An Assessment of Readiness Factors for Implementing ERP Based on Agility (Extension of Mckinsey 7s Model)

Document Type: Original Research

Authors

Department of Management, Fars science and Research Branch, Islamic Azad University, Fars, Iran

Abstract

Studies conducted by many researchers indicate high failure rate of projects of implementing ERP systems. Furthermore, organizations should be agile to be able to respond to market changes fast and effectively to survive in competitive environment. ERP and agility are two important tools for achieving competitive advantages. The main goal of the present study was to identify and prioritize organizational readiness factors for implementing ERP based on organizational agility. In this study, along with extension of McKinsey 7S model (strategy, structure, systems, skills, style, staff, shared values) to 9S (7S+ self-evaluation and supportive factors) model, agility criteria were weighted and rated using group AHP with fuzzy logic approach; so that accountability, speed and flexibility have obtained the maximum score. The nine organizational readiness factors were ranked using integrated FAHP and TOPSIS method based on five criteria of agility. The framework was proposed to a real case of Shiraz distribution cooperative firms. Results showed that among the nine organizational dimensions based on agility, the two added to McKinsey dimensions (self-evaluation and supportive factors) are ranked in the first and fourth places. The proposed framework help the enterprises “to implement ERP system with agility approach” concentrate on change management and develop strategies based on their own priority. 

Keywords


Agarwal, A., R, Shankar & M.K. Tiwari, (2007). Modeling agility of supply chain, Industrial Marketing Management, 36(4):443-457.
Alaskari, O., M.M. Ahmad., N. Dhafr  & R. Pinedo-Cuenca, (2012). Critical successful factors (CSFs) for successful implementation of lean tools & ERP systems. Proceedings of the World Congress on Engineering 2012 Vol III, WCE 2012, July 4 - 6, 2012, London, U.K.
Al-Mudimigh, A. (2007). The role & impact of business process management in enterprise systems implementation. Business Process Management Journal, 13(6): 866–874.
Amoako-Gyampah, K., & A. Salam, (2004). An extension of the technology acceptance model in an ERP implementation  environment. Information & Management, 41(6): 731–745.
Avazpour, R., E. Ebrahimi & M.R. Fathi, (2014). Prioritizing Agility Enablers Based on Agility Attributes Using Fuzzy Prioritization Method & Similarity-Based Approach.  International Journal of Economy, Management & Social Sciences, 3(1): 143-153.
Boehm, M., Stolze, C., & Thomas, O. (2013). Teaching the Chief Information Officers: An Assessment of the Interrelations within their Skill Set. Bottani, E. (2009). A fuzzy QFD approach to achieve agility. International Journal of Production Economics, 119: 380–391.
Bozarth, C. (2006). ERP implementation efforts at three firms. International Journal of Operations & Production Management, 26(11): 1223–1239.
Braunscheidel, M & N. Suresh, (2009). The organizational antecedents of a firm’s supply chain agility for risk mitigation & response. Journal of  Operations Management, 27: 119–140.
Buonanno, G., P. Faverio., F.  Pigni., A.  Ravarini., D. Sciuto & M. Tagliavini, (2005). Factors affecting ERP system adoption. Journal of Enterprise Information Management, 18(4): 384–426.
Chien, S., C. Hu., K.  Reimers &  J.  Lin,  (2007). The influence of centrifugal & centripetal forces on ERP project success in small & medium-sized enterprises in China & Taiwan. International Journal of Production Economics, 107(2): 380–396.
Chuang, M., & W. Shaw, (2008). An empirical study of enterprise resource management systems implementation: From ERP to RFID. Business Process Management Journal, 14(5): 675–693.
Chun, M., & J.  Mooney, (2009). CIO roles & responsibilities: Twenty-five years of evolution & change. Information & Management, 46(6): 323–334.
DellaVechia, T., S. Scantlebury & J. Stevenson, (2007). Three CIO advisory board responses to managing the realization of business benefits from IT investments. MIS Quarterly Executive, 6(1):13–16.
Dezdar, S., &  A. Sulaiman, (2009). Successful enterprise resource planning implementation: Taxonomy of critical factors. Industrial Management & Data Systems,109 (8): 1037–1052.
Duplaga, E., & M.  Astani, (2003).  Implementing ERP in manufacturing. Information Systems Management, 20(3): 68–75.
El Sawah, S., A. Tharwat & M.  Rasmy, (2008). A quantitative model to predict the Egyptian ERP implementation success index. Business Process Management Journal, 14(3): 288–306.
Finney, S   & M. Corbett, (2007). ERP implementation: A compilation & analysis of critical success factors. Business Process Management Journal, 13(3): 329–347.
Ganguly, A., R. Nilchiani,  & J. Farr, (2009). Evaluating agility incorporate enterprises. International Journal of Production Economics, 118: 410–423.
González-Villar, A. J.,  Y. Triñanes., M. Zurrón & M.T.  Carrillo-de-la-Peña, (2014). Brain processing of task-relevant & task-irrelevant emotional words: An ERP study. Cognitive, Affective, & Behavioral Neuroscience, 1-12.
Häkkinen, L., & O. Hilmola, (2008). Life after ERP implementation. Journal of Enterprise Information Management, 21(3): 285–309.
Hanafizadeh, P., & A.Z.  Ravasan, (2011). A McKinsey 7S model-based framework for ERP readiness assessment. International Journal of Enterprise Information Systems (IJEIS), 7(4): 23-63.
Hanafizadeh, P., R. Gholami., S. Dadbin & N. St&age, (2010). The core critical success factors in implementation of enterprise resource planning systems. International Journal of Enterprise Information Systems, 6(2): 82–111.
Hauswald, A., H. Schulz., T. Iordanov & J. Kissler. (2011).  ERP dynamics underlying successful directed forgetting of neutral but not negative pictures. Social Cognitive & Affective Neuroscience, 6(4): 450-459.
Hidayanto, A. N.,  M.A. Hasibuan., P.W. H&ayani & Sucahyo, (2013). Framework for Measuring ERP Implementation Readiness in Small & Medium Enterprise (SME): A Case Study in Software Developer Company. Journal of computers, 8(7): 1777-1782.
Karsak, E. E &  C.O. Özogul, (2009). An integrated decision making approach for ERP system selection. Expert systems with Applications, 36(1): 660-667.
Ke, W & K. Wei, (2008). Organizational culture & leadership in ERP implementation. Decision Support Systems, 45(2): 208–218.
Kim, Y., Z. Lee & S. Gosain, (2005). Impediments to successful ERP implementation process. Business Process Management Journal, 11(2): 158–170.
Laukkanen, S., S. Sarpola & P. Hallikainen,  (2005). ERP System Adoption-Does the Size Matter?. In System Sciences, 2005. HICSS'05. Proceedings of the 38th Annual Hawaii International Conference on (pp. 226b-226b). IEEE.
Law, C & E. Ngai, (2007). ERP systems adoption: An exploratory study of the organizational factors & impacts of ERP success. Information & Management, 44(4): 418–432.
Lee, S & H. Lee, (2004). The importance of change management after ERP implementation: An information capability perspective. Paper presented at the 25th International Conference on Information Systems.
Leidner, D & J. Mackay, (2007). How incoming CIOs transition into their new jobs. MIS Quarterly Executive, 6(1): 7–28.
Lin, C., H. Chiu, H & P.  Chu,  (2006a). Agility index in the supply chain. International Journal of Production Economics, 100, 285–299.
Lin, C., H. Chiu, H & Y. Tseng, (2006b). Agility evaluation using fuzzy logic. International Journal of Production Economics, 101, 353–368.
Mathiyakalan, S., N. Ashrafi., W.  Zhang., F. Waage., J. Kuilboer & D. Heimann, (2005). Defining business agility: an exploratory study. In: Proceedings of the 16th Information Resources Management Conference CA ,15–18.
Menor, L., A. Roth & C.  Mason, (2001). Agility in retail banking: a numerical taxonomy of strategic service groups. Manufacturing & Service Operations Management, 3(4): 272–292.
Metaxiotis, K., I. Zafeiropoulos., K. Nikolinakou & J. Psarras, (2005). Goal directed project management methodology for the support of ERP implementation & optimal adaptation procedure. Information Management & Computer Security, 13(1): 55–71.
MollaHosseini, A &  S.H. Mostafavi, (2007). The agility assessment of organization using fuzzy logic ", Journal of Tadbir, industrial management institute, 186: 24-33. (Farsi).
Motwani, J., R. Subramanian & P. Gopalakrishna, (2005). Critical factors for successful ERP implementation: exploratory findings from four case studies. Computers in Industry, 56(6): 529–544.
Nah, F & S. Delgado, (2006). Critical success factors for enterprise resource planning implementation & upgrade. Journal of Computer Information Systems, 46(5): 99–113.
Nasir, M. H. N & S. Sahibuddin, (2011). Critical success factors for software projects: A comparative study. Scientific research & essays, 6(10): 2174-2186.
Nazemi, A & V. Naderi darreshoori, (2012). Proposed model for readiness assessment of implementation of enterprise resource planning (ERP) in the Armed Forces. Journal of  Research Military Management, 47, 163-184. (Farsi).
Ngai, E., C. Law & F. Wat, (2008). Examining the critical success factors in the adoption of enterprise resource planning. Computers in Industry, 59(6): 548–564.
Oh, W & A. Pinsonneault, (2007). On the assessment of the strategic value of information technologies: Conceptual & analytical approaches. MIS Quarterly Executive, 31(2): 239–265.
Pan, F & R. Nagi, (2010).  Robust supply chain design under uncertain dem& in agile manufacturing. Computers & Operations Research, 37(4): 668-683.
Peslak, A. R. (2006).  Enterprise resource planning success. Industrial Management & Data Systems, 106(9): 1288–1303.
Pinheiro, A. P., T. Liu., P.G. Nestor., R.W.  McCarley., O.F.  Gonçalves & M.A. Niznikiewicz, (2013).Visual emotional information processing in male schizophrenia patients: Combining ERP, clinical & behavioral evidence. Neuroscience letters, 550: 75-80.
Preston, D. S., D.E.  Leidner & D. Chen, (2008). CIO Leadership Profiles: Implications of Matching CIO Authority & Leadership Capability on IT Impact. MIS Quarterly Executive, 7(2).
Rahmati, M. (2010). Critical Success Factors in ERP Implementation. A thesis submitted to the graduate Studies Office In Partial fulfillment of the requirement for The degree of M.A in Industrial Management. August 2010, University of Maz&aran. Iran.
Rai, A., V. Sambamurthy &  R. Agarwal, (2008). How CIOs Can Enable Governance of Value Nets. MIS Quarterly Executive, 7(4).
Razmi, J., M. Sangari & R. Ghodsi, (2009). Developing a practical framework for ERP readiness assessment using fuzzy analytic network process. Advances in Engineering Software, 40(11): 1168–1178.
Remus, U. (2007). Critical success factors for implementing enterprise portals. Business Process Management Journal, 13(4): 538–552.
Ren, J., Y. Y. Yusuf & N.D. Burns, (2003). The effects of agile attributes on competitive priorities: a neural network approach. Integrated Manufacturing Systems, 14(6): 489-497.
Saleh, M. F., M. Abbad & M. Al-Shehri,  (2013), "ERP Implementation Success Factors in Saudi Arabia". International Journal of Computer Science & Security (IJCSS), 7(1): 15.
Saremi, M., M.M. Khani & M. Abedini, (2007). Extraction & assessment of parameters related to the auto industry with a willingness to implement ERP ", Journal of Knowledge Management, 60, 47-77. (Farsi).
Sherehiy, B., W. Karwowski & J. Layer, (2007). A review of enterprise agility: Concepts, frameworks, & attributes. International Journal of Industrial Ergonomics, 37: 445–460.
Snider, B., G. Da Silveira & J. Balakrishnan, (2009). ERP implementation at SMEs analysis of five Canadian cases. International Journal of Operations & Production Management, 29(1): 4–29.
Soja, P. (2008). Examining the conditions of ERP implementations: Lessons learnt from adopters. Business Process Management Journal, 14(1): 105–121.
Somers, T & K. Nelson, (2004). A taxonomy of players & activities across the ERP project life cycle. Information & Management, 41(3): 257–278.
Swafford, P.M., S. Ghosh & N.N. Murthy, (2006). A framework for assessing value chain agility. International Journal of Operations & Production Management, 26(2).
Tseng, Y. H &  C.T. Lin, (2011). Enhancing enterprise agility by deploying agile drivers, capabilities & providers. Information Sciences, 181(17): 3693-3708.
Verville, J., C. Bernadas  &  A. Halingten, (2005). So you’re thinking of buying an ERP? Ten critical factors for successful acquisitions. Journal of Enterprise Information Management, 18(6): 665–677.
Ward, J., C. Hemingway & E. Daniel, (2005). A framework for addressing the organisational issues of enterprise systems implementation. The Journal of Strategic Information Systems, 14(2): 97–119.
Yang, J., C. Wu & C. Tsai, (2007). Selection of an ERP system for a construction firm in Taiwan: A case study. Automation in Construction, 16(6): 787–796.
Yusuf, Y., A. Gunasekaran & M. Abthorpe, (2004). Enterprise information systems project implementation: A case study of ERP in Rolls-Royce. International Journal of Production Economics, 87(3): 251–266.
Zhang, Z., M.K. Lee., P. Huang., L. Zhang & X. Huang, (2005). A framework of ERP systems implementation success in China: An empirical study. International Journal of Production Economics, 98(1): 56-80.