REVIEW OF LITERATURE

ERP systems are designed around a process view of the business, and promise seamless
integration of all information flowing through a company. Top management support, effective
implementation team, organizational-wide commitment to the system and the effective resolution
of misalignments between organizational needs and the ERP package functionality are critical
factors for the success of an ERP implementation project. It is seen in the following literature
review that people are a major source of information gathering and contribute extensively in
ensuring the flow of information across the various functional areas within an organization.
Since people are involved in this process their satisfaction is more important for the success of
the ERP implementation.
2.1 END-USER SATISFACTION IN ERP SUCCESS
Looking for the dependent variable of IS success, DeLone and McLean (1992) identified six
categories: system quality, information quality, information use, user satisfaction,
individual impact, and organizational impact. Through these categories, they proposed a
model for IS success with a process type approach, as illustrated in Figure 1, instead of treating
them independently. According to the model, system quality and information quality,
singularly or jointly, affect positively or negatively information use and user satisfaction.
Moreover, the amount of information use can affect user satisfaction, as well as the contrary,
the latter affecting the former. They also posited that information use and user satisfaction are
direct antecedents of individual impact, which would suggest some organizational impact.
In fact, the measurement of IS success is multidimensional and the research focus will indicate
which categories will be more appropriate. Several researchers have used this perspective to
some extent to assess IS success based on the DeLone and McLean model (Zviran, Pliskin, &
Levin, 2005; Nelson & Wixom, 2005), where user satisfaction category was reported as the one
of the most researched (Ives, Olson, & Baroudi, 1983; Baroudi & Orlikowski, 1988; Chang &
King, 2000; Adamson & Shine, 2003; Doll et al., 2004; Wixom & Todd, 2005). Chin and Lee
(2000, p. 554) define end-user satisfaction with an IS as an overall affective evaluation an enduser has regarding his or her experience related with the information system [IS], being both IS

use and other activities related (e.g., training, participation or involvement in development or
selection) of value in predicting subsequent behavior (e.g., utilization) or performance.

The real-time environment of current IS applications is characterized by end users interacting

with them directly to input data as well as making queries (search for data) for specific decision
making purposes. In this environment, end-users assume more responsibility in operating these
applications and, as a consequence, they obtain an adequate perception about how they are
served by them. This perception is extended to management level personnel who do not
necessarily interact directly with the applications, but are mainly end-users of the information
produced by them to run the business. The first kind of user would be characterized by Doll and
Torkzadeh (1988) as a computing user, while the latter an information user. They also defined
end-user computing satisfaction (EUCS) as an affective attitude towards a specific computer
application by someone who interacts with the application directly (p. 260), definition that can
be adapted to information user regarding the information they receive from the application.
The Information quality category is associated with the output of an IS (Yang et al.,
2006), be the data on paper, electronic file or even on a monitor screen; while system quality
category refers to the system that processes the information required to output, which represents
user perceptions about his or her interaction with the system during the tasks performed (Nelson
& Wixom, 2005). Individual impact category is the effectiveness of the IS in decision making
by users, helping their understanding, problem identification, learning, etc., predicting the
organizational impact category in terms of cost reductions, productivity gains, increased market
share, return on investment or assets, staff reduction, etc. (DeLone & McLean, 1992).

For the six categories presented in the IS Success Model, DeLone and McLean (1992, p.
88) recommended further development and validation before it could serve as a basis for the
selection of appropriate I/S [IS] measures. In the meantime, it suggests that careful attention
must be given to the development of I/S [IS] success installments. Thats what this study is all
about as it evaluates end-user computing satisfaction with an ERP system.
2.2 OVERALL END-USER SATISFACTION (EUS)
EUS has been used as a measure for IS success for about 40 years and is still one of the
most widely used measures in assessing the success of IS. The reasons lie in the high degree of
face validity of satisfaction and in the weak conceptualization or empirically difficult validation
of other measures (Au, Ngai et al. 2008). In particular, if the use of an IS is mandated and user
behavior cannot be analyzed directly, measurement of success in terms of EUS is adequate
(DeLone and McLean 1992). Also in recent IS research EUS is intensively studied in very
different contexts: e.g. social networks (Zhang 2010), web sites (Schaupp 2010) and learning
management systems (Klobas and McGill 2010).
2.3 ERP GROWTH
Shannon (1996) had said about growth of ERP, A large number of corporations have
moved with the ERP wave and implemented one or other of the leading edge ERP software be
it SAP R/3 or Baan Series or Oracle Applications or Ramco Marshal. And significant benefits
by way of cost reduction, improved customer care, shorter supply chain, reduced inventories
and in turn healthy bottom-line. The ERP wave also helped major hardware, networking &
software vendors. To find about growth she made research with end- users through questionnaire
method and analyzed all the factors and thus result from her research articulate the Erp upgrade
in forthcoming years.
2.4 ISSUES IN USAGE OF ERP AMONG END-USERS
Becerra-Fernandez, I., Murphy (2000), say once the company successfully implements the ERP,
the attention moves forward to the most efficient use of the system. Especially since considerable
resources have been invested in the ERP implementation, the best possible utilization of the
system is anticipated

Indeed, the value of an ERP system draws from its effective and efficient usage and not so much
from the system itself. The ERP system during the post-implementation era, ranging from end
user acceptance, to end user satisfaction, to business process reengineering after ERP
implementation to uncertainty management. Additional issues addressed by the articles include
version upgrade/migration, managing dirty data, ERP usage by consulting firms, and political
role of ERP system. To find about the issues during usage of ERP he analyzed through case study
and found Majority companies focus on the transactional capability of the ERP system. Four
articles particularly address the decision support functions of the ERP system, and these are
classified under a sub-theme Decision Support. The articles emphasizing the efficient usage
of ERP systems in a particular function are grouped under a sub-theme Focused Function.
The example functions are manufacturing, marketing, accounting, production, strategic
management, operations, and data archiving. In which we have Maintenance issues while using
ERP systems.
2.5 SELECTION CRITERIA OF ERP AMONG END-USERS
Siriginidi (2000), reveals the normal symptoms that would suggest the need for ERP would be
high levels of inventory, mismatched stock, lack of coordinated activity, excessive need for
reconciliation, flouting of controls, poor customer response levels and operations falling short of
industry benchmarks in terms of cost controls and general efficiency. As author analyzed through
questionnaire method and found that users select ERP due to the tangible benefit includes
reduction of lead time by 60 percent, 99 per cent on-time shipments, increased business, increase
of inventory turnover by 30 per cent, reduction in cycle time by 80 per cent and work in progress
reduced to70 per cent. The intangible benefits include better customer satisfaction, improved
vendor performance, increased flexibility, reduced quality costs, improved resource utility,
improved information accuracy and improved decision-making capability

By: Professor Sowmyanarayanan Sadagopan is the Director of the Indian Institute of

Information Technology, Bangalore (IIIT-B).
A large number of corporations have moved with the ERP wave and implemented one or
other of the leading edge ERP software be it SAP R/3 or Baan Series or Oracle Applications or
Ramco Marshal. Many of them reaped significant benefits by way of cost reduction, improved
customer care, shorter supply chain, reduced inventories and in turn healthy bottom-line.
The ERP wave also helped major hardware, networking & software vendors; in fact in the
last

years

ERP was

the

catalyst

behind

large

corporate

IT investments.

Several

consulting houses & training establishments also benefited by the wave. However several
companies

also

burnt

their

fingers; they

could

not

either manage the

resulting

organizational change or manage the expectations of end users from ERP.

This in turn led to lots of criticism that started questioning the very utility of ERP. That
apart, ERP

has

come

to

stay.

Significant

numbers of

corporations

have either

implemented ERP or implementing ERP. The natural question that arises is what next?
Anticipating that ERP growth would taper off and end users would clamor for things
beyond ERP several ERP software vendors & consultants have been

propagating a

number of ideas that could be a natural extension to ERP. This in turn led to three distinct
directions of growth
1. Looking beyond the limits of enterprise one would like to extend the notion of an
enterprise to suppliers and the management of their enterprises.

Supply Chain

management (SCM) and the resulting optimization of logistics, production planning

and control in the form of Manufacturing Execution Systems and Advanced Planning
Systems. I2 Technologies in particular are the pioneers in this area.
2. 2. Extending the notion of the enterprise all the way to the end consumers
led

to another area generally known as Customer Relationship Management (CRM).

Tools such as data mining find extensive use in this area and IBM did some
pioneering work in this area.
3. 3. From a technological perspective the concept of enterprise component objects is
a major breakthrough that is being mastered currently; the enabling technology
behind

this activity is the use of COM & DCOM, CORBA and Enterprise Java

Beans (EJB) technologies. Use of component technology would lead to "plug &

play" of the modules either from the same ERP

across

different

software

vendor

or

even

ERP software vendors; in addition "extensibility" would also be

possible.
4. Naturally there is a lot of excitement surrounding all these three developments. But
all the three developments leave the very core of ERP untouched. We call such
extensions "horizontal extensions" - in the sense that the processes get extended
beyond

the boundaries of

the enterprise. Typical ERP currently implemented

address

the broad "Common business

processes"

such

as order processing,

purchase, manufacturing planning, logistics, invoicing and accounting processes.

Generally these processes are common to all industries and
with

the

scale

of

are also

invariant

operation, holding pattern or geographic location. In such a

generic environment ERP does a great "clean up" operation removing the "mess"
among disparate functional information systems, integrates the sub-systems, brings
in phenomenal efficiencies and in turn build up a solid "information infrastructure"
for an organization. But what such "plain vanilla ERP" software's miss out is the
leveraging of features unique to a firm or an industry. It is true that
initial

competitive advantage;

once

most

of

the

ERP

provides

firms start implementing ERP,

many of the firms loses out on the initial competitive edge gained through the
implementation of ERP. To sustain competitive advantage a firm has to look at features
that are unique to its operation. That is when they start looking for "beyond plain
vanilla ERP", that provides "vertical" extension of the very roots of ERP.
In the recent years ERP software vendors have partially addressed this problem
by the introduction of "ERP verticals".

Typical such solutions are specific

to

"vertical market segments - Oil, Automotive manufacturing, Banking, Telecom, Food

& Beverage, Media, Government etc. These are re-packaged solutions based on
extensive experience gained

by a specific software vendor through dozens of

implementations in many firms that are key players

some
for

ERP
example

software
SAP

in

in a chosen

being more successful in specific

industry.

industry

With

segments

Oil industry, BAAN in discrete manufacturing, Oracle in

Telecom and Ramco Marshal in process industry - this is a natural evolution. Such
re-packaged solution leads to significant gains in implementation time & quality.

However, they continue to maintain the "plain vanilla" nature of the ERP software by
way of addressing mainly the "common business processes".
For sustained competitive advantage firms should start

leveraging

the "special

processes" that give distinct competitive advantage. Such an activity must be driven
by the "core competence" of the firms and not by ERP software vendors alone.
For example, for firms where product designs, development, deployment &
maintenance constitute the "core competence"; current generation of ERP software
only addresses the peripheral functions. Industries in this segment would include
Shipbuilding, Machine tools, Capital goods manufacture, Aircraft

manufacturers, and

Railway equipment manufacturers, Power plant manufacturers etc. In these industries

product development is the key. Engineering designs and project management that
are generally outside the ERP software must start driving the enterprise; mere importing
of product data from AutoCAD / UG II or the import of ERP data into project
management software

such as Primavera would

development processes

must

organizational business

be

processes.

integrated

not be sufficient.

into

the very

Design

&

of

the

core

This would imply design data including 3D,

rendering, and surface & machining characteristics must be integrated into basic
workflow, viewing, searching, version control & access control. Current generation
of ERP software does not implement all these,

though

they would

support

all these functions. Once again design focused companies would need very
sophisticated product data handling for lifetime support, warranty calculations etc.
The emerging area of Product Data Management (PDM) addresses these issues; but
PDM alone would not be sufficient to meet the enterprise needs. ERP software vendors
will not be able to provide full PDM functionality, though many of them provide
very limited PDM functionality. What is called for is the next generation of ERP
software that truly integrates such "core functionality" specific to engineering industry.
Such PDM enabled ERP would be engineer's ERP" quite different from the

current

plain vanilla ERP that is practically an "accountant's ERP". One could cite many
similar examples. Many airlines have implemented ERP; but their core functions such
as "seat reservation system" continue to be outside the main ERP. To fully leverage
their operations airline industry would need a "seat reservation

enabled ERP".

Similarly mining industry would need "mine planning enabled ERP" and refineries

would need "process control enabled ERP".

In all these cases the firms would

depend heavily on their "core competencies" and standard ERP solutions that
address only the common business processes would not give sustained competitive
advantage. That is the place for the next generation of "beyond plain vanilla ERP".
Article 2
ERP information on infrastructure By: Professor Sowmya narayanan Sadagopan is the
Director of the Indian Institute of Information Technology, Bangalore (IIIT-B).
There are many views to ERP in the organizational context as a competitive weapon,
a means to improve productivity and reduce costs, a tool to integrate information
systems etc.

In

this

note we will

take

yet

another

view, namely, ERP as

the infrastructure for corporate information systems.

An infrastructure has some key features
1. Shared by all2. Available readily3. Reliable enough to be depended upon4. Forms the
backbone of all activities5. Leveraged by many value-added services
1. To be really useful ERP should meet all the key features mentioned above. First
and foremost, it must be shared by all departments across the organizations and
owned by all users. ERP is NOT one more project initiative from EDP/ MIS/ IT
departments. We

do

not

necessarily mean a big bang approach to ERP

implementation. Even if Finance and Logistics modules alone are implemented

other related functions like Production & Quality must be interfaced or externally
integrated so that the base-data of ERP truly reflects the state of affairs across the
organization. There are enough tools available today, both from ERP vendors or
other tools vendors to accomplish this. Even Microsoft Back office can be used for this
external integration. More important the users in the departments where ERP modules
are currently not implemented should be as much part of ERP as those departments
where ERP is being implemented. The essence of ERP is integration and this must not be
lost sight of under any circumstances.
2. The second feature of ready availability is important, particularly in Indian
scenario. The per user licensing cost of ERP being high, the tendency in many
Indian companies going for ERP is to restrict ERP access to key managers and
senior personnel. While the logic is correct from cost point of view it beats the very
purpose of ERP, which is data ownership. If the order -entry clerk has to own the data
that person will own the data only if he / she were responsible for the data creation

/ updating.
evolved

The access control and infrastructure management tools are sufficiently

today that data sensitivity can be mapped

to the user hierarchy without

hardware-based control. As such there is no need even to have separate ERP access
terminals; ERP access can be through the
that

every

user

routinely accesses

for

same
e-mail

PC

/ Workstation/ Terminal

/ word- processing / Internet /

Intranet. What is important though is the widespread access to every point of data
generation and modification so that data ownership can be maintained.
3. Infrastructure must offer highest levels of reliability. Naturally
servers, disk

the choice of

systems, network devices & access devices must be such that one

can take ERP availability as granted. While data processing or word processing can wait
for a few hours or a few days of downtime, ERP cannot and one should not resort
offline operations with later adjustmentsexcept in rare circumstances.

to

Thanks to

distributed processing some of these buffered transactions take place behind

the screen but end-users should not be forced to resort to off-line processing. This
calls

for

better

planning par t icu lar ly on

uninterrupted electric power supply

using appropriate UPS devices both for back- end servers, network equipment &
front-end terminals / workstations.
4. The fourth aspect is the nature of ERP as the information backbone

Of the

organization. There is no point in every user department maintaining individually

private systems even after ERP has been implemented. The organization would be
back

to square one with multiple data for key elements beating

the very

purpose for which ERP was put in place Unless users depend on ERP data for their
very

job

function, irrespective of their departmental affiliations, the full benefits

of ERP for organizational excellence would remain a distant dream.

5. The most important part of ERP, viewed as infrastructure
it provides
well-

for

host

of value-added

implemented ERP would pave

services

is

the support

through applications.

the way for organizational level data

discipline. Users will not have to chase others for information; no need to set up
reminders, follow-up
on

groups

and meetings.

Information

would be available

tap; however it is important that the users start planning for innovative use of

this information for planning & analysis. Ultimately the real use of information is
to provide insight; information per se will be of little use, except where required

from

statutory

Management,

point

of

Customer

view.

It is

Relations

important to plan for

Management, Data

Supply

warehousing

Chain

&

Data

mining (OLAP) and other initiatives right away so that with the high quality
information infrastructure provided by ERP the organization can leverage the high
quality

information systematically

generated & maintained

by

ERP

towards

corporate excellence. Finally infrastructure should not be viewed from a narrow

cost benefit and ROI perspective. The true benefits of ERP are not necessarily
apparent on day 1. Accordingly benefit cost ratio might unduly overemphasize costs
that are apparent and underemphasize benefits that may not be apparent. Like every
other infrastructure- roads, sea-ports, airports, telecom and railways information
infrastructure in the form of ERP needs a different mindset too. This is particularly
true in India where we have a distorted view of infrastructure planning to build
it incrementally through a meter gauge, broad gauge, single track, double track and
finally electrical three track system taking decades to build the
millions

of

users

to

track,

putting

enormous inconvenience, choking the business growth and

running into cost & time over runs and the attendant CAG Audit queries on the poor
engineers! What was necessary on day 1 was to plan a world-class 3 track electrified rail
line or a four-lane free way that would have changed the very face of Indian
industries. Hopefully we will not repeat the same mistakes in building the information
infrastructure in organizations. It must be noted that investments in infrastructure
pays by the innovative ways in which the infrastructure is put to use investments
in roads pays off through returns from trucking industry, business generated through
phone calls pays for

investments

in telecom network similarly innovative use of

data generated through ERP would pay for ERP investments. One should not just stop
at ERP implementation alone.
must be put to good use.

The improved organizational agility provided by ERP