1 ¼ “strongly disagree” to 5 ¼
“strongly agree”). Table I demonstrates the seven research variables, the number of
items used for their measurement and the studies from which they where adapted.

3.3 Data collection

The final questionnaire and a cover letter including all necessary clarifications, was
sent to the IT managers of the companies of the sample. IT managers were selected as
the key respondents, due to their experience and expertise. Questionnaires were sent
only after telephonic contact with the IT manager in each company has been
established. In order to send the questionnaire and the necessary clarifications to the
person contacted by telephone, fax, traditional mail, or electronic mail services were
utilized.
After making all necessary telephone calls, 361 questionnaires were distributed to
361 companies that agreed to participate in the survey. The research period lasted four

Variables Number of items Adapted from

Top management support 7 Lee and Kim (1992)
User support 6 Jiang et al. (2000)
Consultant support 10 Freeman and Dart (1993)
Communication effectiveness 4 Davison (1997)
Conflict resolution 4 Sussman and Guinan (1999)
Knowledge transfer 4 Simonin (1999), Wang et al. (2007) Table I.
ERP effective implementation 5 Shin and Lee (1996) The measurement of the
Total 40 variables of the study
JEIM months (September to December 2008). Totally, 112 questionnaires were returned, and
25,1 after realizing all necessary controls 108 were used for data analysis (data analysis was
conducted with the use of the statistical packages SPSS 14.0 and Lisrel 8.74). The 112
returned questionnaires represent a very satisfactory response rate of 31 percent.
The majority (24.7 percent) of the companies of the sample belong to the “Informatics”
industry (sector), while 14.8 percent to the “Electronic” and 12.3 percent to the “Food”
68 industry. Moreover, the 37 percent of the companies of the sample employ 101 to 500
employees, 30.9 percent employ 51 to 100 employees, while only 6.2 percent and 12.3
percent of the companies employ less that 50 and more that 1,000 employees
respectively. Accordingly, the results indicate that the annual sales of the 32.1 percent of
the companies of the sample are between 10,000,000 and 50,000,000 Euros, while the
second larger category (29.6 percent) includes companies that have annual sales between
1,000,000 and 10,000,000 Euros. The majority of the respondent companies (34.6 percent)
have been using an ERP system for more than two years, 29.6 percent less than two years
and 35.8 percent less that one year. Finally, about half of the Greek companies of the
sample (49.6 percent) have chosen “SAP Ltd” as their ERP system provider, 26.7 percent
“Oracle Ltd” and 23,7 percent have chosen another supplier.

3.4 Reliability and validity

The instrument (questionnaire) that was used in the present study was tested for both
its content and construct validity. The control for the content validity was conducted
prior to the beginning of the survey and included consultation with academics of the
field, consultation with experienced practitioners, and pilot testing.
The control for the construct validity was conducted in two steps. Each of the
seven research variables was evaluated for its unidimensionality and reliability, for the
goodness of fit to the proposed research model.
The estimation of the unidimensionality of each of the seven variables was
conducted using explanatory factor analysis with the method of principal component
analysis. Moreover, for the estimation of the reliability of the research variables, the
statistical measure Cronbach’s alpha was used (the statistical package SPSS was used
in both cases).
All tests concluded that all the scales used, after minor amendments (extraction of
items), are valid and reliable (see Table II for the main results).
Furthermore, the evaluation of the goodness of fit of each of the seven research
variables to the proposed model was conducted using confirmatory factor analysis,
with the use of the statistical package LISREL 8.71.
All tests conducted produced satisfactory results (see Table III for the main results
concerning the estimation of the goodness of fit). Finally, after the successful
completion of the control for the construct validity of the questionnaire, the final
score of each variable was calculated using the mean of the items used in each case.

4. Results
The conceptual framework of the present study suggests that top management support,
user support and consultant support are positively related with ERP system effective
implementation, through communication effectiveness, conflict resolution and knowledge
transfer (see Figure 1). The examination of the conceptual framework and the verification
of the 14 hypotheses were conducted with the use of the “structural
 Kaiser- Bartlett’s test Cronbach Factors affecting
Variables Mayer-Olkin of sphericity Eigenvalue Variance alpha effectiveness
Top management *
144.9
support 0.691 2.656 77.31% 0.846
*
User support 0.716 169.5 3.003 79.63% 0.894
*
Consultant support 0.663 91.9 2.013 66.34% 0.736 69
Communication *
effectiveness 0.763 163.2 2.520 63.85% 0.766
*
Conflict resolution 0.712 96.3 2.112 58.58 0.736
*
Knowledge transfer 0.836 23.3 2.963 75.09 0.891 Table II.
ERP system effective *
implementation 0.779 163.3 2.367 76.84 0.821 Estimation of
* unidimensionality and
Note: p , 0:01 reliability

2 VE
X
Variables CR (%) RMSEA CFI GFI
Top management support 37.71 * 0.81 63 0.0967 0.97 0.98
User support 13.58 * 0.83 68 0.097 0.99 0.99
Consultant support 21.66 * 0.73 56 0.095 0.96 0.99
Communication effectiveness 13.23 * 0.89 64 0.096 0.99 0.97
Conflict resolution 19.49 * 0.91 78 0.097 0.96 0.99
Knowledge transfer 9.69 * 0.87 64 0.086 0.96 0.99 Table III.
ERP system effective implementation 25.32 * 0.86 73 0.099 0.97 0.97
* Estimation of the
Note: p , 0:05 goodness of fit

equation modeling technique”. the certain multivariate technique was used because of
its ability to simultaneously examine a number of depended linear relations, where
one or more construct (variable) is both dependent and independent according to the
relation it belongs (Hair et al., 1995; Kelloway, 1998). For the conduction of the
appropriate analysis the statistical package LISREL 8.74 was used.
The estimation of the structural model was conducted with the maximum likelihood
estimation method, which is the most widespread method of estimation (Anderson and
Gerbing, 1988; Kelloway, 1998). The covariance matrix was used as the table of entry,
because the control of the hypotheses in the structural equation modeling technique is
based on the hypothesis that the matrix that will be analyzed is the covariance matrix.
Thus, even though the use of the correlation matrix has widespread use in a lot of
applications, the use of the covariance matrix is recommended (Kelloway, 1996). Finally,
the extraction of the standardized completely solution was requested.
2
To evaluate the fit of the overall model the chi-square value (X ¼ 712:69 with 447
degrees of freedom) and the p-value (p ¼ 0:05060) were estimated. These values indicate
2
a good fit of the data to the overall model. However, the sensitivity of the X statistic to
the sample size enforces to control other supplementary measures of evaluating the overall
2
model, such as the “Normed-X ” index (1.59), the RSMEA index (0.087) the CFI (0.95)
and the GFI (0.93), that all indicate a very good fit. For the control
JEIM of the measurement model the significance of the factor loadings, the construct
25,1 reliability and the variance extracted were estimated. Results indicated that all
loadings are significant at the p , 0:05 level. Additionally, the construct reliability and
the variance extracted measures for all constructs are satisfactory.
Table IV illustrates all relations between research variables, as they have been
determined by the hypotheses of the study (see paragraph 2). For the verification (or
70 the rejection) of every research hypothesis, two controls have been conducted: the value
and the direction of the relation between the two latent variables; and the significance
of the relation, indicated by the t-value, were examined. According to Hair et al. (1995),
when the t-value is above 1.96 and below 21.96, the hypothesis is significant at the
significance level of 5 percent. Otherwise, the hypothesis is statistically insignificant.
Results offer support to 8 research hypotheses (H2, H4, H5, H7, H8, H10, H12,
H14), while six hypotheses are not verified by the empirical data (H1, H3, H6, H9,
H11, H13). The analysis of the results gives room for interesting observations and
offers guidelines to ERP implementing companies.
4.1 General observations

In general, it should be highlighted that the empirical results suggest that only
knowledge transfer and consultant support can directly and positively influence ERP
effective implementation (H4 and H5), while the postulated effect of communication
effectiveness and conflict resolution is insignificant (H1 and H3). Between these two
significant paths, consultant support seems to be of greater importance that knowledge
transfer (0.41 and 0.25 respectively).
4.2 “ERP consulting process” dimension

The only variable of the “ERP consulting process” dimension that has a direct positive
impact on ERP effective implementation is knowledge transfer (H4). Results failed to

Hypothesis Path Effect t-value Result

H1 Communication effectiveness ! ERP system 20.76 21.46 Rejected

effective implementation ! conflict resolution
H2 Communication effectiveness 0.73 3.09 Accepted
H3 Conflict resolution ! ERP system effective 1.20 1.90 Rejected
implementation ! ERP system effective
H4 Knowledge transfer 0.25 2.36 Accepted
implementation ! ERP system effective
H5 Consultant support 0.41 2.46 Accepted
implementation ! communication effectiveness
H6 Consultant support 20.09 20.71 Rejected
H7 Consultant support ! conflict resolution 0.49 3.26 Accepted
H8 Consultant support ! knowledge transfer 0.22 2.35 Accepted
H9 Top management support ! communication 20.28 22.00 Rejected
effectiveness ! conflict resolution
H10 Top management support 0.19 1.99 Accepted
Table IV. H11 Top management support ! knowledge transfer 0.01 0.14 Rejected
Direct effects between H12 User support ! communication effectiveness 0.53 3.53 Accepted
research variables (test of H13 User support ! conflict resolution 0.04 0.29 Rejected
hypotheses) H14 User support ! knowledge transfer 0.22 2.46 Accepted
establish a significant relationship between communication effectiveness and conflict Factors affecting
resolution, on the one hand and ERP system effective implementation on the other effectiveness
(H1 and H3). It seems that these two variables do not have the capacity to directly
influence the outcome of the ERP implementation process, mostly because they are
not as equally significant as knowledge transfer and consultant support. They may be
necessary for maintaining a good working environment while the implementation
process takes place, but they fail to directly influence the overall success of this 71
process.
Moreover, communication effectiveness has a quite large effect (0.73) on conflict
resolution (H2). This is quite logical, since the higher the communication between
business entities, the better the possibility to resolve the problems that occur during
the implementation of an ERP system.

4.3 “Human input” dimension

User support is the only variable of the “human input” dimension that has an
influence on communication effectiveness (H12). This finding indicates that the
willingness of users to support the project and accept the corresponding
organizational changes motivates them to openly express themselves regarding their
thoughts and requirements during the implementation process.
Moreover, both consultant support and top management support are positively
associated with conflict resolution (H7, H10). Consultants can enhance the ERP
implementation process by facilitating conflict resolution, thus, reducing the
occurrence of persistent conflicts. Top management support is also critical to inter-
unit conflict resolution, since top managers are responsible for coordinating the
various business departments and provide compulsory guidelines and instructions.
Finally, it is found that user and consultant support influence knowledge transfer
(H8, H14) with the same intensity (0.22). The support of users and consultants during
the implementation period leads in higher levels of knowledge transfer, meaning that
the organization absorbs more knowledge about the use of the system, the knowledge
gap between users and consultants is eliminated and, thus, the ERP implementation
better satisfies the requirements of the company. This finding is very important, since
knowledge transfer is one of the two research variables that have a direct impact on
effective ERP implementation. Hence, it is supported that user and consultant support
have an indirect impact on ERP system effective implementation, an impact that is
mediated through knowledge transfer.
Figure 2 presents the revised form of the proposed conceptual framework, in which
only the significant paths are shown.

5. Conclusions
The present study has proposed a conceptual framework that investigates the main factors
leading in the effective implementation of an ERP system. To the best of our knowledge, it
is the first empirical evidence that demonstrates the relationship between human inputs,
variables that are connected with the ERP implementation process and the final outcome
of this process. The examination of the conceptual framework was made with the use of a
newly developed structured questionnaire and the results offer interesting implications to
ERP adopting companies. The presentation of the
JEIM
25,1

72

Figure 2.
ERP implementation
process model – results

conclusions follows a structured path, so as to enhance their clarity and avoid any
possible misinterpretation.

5.1. Consultant support

The study empirically shows that the support of external consultants is crucial for the
effective implementation of ERP systems. The assistance provided by external
consultants is essential, even more important than that provided by top managers. The
contribution of the consultants’ involvement and support in the implementation
process has also been verified in the studies of Wang and Chen (2006), Chang (2004)
and Finney and Corbett (2007).
Since consultant support is a factor with such a significant influence on ERP
system effective implementation, companies should focus on hiring the right
consultant group for the specific business environment. Efforts towards consultant
selection should not be viewed as a time wasting procedure, since the experience of
consultants in similar business contexts, the commitment towards achieving mutual
goals and the shared mentality of the two contactors are of crucial importance for
successful implementation.
Consultants should not only acquire technical skills, but should also have a broad
understanding of the individual business practices and a genuine commitment towards
resolving every-day issues considering ERP system implementation. It would be
 implementation),
advisable for adopting companies to make a contractual connection between the while user support
fees paid to the consultant team and the improvement in certain areas of business influences both
activity. communication
In general, the consultant group should be viewed as a valuable “ally” in the effectiveness and,
ERP implementation process: consultants need the support and the acceptance of
the company personnel in order to be able to fully integrate their valuable
expertise and make a substantial difference in the implementation of ERPs. If
system users adopt a negative attitude towards working together with a
professional team of consultants, the implementation procedure will surely
produce poor results.

5.2 Knowledge transfer

The present survey has statistically indicated that knowledge transfer is a
significant factor for ERP system success. On the same vain, the study of Wang et
al. (2007) has produced the same results. On the other hand, no significant
relationship was found between communication effectiveness, conflict resolution
and ERP system effective implementation. Wang and Chen (2006), also found no
relationship between communication effectiveness and ERP system success, but
established a relationship between conflict resolution and ERP system success.
Apparently, the incorporation of knowledge concerning technical aspects of ERP
systems is more important than effective handling of communication, as well as
conflict resolution among organizational members of Greek companies.
From the above, it is apparent that ERP adopting companies should build the
necessary structures in order to facilitate the procedure of knowledge transfer.
System users not only need to be taught the newly implemented ERP technology,
but they, furthermore, need to learn more about their new organizational
responsibilities. Moreover, they should actively try to acquire maximum results
from the use of the ERP system, since passive attitude is not a path that leads to
successful ERP implementation.
In order to do so, the adopting company should, firstly, understand that with the
use of an ERP system every employee is being continuously trained. Therefore,
companies should provide opportunities for employees to enhance their skills by
providing training opportunities on a continuous basis, in order to meet the
changing and complex needs of the business environment (Bingi et al., 1999).
Moreover, the adopting company should make sure that the knowledge transfer
procedure is not short or inconclusive, since the literature recognizes the limited
consultation period as a factor that undermines possible positive effects (Nah et
al., 2001). Furthermore, since it is difficult for consultants to pass the knowledge
to computer illiterate employees, the adopting company should organize computer
seminars prior to the implementation of the new ERP system. Finally, the adopting
company should appoint its most prominent employees (from all functional
business areas) to follow the implementation procedure step by step, so as to be
able to play the role of the “internal consultant” after the withdrawal of the
professionals.

5.3 Top management support

According to the statistical analysis, the role of top management support seems to be
of less important that the one provided by users, since top managers assist only in the
resolution of conflicts (a factor that has no relationship with ERP system effective
Factors affecting effectiveness

73
JEIM more importantly, knowledge transfer (a factor that is related with ERP system
25,1 effective implementation). These findings are in line with the corresponding ones in
the studies of Wang and Chen (2006) and Wang et al. (2007).
On a practical level, the above imply that a company needs to ensure user support
in order to be led into a successful ERP implementation. This can be achieved by
allowing future users to:
74 . report their views on the necessity of the implementation;
. contribute to the specifications of the system;
. participate in the implementation process; and
. collect various rewards upon successful use of the implemented ERP system.

Without the active participation and the overall acceptance of its users, every ERP
system, no matter how expensive and elegant, is destined to produce less positive
results that the ones anticipated, or even fail miserably.

5.4 Overall conclusions

In general, the present study argues that consultant support and knowledge transfer
are the two key factors for ERP system success. The consultants may improve the
performance of ERP systems directly, through their experience and technical expertise
and indirectly through the effective transfer and sharing of ERP system knowledge
among various inter-organizational members. In other words, the transfer of
knowledge from the consultants may raise the level of user know-how, then users
subsequently should be able to successfully maintain and further modify the ERP
system without consultant engagement.
Therefore, practical efforts in hiring the right consultants are essential, especially
since the consulting fees are quite significant. Moreover, ERP adopting companies
should improve their knowledge management capabilities in order to successfully
facilitate the transfer of knowledge from consultants. In order to pursue a successful
ERP implementation and gain sustainable competitive advantage, companies need to
develop their internal knowledge capabilities before implementing an ERP system.
The building of these capabilities will ensure that the knowledge offered by
consultants is properly disseminated throughout the organization. Organizational
practices, culture, and structure should be reinforced to address this necessity (Nonaka
and Takeuchi, 1995).

6. Impact of the research

The empirical research included in the present paper has a dual impact. On the one
hand, offers important guidelines to companies implementing an ERP system and on
the other, develops a coherent conceptual framework that thoroughly investigates the
process of the effective implementation of an ERP system, thus, broadening the
understanding on the issue. Given the influence of ERP systems on business success,
such a dual contribution seems rather significant for both practitioners and academics.

7. Limitations and future research

A limitation of the present study is the relatively small size of the sample. This may
be attributed to the nature of the population of the study (Greek companies that have
implemented an ERP system), which is rather small and difficult to be defined due to Factors affecting
lack of available data. In addition, IT managers were often hesitant to reveal inside effectiveness
information about the company’s policies, as well as information regarding the ERP
system performance. Given that companies in Greece are mostly small and medium-
sized, most of them do not have an autonomous IT department and are using external
IT specialists to assist with the system’s implementation and operation. As a result, it
was not always possible to contact the internal staff of each company, and, therefore, 75
gather an overall and consistent evaluation of the ERP system implementation.
The present study has emphasized the vital role of the consultants in enhancing the
performance of the ERP system, by means of their experience and the transfer of their
knowledge and technical expertise to the ones that have acquired and are using the
ERP system. Further research on the effective implementation of the ERP systems is
suggested with larger samples that would, probably, offer more information and
strengthen the initial outputs of the present research. Moreover, it would be interesting
to include additional variables to the proposed conceptual framework of the present
study (e.g. change management, team morale and motivation, training, job redesign)
and finally, gather empirical data from all company personnel, so as to achieve a
rounder view of the subject under investigation.

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About the authors

78 Dimitrios Maditinos is Assistant Professor of Information Technology, Finance and Financial
Modeling in Kavala Institute of Technology, School of Business and Economics, Greece. He
holds degrees in Business Administration with specialization in Information Technology from
Lund University, Sweden, and a PhD from the Business School, Greenwich University, UK.
Before becoming a full academic he worked in a senior position for the Greek Productivity
Center, responsible for professional training in Information Technology and Management. His
research interests are in financial modeling, performance measurement systems, investors’
behavior in stock exchanges, financial information systems and electronic commerce. Dimitrios
Maditinos is the corresponding author and can be contacted at: dmadi@teikav.edu.gr
Dimitrios Chatzoudes is a PhD Candidate in the Department of Production and Management
Engineering of Democritus University of Thrace, Xanthi, Greece. His bachelor degree is on
business administration and his postgraduate degree on international economics. His academic
interests include research methods, international relations and production management.
Dr Charalampos Tsairidis is an Assistant Professor in the Department of Social
Administration of Democritus University of Thrace, Komotini, Greece. He studied
Mathematics and completed his PhD thesis at the University of Ioannina, Ioannina, Greece.
Topic of thesis: statistical information theory and censoring. His main research interests are in
the area of statistical information theory, statistical data analysis and social statistics.

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