2008 International MCETECH Conference on e-Technologies
Implementing ERP in SMEs: Towards an Ontology Supporting Managerial
Decisions
Hamid Nach
Ph. D. Candidate
Information Technology
InnoV Research Group
Université du Québec à Montréal
nach.hamid@uqam.ca
Abstract
The purpose of this research project is to consolidate
and formalize as ontology, on the basis of an extensive
literature review, the key processes and skills required
for successful implementation of ERP in an SME.
Using the Protégé software program, the research
identified and formalized 395 terms, each of which has
its own definition. Exploitation of this ontology could
take multiple and varied forms, including creation of a
learning system, an on-line cooperation platform, or a
project management process mapping tool
contributing to successful use of ERP in SMEs.
1. Introduction
Small and medium-sized enterprises (SME) are
increasingly likely to introduce ERP-type management
software packages, and in fact, this is the new market
for major publishers of integrated software packages.
However, ERP (Enterprise Resource Planning)
projects are particularly difficult to carry out in SMEs.
Often inadequately provided with human and financial
resources, SMEs are less well prepared for ERP than
large companies. Their chances of surviving or getting
back on track after a failed ERP implementation are
lesser than for large firms. In addition, when they
undertake ERP implementation projects, SME
managers carry out their role only to the extent
permitted by their level of skills and knowledge. The
literature, nonetheless, is quite explicit regarding the
healthy management practices that can lead to the
success of an ERP project [1]. This research project is
a first step towards overcoming this deficit. By
adopting a holistic approach, it intends to consolidate
and formalize as ontology, on the basis of an extensive
literature review, the key processes and skills required
for successful introduction of ERP in an SME. The
research led to identification and formalization of 395
terms, each with its own definition. The hierarchical
0-7695-3082-6/08 $25.00 © 2008 IEEE
DOI 10.1109/MCETECH.2008.11
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Albert Lejeune, Ph.D.
Professor, ESG. UQAM
Management & Technology Department
InnoV Research Group
Université du Québec à Montréal
lejeune.albert@uqam.ca
structure of the formalized classes is presented as an
ontology and is exploited with the Protégé software
program. Using this tool, which provides
interoperability and support for the semantic Web,
exploitation of the ontology could take multiple and
varied forms, including creation of a learning system,
an on-line cooperation platform, or a project
management process mapping tool contributing to the
successful use of ERP in SMEs.
2. Conceptual framework
An ontology is a specific organization of conceptual
knowledge in a given area based on the idea of class,
or concept, and relying on a generally taxonomic
organization of classes. Its goal is to formalize and
manage know-how and other kinds of knowledge. To
build an ontology, it is necessary to define the scope of
the knowledge to be processed. This is why we have
developed the conceptual framework presented in
Figure 1. The model is built on premises developed in
Kauffman et al.’s theory [2] and in the IT (information
technology) conversion theory developed by Henry
Lucas [3]. Kauffman et al. [1] argue that any IT
initiative combines three axes: the flow of values,
potential value and achieved value. 1) The flow of
values is a set of values sustained by the enterprise’s
environment. These are the values usually observed
when a specific technology is properly implemented
and used. 2) Potential value is an instance of a value
identified within the flow of values. In a perfect
world, potential value would be identical with real
value. However, this is rarely the case because of the
cultural, organizational and technological specificity of
each organization, on the one hand, and the constraints
imposed by the environmental landscape on the other.
These elements are barriers to value achievement. The
barriers can usually be identified as belonging to one
of two types: environmental barriers and
organizational barriers. Potential value, then, would
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 simply be the maximum that an organization is able to
achieve given the environment in which the IT
initiative is launched. 3) Achieved value is the real
value that the organization obtains as a result of its
investment. This value depends on the organization’s
ability to take the greatest possible advantage of the IT
initiative, in Lucas’s terms [2], it is IT conversion
capability. It is a complex combination of managerial
and technological habits that reflect an organization’s
predisposition to use its human capital and available
technological resources to create new values. This
factor is a unique attribute that is difficult or even
impossible to reproduce, because it is forged from
experience and knowledge accumulated over time and
because it is disseminated throughout the processes
and culture of each organization.
Figure 1: Conceptual framework
3. Literature review
3.1 Flow of values
A study of the literature has given us an idea of the
reasons why an SME might consider undertaking an
ERP project. With regard to external flow, SMEs
facing major environmental uncertainties could benefit
from ERP that would help them further integrate their
information and processes [4] Moreover, when the
competition has a technology that provides a
competitive advantage such as ERP, the likelihood is
great that an SME from the same sector of activity will
adopt a similar technology. SMEs are subject to
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initiators such as partners or their suppliers, who may
force the company to adopt ERP. With regard to
internal flows, the need to improve the company’s
internal processes is one of the key factors that may
lead it to adopt ERP.
3.2 Barriers to value achievement
Major organizational barriers identified in the literature
are as follows. 1) A lack of human and financial
resources. 2) Underuse of information systems (IS). 3)
Informal strategic planning: SMEs rarely carry out
long-term strategic planning and are chiefly invested in
short-term operational planning processes [5]. 4) A
leader with a dominant personality 5) The structure of
the enterprise, since there are fewer hierarchical levels
in an SME than in a large enterprise. In addition,
competitiveness, an unstable environment, market
deregulation and globalization are major
environmental elements that constitute barriers to
value achievement for an ERP-type IT initiative.
3.3 IT conversion contingencies
In terms of IT conversion contingencies, several
elements have been identified as determinants for the
success of an ERP initiative. These are structured
according to the conceptual framework given in Figure
1 and are presented as follows. 1) Management
commitment and support. 2) The presence of a
champion. 3) A balance of business and technological
expertise within the project team. 4) User awareness of
the role of ERP. 5) Responsibilities taken on by one or
more super-users. 6) Management of consultants. 7)
Implementation of a strategic vendor-client partnership
8) Definition of the project’s scope and objectives. 9)
Risk management. 10) Choice of an appropriate
implementation strategy. 11) Choice of the software
package that is closest to the enterprise’s
organizational processes. 12) Creation of a mechanism
ensuring effective communications. 13) Training
provided for both managers and users. 14) It is also
acknowledged that ERP introduction must
imperatively be accompanied by a series of
organizational changes at the level of culture, structure
and business processes. 15) Another element is
minimal customization of the software package. 16)
Implementation of an appropriate technological
infrastructure is also an element.
 4 The ontology-building process
There are generally three ways of building an
ontology: the manual method, the automatic method
and the mixed method. We chose the manual approach
and use what we call the ontologizing process (see
Figure 2) [6]. This is a manual and progressive
method that includes seven main stages. Conceptual
maps ease the transition towards a digital ontology
design environment such as Protégé. Below is a brief
description of the actitivies involved in the process.
Figure 2: The ontologizing process
(1) Data collection. As part of this research, we have
extensively relied on the literature related to the
introduction of ERP in SMEs. (2) Listing of terms.
This step involved placing the constructs identified in
the previous step in an alphabetically-organized list.
The purpose of the list is to make it easier to identify
and count concepts, but also to detect redundant
constructs. (3) Cluster organization of concepts.
This activity involves manipulating and grouping the
terms from the list. Here the first relationships and
connections between terms are established. At this
level of the process, focus is on two types of relation:
meronymic relations – A is part of B – and hyponymic
relations – relations of inclusion or heritage between
two objects (A is a B) (4) Reproduction of the cluster
as a graph. This activity involves transcribing the
hierarchical structure defined in the previous step in a
computer program for knowledge modelling. Using
the graphic tool makes it easier to manipulate terms,
particularly as they become more numerous. In this
case, we used the TouchGraph utility1. (5)
1
http://www.touchgraph.com
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Development of concentric maps. The structure of
the graph is reproduced in the form of concentric
maps. A concentric map consists of a centre
surrounded by rings. The circle defining the centre is
called a node; it contains the basic term used to
identify the domain or universe under study. Around
this ring, other rings indicate the other concepts. Each
ring presents subconcepts related to the main concept.
Concentric maps, which are read clockwise beginning
at twelve o’clock, have the advantage of providing a
visual synthesis and defining knowledge while
implicitly presenting the hierarchical structure of the
concepts. 6) Glossary development. The glossary
becomes the domain’s reference material. Its chief
function is to ensure that terms have uniform meanings
and are uniformly understood. 7) Index development.
The index makes it easier to detect lexical elments.
This activity involves putting concepts into an
alphabetical table referring to pages and resources
used, just as is usually done in books.
5 Toward a domain ontology
The ontologizing process made it possible de identify
and formalize 395 concepts relating to the domain of
ERP adoption in an SME. Each concept has its own
definition. The concepts are presented in 46 concentric
maps, with an average of 8 concepts per map.
Concepts are of three distinct types. First come
“actors”, i.e. individual entities capable of acting or of
directing an action (e.g. super-user, consultant, project
leader). Next are “objects”, entities which may be
abstract (e.g. alignment, risk, support) or concrete
(technological platform, workstation). Finally, there
are “actions” which actors may undertake as part of the
project (e.g. classifying needs, requiring
demonstrations, releasing resources). Taxonomic
depth is 8 levels. As previously discussed, concentric
maps are an important step in the ontologizing process.
These representations make it easier to see a synthesis
emerge from a large number of hierarchically-
organized concepts. Figure 3 shows the concentric
map of the first level. It shows the following
superclasses: 1) “flow of values” with its associated
classes “external flow” and “internal flow”, then 2)
another superclass, “barriers to value achievement”
with two sub-classes, “environmental barriers” and
“organizational barriers”, and finally 3) the
“implementation project” superclass. The latter
includes IT management processes and key success
factors associated with phases i) “evaluation”, ii)
“selection” and iii) “implementation”. The “risk” class
is also shown on this map.
 Figure 3: first level concentric map
In order to better to exploit the taxonomy, we found it
necessary to move to a digital environment appropriate
for developing and using ontologies. We chose the
Protégé software program2. This is an editor that
makes it possible to build an ontology for a given
domain, to define entry forms and to acquire data by
using the forms as instances of the ontology. The
taxonomy we had developed was therefore reproduced
in the Protégé environment. In the following figure
(Figure 4), we provide a view of the ontology using the
“Jambalaya” plug-in.
Figure 4: Visualization of the ontology in Protégé using the
“Jambalaya” plug-in
6 Conclusion and future research
The ontology developed as part of this research project
could provide an adequate platform for implementing
2
http://protege.stanford.edu/
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a learning system, an on-line cooperation platform, or
a project management process mapping tool that could
support successful use of ERP in SMEs. Moreover, it
has been established that ontologies are tools that can
be used for training and that their use contributes to
more effective knowledge management [12]. However,
even a perfectly modelled ontology will be completely
useless without mechanisms to provide training or
decision-making support for the people using it. As
part of future research processes, it would be
particularly useful to develop a prototype for an on-
line learning platform dealing with IT management
processes. From this perspective, it would be
necessary to define target scenarios and define
instances of them in specific organizational contexts.
Scenarios are story outlines consisting of a series of
actions carried out by actors in relation to specific
objects and in view of specific goals, as defined in the
taxonomy. Because of its holistic approach, this
research project does make a significant contribution
to the capitalization and formalization of knowledge
related to the adoption of integrated management
software packag[5]es by SME’s and to the possibility
of developing an on-line learning system in a variety
of industries.
References
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