EJISE Volume 16 Issue 2

Editorial to Volume 16 Issue 2 of EJISE coming soon
86
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Bases of Intra-Organizational Power: An Analysis of the Information
Technology Department
Andrew J. Setterstrom1 and J. Michael Pearson2
1
College of Business, Northern Illinois University, USA
2
College of Business, Southern Illinois University Carbondale, USA
asetterstrom@niu.edu
Abstract: Power is an important aspect of the social systems that make up organizations. The concept of power
helps to explain how organizational decisions are made and executed, despite opposition that results from
competing goals and desires amongst those in which a given decision affects. Using resource dependence and
strategic contingency theories for guidance, we identify potential sources of intra-organizational power for the
information technology (IT) department and its members. The comprehensive list of propositions developed in
this paper will provide researchers potential hypotheses to test in future research, as well as a means to assess
overall IT departmental power. While power plays an important role in facilitating the execution of the activities by
an organization’s IT department, it is often pursued by self-interested individuals, due to the fact that it provides
the ability to influence decisions, such as resource allocation, as well as providing a sense of control over
organizational outcomes and personal satisfaction. Based on the propositions developed in this paper, we
demonstrate how power considerations provide one plausible explanation for many of the poor organization
outcomes that occur with respect to the IT function, including technology for technology’s sake, a lack of user
preferences being integrated into IT systems development projects, resistance to using of knowledge
management systems, and resistance to IS outsourcing. Our discussion of power-gaining activities provides
practitioners an explanation of dysfunctional behaviors that previously may have been perceived as irrational, or
even undetected. In our discussion section, we provide suggestions for researching the propositions we have
developed. In particular, we suggest that a longitudinal or multi-case study approach may provide the best
method for researchers to test our set of propositions. At the same time, we caution that results from case studies
would be difficult to generalize, as the configuration of IT solutions adopted by organizations tend to be
idiosyncratic.
Keywords: Information Technology Department, Strategic Contingency, Resource Dependence, Dysfunctional

Behavior
1. Introduction
The study of power in social systems has long been an important pursuit for scholars, in the context of
both intra- and inter-organizational situations. In particular, the past three decades have generated an
increased interest in power in the mainstream information systems (IS) research and has precipitated
considerable examination (see Jasperson et al., 2002). This is not surprising, as research has
suggested that power plays a critical role in execution of business functions carried out by an
organization’s IT department. For instance, IT departmental power has been demonstrated to be an
important aspect of IT governance, affecting the ability of the IT function to control the development of
IT projects, as well as to successfully propose IT investments for implementation (Xue, Liang, and
Boulton, 2008). In the same vein, Preston, Chen, and Leidner (2008) argue that IT managers,
specifically CIOs, need some degree of decision-making authority to pursue IT initiatives that support
organizational strategies. It has also been shown that individuals within organizations resist the
implementation of IT perceived to shift the distribution of power away from them (Alvarez, 2008;
Lapointe and Rivard, 2005; Sarker, Sarker, and Sidorova, 2006). Consequently, power considerations
for information systems implementation are important in avoiding implementation failure.
Prior scholarly investigations have attempted to gauge the power possessed by an organization’s IT
department by conducting empirical research into the perceived power relative to other departments
(e.g. Lucas, 1984; Lucas and Palley, 1987; Saunders and Scamell, 1986). While providing valuable
insights, these studies tend to be problematic in that perceptions often do not account for unenacted
power (Lucas, 1984; Pfeffer, 1981), while technology users may even fail to recognize when power is
being leveraged (Provan, 1980). Sillince and Mouakket (1997) observed that power is
multidimensional and that much of the IT research has historically adopted too narrow of an
operationalization; they argue that multiple views of power are necessary in gaining a more complete
understanding of power’s complexities. Pfeffer (1981) suggests one possible method for accurately
gauging power is to utilize Gamson’s (1968) indirect approach: assessment of the potential sources of
power. This indirect approach has the ability to detect power that is unutilized or which is exercised
without being perceived by other actors within the organization.
ISSN 1566-6379 88 ©Academic Publishing International Ltd
Reference this paper as: Andrew J. Setterstrom and J. Michael Pearson, “Bases of Intra-Organizational Power:
An Analysis of the Information Technology Department” The Electronic Journal Information Systems Evaluation
Volume 16 Issue 2 2013, (88-102) , available online at www.ejise.com
Andrew J. Setterstrom and J. Michael Pearson
The contribution of this paper is to provide a comprehensive examination of critical sources of power
for an organization’s IT department. Drawing from the theories of resource dependence and strategic
contingency as a theoretical framework (Hickson et al., 1971; Hinings et al., 1974; Pfeffer and
Salancik, 1978), a set of propositions are developed that identify potential sources of organizational
power for IT departments that are intended for use in future research. Information about the sources
of power for IT departments would provide both researchers and practitioners examining the decision-
making authority of the IT department an approach to assessing departmental power.
In addition to providing propositions, we demonstrate how one driving factor many common problems
organizations experience relating to their IT function can be traced to, in part, attempts to gain
legitimacy and power by IT personnel. The misuse of power by organizational leaders has been well
documented (see Higgs, 2009). Previous literature has suggested many possible sources for issues
relating to an organization’s IT function, such as a low level of shared understanding between the CIO
and top management about the role of IT within an organization (Tan and Gallupe, 2006) or not using
the optimal type of IT governance structure (Van Grembergen and De Haes, 2009). Our work,
however, suggests poor business results from technology may be attributed to intentional behaviors
by IT personnel to gain power or avoid its erosion. We argue that an important step in mitigating the
negative effect that power-gaining activities have on organizational performance is to recognize when
they are occurring.
By examining the contending forces affecting the different sources of power, our purpose is to
establish a better understanding of the nature of intra-organizational power for a firm’s IT department
and some of its consequences. Astley and Sachdeva (1984) observed that in the pursuit of identifying
sources of power through resource dependence, hierarchal authority is frequently overlooked. While
not the focus of this paper, the importance of formal power should not be ignored. The potential bases
of power derived from the theories utilized in this paper are by no means exhaustive or mutually
exclusive, but simply reflect broadly defined areas where intra-organizational power may be gained.
Because the theory into power developed throughout the last several decades remains relevant, we
will be revisiting this stream of research and using it as a lens for interpreting some of the challenges
faced by contemporary IT departments.
2. Literature Review
2.1 Power of IT Departments

While being recognized by researchers as an important aspect in organizational studies, power
remains difficult to define. This is in part due to the numerous interpretations and meanings of power
that researchers have developed (March 1966; Pettigrew, 1972; Pfeffer 1981; Wrong, 1968).
Furthering complicating its understanding, many scholars point out the difficulties in
defining/developing measurements to assess power (Frost, 1987; Jasperson et al., 2002; Silva, 2007;
Pfeffer and Salancik, 1978; Pfeffer, 1981). In his seminal article, Emerson (1962: 32) provides a
commonly cited conceptualization of power: “the power of actor A over actor B is the amount of
resistance on the part of B which can potentially be overcome by A.” In this definition, power is
attributed to the social relation, not the individual actors. Emerson asserts that in any social relation
there is mutual dependence; that is, each actor provides the other actor resources that are valued,
which can range from fiscal resources to “ego-support”. The source of power for an actor resides in
the other actor’s dependency on the resource that is being provided. When one actor has greater
dependence on the resources being exchanged than the other actor, the actor with the least amount
of dependence in the social relationship gains power over the more dependent actor. Importantly,
Emerson (1962) observes that despite the value of a resource provided, if that resource is readily
available elsewhere, high dependency on the supplying actor does not occur. For the purposes of our
paper, we employ Emerson’s conceptualization of power.
IT departments generally do not possess what Weber (1947) would refer to as “formal authority.”
However, as Mintzberg (1983) points out, in addition to the traditional view of legitimate, or hierarchal
power, power can also be gained through political or social sources. Empirical studies have examined
the perspectives of both top managers and other departments within organizations. Historically, they
suggest the perceived power of IT departments has been low (Lucas, 1984; Lucas and Palley, 1987;
Saunders and Scamell, 1986). However, more recent research in the area suggests that some IT
departments now possess moderate amounts of power (Setterstrom and Pearson, 2009), suggesting
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Electronic Journal Information Systems Evaluation Volume 16 Issue 2 2013
that changes in the contemporary businesses have occurred and that this stream of research should
be revisited.
2.2 Strategic contingency

Building on Emerson’s (1962) notion of power, strategic contingency theory (Hickson et al., 1971) has
served as a framework for organizational scholars to operationalize intra-organizational power. It
posits that power among organizational departments can be defined as a dependent variable
connected to three contributing variables, or sources of power: (1) coping with uncertainty, (2) non-
substitutability, and (3) centrality. Hickson et al. define uncertainty as an information deficit pertaining
to possible outcomes of future events. This is congruent with Thompson’s (1967) view of uncertainty,
in which he theorized that organizational structure is, in part, a result of attempts to minimize or
eliminate exposure to uncertainty through departmental buffering and division. In this way, some
organizational units or departments manage varying amounts of uncertainty while others function in
virtually certain environments. Successful coping of uncertainty reduces the impact that the
uncertainty has on activities of other departments within the organization and consequently confers
power through dependency of the organization and its subunits on the coping subunit.
Substitutability is the degree to which there are available alternatives for completing the activities of a
particular subunit (Hickson et al., 1971). When a person or department can easily be replaced, either
through the market of available employees or from other organizations, the dispensable nature of the
subunit fails to provide a base for power. However, in instances when the functions performed by a
subunit are critical to the organization and replacement would be difficult, the subunit gains power
through its non-substitutability.
Thompson (1967) described organizations as collections of systems, both open and closed, of
interdependent roles and activities. Based on this definition, Hickson et al. (1971) describe centrality
as the degree to which a unit’s activities are connected with other units within the organization. The
concept of centrality can be divided into two distinct measures: the number of other activities within
the organization to which the workflows of the unit connect and the “speed and severity with which the
workflows of a subunit affect the final outputs of the organization.” (Hickson et al., 1971: 222). If either
the pervasiveness or immediacy of the workflows increases, the power of the subunit relative to other
units increases.
Hickson et al. (1971) hypothesized that these three contingencies (coping with uncertainty, non-
substitutability, and centrality) are interrelated to each other. Control over only a single contingency is
inadequate for gaining organizational power. Therefore, as the number and degree of contingencies
controlled by a department increases, the greater the power for the department within the
organization. Empirical testing has produced mixed results supporting this idea (Cohen and Lachman,
1988; Hinings et al., 1974; Ibarra, 1993; Saunders and Scamell, 1982).
2.3 Resource dependency and political sources of power

In 1974, Salancik and Pfeffer observed that the power possessed by individual departments within a
university was relative to the amount of resources possessed by the department, either through
allocation of budget or grants. This led to their formulation of the resource dependency theory (1974).
Resource dependence theory posits that organizations, and subsequently departments and subunits
within organizations, require a continued supply of resources to carry out the processes and functions
for which they were designed. The most commonly conceived resources include money, material
inputs, expertise, customers, and personnel, but other resources can include social legitimacy or
prestige. Resource dependency asserts that individuals or subunits gain organizational power if they
are able to provide resources that are considered crucial to the organization and challenging to obtain
(Pfeffer, 1981; Pfeffer and Salancik, 1978). Resource dependency theory has offered a politically
oriented view of power (Pfeffer, 1989) and has served as a seminal work in the pursuit of scholarly
understanding of power (Ibarra and Andrews, 1993; Orlikowski and Gash, 1994).
While providing considerable explanatory power, resource dependence and strategic contingency
theories are incomplete in their assessment of the determinants of power. In his seminal discussion of
power within organizations, Pfeffer (1981) posited that affecting decision processes and consensus
among individuals were also considerable sources of organizational power. For example, while having
the authority to make a decision confers power on the decision-maker, having an effect on decision
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constraints, values, information available about alternatives, and objectives used in the decision-
making process can also be interpreted as organizational power (Pfeffer, 1981). Consensus is a
situation where individual members of a subunit share a common view. Consequently, individuals
from the unit act and speak in a similar ways. This allows the subunit to argue more convincingly that
results from a decision or action are more certain, thus compelling other subunits to rely more heavily
on the focal subunit (Pfeffer, 1981). Enz (1988) offers a more compelling interpretation of how
consensus can result in power; when values and perspectives are shared between a subunit and top
management, or what Thompson (1967) would refer to as the “dominant coalition,” power will be
conferred to the subunit. Enz (1988) argues that this is a result of value systems serving as a
rationalization of conferring power to some subunits but not to other subunits.
3. Sources of power for the IT department
3.1 Coping with uncertainty

The development of IT-based solutions has diminished the uncertainty of some critical business
aspects. This is accomplished in several ways. First, IT provides information quickly and accurately to
departments throughout an organization, despite their geographic location. Additionally, IT does not
simply facilitate the diffusion of information, but it is increasingly the key component in processing raw
data to create information. Sophisticated data warehouses and data mining software are able to
extract meaningful information from data that would not be possible by individuals. Such actionable
information can be used to identify business opportunities and threats, aid in critical decision-making,
and help formulate business strategies (March and Hevner, 2007). Furthermore, by providing real-
time information, IT has enabled improvements in organizational processes and logistics control,
enhancing efficiency and effectiveness (Carton and Adam, 2010; Zammuto et al., 2007). As
Thompson points out (1967), the ability to help an organization cope with uncertainty results in the
conferring of power. By controlling, transmitting, and manipulating high quality information, the IT
department enables other subunits to more effectively absorb uncertainty (Pettigrew, 1972)
Proposition 1: As an organization’s utilization of information technology to store,
retrieve, create, and transmit information increases, the power possessed by the IT
department will increase.
New systems development results in a high degree of uncertainty. This is for several reasons. First,
the process of technology implementation itself causes uncertainty. Research shows that the risk of
implementation for new information systems is high, especially in instances where the technology is
particularly sophisticated or complex (Barker and Frolick, 2003; Dalcher and Genus, 2003). Evidence
of this point can be observed in ERP implementations, which, despite advances in IT project
management approaches over the last several decades, still experience a high number of failures
(Hawari and Heeks, 2010; Muscatello and Parente, 2006) Second, an organization needs an
adjustment period, to routinize the processes involved with the new technology and to crystallize
changes in organizational structure resulting from adoption, before uncertainty from a new technology
implementation recedes. Employees often revert to old business procedures or find work-arounds to
using an information system during the period following its implementation (O’Donovan et al., 2010),
which can be attributed to ambiguity related to using a new system. Based on these two observations,
we argue that the propensity of an IT department to undertake innovative systems development has a
direct effect on organizational uncertainty, which, consequently, the best equipped subunit for coping
with this uncertainty is the IT department.
Proposition 2: As the frequency in which different information technologies are
implemented in an organization increases, the power possessed by the IT department
will increase.
These first two propositions warrant a caveat to organizations relying on IT departments to supply
technology resources. Businesses are entities where political activity takes place. In fact, one recent
study found that political behavior is typical in organizations and managers generally perceive such
tactics as both necessary and ethical (Buchman, 2008). This same study went on to report it was a
commonly held belief that failing to carry out political activities has a negative impact on both a
manager’s career and the ability of a department to secure needed resources. This is problematic, as
research has shown that while individuals within an organization might be rational, aspirations and
preferences possessed by employees are generally not homogeneous throughout an organization
(Cyert and March, 1963; Yukl, 2002); individuals value their personal beliefs and the requirements of
their departments more highly than the needs of the organization at large (King, 1983). This is in

agreement with Brass, Butterfield and Skaggs’ (1998) work, where they argue that unethical behavior
in organizations is more likely to occur across functional areas, as opposed to occurring within a given
group. Hickson et al. (1971) discussed the possibility that individual departments will intuitively act to
preserve or gain power within an organization, thus pursuing departmental desires over organization
goals. Certainly this argument holds true for individuals and groups within the IT department as well.
Given our first two propositions, we argue that behavior previously labeled as “technology for
technology’s sake” might in fact be rationalized efforts to increase personal or IT departmental power.
Some evidence of this assertion can be seen in a longitudinal case study by Brown (1998), where
group narratives were analyzed in an effort to understand attempts to legitimize the implementation of
a hospital information support system. His research found that while the IT project team emphasized
benefits to the organization in campaigning for the implementation of the system, their underlying
motivations for system adoption were to increase the dependency on the IT department and promote
career growth. Similarly, Hussain and Cornelius (2009) conducted a longitudinal case study in which
IT management was found to implement organizational-wide IT projects to increase the credibility and
importance of the IT department.
3.2 Non-Substitutability
Thompson (1967) would describe IT as an intensive technology, as it utilizes many complex and non-
standardized inputs to provide a unique informational output. Consequently, specialists with extensive
training and experience are required to handle the various functions of the IT department. Despite the
growing prevalence of end-user development of computing solutions (Lieberman et al., 2006), a high
degree of expertise remains necessary for successfully implementing large and complex information
technologies, such as ERP systems (Maditinos, Chatzoudes, and Tsairidis, 2012).We argue that IT
department gains power through the inability of subunits to substitute its expertise with resources from
within the firm. As technology solutions become more complex and sophisticated, advanced IS skills
become increasingly important to manage them. Given that advanced IS skills are difficult to obtain or
imitate (Wade and Hulland, 2004), increasing the complexity of information technologies utilized by an
organization results in higher levels of reliance on the IT department to manage them. This view of
non-substitutability affirms Lucas and Palley’s (1987) observation that an unsophisticated level of
computing support for an organization consequently resulted in a low levels of power for the IT
department.
Proposition 3: As the complexity of IT solutions utilized by an organization increase,
the power possessed by IT department will increase.
The inundation of technology solutions in the market also has an effect on IT departmental power. As
actors within organizations gain the ability to purchase applications from external commercial sources,
they are able to rely less upon the IT department, consequently reducing the IT department’s power
(Markus and Bjorn-Andersen, 1987; Willcocks, Fitzgerald, and Lacity, 1996). We extend this
observation to assert that the availability of open source software solutions reduces reliance on a
firm’s IT department in the same way. Though organizations might choose not to seek IT solutions
externally, the availability of such solutions makes the IT department more substitutable, particularly in
cases where the technology provided by the IT department is generic and unspecialized. Conversely,
in cases where systems provided by an IT department are idiosyncratic, seeking technology solutions
through external sources becomes less viable. The more unique the features and functionalities of a
given system, the less suitable a commercially available becomes.
Proposition 4a: As IT solutions provided to an organization by an IT department
become available from sources external to the organization, the power possessed by
the IT department will decrease.
Proposition 4b: As the information systems provided to an organization become
more idiosyncratic and specialized, the power possessed by the IT department will
increase.
Interestingly, case study research has provided some evidence IT workers possess an intuitive
understanding of propositions 4a and 4b. In one particular case study, an administrator for a system
developed in-house was observed campaigning with system users to resist the implementation of a
commercially-developed ERP component (Setterstrom and Pearson, 2010). The project manager for
the ERP system believed that this action was carried out by the system administrator to conserve the
value of the unique expertise needed to manage the legacy system. Ultimately, the system
administrator’s political activity resulted in the failed implementation of the new system.

The use of information technology continues to become increasingly commonplace in society.

Decreases in technology costs, the increased popularity of the Internet, and the prolific use of
computers in public schools are just a few examples of the driving forces behind the diffusion of IT. As
a result of increased exposure, users are generally becoming more IT self-efficacious (Torkzadeh,
Chang, and Demirhan, 2006). Studies suggest that users who have become generally self-
efficacious, and consequently confident, with using IT have less anxiety when adapting to new and
specialized technologies than users with lower self-efficacy (Agarwal, Sambamurthy, and Stair, 2000).
Moreover, individuals with a high degree of self-efficacy learn new computer skills more quickly than
individuals with a low degree of self-efficacy (Downey and Zeltmann, 2009). As computer users
become more self-efficacious, they perceive less need for support from an IT department and are
more inclined to independently seek out technologies that fulfill their business needs. Consequently,
those individuals become less dependent on the IT department to supply technology solutions or
support.
Proposition 5: As computer users in an organization become more self-efficacious
with IT, the power possessed by the IT department decreases.
Interestingly, this proposition provides a possible explanation for some of the seemingly irrational
adherence to bureaucratic policies and procedures that IT personnel exhibit as it pertains to the IT
domain. One example of this is prohibiting users from making IT purchases without the approval of
the IT department (Markus and Bjorn-Andersen, 1987). Another example would be the refusal of IT
personnel to allow capable users to perform software upgrades or maintenance on their PCs, arguing
that a qualified technician must carry out the work (Setterstrom and Pearson, 2010). Because many IT
personnel understand, at least at an intuitive level, that allowing users to perform IT–related tasks
contributes to the substitutability of their position, some individuals will respond with behavior to
protect their territory.
Routinization is a concept discussed by Hickson et al. (1971) which states that as an organization
creates recurrent task activities for carrying out business functions and the processes for executing
those tasks are documented, absorption of the tacit knowledge necessary to carry out those business
functions is captured from employees. An example of routinization in the context of IT can be found in
the maintenance of workstation computers. These routines can be broken down into individual tasks
and then automated so that any organizational member can properly perform the maintenance. In
creating this routinization, the power of the IT staff whose duty it is to conduct routine workstation
maintenance becomes negligible. Routinization is not limited to workstation maintenance, however; it
is applicable to many of the functions that an IT department performs, such as software upgrades and
server maintenance. Similarly, poor documentation of the current computing systems’ configurations
can further enhance the non-substitutability of IT personnel (Lucas, 1984). Especially in situations
where the organization’s computing solutions are complex and sophisticated, or the technology is
relatively new or not widely in use, lack of documentation makes substitution of IT personnel, even
through the employment market, increasingly difficult.
Proposition 6: As tasks executed by the IT department become routinized and
documented, the power possessed by the IT department will decrease.
This proposition suggests another point of caution for organizations with regard to power maintaining
behavior: resistance to documenting and routinizing job functions within the IT department (Crozier,
1964; see Reed, 1996). As documentation is created that prescriptively outlines the procedures
necessary to administer IT systems, IT professionals become more substitutable and their power is
eroded. Therefore, it should be expected that some IT professionals will resist organizational
pressures to document the details of their job functions, keeping the tacit knowledge of their duties
secret. In interviews with CIOs and project managers at universities, Setterstrom and Pearson (2010)
documented occurrences in which systems administrators and network administrators were reluctant
to document the configurations of the technologies they administer. In the opinion of their supervisors,
this was done to increase personal job security.
Interestingly, resistance to documenting job duties would have a notable impact on knowledge
management systems. Knowledge management systems are implemented into organizations to help
leverage knowledge assets in an effort to create competitive advantage (Halawi, Aronson, and
McCarthy, 2005). Despite the potential benefits from their effective use, members of organizations
adopting knowledge management systems are often observed to be reluctant to contribute their
knowledge (in ‘t Hout, Vrancken, and Schrijnen, 2010, see Kankanhalli, Tan, and Wei, 2005). While
research has suggested factors such as organizational characteristics, social context, or
characteristics of the knowledge itself can affect individuals’ willingness to share information (van

Wijk, Jansen and Lyles, 2008), we assert that some employees, IT personnel in particular, would be
motivated to actively resist the absorption of their knowledge into knowledge management systems by
the desire to retain organizational power. Research has shown that individuals’ willingness to share
knowledge can be tied to rational self-interest (Constant, Keisler, and Sproull, 1994), and our
proposition is congruent with arguments put forth by other researchers that have observed some
individuals are unwilling to contribute to knowledge management systems in an attempt to avoid a
loss of personal power (Davison, Ou, and Martinsons, 2012; Durcikova and Everard, 2004). This has
important implications, as critical activities carried by the IT function, such as information systems
development, could be negatively impacted by resistance to contribute to knowledge management
systems, because they are highly reliant on knowledge sharing for positive outcomes (Kotlarsky and
Oshri, 2005; Tesch et al., 2009).
3.3 Centrality in workflow

Information technology is increasingly used by organizations to facilitate their workflow (Stohr and
Zhao, 2001). With an ERP system, for instance, an organization can track and manage all of its
human resource, manufacturing, financial, supply chain, project management, and customer
relationship management activities in a single system. Consequently, ERP systems can improve
workflow and increase overall organization competitiveness (Hitt, Wu, and Zhou, 2002; Kohli and
Devaraj, 2003). Moreover, technology enables firms and divisions that are widely dispersed
geographically to more effectively communicate, allowing for more effective vertical control and
horizontal coordination, while helping to compensate for communication problems that correlate with
increased organizational size (Fulk and DeSanctis, 1995). For example, e-mail, has become
commonplace as a means of communication both within and between organizations and has been
argued to improve workflow (Zhao, Kumar, and Stohr, 2000). Likewise, collaboration technologies are
increasingly adopted by organizations to facilitate the completion of projects by virtual teams
(Weimann et al., 2010). As organizations adopt information technologies to facilitate workflow and
enable communication, the IT department acquires a more central role in the organization.
Correspondingly, the pervasiveness or immediacy of the IT department increases relative to other
subunits within the organization, resulting in a greater degree of power.
Proposition 7: As the workflow of organizational processes becomes more
dependent on information technology to administer, the power possessed by the IT
department will increase.
3.4 Provide resources

The capacity of an organization to execute the daily functions of an IT department internally, which
are to design, implement, maintain, and develop an organization’s computing services functions, is
very difficult without services of the IT professionals. Even IT processes that have been routinized
require a degree of technical knowledge beyond the capacity of many non-IT personnel. This
precipitates into expert power (French and Raven, 1959; Reed, 1996). The amount of expertise
needed to perform the IT functions within an organization increases as the variety and number of IT
systems utilized cumulates. This concurs with Lucas and Palley’s (1987) overall assessment of IT
departmental power in which they asserted that power increased as the organization’s portfolio of
information systems increased.
An important distinction is drawn in this paper between IT variation and quantity. Variety refers to the
level of diversification within an IT portfolio. As differences in the types of technologies employed by a
firm increases, the number of specific areas in which there is a need for a high level of IT expertise
also increases. Quantity simply refers to the sum of technologies used by the organization. As the
amount of IT within a firm increases, the amount of time, and consequently the number of IT
professionals, required to administer systems will also have to increase to meet the technology
demands of the organization.
Proposition 8a: As the variety of IT systems utilized by an organization increases, the
power possessed by the IT department will increase.
Proposition 8b: As the number of IT systems utilized by an organization increases,
the power possessed by the IT department will increase.
The propositions developed thus far offer some explanation as to why some IT managerial practices
are met with resistance by members of the IT department. IT governance decentralization, for
instance, can be defined as the degree to which the decision-making authority concerning IT-related

activities is granted to divisional IT personnel and other organizational members outside the direct
hierarchal authority of the IT department (Sambamurthy and Zmud, 1999). IT governance
decentralization results in power erosion for the IT department in two ways: first, formal decision-
making authority for IT-related activities is lost by the central IT department. Second, decentralizing
the IT governance results in a reduction of dependence on the IT department for resources, such as
expertise. As dependence on the IT department decreases, so too does the power resulting from
dependence. These shifts in power provide a possible explanation for conflicts which occur when the
degree of IT governance centralization/decentralization within organizations is altered (Peterson,
2003).
Similar to IT governance decentralization, outsourcing also decreases the power of the IT department
and its members. Organizations outsource functions of their IT department to reduce costs, gain
access to technological expertise, or so that a firm might focus on its core competencies (Bergkvist
and Johansson, 2007). Despite potential benefits to the organization, attempts to outsource part of
the IT function fail remain common (Devos, Van Landeghem, and Deschoolmeester, 2008). One
possible reason for difficulties in outsourcing the IT function might be due to concerns about loss of
power. As our propositions suggest, outsourcing would erode power for several reasons, including a
reduction in the portfolio of solutions provided by the IT department and a simplification of the
information systems managed by the IT department. Members of the IT department appear to
intuitively understand these consequences, as research suggests IT personnel believe outsourcing
reduces the need for technical personnel (Apte et al., 1997). Therefore, it can be expected that IT
departments and personnel within them will be resistant to IS outsourcing (Khosrowpour et al., 2011),
including outsourcing through cloud-computing (McAfee, 2011).
3.5 Affecting decision processes

As a result of its position in an organizational hierarchy, the IT department may not be perceived as
possessing the ability to affect decision processes. However, power literature suggests that control of
relevant information is a source of potential influence (McCall, 1979; Pettigrew, 1972; Pfeffer, 1981).
Even though IT use is becoming more widespread in business, many organizational executives
continue to find IT enigmatic in nature. Comprehending the vast variety of technology solutions
available in the market tends to be a daunting task for decision-makers who lack technical knowledge.
Consequently, IT managers are commonly relied upon by top executives to select which systems to
purchase (McAfee, 2006; McKeen and Smith, 1997), including IT that supports strategic
organizational initiatives (Preston, Chen, and Leidner, 2008). Even when IT governance structures
are in place dictating who and how IT decisions are made, it has been observed that decisions such
as upgrades and maintenance are often not subject to these established rules (Weill and Woodham,
2002). Furthermore, IT system developers are frequently granted the authority to select system
features and choose system development methodologies for the implementation of new technologies
(Markus and Bjorn-Andersen, 1987).
Proposition 9: As the degree to which IT managers affect the decision-making
processes increases, the power possessed by the IT department increases.
Of importance to organizations, analysis of how affecting the decision-making process provides power
helps bring to light additional behavior which might be exercised to gain power. Because non-IT
professionals may not have developed opinions about which IT solutions will best meet organizational
needs, it can be expected that some IT professionals will attempt to persuade individuals that a given
portfolio of IT solutions is best for the organization, when in fact the suggested IT portfolio is what will
best secure the power possessed by the IT department. This can be achieved by disclosing or
withholding information, true or otherwise, about decisions constraints on IT investment decisions. An
example of this can be seen in case study research conducted by Howcroft and Light (2006), where
IT consultants were observed persuading decision makers’ to alter the scope of the project being
implemented, as it would result in better meeting the needs of the organization; this was argued to be
a conceptual exercise of power by the consultants. In the same vein, IT professionals might attempt to
influence organizational IT decisions by using acronyms and terminology that are difficult for non-
experts to understand, thus mystifying services provided by the IT department. In a case study
conducted by Sillince and Mouakket (1997), evidence was found that system analysts developing a
system to support the functions of the housing department at a university used technical language
that was difficult for end-users to understand for the purpose of gaining greater control over the
development of the project.

3.6 Consensus
Research suggests that the psychological climate toward IT is one dimension of organizational
context which, if positive, can lead to conferring of power (Ein-Dor and Segev, 1982). When
consensus about values, goals, and organizational interests is achieved within a subunit, individuals
within the unit will behave in a similar manner. In the instance of an IT department, this would mean
that the IT professionals agree about what information technologies should be utilized and how these
technologies help the organization fulfill its goals. As a result, conflicts within the department are
minimized. This type of consensus creates a convincing image of the IT department that technology
decisions are certain, resulting in other departments perceiving the IT department as having strong
expert power.
Proposition 10: When consensus about values and goals is reached among the
members of the IT department, the power possessed by the IT department will
increase
Enz’s (1988) research suggests a correlation exists between the degree to which a department
shares critical organizational values with the firm’s dominant coalition and the power conferred to that
department. Enz cites Walsh et al. (1981) in arguing that by sharing similar values as the dominant
coalition, a department is able to influence the power structure of an organization as it is developed.
This is due to values congruity serving as a rationalizing device for top management in deciding to
distribute power to some organizational departments but not to others. Because this power
distribution is integrated into the organizational rules and structure, it becomes immobile and difficult
to erode. Furthermore, Enz posits that shared values also allow for influence in establishing which
strategic contingencies are accepted as critical to the organization. In terms of the IT department, this
can mean that IT managers are systemically granted a larger degree of power and IT is positioned as
a critical solution for coping with organizational uncertainties. Hussain and Cornelius (2009) found
evidence of this in their case study where IT management ‘demonstrated’ the benefit that a given IT
project would have to the organization, when, in fact, the ultimate goal of IT management was to
increase personal and departmental power.
Proposition 11: As the degree of value congruity between top management and the
IT department increases, the power possessed by the IT department will increase.
Frost (1987) asserted that coalitions can be an effective source of power. Historically, however, the IT
director has not been a member of the dominant coalition (Kaarst-Brown, 2005; Peppard and Ward,
1999). A powerful figure head can help increase the power of the IT department by possessing the
ability to influence the dominant coalition through strong political skills. Our assertion ties closely into
the idea of prestige power, which is the "managers' reputation in the institutional environment and
among stakeholders" (Finkelstein, 1992: 510). Prestige power for the CIO is greatest when he/she
has established relationships with key individuals in industry and the firm (Medcof, 2008).
Connections with individuals in industry help provide the CIO knowledge about technology and
access to important resources, such as highly qualified technology professionals. Such ties improve
the status of the CIO among members of the organization. At the same time, connections with the
dominant coalition allow the CIO to fully understand the organization and its strategies (Chatterjee,
Richardson, and Zmud 2001), and provide the opportunity to convey the importance of IT to the
organization in reducing uncertainty. Research provides some evidence supporting our argument, as
CIOs who reports directly to the CEO and members of the dominant coalition have greater influence
on the joint development of business and IT strategies than CIOs with no such connections (Byrd,
Lewis, and Bryan, 2006; Peppard, 2010).
Proposition 12: If the dominant coalition perceives the IT department as having a
strong leader, the power possessed by the IT department will increase.
3.7 Interrelation of power sources

As mentioned in the literature review, Hickson et al. (1971) asserted that power conferring
contingencies are interrelated to each other and that control over only a single contingency is
inadequate for gaining organizational power. They concluded that as the number and degree of
contingencies controlled by a department increases, the greater the power for the department within
the organization. Having identified many of the possible sources of power for an IT department, we
can begin to examine possible relationships among them. For example, propositions 2, 3 and 4 can
potentially be interrelated. While the frequency in which new IT is implemented within an organization
affects uncertainty, if the technologies implemented are not particularly complex or sophisticated, the

uncertainty created by the implementation process is to a much lesser degree than that created by
more complex, sophisticated technologies. Moreover, despite potential uncertainty which is created by
implementing complex technologies frequently, if the IT implemented is consistently similar in variety,
the implementation process from project to project will also be similar. Hence, the organization gains
experience through repetition and again uncertainty is reduced as compared to the implementation
technologies that are varied in nature.
While many more potential combinations of relationships we have not discussed can have an effect
on the IT department’s overall power within the organization, our purpose is not to provide an
exhaustive set of examples. Rather, we simply aim to illustrate how possession of one source of
power, in and of itself, is insufficient for gaining intra-organizational power; an IT department must
possess a combination of power sources which results in a high degree of dependence for substantial
power to be gained.
Proposition 13: As the number and degree of valuable resources provided by the IT
department increases, the overall power possessed by the IT department will
increase.
4. Discussion
Using resource dependency theory for guidance, this paper developed a set of propositions
describing factors that influence the power relationship between an IT department and other actors
within an organization. Further, we suggest that these sources of power are interrelated; as the
number and the degree to which these sources are controlled by a department increases, the greater
the power possessed. With the increasing prominence of IT in organizations, initial intuition would
suggest that the IT department’s power would correlate with the general increase of spending on IT.
However, this assumption, in and of itself, is short-sighted. While the growth of IT usage potentially
acts to increase the IT department’s power within an organization, there are also many counter acting
forces, such as increased user self-efficacy, the increasing availability of commercial technology, and
the information absorption by organizations.
Organizations experience many problems related to their IT functions. These issues commonly
include technology for technology’s sake, a lack of user preferences being integrated into IT systems
development projects, and lack of IT alignment with overall firm strategy. With the understanding that
organizations are places that political activity takes place and that individual employees’ preferences
and needs are not necessarily consistent the needs of the organization, we argue that many of the
common IT issues organization grapple with might be, in part, the result of intentional behavior by the
IT personnel to avoid power erosion.
Table 1: IT Departmental Power Propositions
Coping with Uncertainty
Proposition 1: As an organization’s utilization of information technology to store, retrieve,
create, and transmit information increases, the power possessed by the IT department will
increase.
Proposition 2: As the frequency in which new information technologies are implemented in
an organization increases, the power possessed by the IT department will increase.
Non-Substitutability
Proposition 3: As the complexity of IT solutions utilized by an organization increase, the
power possessed by IT department will increase.
Proposition 4a: As IT solutions provided to an organization by an IT department become
commercially available, the power possessed by the IT department will decrease.
Proposition 4b: As the information systems provided to an organization become more
idiosyncratic and specialized, the power possessed by the IT department will increase.
Proposition 5: As computer users in an organization become more self-efficacious with IT,
the power possessed by the IT department decreases.
Proposition 6: As tasks executed by the IT department become routinized and documented,
the power possessed by the IT department will decrease.
Centrality in Workflow
Proposition 7: As the workflow of organizational processes becomes more dependent on
information technology to administer, the power possessed by the IT department will
increase.
Provide Resources

Proposition 8a: As the variety of IT systems utilized by an organization increases, the power
possessed by the IT department will increase.
Proposition 8b: As the number of IT systems utilized by an organization increases, the
power possessed by the IT department will increase.
Affecting Decision Processes
Proposition 9: As the degree to which IT managers affect the decision-making processes
regarding organizational IT increases, the power possessed by the IT department increases.
Consensus
Proposition 10: When consensus about values and goals is reached among the members of
the IT department, the power possessed by the IT department will increase
Proposition 11: As the degree of value congruity believed by top management to exist
between itself and the IT department increases, the power possessed by the IT department
will increase.
Proposition 12: If the dominant coalition perceives the IT department as having a strong
figure head, the power possessed by the IT department will increase.
4.1 Interrelation of Power Sources

Proposition 13: As the number and degree of valuable resources provided by the IT
department increases, the overall power possessed by the IT department will increase.
Practitioners have many possible solutions to help mitigate these dysfunctional behaviors, but an
important step is to recognize when these power-gaining activities are occurring.
While our discussion of implications for our propositions focused on how the pursuit of power by IT
personnel can be detrimental to organizational outcomes, caution should be exercised interpreting the
arguments we have presented. As previously discussed, power and politics have long been observed
as having an important role in the execution of business functions by the IT department, such as the
implementation of new information systems into an organization (Avgerour and McGrath, 2007;
Doolin, 2004; Jasperson et al., 2002; Lapointe and Rivard, 2005; Levine and Rossmoore, 1995;
Markus and Bjorn-Andersen, 1987; Sillince and Mouakket, 1997; Silva and Hirschheim, 2007).
Consequently, while power may be a source of dysfunction for an organization’s IT function, it is
nonetheless crucial in garnering commitment and support for IT strategy and decisions, as well as
facilitating change.
4.2 Future research

Investigation into the sources of power for an IT department has several implications for future
research. Previous investigations into the power possessed by IT departments are dated. With the
drastic increase of IT spending over the last couple of decades, the general perceptions for the
importance of IT to businesses potentially has changed. In general, this stream of research needs
reexamination. Additionally, the relationship between the propositions presented in this paper need to
be empirically evaluated. This will help to support the validity of not only the propositions presented in
this paper, but also the strategic contingency and resource dependency theories. Power gaining
activities performed by IT personnel should also be investigated. This would provide useful
information to researchers in better understanding the rationale utilized in some IT decisions. It might
also be beneficial for managers in identifying behaviors which are counterproductive to organizations.
Empirical research into this area may be problematic in that, as discussed earlier, gauging power can
be difficult. To address this issue, researchers have suggested that both objective and subjective
measures be used in combination when measuring power (March, 1966; Pfeffer, 1981). Provan
(1980) provides one methodology which might be helpful in overcoming these difficulties by
suggesting measures of power that can be triangulated to an overall power evaluation; specifically, he
suggests gathering perceptual data, information about formal position within an organization and
membership in decision-making coalitions, information on dependence, and information on
demonstrated ability to influence organizational outcomes, such as budget allocations. If information
gathered from these multiple measures of power is consistent, it can be argued that an accurate
overall measure of power for a department has been obtained. Even if a clear assessment IT
departmental power can be obtained, the meaning of such data may be difficult to determine due to
the substantial differences in the types of IT utilized from organization to organization. Therefore, we

suggest either a multi-case study or a longitudinal study of a single organization. Using this approach,
researchers can compare the overall assessment of IT departmental power across cases or time,
then identify variations in potential sources of power that might be the cause of these power
differences. This method of theory testing is referred to as “pattern matching” (Campbell, 1975). In our
opinion, a longitudinal study of a single organization would provide the highest degree of internal
validity, as this approach would best control confounding variables.
4.3 Conclusions
Power will remain an important consideration in the study of both organization theory and
management information systems, due to its pervasive nature in the social systems that make up
organizations. A more complete understanding of power will help the explanation of behaviors, both at
the individual and departmental level, which otherwise appear to have no rational cause.
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The effects of ERP-implementations on the non-financial
performance of small and medium-sized enterprises in the
Netherlands
Ivo De Loo, Jan Bots, Edwin Louwrink, Dave Meeuwsen, Pauline van Moorsel,
and Chantal Rozel
Nyenrode Business University, School of Accountancy & Controlling,
Breukelen, The Netherlands
i.deloo@nyenrode.nl
Abstract: In this paper we try to assess the impact of ERP-implementations on the development of
non-financial organizational performance, as described by Shang and Seddon (2002) and Eckartz et
al. (2009). We assess this impact for Dutch small and medium-sized enterprises, using a small but
unique dataset. Several aspects of the performance of organizations are compared before and after
the introduction of an ERP-system, taking into account a three-year period, and controlling for several
influential factors (like organizational size, financial health and sectoral differences). We conclude that
by and large, organizational performance increased significantly more for organizations that
implemented an ERP-system in the last three years than for organizations that did not implement
such a system. We also conclude that organizations that implemented an ERP-system at most three
years ago did not have significantly lower non-financial performance than organizations that did not
implement such a system. Additional analyses suggest that we would oversell our results if we would
claim that ERP-systems are the main or sole source of the effects found. Nevertheless, although
limited to Dutch SMEs, our results contradict some of the views expressed in the ERP-literature.
Keywords: ERP systems, organizational performance, organizational benefits, non-financial

performance, SME, surveys
1. Introduction
Ever since their introduction in the 1990s, Enterprise Resource Planning (ERP) systems have been
widely used by organizations wishing to work with integrated information systems in the hopes to
increase their market agility (Grabski and Leech 2007; Keller 1999). Many researchers have tried to
assess the impact of the introduction of ERP- systems on organizational conduct, often focusing on a
system’s performance effects. Examples include Hunton et al. (2003), Kallunki et al. (2011), Liu et
al.(2008), Poston and Grabski (2001), Nicolaou (2004) and Nicolaou and Bhattacharya (2006). One of
the main questions in this type of research seems to be whether the (chiefly) financial performance of
organizations adopting an ERP-system has deteriorated or improved during the post-implementation
period.
The implementation of an ERP-system in an organization is often accompanied by substantial

changes in organizational structure and ways of working (Bernroider 2008; Grabski and Leech 2007;
Kallunki et al. 2011). Such implementations seem to be set apart by their complexity, and more
specifically, by the difficulties involved in implementing large-scale changes in an organization
together with a transition to new systems, whilst legacy systems may be in place (Kumar et al. 2002;
Jones et al. 2006). Eckartz et al. (2009) even state that ERP-systems have a “(…) decisive impact on
almost all aspects of an organization” (p2). Partly, the impact of these effects seems to be influenced
by whether or not an ERP-system is tailored to fit an organization before it is implemented (Hong and
Kim 2002; Kumar et al. 2002).
In general, organizations (and consultancy firms alike) seem to think that the introduction of an ERP-
system allows for more efficiency in organizational work, and therefore, for better (financial)
performance vis-à-vis non-adopting organizations, because of the fact that best practices are
embraced (Bernroider 2008; Davenport 1998; Sneller 2010). It is also expected that in conjunction to
this, ERP-implementations invoke more reliable information recording and exchanges in an
organization (Shang and Seddon 2002). However, is the situation always that simple?

Reference this paper as: Ivo De Loo, Jan Bots, Edwin Louwrink, Dave Meeuwsen, Pauline van Moorsel, and
Chantal Rozel, “The effects of ERP-implementations on the non-financial performance of small and medium-
sized enterprises in the Netherlands” The Electronic Journal Information Systems Evaluation Volume 16 Issue 2
2013, (103-116) , available online at www.ejise.com
Markus and Tanis (2000) developed a framework to describe the ‘typical’ phases involved in the
adoption and implementation of an ERP-system. After a chartering phase, comprising the decisions
leading to the approval of the implementation of a specific system, the communication in the
organization about this, and the system’s funding, a project phase is entered, in which a system is set
up and executed in one or more organizational (business) units. This ultimately results in its rollout
and start-up across the organization (‘going live’). Thereafter, a shakedown phase is witnessed, which
takes up the period of time between the aforementioned ‘go live’ date and the moment that user
acceptance has occurred, bugs have been fixed, system training has been accommodated, and a
system has been ‘fine-tuned’ to fit an organization. Finally, Markus and Tanis discern an onward and
upward phase. This phase generally occurs between 1-3 years after a system’s ‘go live’ date, and
covers the period from ‘normal operations’ until a system is replaced completely by another system or
is upgraded. Alas, all of these phases are fraught with problems that can affect an organization’s
performance. For instance, Kumar et al. (2002) found that in many Canadian governmental
organizations, project schedules tended to be revised as organizations underestimated the amount of
work involved in implementing an ERP-system, inadequate training in the new system occurred, and
difficulties in assuring the quality of the data entered in the system were paramount. Other studies
have reported similar problems: implementation costs may rise exponentially, employees may refuse
to work with the new system, and data integration processes between new and old (legacy) systems
may be more troublesome than expected (Botta-Genoulaz and Millet 2005; Hunton et al. 2003; Ross
and Vitale 2000; Nicolaou 2004; Scott 1999; Sneller 2010). It may therefore not come as a surprise
that more than 70% of ERP-introductions do not reach their intended effects, and may even be
regarded as complete failures (Al-Mashari et al. 2006; Buckhout et al. 1999; Hong and Kim 2002;
Stefanou 2001).
In this paper we will look at organizations that implemented an ERP-system between one and three
years ago, and compare their self-assessed organizational benefits with a set of comparable
organizations that did not implement or have such systems in the same period. The period of three
years has been chosen for Nicolaou and Bhattacharya (ibid.) concluded that organizations adopting
an ERP-system needed at least two years to generate positive financial performance. The authors
term this the “... lag-led re-emergence of performance gains ...” (ibid. p20) (see also Wah 2000).
Contrary to their research, however, we decide to look at non-financial organizational performance
(Shang and Seddon 2002), this being an area where so far little research seems to have been done
(Eckartz et al. 2009). On top of this, we follow up on Esteves and Bohorquez’s (2007) call for more
research on the benefits of ERP-implementations in small and medium-sized enterprises, this being
the market where ERP-systems are nowadays implemented most often (Adam and O’Doherty 2003).
This paper will proceed as follows. We start by setting out the types of benefits that may be expected
from an ERP-system in section 2.. Thereafter, in section 3.1, our research approach and method will
be discussed. The main results will be presented in section 3.2. Finally, in section 4, we will put
forward the conclusions that we think can be distilled from this research and discuss some of its
drawbacks. We will also point out what we see as viable avenues for further research.
2. ERP benefits
In this study we define an ERP-system as a business support system that maintains the data needed
for various business functions such as manufacturing, financials and supply chain management in a
single database, so that transactions only need to be processed once (Kumar and van Hillegersberg
2000).
Eckartz et al. (2009) present the results of an extensive literature review on enterprise system (ES)
performance, with particular reference to ERP-systems. They aim to determine all benefits that may
be achieved during and after an ES-implementation, both tangible and intangible. Their analysis
results in what they call a ‘3-dimensional benefit framework’. It is largely based on a similar
classification of benefits from Shang and Seddon (2002). The three dimensions Eckartz et al. (2009)
distinguish are:
 Operational, managerial and strategic benefits (Anthony 1965; Shang and Seddon 2002);
 Process, customer, financial and innovation benefits, following the four perspectives of the
balanced scorecard (Kaplan and Norton 1993). Also included is a fifth perspective to assess
employee resistance or willingness to change (Eckartz et al. 2009);

Ivo De Loo, Jan Bots, Edwin Louwrink et al
 Benefits falling into IT infrastructure and organizational categories (Shang and Seddon 2002).
These are often intangible and hard to identify (such as organizational learning and improvement
in communications), and are, consequently, not researched very much (Eckartz et al. 2009).
Eckartz et al. explicitly ask researchers to validate their framework in a variety of ways, among others
by determining how the various dimensions and categories of ES-related benefits impact on one
another. Our own goal with their framework is, however, more modest. We wish to examine (non-
financial) organizational performance, which Eckartz et al. call ‘organizational benefits’. We will only
try to validate this particular aspect of their framework, as these benefits apparently have not been
researched as often as more tangible ES-benefits (see also Hunton et al. 2003; Nicolaou and
Bhattacharya 2006). According to Shang and Seddon (2002), organizational benefits “… arise when
the use of an ES benefits an organization in terms of focus, cohesion, learning and execution of its
chosen strategies” (p279). They go on to argue that the potential organizational benefits of ES-
implementations evolve around the following issues, which will all be taken along in this study:
 Changing work patterns with shifted focus: the harmonization of interdepartmental processes and
interdisciplinary matters
 Facilitating business learning and broadening of employee skills: greater possibilities to enhance
employee learning
 Employee empowerment: more pro-active, perhaps even entrepreneurial, employee behavior and
involvement in business management
 Building common visions: departments work as a unit, and not as separate entities, sustaining a
shared image on organizational work across different levels of the organization
 Shifting work focus: concentration on core work
 Increased employee morale and satisfaction: increased work efficiency and (more) content users,
who are provided with better quality service.
We will focus on ERP-systems as a particularization of ES-systems, which is not uncommon in the

ES-related literature (Shang and Sheddon ibid.). There are many articles trying to assess the
performance effects of ERP-system introductions in an organization (Hunton et al. 2003, Kallunki et
al. 2011; Liu et al. 2008; Nicolaou 2004; Nicolaou and Bhattacharya 2006; Poston and Grabski 2001).
Although the focus of these papers is chiefly on financial performance (Kallunki et al. 2011 is one of
the few exceptions), the way in which these authors conceptualized their research is also followed
here, even though we focus on specific non-financial benefits: the six dimensions of organizational
benefits described by Shang and Seddon (2002).
Nicolaou and Bhattacharya (2006) report that changes in ERP-systems often offset implementation
issues that at first, negatively affect the long-term financial performance of organizations. The sooner
adaptations are made, the better performance may develop. Adapting a system too late may result in
a deterioration of financial performance. Following Nicolaou (2004), they also find that an, at least,
two year time lag may be useful to assess the performance impact of ERP-systems, as this lag seems
to be necessary for positive differential financial performance in adopting vis-à-vis non-adopting
organizations to start materializing. Kallunki et al. (2011) obtain similar results in their exploration of
the effects of ERP-implementations on both the financial and non-financial performance of 70 Finnish
business-units. They conclude that ERP-systems can improve both the financial and non-financial
performance of business-units, chiefly in the long run (three years or more). Using specific forms of
management control can help to achieve this.
Taken together, this leads to the first hypothesis we would like to test in this study:
H1: Organizational benefits are significantly larger for organizations that have
implemented an ERP-system in the last three years than for organizations that did not
implement or have such a system.
The financial performance effects of ERP-implementations in Chinese chemical firms were assessed
by Liu et al. (2008). They find no significant performance improvement during the implementation
period and during the first three years after implementation. At first, a decline in performance is
witnessed, which is in line with the Markus and Tanis (2000) framework and previous studies by
Nicoloau and Bhattacharya (2006) among others. However, a slight performance improvement in the

third year after implementation occurs, which may indicate that the financial benefits of ERP-
implementations may only manifest themselves after more extensive ERP-use.
The impact of ERP-system adoption on the financial performance of over 60 organizations that were
matched, on the basis of their 2-digit SIC-code as well as their size, with organizations that had not
adopted such a system, was the focus of a study conducted by Hunton et al. (2003). Although the
financial performance of ERP-adopting organizations was generally better over a three year period
than for non-adopters, no improvement in the financial performance of adopting organizations could
be witnessed before and after the implementation of an ERP-system. Nevertheless, the financial
performance of non-adopters decreased over time.
These particular outcomes lead up to the following hypothesis that will be tested in this study:
 H2: Organizations that implemented an ERP-system in the last three years had significantly better
organizational benefits three years ago than organizations that did not implement or have such a
system (Hunton et al. 2003).
Esteves and Bohorquez (2007) stress the importance of more research on the benefits of ERP-
implementations in small and medium-sized enterprises. This call is followed up on here. We will
compare differences in organizational benefits for Dutch small and medium-sized enterprises.
Bernroider and Tang (2003), albeit indirectly, suggest that although many studies have been
conducted on ERP-implementation effects in Europe, few studies have been conducted in the
Netherlands. As ERP-systems as such have been said to have their roots in Europe (Pairat and
Jungthirapanich 2005), the lack of focus on this country is striking. It will be ‘redeemed’ here.
We will now discuss our research approach. We will start with setting out our research method, after
which a description of the main research findings will follow.
3. Research approach
3.1 Method
The data used to test H1 and H2 have been obtained via a self-developed survey that was almost
entirely based on validated concepts taken from the ERP-related literature (Berchet and Habchi 2005;
Bradley 2008; Eckartz et al. 2009, Grabski and Leech 2007; Hong and Kim 2002; Hunton et al. 2003;
Shang and Seddon 2002; Soja and Poliwoda-P kosz 2009; Vluggen 2006). The survey was
developed to assess the performance and circumstances faced by a variety of Dutch firms during the
2007-2009 period. Two surveys were constructed: one for organizations that had implemented an
ERP-system in the last three years (and had no such system before), and a similar survey for
organizations that did not have an ERP-system - the main difference being that the latter survey came
without the questions on ERP.
As part of the preparation for their master of science thesis, part-time master of science students in
accountancy from the university that the authors of this paper stem from were asked to select and
approach top-level managers who were knowledgeable about an organization’s primary processes
(CFOs, CIOs, etc.) in four organizations: two organizations with and two organizations without an
ERP-system. They received the, for them, appropriate survey. The data were collected in November
and December 2010, and were returned both on paper and in a pre-prepared Excel-sheet. As names
and contact persons of the organizations that had been approached had to be handed in as well, we
had the possibility to check whether the organizations in question had indeed been approached, and
an appropriate interviewee had been selected. Several checks were carried out to safeguard that the
data had been entered correctly in Excel (for instance, by checking several surveys in their entirety or
1
by checking specific variables across surveys) . The survey questions relevant to this study can be
found in Appendix 1. Forty organizations in our sample were SMEs (according to EC guideline
2003/361/EC 2) and completed the survey they had been given. The data of these organizations will
be used in our analyses. The aim is to create matched pairs of organizations based on their size,
whose organizational benefits can subsequently be compared as stated in H1 and H2. We will correct
the matching procedure for sectoral effects and possible other factors related to an organization’s
size. Like in the Hunton et al. (2003) study, sectoral effects will be taken into account by looking at an
1
Both surveys can be obtained from the corresponding author on request.
2
Refer to http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm for details.

organization’s 2-digit SIC-code (see also Barber and Lyon 1996). Size is expressed in this study as
the natural logarithm of the sales of an organization, which is one of the ways in which Hunton et al.
(2003) operationalized this item.
However, contrary to the Barber and Lyon (1996) and Hunton et al. (2003) studies, we believe that
organizational size is dependent on a number of other factors, the influence of which has to be purged
before matching can occur. To accomplish this, two regressions will be run. We first run the following
regression for organizations that had implemented an ERP-system in the last three years:
LOGMSALES= 0 + 1FINHEALTHt + 2PEUt + 3 GOLIVE + t
where 3:
LOGMSALES = the natural logarithm of the mean of organizational sales for the 2007-2009 period
(our size measure);
FINHEALTH = financial health of an organization;
PEU = perceived environmental uncertainty;
GOLIVE = dummy indicating whether the ‘go live’ date of a system occurred in 2007 (‘0’), 2008 (‘1’),
or 2009 (‘2’).
The reason for including the ‘go live’ date of a system has been set out in the previous section: it
generally takes time before the fruits of an ERP-implementation can be reaped (Markus and Tanis
2000; Nicolaou and Bhattacharya 2006).The PEU variable has been incorporated to accommodate
effects occurring in the environment of an organization. The operationalization of this variable has
been taken from Vluggen (2006). Cronbach’s alpha will be calculated to substantiate the
operationalization chosen.
The financial health variable tries to put the respondents’ view on whether they thought their
organization was in a healthy financial state. This was a single-item measure. We assert that an
organization’s financial health can affect the benefits ultimately obtained from an ERP-system
(Berchet and Habchi 2005; Hunton et al. 2003). We also feel that the recent financial crisis, which
occurred in the period of study, exacerbates the importance to include such a variable.
A similar, second regression will be run for organizations without an ERP-system, without the ‘go live’
variable.
The standardized residuals of these two regressions will subsequently be used to match
organizations. Thus, the residuals constitute our corrected size measure. Barber and Lyon (1996)
assert that when organizations are matched within the same 2-digit SIC-code, viable matches are
possible. As stated, this conforms to the correction for sectoral effects proposed by Hunton et al.
(2003). Of course, a perfect match in terms of standardized residuals will be highly unlikely.
Organizations, at best, will have roughly similar residuals. Barber and Lyon (1996) therefore decide to
use a 90%-110% range of the matching variable to carry out their matching. They say that as long as
the values of the matching variable are between 90%-110% of one another, a ‘good’ match can be
made. They also propose several ‘alternative rules’ to extend the possibilities of a match when the
abovementioned match cannot be made when using 2-digit SIC-codes. The following rule proved to
be the most promising in their study on organizational performance:
“First, we attempt to match … within the 90%-110% filter, using all firms in the same
one-digit SIC code. If we still find no … match, then we try to match … within the 90%-
110% filter using all firms without regard to SIC code. If we still find no … match, our
third step is to use the firm… closest to the firm in question, without regard to SIC
code” (Barber and Lyon, 1996, p370).
Following Hunton et al. (2003), wee will apply the same alternative rule here, even though
organizational size is our matching variable (instead of organizational performance).
The statistical test that in the Barber and Lyon (ibid.) study yielded the most statistical power is the
non-parametric Wilcoxon test (Hair et al. 2010). Its application led to consistently more powerful
3
For details, refer to Appendix I.

results than (in)dependent sample Student t-tests. This happens to be the same test used by Hunton
et al.(2003). It can accommodate very small sample sizes (with typically even less than ten
observations) and still have substantial statistical power (Noether 1987). Therefore, we will apply it as
well to test for differences in organizational benefits between the matched firms.
The six dimensions of organizational benefits distilled by Shang and Seddon (2002) are linked with
ten aspects in our survey (see Appendix I for details). Respondents were asked to indicate how they
judged the performance of their organization on these ten aspects, both currently and three years
ago. A Likert 1-7 scale was employed to assess this (Grabski and Leech 2007). A low score on this
scale indicates poor performance on a particular aspect, whereas a high score indicates very good
performance. Cronbach’s alpha will be used to substantiate the operationalization chosen.
3.2 Results
All ten aspects we used to operationalize Shang and Sheddon’s (2002) organizational benefits
concept could be grouped together. For the current data, Cronbach’s alpha was 0.770. For the data
from three years ago it was 0.836. Both values are larger than the commonly used threshold of 0.70
(Nunnally 1978).
A Cronbach’s alpha analysis was also performed to see whether the six items discerned by Vluggen
(2006) to capture PEU could be grouped together. Alas, Cronbach’s alpha was only 0.653. Although
below the 0.70 threshold, the value of 0.653 is deemed acceptable for exploratory studies, and was
therefore satisfactory for our purposes (Nunnally 1978). Deletion of items within the construct would
not have yielded a larger Cronbach’s alpha value.
In the regression analyses, multicollinearity was considered by checking pairwise Spearman rank
corrections for all explanatory variables. No problems were noted, for both regressions. The highest
bivariate correlation was between FINHEALTH and PEU for organizations with an ERP-system (-
0.183). No correlation was significant at the 5% level of significance.
By and large, the regression results of the two regressions for LOGMSALES were not impressive, as
can be seen in Table 1, panel A and B. In panel A it is shown that the regression for ERP-related
2
organizations had an R of 0.027 (with 21 observations), with no statistically significant variables at
either the 1%, 5% or 10% level of significance, except for the constant term. Both LOGMSALES and
the standardized residuals of the regression were normally distributed on the basis of a Kolmogorov-
Smirmov test at all of the aforementioned levels of significance, with p-values equal to 0.877 and
0.898 respectively (Hair et al. 2010). As shown in Table 1, panel B, roughly the same conclusions
held for the regression for the group of non-ERP adopting organizations (with 19 observations). This
regression yielded an R2 of 0.058, with only the constant term being significant at the1%, 5% and 10%
level of significance..P-values of the Kolmogorov-Smirov test for the LOGMSALES variable and the
standardized residuals were 0.612 and 0.543 respectively, suggesting normal distributions in both
cases. Visual inspection of predicted and standardized residuals suggested that homoscedasticity
was present in both regressions (see also Hair et al. ibid.).Two Glejser tests were carried out to
substantiate this conclusion (Gujarati and Porter2008). In this test, the absolute values of the
residuals of a regression become the dependent variable in a new regression, using all of the
explanatory variables of the original regression. Heteroscedasticity may be present when one or more
coefficients are significant in the new regression model. This was not the case in either of the two
regressions carried out here. This corroborated our visual impression that the residuals of both
regressions were homoscedastic.

Table 1: Regression results for LOGMSALES for organizations with (panel A) and without (panel B)
an ERP-system.
Panel A
Variable Coefficient t-statistic (p-

value)
Constant 16.765 18.857 (.000)
FINHEALTH .056 .512 (.615)
PEU -.026 -.169 (.868)
GOLIVE -.047 -.320 (.753)
F-statistic for
model (p-value):
.158 (0.923); R2:
.027
Panel B
Variable Coefficient t-statistic (p-

value)
Constant 17.558 27.679 (.000)
FINHEALTH -.066 -.746 (.467)
PEU -.091 -.588 (.565)
F-statistic for
model (p-value):
.488 (0.622); R2:
.058
Table 2 depicts the sectors in which the 21 sample organizations with and 19 sample organizations
without an ERP-system operated, according to the respondents. This gives us some insight into the
number of viable matches that can be made to assess H1 and H2.
Table 2: Sample overview of ERP- and non-ERP adopting organizations per SIC-code
SIC-code Total number of Number of ERP-adopting Number of non-ERP

organizations organizations adopting organizations
20 1 0 1
25 2 1 1
26 1 0 1
28 7 5 2
29 2 1 1
31 1 1 0
35 2 2 0
45 5 1 4
50 1 0 1
52 1 0 1
60 2 0 2
65 3 2 1
70 3 0 3
71 1 1 0
72 3 3 0
74 2 2 0
85 2 1 1
93 1 1 0
Total 40 21 19

From Table 2, it is immediately clear that even when including 1-digit SIC-codes in our analysis, not
all organizations can be matched based solely on the sector in which they operate, for the mostly
dissimilar number of observations (standardized residuals) per sector (see also Barber and Lyon
1996).
For instance, there are five organizations in the dataset with SIC-code 28 (producers of metal
products) among the organizations with an ERP-system, but only two among the non-adopting
organizations. Therefore, at best, two organizations can be matched for this particular sector at the 2-
digit SIC-code level. Even when the possibilities for matching are extended following Barber and
Lyon’s alternative rule, we can only viably match 15 of the 19 organizations that could in principle
have been matched, as we deem the difference between standardized residuals to be too large for
the remaining four organizations (differences were more than 100%, and in two cases even more than
300 and 1000%). This we find a shortcoming of Barber and Lyon’s alternative rule: it encourages
researchers to keep on matching cases until there are none left in the database. In the end, this may
mean linking too dissimilar organizations, but still calling such links a ‘match’. This we believe is
misleading, and is something we try to circumvent here.
Two Wilcoxon paired-sample tests were conducted to assess H1 and H2. The results of these tests
have been summarized in Table 3. We could not reject H1 at either the 5% or 10% level of
significance, but we could at the 1% level of significance. H2 could not be reject at either the 1%, 5%
or 10% level of significance (p-values were 0.030 and 0.670 respectively). Thus, before the
implementation of an ERP-system, organizational benefits were not significantly larger for
organizations that implemented such a system than for organizations that did not implement or have
such systems, but there is some indication that ERP-adopting organizations outperformed non-
adopting organizations after the implementation (and within three years), even though the latter result
is not particularly strong, judging from the corresponding p-value of 0.030. We believe that the
number of observations in our sample did not affect this outcome, as Wilcoxon tests have been
shown to have sufficient power in case of small samples (Barber and Lyon 1996;Noether 1987).
Table 3: Wilcoxon test results for H1 and H2.
Wilcoxon test p-value Mean (median)

organizational
benefits for
matched
organizations
Difference in .030 ERP-adopting

organizational organizations
benefits of matched (2009): 5.093
organizations (2009) (5.100)
ERP-adopting
Difference in .670
organizations
organizational
(2007): 4.353
benefits of matched
(4.500)
organizations (2007)
Non-adopting
organizations
(2009): 4.673
(4.500)
Non-adopting
organizations
(2007): 4.220
(4.200)

In the following section, we will discuss our results against the background of the
extant literature.
4. Discussion and conclusions
Our results partly corroborate the results in the ERP-literature, but they contradict others. For
instance, all of the SMEs that implemented an ERP-system in the last three years needed less than
three years for organizational benefits to start materializing. This is in line with Nicolaou (2004) and
Nicolaou and Bhattacharya (2006), who suggested a period of two years for this to happen, but not
with Kallunki et al. (2011) and Liu et al. (2008), who found a period of at least three years more likely.
However, the aforementioned studies do not focus on SMEs. Perhaps the relatively less intricate
organizational structure of many SMEs as compared to large multinational companies may be a
reason for this different outcome. However, the fact that ERP-adopting organizations tend to
outperform non-adopting organizations, sometime after a system’s adaptation, and perhaps only for a
limited period of time, is something that has been mentioned in the ERP-literature before (Bernroider
2008; Davenport 1998; Sneller 2010).
One might wonder if the ERP-adopting and non-adopting firms in our sample underwent statistically
significant increases or decreases in organizational benefits over the last three years themselves.
This could provide additional information on our likely acceptance of H1 and rejection of H2.Two other
Wilcoxon paired-sample tests were carried out to assess this, using our entire sample of 21 ERP-
adopting and 19 non-ERP adopting firms. As indicated in Table 4, in both cases, we rejected the null
hypothesis that no changes in organizational benefits occurred in the 2007-2009 period at the 1%, 5%
and 10% level of significance (p-values was 0.001for both tests). Thus, by and large, both ERP-
adopting and non-adopting firms had significant changes in organizational benefits in three years’
4
time - the changes being positive in both cases . Although organizational benefits were slightly less
for non-ERP adopting firms than for adopting firms both three years ago and now, they increased by
almost the same amount in the intervening period. Still, changes were sufficiently different for H1 to
be accepted. This suggests that other factors affected both adopting and non-adopting organizations’
performance between 2007-2009 considerably, rather than or in addition to just the implementation of
an ERP-system. Although such systems ostensibly had some impact on the performance of adopting
firms vis-à-vis non-adopting firms, other factors must have influenced our results as well, judging from
the latter two tests. Thinking that ERP-implementations are the main culprit of this result may thus be
too far-fetched.
Table 4: Wilcoxon test results for additional analyses.
Wilcoxon test p-value Mean (median)

organizational
benefits for all
organizations 5
Difference in .001 ERP-adopting

organizational organizations
benefits of ERP- (2009): 4.871
adopting (4.800)
organizations (2007-
ERP-adopting
2009)
organizations
(2007): 4.286
(4.200)
Difference in .001
Non-adopting
organizational
organizations
benefits of non-
(2009): 4.853
adopting
(4.700)
organizations (2007-
2009) Non-adopting
organizations
(2007): 4.316
4
As can be seen in Table 4, for all ERP-adopting firms, the mean (median) level of organizational benefits rose from 4.286
(4.200) to 4.871 (4.800) while for non-adopting firms it rose from 4.316 (4.200) to 4.853 (4.700).
5
Note that in Table 3, mean and median organizational benefits for the 15 matched organizations are presented, whereas in
Table 4, all ERP and non-ERP adopting organizations in our sample are taken along.

(4.200)
Acknowledging that there are many factors influencing an organization’s performance apart from an
ERP-system, the question arises how these factors might be disentangled to assess their individual
impact. Unfortunately, this may be extremely difficult, no matter which theoretical frameworks are
adopted or research methods are applied. Think for example of the effects of management team
changes on organizational performance, or the empathy that is felt for a consultant who helped an
organization during an ERP-implementation, which makes that some employees continue to put in
extra hours to make the system a success. How can such effects be set apart from the effects caused
by an ERP-system by itself, when examining an organization’s day-to-day business? All of these
effects are obviously interrelated, often intricately so (Scapens 2006). On top of this, organizations
can be seen as constellations of human and non-human actors, each with a specific past, and with
their own set of rules and routines that have developed over time, which may be difficult to control and
change (Boudreau and Robey 2005). How can such organizations be compared with others, so that
reliable, general statements about the effects of ERP-systems on organizational conduct can be
made (see also Argyris 1964)? Many of these aspects are overlooked when organizations are treated
as ‘black boxes’, as is commonly done in much of the ERP-related literature on financial performance
effects (see also Grabski et al. 2011). Some claim that the fact that this has not often been done has
resulted in a highly influential ERP-rhetoric: ERP-systems are supposed to be beneficial for
organizations when they are implemented ‘correctly’ and are used throughout an organization without
difficulty. This is what these systems ‘simply’ are made to do, given their focus on ‘best practices’
(Lang and Wagner 2006).
An alternative view on the relation between ERP-implementations and organizational performance

has been provided by Ahrens and Chapman (2007), Hopwood (1987) and Scapens (2006) among
others. These authors claim that employees develop shared understandings of accounting practices
(like those evolving around an ERP-system) in organizations, and organizational processes as a
whole, in situ, jointly with fellow employees. Employees base their efforts on behalf of the organization
on these understandings. Employee efforts, on their turn, can affect such understandings and the way
in which they are shared. In terms of ERP-systems, this would imply that the performance effects of
the latter’s introduction and use at least partially depend on how such systems are perceived in an
organization by employees, and how their opinion about these systems changes over time. All this is
overlooked in the perspective we have taken here, and therefore warrants further study.
Nevertheless, we assert that there is clearly added value in this paper. It lies in the fact that as of yet,
not much empirically supported research seems to be available for Dutch SMEs (Bernroider and Tang
2003). We admit that generalizable results cannot be claimed on the basis of this study. Still, valuable
insights into some of the effects that ERP-implementations might (not) realize in specific settings
when looking at non-financial performance benefits have been generated. Further research, using
larger samples, and also, perhaps, taking into account other factors like the presence of specific
integrating mechanisms that might help in realizing the alleged integration benefits of ERP-systems
(Grabski and Leech 2007; Kallunki et al. 2011; Kumar et al. 2002), could yield further important
insights into an, in our view, under-researched area in the ERP-literature.
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Appendix 1: Relevant survey questions

Organizational benefits [Eckartz et al. 2009; Shang and Seddon 2002]
Could you tell us how your organization currently performs/does on the following aspects? Please
use the scale below 6.
(1= very poorly; 2= quite poorly; 3= somewhat below expectations; 4= as expected; 5= somewhat
better than expected; 6= quite well; 7= very well; 8= don’t know)
very very don’t

poorly well know
Current performance
1 2 3 4 5 6 7 8
1. Internal communication
2. Standardization of work processes
3. Quality of internal reports
4. The degree to which work activities and decision
power have been relegated to other employees than
managers
5. Flexibility of work processes
6. The size of budgets available for internal and
external courses
7. Building a common, organization-wide vision
8. Focus on core tasks
9. Employee satisfaction
10. Mutual behaviour of employees
Financial health [Berchet and Habchi 2005; Hunton et al. 2003]
How far do you agree with the following statement: “I work in a financially healthy organization”?
completely substantially disagree agree substantially completely don’t

disagree disagree somewhat somewhat agree agree know
1 2 3 4 5 6 7
Perceived environmental uncertainty [Vluggen 2006]
6
This question was repeated to assess the situation in an organization three years ago.

Below you can find several statements that are presented as opposite pairs. All statements concern
the market(s) and environment(s) your organization operates in. Could you please tell us how far
these statements currently reflect the situation your organization faces?
don’t
1 2 3 4 5 6
the marketing know
the marketing strategy
strategy of our
of our organization is
1. organization is
hardly ever changed to
changed very often to
fulfill customer needs
fulfill customer needs
don’t
our line of products 1 2 3 4 5 6
our line of products know
and services stays very
2. and services changes
much the same over
very quickly over time
time
don’t
1 2 3 4 5 6
it is relatively easy to know
our competitors are
3. guess what our
highly unpredictable
competitors are doing
don’t
1 2 3 4 5 6
it is relatively easy to it is extremely difficult know
4. determine what our to determine what our
customers want customers want
don’t
1 2 3 4 5 6
we continuously have we hardly ever know
5. to anticipate changes have to anticipate
in our environment in changes in our
order for our environment in
organization to survive order for our
organization to
survive
don’t
1 2 3 4 5 6
our production know
6. our production technology changes
. technology is stable very rapidly
Go live’ date [Markus and Tanis 2000]

According to our information, an ERP-system has been implemented in your organization somewhere
during the last three years. Below you can find several question about this system, that we kindly
request you to answer.
1. What was the ‘go live’ date of the ERP-system?

The ‘go live’ date is the moment in time all users in your dd/mm/yy
organization were allowed to work with the system for
the very first time.

A Delphi Examination of Inhibitors of The Effective use of Process
Industry Enterprise Resource Planning (Erp) Systems: A Case
Study of New Zealand’s Process Industry
Chidi Gerard Ononiwu
Department of Information Systems, University of Cape Town South Africa
onnchi001@myuct.ac.za
Abstract: An ERP System is among the core information system (IS) software being adopted in the process
industries globally. Such systems are claimed to offer strategic and operational improvement to firms’ supply
chain effectiveness. Prior studies have shown that most adopting firms are not achieving the strategic business
value identified in the project justification due to employees’ ineffective use of the system. The gains that such
firms have achieved by implementing ERP systems in terms of increase in operational efficiency are often
accompanied by daunting ineffective usability problems. Building on Technology–Organization–Environment
(TOE) theory, Task-Technology Fit (TTF) theory and the theory of usage inhibition, this study examines the
inhibitors of the effective use of ERP systems. The study used the Delphi technique to draw from the experiences
of a few ERP adopters from New Zealand’s process industries. Findings suggest that non-collaborative training
among employees, low absorptive capacity and system misfit are the top most critical inhibitors. Others inhibitors
include inadequate ERP expertise, ERP default attributes, lack of continuous improvement and poor vendors’
support. The theoretical and practical implications of these findings are discussed in the concluding section.
Keyword: Enterprise resource planning system, Effective use, Delphi methodology, Process
1. Introduction
Many large and small-scale process industries in both developed and developing economies have
invested in Enterprise Resource Planning (ERP) systems (AberdeenGroup, 2008). The adoption of
such systems replaces outdated legacy systems in order to meet the ever-changing business
environment (Esteves, 2009; Hsieh and Wang, 2007). One significant reason for the adoption of ERP
systems by these organisations is to account for the standardized process and integration of the
business unit functions for decision-making (Hakkinen and Hilmola, 2008). Obtaining inter-
organizational value chains and transactional backbone for e-business collaboration with clients,
partners and suppliers have also been major drivers of ERP wide adoption by firms (Jasperson et al.,
2005, Wang et al., 2008).
There have been discussions in much of the extant literature on ERP implementation failures (Yu,
2005). However, it continues to be the most widely adopted information systems (IS) globally (Esteves
and Bohorquez, 2007). Several studies have shown that the enormous investments in ERP systems
could only achieve transactional efficiency, leaving the emergent strategic value of the system under-
utilized (Chen, 2001; Hsieh and Wang, 2007; MacKinnon et al., 2008). Though the benefits of such
systems are enormous, users frequently take advantage of only the most basic use, instead of
effectively using the system to create business values (Sousa and Goodhue, 2003). The effective use
of ERP systems is not just the mandatory basic use (Hsieh and Wang, 2007; Sousa and Goodhue,
2003). Rather, it is the exploratory and exploitative use of the features of the application to enhance
organisations’ productivity (Boudreau, 2002; Loftus, 2008; Sousa and Goodhue, 2003). Effective use
is to get users to move beyond the routine use demanded by their assigned task(s) in the workplace
and uncover new ways of using the system features (Sousa and Goodhue, 2003).
To effectively utilize ERP systems in the process related industries (such as Chemical, Food &
Beverage, Pharmaceuticals, Metals & Mining, Pulp and Paper Industries) has been a lingering
problem (Aarde, 2007; AberdeenGroup, 2008; Hameri and Lehtonen, 2001; Lail, 1999; Shah, 2005).
Although deployment of ERP systems originated in the discrete industries, process industries are
increasingly adopting such systems to support their cyclical business operations (Aarde, 2007; Lail,
1999). Due to the vertical structure in the organic growth of this type of industry, ERP systems have
replaced their legacy sets of IS to support supply chain operations (Hameri and Lehtonen, 2001; Lail,
1999). The supply chain operation stems from optimal utilization of the existing plant capacity through
operation planning and scheduling (Thompson, 2000). Such planning and scheduling demand
effective use of ERP systems in mass customization, not in the products, for the industry operates low

Reference this paper as: Chidi Gerard Ononiwu,” A Delphi Examination of Inhibitors of The Effective use of
Process Industry Enterprise Resource Planning (Erp) Systems: A Case Study of New Zealand’s Process
Industry” The Electronic Journal Information Systems Evaluation Volume 16 Issue 2 2013, (116-133) , available
online at www.ejise.com
volume functional products, but in the services associated with the products (Akkermans et al., 2003).
The functional products characterised by a high degree of variability distinguish the process industries
from the discrete industries (Aarde, 2007). Usability problems in ERP have been attributed to poor
business performance and low managers’ productivity in these types of industries (Iansiti, 2007; Lail,
1999; Shah, 2005). Although ineffective use is among the major challenges confronting ERP post-
implementation success, little research has been conducted on this issue, especially in the process
industry (Hamerman, 2007; Hsieh and Wang, 2007).
Often, scholars have observed that individual usage of ERP systems is impacted by social,
organizational, environment and individual adoption factors (e.g., Al-Mashari et al., 2003; Amoako-
Gyampah, 2007; Chang et al., 2008; Hakkinen and Hilmola, 2008; Hsieh and Wang, 2007; Ifinedo,
2008; Nicolaou, 2004). Most of these factors, which cut across the implementation and post-
implementation phases of ERP life cycle, are labelled as enablers of the system usage (Cenfetelli,
2010). However, there exist inhibitors that serve solely to discourage effective system usage and are
distinctly different from enablers of such usage (Cenfetelli, 2010). Cenfetelli (2010) defined inhibitors
as those negative factors that discourage IT usage (in this case ERP systems) when present, but do
not necessarily favour such usage when absent. This asymmetric effect implies that inhibitors are not
necessarily the mirror opposite of enablers, but are qualitatively distinct constructs that are
independent of but may coexist with enablers (Cenfetelli, 2010; Bhattacherjee and Hikmet, 2007). To
focus on such inhibitors, which have received less attention from prior studies, requires the views of
experienced users of ERP systems. The perceptions of such users will assist in establishing the link
between the inhibitors and the effective use of ERP systems as well as in ranking them for managerial
attention. The study tends to focus on the process industry because a recent study by Zhu et al.
(2010) notes that the relative effects of the factors on the post-implementation success of ERP differ
across different industries. Hence, in order to obtain a broader view of these inhibitors, Technology-
Organization-Environment (TOE) framework, Task Technology Fit (TTF) and the theory of usage
inhibition by Cenfetelli (2004) are used as lenses to guide the study. The purpose of integrating these
theories is to offer a suitable framework for the categorization of the inhibitors before subjecting them
to empirical testing. Consequently, two research questions are incorporated to focus the investigation:
 1) What factors do managers in the process industry consider to be inhibitors to the effective use
of ERP systems?
 2) Which of the factors / inhibitors should managers in the process industry consider more
deserving of their attention?
The study is particularly interested with the strategic managers since they are the ones to drive the
effective use of the system (Ifinedo, 2008; Loftus, 2008). A Delphi approach is adopted to
systematically identify and rank the major inhibitors. The Delphi technique further grants the study the
opportunity to engage multiple perspectives of ERP key users considered as experts in the use of the
systems from New Zealand’s process industries.
The rest of this paper is organized as follows: Section 2 consists of the literature review that focuses
on the need to re-conceptualize ERP usage and the theoretical background with relevant literature on
ERP usage. Section 3 describes the Delphi research methodology and the findings. Section 4
discusses the findings and presents the implications of these findings to both research and practice,
the limitations of the study, and future research directions. Section 5 concludes this paper.
2. Literature review
2.1 Reconceptualising ERP Usage

Special attention to critical success factors (CSF) in ERP implementation is evident from the bulk of
literature associated with the implementation phase (Esteves and Bohorquez, 2007). By drawing from
Robertson et al. (1996) four-phase process model of ERP life cycle, it is evident that the
implementation phase (i.e. installation, configuration and change management process) constitutes
the third phase of the process model. Other phases include agenda (i.e. preparation to adopt the ERP
system) as the first phase, design (redesign business process to fit the workability of the ERP system)
as the second phase, and appropriation (use, routinization, infusion and continuous improvement of
the ERP system in the organization) as the fourth and the last phase. Considering the process nature
of the model, trends in literature that focus on the implementation phase, poses a limited
understanding of the other phases of the ERP life cycle (Kamhawi, 2008). Perhaps, either the focus
on CSF is to forestall the rampant implementation failures, or it may be that such scholars treat ERP

implementation as an all-inclusive process spanning this four-phase model. However, treating ERP
implementation as an all-inclusive process for whatever reason(s) limits the crucial and holistic
understanding of each of the phases of the ERP life cycle. To avoid such will help in the proactive
seeking of relevant solutions for achieving success at each specific phase. Without diagnosing every
phase of the ERP innovation process to understand the weakest link, we argue that the overall ERP
success will be conceptualised vaguely.
The realisation of ERP business values has often been assumed to be met when implementation
success is achieved. In many cases, however, such an assumption has proven to be incorrect over
time (Markus and Tanis, 2000; Soja and Paliwoda-Pekosz, 2009; Yu, 2005; Zhu et al., 2010). In fact,
ERP failure cuts across the four phases of the ERP life cycle, with significant and enduring negative
consequences in the appropriation phase when the enormous resources expended in the installed
systems did not yield an appreciable business value due to underutilization (Zhu et al., 2010). This
brings us to the urgent need to understand the concept of “use” in the ERP research domain and, on
the basis of this understanding, will the inhibitors of effective use be identified and empirically
validated.
Being often considered as an obscure territory, the concept of “use / usage” and its ambiguous
application in the ERP research domain has been contentious (Brown et al., 2002; Nah et al., 2004).
The ambiguity associated with this concept (use), stems from researchers equating ERP systems to
any other IS (Ifinedo, 2008). ERP systems are different from traditional IS due to their ability to impact
significantly on the “…technological, operational, managerial, strategic, and organizational
components of the adopting firm” (Ifinedo, 2008, p.552). It is mandatory for users to utilise the
installed ERP system as it reorganises an adopting firm to fit into its default business logics, popularly
expressed as “best practise” (Yu, 2005). Its nature of sophistication demands that firms solicit external
consultants to assist in developing and transferring their ERP knowledge skills to the adopting firms
(Ifinedo, 2008; Soja and Paliwoda-Pekosz, 2009). Even prior to implementation, it is expedient for
firms to understand how to effectively use the system to achieve their organisational goals (Ifinedo,
2008). A lack of appreciation of the uniqueness of ERP can cause the demise of the adopting
organisation, after having expended enormous resources (Chen, 2001; Ifinedo, 2008; Yu, 2005).
Consequently, it is evident that frequent application of the concept use to measure ERP success,
demands re-conceptualization to reflect its uniqueness and specific design features that need not to
be generalized to other IT artifacts (Gable et al., 2003; Nah et al., 2004). To do this depends on the
accurate understanding of the mandatory and the non-mandatory nature of adopting ERP systems.
Therefore, it is inappropriate due to bias to employ the construct “use / usage“, “user acceptance” or
“intention to use” to evaluate ERP, since users are already obligated to use the application in their
everyday tasks. This study argues that these constructs (i.e. “use”, “user acceptance” or “intention to
use”) that stem from attitude-intention-behaviour theories are inconsequential and highly prone to
bias, since it is obvious that employees are mandated to use such systems in their organisation,
especially during the early individual’s adoption to get his or her job going. Extant literature (e.g.,
Brown et al., 2002; Gable et al., 2003; Nah et al., 2004) has also criticised employing these constructs
to assess a mandatory phase of ERP success. However, as users gather experience with the system,
individual usage of ERP shifts to the non-mandatory phase driven by the users’ intrinsic motivation to
learn more of the system capabilities. Therefore, a more robust and parsimonious construct termed
“effective use” or “extended use” could be employed to assess ERP systems (Boudreau, 2002; Hsieh
and Wang, 2007; Loftus, 2008; Sousa and Goodhue, 2003). Sousa and Goodhue (2003) note that the
effective use of an ERP system is discretionary and significantly driven by the users’ business
knowledge, the conceptual knowledge of the application and its procedural knowledge and motivation.
Paraphrasing Sousa and Goodhue (2003), exploratory and exploitative use of the system cannot be
mandated; despite not being part of the formal job expectations per se, it contributes significantly to
organisational productivity. Boudreau (2002) noted the erroneous view of assuming “use” to mean
“effective use” as he observes that the degree of use does not necessarily translate to effectiveness.
Boudreau classifies “effective use” to mean “quality of use”, which is an exploitative use of the
functionalities of the system for organisations’ competitive advantage (Boudreau, 2002; Loftus, 2008;
Sousa and Goodhue, 2003).
A clearer understanding of this concept of “use”, especially in the ERP environment, can also be
derived from the earlier work of Lassila and Brancheau (1999). Lassila and Brancheau (1999)
classified “use” in the context of organisational environment to have four “equilibrium states” depicting
the increasing sophistication of use in the ERP environment. These four states pictured: (1) limited
“use” (i.e. low-integration), (2) “use” as to support existing processes (i.e. standard adoption / basic

use), (3) “use” as to redesign existing work processes (i.e. expanding), and (4) “use” as to exploit the
capabilities of ERP to align with the ever changing business environment (i.e. high integration)
(Boudreau, 2002). Therefore, the effective use of ERP revolves around ‘expanding’ to ‘high
integration’ where users have gone beyond the mandatory use (i.e. low-integration and standard
adoption) to a discretionary exploitation of the system for competitive advantage (Loftus, 2008; Sousa
and Goodhue, 2003).
2.2 Theoretical background

The appropriation phase of the ERP life cycle being the focus of this research consists of use,
routinization, infusion and continuous improvement of the ERP system in the organization as noted
earlier (Li et al., 2006; Robertson et al., 1996). Routinization describes the state where system use is
institutionalized within the organisational culture of the adopting organisations (Hsieh and Wang,
2007). Infusion refers to the process of embedding an ERP system deeply by reason of exploratory
and exploitation use of the system within an individual’s or organization’s work systems (Hsieh and
Wang, 2007). Unfortunately, employees’ attainment to the appropriation phase, where the system
should be effectively utilized for the realization of the business value, has been hindered by some
factors. Drawing from the theory of usage inhibition by Cenfetelli (2004), or the dual-factor model as it
is popularly called; such factors that dissuade system usage (in this case ERP system) are classified
as inhibitors (Cenfetelli, 2004; 2010). The dual-factor model primarily focuses on the fact that factors
associated with IS usage are determined by a simultaneous examination of enabling and inhibiting
factors. As noted, prior research drawing from the IS success model (DeLone and McLean, 1992;
2003) and behavioural theories such as TAM (Davis et al., 1989) or innovation diffusion theory (IDT)
(Rogers, 2003) have almost exclusively focused on eliciting enabling factors that influence system
usage, with an implicit assumption that the opposite of such enabling factors equates to inhibitors
(Cenfetelli, 2004). However, inhibitors are distinct and unique from the multiple arrays of enablers that
have been studied in prior IS literature (Cenfetelli, 2010). The basis of inhibitor uniqueness in
dissuading system usage lies in the asymmetrical negativity bias and perceptual bias prompted by the
mere sighting of the presence of inhibitors in the systems usage. Asymmetrical negative effects serve
to obviously signal a user that the system in use has poor features despite possessing positive
features (Cenfetelli, 2004; 2010; Bhattacherjee and Hikmet, 2007). At the same time, the perceptual
bias effect produces a much more diagnostic cue that can dissuade system usage behaviour or even
negatively reduce the positive valence of the enabling factors (Cenfetelli, 2004; 2010; Bhattacherjee
and Hikmet, 2007).
Bringing this concept of inhibitors theory to the ERP research domain, ERP default complexities
associated with system features, such as difficulty in accessing the correct functionality, system
output limitations, poor support in error situations and complexity of the system, have been attributed
to ERP usage inhibitors (e.g., Hamerman, 2007; Iansiti, 2007; Topi et al., 2005; Soja and Paliwoda-
Pekosz, 2009; Van Everdingen, 2000). Sousa and Goodhue (2003) conceptualize the effective use of
ERP to be influenced by employees’ understanding of the system’s procedural knowledge (i.e. syntax,
semantics and commands), application knowledge (the understanding of the business processes’
workflow mapped in the application) and business context knowledge (the understanding of the
processes specific to the business across the organizational functions). However, poor acquisition of
such knowledge, due to low absorptive capacity and inadequate training to acquire such knowledge
and systems inflexibility, constitute the major inhibitors of ERP system usage (Al-Mashari et al., 2003;
Iansiti, 2007; Kouki et al., 2006; Topi et al., 2006; Soja and Paliwoda-Pekosz, 2009; Sousa and
Goodhue, 2003). Drawing from Task-Technology Fit (TTF) theory, a system misfit to the employees’
assigned tasks / business process has been noted to impact negatively on ERP individual
performance (Kositanurit et al., 2006; Soja and Paliwoda-Pekosz, 2009; Somers and Nelson, 2003;
Smyth, 2001). Lack of continuous improvement strategy from the top management, poor vendors’
service support, poor communication and lack of motivation among the employees are also
considered as inhibitors to ERP system usage (Al-Mashari et al., 2003; Chang et al., 2008; Soja and
Paliwoda-Pekosz 2009).
To categorize the enablers from prior studies, the TOE framework (Tornatzky and Fleischer, 1990)
has been noted to be commonly used (Pan and Jang, 2008; Zhu et al., 2010). As generic theory of
technology diffusion, the TOE framework can as well be used for studying related factors that
dissuade ERP usage adoption. The TOE framework identifies three facets of the IS adopting
organisation’s contexts, namely the technological, organisational and environmental context. The
technological context describes both the internal and external technologies relevant to the

organisation. The organizational context consists of descriptive measures such as a firm’s size and
scope, centralization, formalization, and complexity of managerial structure, the quality of human
resources, and the amount of internal slack resources. The environmental context is the arena in
which a firm conducts its business: its industry, competitors and dealings with government (Tornatzky
and Fleischer, 1990). Prior studies of ERP adoption drew from TOE to elicit enabling factors that
positively impact on ERP success or performance (e.g., Pan and Jang, 2008; Shahawai and Idrus,
2010; Zhu et al., 2010). Consequently, building on the dual-factor model, TOE can as well be used to
elicit inhibitors of effective use of ERP systems, since IS usage is determined by a simultaneous
examination of enabling and inhibiting factors (Cenfetelli, 2004).
3. Methodology
3.1 A Delphi approach

Due to the nature of the study’s research questions, the Delphi technique is deployed to address
them. The Delphi technique provides a structured approach to collect data in a subjective
environment of complex issues with aims to rank the issues identified (Broomfield and Humphries,
2001). The Delphi method allows for a systematic, interactive, iterative collection of expert opinions
and critically evaluates them. Thereafter, the participants are encouraged to revise their earlier
answers in view of the replies of the other experts to research a consensus. The process stops when
either consensus has been reached among the participants or when sufficient information has been
gathered (Okoli and Pawlowski, 2004). Generally, the Delphi technique is a procedure to obtain the
most reliable consensus of a group of experts by a series of intensive questionnaires interspersed
with controlled opinion feedback. With the Delphi approach, the experts’ mental processes rather than
statistical formulas are the primary processors of facts for convergence on the “best” estimate.
The ranking-type approach of Delphi proposed by Schmidt et al. (2001) is adapted and used for this
study as shown in Figure 1. Such an approach overcomes many of the criticisms of the Delphi method
as not having a valid statistical measure of consensus (Miaskiewicz and Kozar, 2006). The ranking-
type approach is composed of three phases: brainstorming, narrowing down, and ranking. Consensus
among the rankings of the participants is measured by using the Kendall’s W non-parametric statistic.
Schmidt et al. (2001) proposes that a Kendall’s W value of 0.7 indicates high consensus among the
experts. The round 2 and round 3 of the Delphi method were conducted electronically by the emailing
of the questionnaire in a 5-point Likert scale (critical barrier (5) to not a barrier(1)) for round 2 and
(deserves critical attention (5) to deserves no attention (1)) for round 3. Such emailing allows the
participants to submit their responses online as well as to reduce the lengthy time associated with a
Delphi research. Apart from ranking the inhibitors in round 3 of the Delphi study, the panellists were
also asked to comment on how the inhibitors were reflected in their respective companies and
suggest ways of improving them. The panellists were encouraged to do this because as Gummesson
(2000) put forth “… those who are closest to a problem are also those who are best suited to identify
the problem and suggest solutions” (p. 41). We therefore gleaned their comments to enrich the
discussion section of the paper.
3.2 Expert’s selection and sampling technique

Three major process companies in New Zealand as well as their SAP consultants were selected for
this study. We use the pseudonyms PaperCO, DairyCO, AgroCO to represent the process companies
and OxySAP to represent their SAP consultant to maintain confidentiality. PaperCO is into pulp and
paper manufacturing, DairyCO produces dairy products, AgroCO is into animal husbandry and Agro
allied products. These organisations were selected for three reasons. First, the three process
companies are among the largest process companies in the Australasian region with a minimum
number of around 10,000 staff. Second, the three process organisations have a mature SAP
environment. Third, these organisations have adopted modules beyond the core financial modules
since 1999, which include sales & operational planning (S & OP) of SAP, supply chain management
(SCM) module comprising sales and distribution (SD) module and a material management (MM)
module. Other modules include a strategic enterprise management (SEM) module for business
analytics and SAP solution manager. It was on the basis of the contacts made in these companies
that a three-round, non-anonymous Delphi technique, which was suggested by von der Gracht et al.
(2008), was used.

Figure 1: Steps of the Delphi study

Experts within these three companies were selected based on their great knowledge and minimum of
5 years experience in ERP systems usage (Cantrill et al., 1996). Consequently, 3 groups of managers
in the strategic position were invited by snowballing sampling to cover a wide variation of experts for
the Delphi process (Yeoh et al., 2008). These are 7 key users of SAP from PaperCO as well as 10
members of New Zealand SAP User Group (NZSUG) consisting of 6 member from DairyCO and 4
members from AgroCO. Three members from SAP vendor /consultant were also invited. NZSUG
consists of key users of SAP licensed customers in New Zealand from the three major process
industries mentioned above in New Zealand. The researcher solicited the help of influential persons to
encourage participants to cooperate with the researcher (Hsu and Sandford, 2007). Top management
personnel in PaperCO and the Chairman of NZSUG, who also participated in the Delphi approach,
were the motivators.The researcher also had a face-to-face meeting with the panellists, to encourage
more participation and commitment (Hsu and Sandford, 2007). The 20-member panel has been
reported to be an appropriate sample to elicit information in complex issues using Delphi technique.
Delphi sample size does not depend on statistical power, but rather on group dynamics for arriving at
consensus among experts (Anderson and Schneider, 1993; Okoli and Pawlowski, 2004).
For 11 months (May 2008 – April 2009), the panel members assessed the content standards and
indicators that make up the three rounds stated earlier. To improve the content standards of the
issues under investigation in each round, the panel members were asked for suggestions. After each
round, the standards were revised based on their judgments and comments after analyses by the
researcher then sent to the panel members as feedbacks.
3.3 First round: Qualitative brainstorming session

The first round of the qualitative Delphi is focused on eliciting the factors considered to be inhibitors
by the experts. Two open questions were used such as: “How can we explore the use of SAP beyond
the basic use we are currently doing? Have we maximized SAP capabilities in our everyday job
challenges if not why? The 20 panel members’ responses that lasted for an hour were tape-recorded
and transcribed. The open questions avail the experts the opportunity to brainstorm on the issues at
stake with the researcher moderating the session with the aim of getting the experts focused. The use
of open questions has been advocated by scholars (e.g., Collins et al., 2009; Hübner-Bloder and
Ammenwerth, 2009; Nayan et al., 2010; Okoli and Pawlowski, 2004) for its appropriateness in eliciting
the constructs or items especially in round one of Delphi.

The transcribed texts were imported into Nvivo qualitative software for content analysis and coding to
elicit categories. First, we labelled the dimensions of the categories according to the “meaning they
evoke”, “words of respondents” or “borrowed from literature” (Strauss and Corbin, 1998). The main
categories consist of non-repetitive, non-overlapping statements, which were identified as the
meaning units of experience. In the next step, we went line-by-line through the texts in which we
assigned each text phrase to a category. If a text phrase did not match the established categories, we
defined a new category (inductive categorization). The whole system of categories was revised and
adapted with regard to the subject and aims of the qualitative Delphi approach (i.e. eliciting inhibitors
to the effective use of ERP systems from the experts) before finalizing the analysis. The resulting list
of categories reflected the possible inhibitors. The overall categorization was done by the researcher
and assisted by an independent coder; any differences in opinions were resolved by discussion. The
categorization items include inadequate ERP expertise, ERP default attributes, non-collaborative
training among employees, low absorptive capacity, poor user involvement, lack of continuous
improvement, system misfit, consultant’s ineffectiveness, and poor vendors’ support. Drawing from
TOE framework, TTF theory, the dual factor model and the findings from the qualitative content
analysis in round one, a priori conceptual framework for the research was developed as shown in
Figure 2. This framework is a conceptual taxonomy of inhibitors identified for further investigation in
rounds two and three of the Delphi. It is meant to be representative, not causal; hence, there are no
arrows.
3.4 Second Round: Quantitative Survey – The Narrowing Down Round

The nine categorized items in the first round were converted to questionnaires based on a 5-point
Likert scale (critical barrier (5) to not a barrier (1)) as stated earlier. The questionnaires were emailed
to the 18 panellists - for two of the panellists had withdrawn citing lack of time. As in other Delphi
studies, systematic e-mail and telephone reminders were sent to the panellists for the questionnaires
to be returned (approximately) on time and to support the response rates (Okoli and Pawlowski,
2004).Table 1 shows the analysis from SPSS 16.0; the quartile deviation value for all elements is less
than 1. This means all experts agreed with all items given, with strong agreement among 7 items that
have quartile deviation of 0.0- ≤ 0.5 (Nayan et al., 2010). Two items were valued as average, meaning
that the panellists still have consensus, but within the middle range with a quartile deviation value
between 0.6- ≤ 1.0 (Nayan et al., 2010). Two items ( poor user involvement and consultants’
ineffectiveness) were pruned out to ensure parsimony, having a median split value less than 3.5 for a
5-point Likert scale and a quartile deviation of value of 0.6- ≤ 1.0 (Bradley and Stewart, 2002; Nayan
et al., 2010).
Figure 2: A conceptual taxonomy of inhibitors of effective use of ERP systems

Table 1: Item analysis for Round 2

S/N Items Mean Median Q3 Q1 Quartile
Deviation
1 Non-collaborative training among the 4.7 5 5 4 0.5
employees
2 System misfit 4.3 4 5 4 0.5
3 Inadequate ERP expertise 3.9 4 4.25 3.75 0.25
4 ERP default attributes 4.4 4.5 5 4 0.5
5 Low absorptive capacity 3.9 4 4.25 3.75 0.25
6 Poor user involvement 3.2 3 4 2.75 0.625
7 Lack of continuous improvement 4 4 5 4 0.5
8 Consultant ineffectiveness 3.3 3 4.25 3 0.625
9 Poor vendors’ support 4.5 5 5 4 0.5
Quartile deviation of 0.0- ≤ 0.5 = 7 items and 0.6- ≤ 1.0 = 2 items
3.5 Third round: quantitative survey – The ranking round

The panellists were told to rank the selected items / inhibitors from round 2 in order of priority to arrive
at the most inhibitors deserving of the manager's attention. In line with a prior study by Schmidt et al.
(2001), multiple ranking rounds were conducted to reach an acceptable level of consensus by the
panellists. Kendall's coefficient of concordance (W) was computed using SPSS version 16.0 in each
ranking round to arrive at the panellist consensus. The ranking rounds stopped when the coefficient of
concordance indicated a strong consensus (W ≥ 0.76). Earlier work by Schmidt (1997) stipulates the
interpretation of Kendall’s coefficient as shown in Table 2.
Table 2: Interpretation of Kendall’s W
W Interpretation Confidence in Ranks
0.1 Very weak agreement None
0.3 Weak agreement Low
0.5 Moderate agreement Fair
0.7 Strong agreement High
0.9 Unusually strong agreement Very high
The three ranking round results are shown in Table 3. Round 3 of the mean ranking, where Kendall’s
W is (0.76 < p 0.05), indicates a strong agreement among the 18 panel members (Schmidt et al.,
2001).
Table 3: The three round Ranking of Inhibitors (n=18)

To ensure the practical relevancy of this research we synthesised the empirically developed list of 7
inhibitors of effective ERP usage, as shown in Table 3, with what was gleaned from the comments the
panellists made in round 3. As noted earlier, the comments emanate from the panellists’ answers to
the question on how such barriers reflect their companies’ situations and the suggested ways of
resolving them. From the developed items, only non-collaborative training among employees that is
within the organisational context is considered as a critical inhibitor and most deserving of managers’
attention, as shown in Table 3. From those three important inhibitors, only two (low absorptive
capacity and system misfit) are related to organisational issues, while one (inadequate ERP expertise)
is related to technical issues. Among the three moderate inhibitors, one (ERP default attributes)
belongs to technical issues, while lack of continuous improvement is of organisational issues and the
last inhibitor (poor vendors’ support) falls within environmental issues.
We first focus on training issues since it is the most prevalent inhibitor to effective use of ERP
systems. In the area of training, the implications are that process industries in New Zealand are
experiencing misfit in their training process. It is incorrect to envisage that the strategic users are not
trained; rather there are misalignments in the training process according to panel members.
Management should, in the future, engage consultant trainers that will work in collaboration with the
active users to develop their unique business context related training. The research strongly

supported the views of other scholars (e.g., Al-Mashari et al., 2003; Soja and Paliwoda-Pekosz, 2009;
Sousa and Goodhue, 2003) that users have to be trained. However, the findings from the study
suggests that users should be trained on the appropriate knowledge levels i.e. procedural knowledge,
application conceptual knowledge, and business context knowledge (Sousa and Goodhue, 2003), in a
participatory manner among the employees themselves. In doing this, the employees therein will
develop a healthy psychological ownership of the system, and to personally identify innovative users
to share their experience (Soja and Paliwoda-Pekosz, 2009; Sousa and Goodhue, 2003). In this way,
management could reduce the resources expended in organizational learning in the future. The
resources could be channelled to innovativeness by tapping into the users’ unique insight of the
business through effective use of the systems (Gupta, 2000; Sousa and Goodhue, 2003).
Second, low absorptive capacity among the employees, being defined by Cohen and Levinthal (1990)
as the firm's inability to appreciate an innovation, to assimilate and to apply it to new ends, strongly
requires organisational prior relevant knowledge and its investments in acquiring new knowledge
(Ravichandran, 2005). ERP, being a complex system, imposes a heavy learning curve and, as such,
the more a firm possesses prior ERP related knowledge, the more effective is its usage. ERP’s low
absorptive capacity and its default attributes of being complex as well as the perceptions it generated
among employees gave rise to inadequate ERP expertise. To lessen the effect, the right type of
training and individual skill development is highly needed (Calisir and Calisir, 2004; Soja and
Paliwoda-Pekosz, 2009).
Third, the presence of system misfit, where the system is not aligning with the business process,
contributed to ineffective system usage (Soja and Paliwoda-Pekosz, 2009). A typical example is in the
area of process industry supply chain (SC) operations. ERP’s support in SCM is of two dimensions:
operational and strategic (Akkermans et al., 2003). For operational, panellists are of the view that the
systems is compatible enough to support SC transactional functionality. However, in supply chain
design, the panellists emphasised the inflexibility of ERP to support SC design and knowledge
knowhow. For example, channel differentiation is used to service different market segments in the
process industry, but their present ERP is not flexible enough to support such without much
customization. Customization on its own is done with every necessary caution to avoid too much cost
in keeping the consultants on site and to avoid subsequent upgrade difficulties (MacKinnon et al.,
2008). For these reasons, the industry did not consider ERP as a critical enabler of Supply Chain, the
panel members commented. One key area vendors normally advice is redesigning the industry
business process to fit the functionality of the ERP systems to lessen customization (Soja and
Paliwoda-Pekosz, 2009). However, this does not encourage competitive advantage as everybody is
doing the same thing overtime. Another long-term issue the panellists revealed is the reengineering
initiatives in ERP systems to support the industry. The panellists highlighted that such initiative
demands a strategic leap that needs top management support (Ifinedo, 2008). It also demands
external mediating agents such as the local vendors / consultants whose services are noted to be
inefficient, probably due to inexperience, and the cost of hiring tested consultants outside New
Zealand is usually prohibitive.
Fourth, the inadequate ERP expertise is heightened by the complex default attributes of ERP systems
and lack of continuous improvement. Default attributes of ERP systems as an inhibitor stems from
employee’s difficulty in accessing the correct functionality to support their work-related tasks as well
as the system’s poor support in error situations. Based on this, the employees tend to lack expertise
in handling the ERP system to achieve their dynamic and strategic job roles in the New Zealand
process industry.
Fifth, a lack of continuous improvement by top management in not upgrading the ERP system
heightens the ineffective use of ERP systems. Several ERP vendors in their recent updates tend to
address users’ complexity issues, improve on the system’s flexibility and its business process
adaptability. However, if the adopting organisations are not appropriating the upgrades on time they
will continue to face usability challenges. This situation was buttressed by one panellist’s comment
that “they now have a legacy ERP system”, suggesting that after the implementation the management
shows less concern in upgrading the system. Top management on their own are not committed to
upgrades due to the risk associated with it and the huge financial implications (Soja and Paliwoda-
Pekosz, 2009; Van Everdingen, 2000).

Lastly, poor vendors’ support also contributes to ineffective use of ERP by strategic managers. ERP
vendors tend to be proactive and very much concerned with implementation success. However, once
the system “goes live” they seem to relax in their pragmatic approach to assist the adopting
organisations to ensure effective use of the system (Hakkinen & Hilmola, 2008; Pan et al., 2007). The
adopting organisation should in the future liaise with vendors to adopt collaborative usability
mechanisms. Such mechanisms will encourage vendor-client collective understandings in dealing with
ineffective use of the system among strategic managers.
4. Contribution of the study
By addressing the research questions, one important contribution of the study was in identifying the
seven inhibitors we have earlier discussed, seen to have impacted negatively on the effective use of
ERP systems in the process industry. By ranking such inhibitors in the order of relevance, the study
presents non-collaborative training among employees as the top-most inhibitor to deserve manager’s
attention followed by other inhibitors as its second major contributions. By such rankings the
managers could prioritise their strategic interventions in line with the available resources earmarked
for IS continuous maintenance by the top management. These inhibitors are classified as internal
inhibitors; the only exception was poor vendors’ support that is classified as an external inhibitor.
Internal inhibitors can be resolved within the adopting organisation by the strategic managers since
their attentions have been drawn in this study using Delphi technique, while the external inhibitor need
to be addressed by collaborating with the vendors of ERP systems in this case SAP. These
contributions have addressed the extent to which the study has answered the research questions.
Besides, it has also addressed the limitations of the existing literature, which seems to concentrate
more on enablers of ERP usage adoption, with an implicit assumption that the opposite of such
enabling factors equates to inhibitors. By integrating the commonly used theories in IS, the study has
been able to categorize and rank the inhibitors that are qualitatively distinct from the enablers as
factors that could inhibit the effective use of ERP systems in New Zealand’s process industries.
5. Limitations
The study was not without limitations. Specifically, since the Delphi method requires participants with
varied expertise, the researcher had to rely on the recommendations of other experts considered as
motivators to populate the panels. This process is known as daisy chaining and has the potential to
form cliques. The study considers only process industries with SAP installed base; therefore the
findings might not be generalized to other ERP software such as Oracle or Microsoft ERP products
(Navision, Axapta), especially on findings related to ERP default attributes. Delphi multistage probing
requires considerable time, and, in addition, the fact that participants inevitably drop out after the first
round of the three round iteration process might slightly affect the result.
6. Conclusion and further research
The empirical findings of the study suggest that ERP adopters in New Zealand’s process industries
are not achieving the strategic business value identified in the project justification due to employees’
ineffective use of the systems. It has also further heightens the need for ERP adopters to evaluate
every phase of the ERP innovation process to understand the weakest link, especially in the
appropriation phase. Apparently, ERP adopters in New Zealand’s process industries have witnessed
implementation success, but this study takes it further to reveal that despite that, there are inhibitors
to the effective use of the systems.
By integrating TOE framework, TTF and IT inhibition theories as well as using the Delphi technique,
we highlight the top-most inhibitors that support ineffective use of the ERP systems in the
organisations seen as distinct and unique from the multiple arrays of enablers of ERP use that have
been studied in prior IS literature. With hardly any research in New Zealand to determine inhibitors of
effective use of ERP systems, this study has shown that while the firms have registered
implementation success, they are hindered from achieving the strategic business value because of
the prevailing constraints, some of which are more specific to New Zealand’s process industries,
especially in the areas of collaborative training among employees and poor vendors’ support.
Consequently, the next dimension that emerged in this study was the proffering of solutions to
overcome such prevailing inhibitors by the strategic managers seen as expert users who were eager
to go beyond the basic use of the ERP systems. By proffering such solutions for top management’s
attention by the managers themselves who occupy various strategic roles in the adopting
organisation, confirms the practical relevancy of the study, which has not been the focus of prior ERP
studies. Several IS researchers have highlighted the need for IS studies to be relevant to practitioners

as well as maintain the dictates of a rigorous academic research (e.g., Benbasat & Zmud, 1999;
Rosemann & Vessey, 2008). In summary, by way of answering the research questions, the study has
been able to: (1) identify the inhibitors plaguing New Zealand’s process industry, (2) prioritised them
for management’s attention, and (3) suggest practical solutions to overcome such inhibitors for
managerial interventions. Besides, for us to pay heed to the previous section remarks on limitations
of the study, a further research could consider other types of ERP software packages with reference
to other industries in New Zealand.
Acknowledgements
The author would like to thank the participants of 2011 IS Writer's Workshop organised by Information
Systems department of University of Cape Town (UCT) for reviewing this paper prior to submission.
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Appendix: Delphi Brainstorming Session and Survey Questionnaires

Delphi Investigation to Identify the Barriers to Effective Use of Process Industries’ ERP
systems in New Zealand
Round 1 – Brainstorming Session
Dear Valued Participants,
I thank you for agreeing to take part in this Delphi 3 round study. We are starting with the
brainstorming session that will take an hour of your time. Having made huge investments in
implementing ERP systems, the study aims to identify the supposed barriers that could restrain the
users from maximizing the business value of the systems in New Zealand’s process industries.
The questions for our deliberation are: “How can we explore the use of SAP beyond the basic use we
are currently doing? Have we maximized SAP capabilities in our everyday job challenges if not why?.
I posted these questions to you all prior to the brainstorming session for your reflections. To avoid
cliques, please do not share your reflections with any of your colleagues prior to the brainstorming
session.
The venue for the brainstorming session is Waikato Management School auditorium; the attached
camus map will assist you to easily locate it. It will begin at 10:30 am on May 15 2008
Once we have received responses from all participants during the brainstorming session your tape
recorded voice will be transcribed and coded to derive themes and formulate the first questionnaire,
which you should receive within the next two weeks. To minimise the time between successive rounds

of the Delphi survey it would be appreciated if you could return each questionnaire within two weeks
of receipt via email: gerrychi@gmail.com
We would like to remind you that individual responses will be strictly confidential to the research team
and will not be divulged to any outside party.
If at any time you would like to discuss the Delphi study, please do not hesitate to contact me.
Regards
Chidi Ononiwu
Department of Management Systems

Waikato Management School Hamilton
Delphi Survey to Identify the Barriers to Effective Use of Process Industries’ ERP Systems in
New Zealand
Round 2 – The Quantitative Survey Round
Dear Valued Panellists,
Thank you very much for your 100% attendance in the first round of our research and the tremendous
contributions you made during the brainstorming session. Based on that, we have identified nine key
barriers to effective use of process industry ERP in New Zealand, namely:
1) Inadequate ERP expertise
2) ERP default attributes
3) Non-collaborative training among employees
4) Low absorptive capacity
5) Poor user involvement
6) Lack of continuous improvement
7) System misfit
8) Consultant ineffectiveness
9) Poor vendor support
I converted these nine key barriers into questionaries as shown below for the second round of the
Delphi study. Please indicate your answers by means of a tick in the appropriate box. If there are any
objections to these barriers we have gleaned from the brainstorming session you are highly
encouraged to comment on them.
All information provided will be treated in the strictest of confidence and in line with ethic codes of the
university. If you do not want to receive further emails on this subject you are equally free to indicate.
Thank you for your valued participation
Regards
Chidi Ononiwu


Please check which ERP system you use SAP Oracle Elixir Microsoft Best of
in your organisation. You can tick more Navision / breed (BoB)
than one depending on your usage. Axapta and
Others
Please check according to your level of

perception to any of these factors you not a minor moderate important critical
consider as being barriers to effective barrier barrier barrier barrier barrier
use of your ERP systems
Please check only one box in a row from 1 2 3 4 5
here
1 Inadequate ERP expertise

2 ERP default attributes
3 Non-collaborative training among
employees
4 Low absorptive capacity
5 Poor user involvement
6 Lack of continuous improvement
7 System misfit
8 Consultant ineffectiveness
9 Poor vendor support
In your opinion, what other barriers of effective use of ERP systems in your organizations? Please describe it fully in this space.
Thank you very much for participating!
Delphi Survey to Identify the Barriers to Effective Use of Process Industries’ ERP Systems in
New Zealand
Round 3 – Ranking Round
Dear Valued Panellists,
Thank you very much for your reply in the second round of our research. This is the final round of the
Delphi survey. Generally, it has been very impressive and I commend you all for that. However, we
have not yet reached consensus. In the previous rounds we only had two drop outs citing lack of time
to continue. Please see the results of round 2 and if there are any objections you are free to
comment.

Table 1: Item analysis for Round 2

S/N Items Mean Median Q3 Q1 Quartile
Deviation
1 Non-collaborative training among the 4.7 5 5 4 0.5
employees
2 System misfit 4.3 4 5 4 0.5
3 Inadequate ERP expertise 3.9 4 4.25 3.75 0.25
4 ERP default attributes 4.4 4.5 5 4 0.5
5 Low absorptive capacity 3.9 4 4.25 3.75 0.25
6 Poor user involvement 3.2 3 4 2.75 0.625
7 Lack of continuous improvement 4 4 5 4 0.5
8 Consultant ineffectiveness 3.3 3 4.25 3 0.625
9 Poor vendor support 4.5 5 5 4 0.5
Quartile deviation of 0.0- ≤ 0.5 = 7 items and 0.6- ≤ 1.0 = 2 items
Table 1 shows the analysis from SPSS 16.0; the quartile deviation value for all elements is less than
1. This means all experts agreed with all items given, with strong agreement among 7 items that have
quartile deviation of 0.0- ≤ 0.5 (Nayan et al., 2010). Two items were valued as average, meaning that
the panellists still have consensus, but within the middle range with a quartile deviation value between
0.6- ≤ 1.0 (Nayan et al., 2010). Two items ( poor user involvement and consultants’ ineffectiveness)
were pruned out to ensure parsimony, having a median split-value less than 3.5 for a 5-point Likert
scale and a quartile deviation of value of 0.6- ≤ 1.0 (Bradley and Stewart, 2002; Nayan et al., 2010).
Based on the result of roll 2 we now have 7 key barriers. You are now asked to rank these 7 key
barriers in the order of importance for managers’ attention. The ranking round will be done three times
until we achieve consensus. Also you have to comment on how the barriers reflect your present
company situation and suggest ways of improving them. We encourage you to do this because as
Gummesson (2000) put forth “… those who are closest to a problem are also those who are best
suited to identify the problem and suggest solutions” (p.41).
Rank these 7 barriers in the Deserves Deserves

order of importance to deserve Deserves minor moderate Deserves Deserves
managers’ attention no attention attention important critical
attention attention attention
Please check only one box in 1 2 3 4 5

a row from here
1 Inadequate ERP expertise
2 ERP default attributes
3 Non-collaborative training
among employees
4 Low absorptive capacity
5 Lack of continuous
improvement
6 System misfit
7 Poor vendor support
Please comment on how the barriers reflect your present company situation and suggest ways of improving
them in this space.

All information provided will be treated in the strictest of confidence.
Thank you for your valued participation
Regards
Chidi Ononiwu


The Usage and Impact of Broadband: A South African Household
analysis
Lisa F Seymour and Mogen Naidoo
Information Systems Department, University of Cape Town, South Africa
Mogen.Naidoo@hotmail.com
Lisa.Seymour@uct.ac.za
Abstract: Broadband infrastructure is seen as crucial to a country’s social, economic and scientific goals and a
requirement of the knowledge economy. Broadband has the ability to improve the lives of citizens as it can
provide ICT skills for employment and improve access to online forms of education. It has been purported to
provide consumers with better work/life balance attributed to increased empowerment and productivity, the ability
to work from home and reduced stress. South Africa has recognized the importance of high-speed broadband
technology to advance the communications infrastructure of the country. However, although the demand for
broadband is quite high, the adoption of the technology is lower than anticipated, particularly within the
households of consumers. South Africa has fallen behind international peers in both the developed and some
developing markets in its rollout of broadband services. While various studies and models aim to explain the
adoption of broadband, there is little literature on the impact of broadband services in African countries. To
address this need this paper investigates the use and impact of broadband services in South African households.
The research comprises an initial literature review, followed by a qualitative study which is then validated by a
quantitative study. The study shows that South African broadband users are predominantly experimental users.
Users with higher usage of broadband in terms of variety or rate of use are able to work from home and purport
to save time which results in a more comfortable lifestyle. They are more satisfied with the technology and show
an interest in future-oriented communication technologies. The resultant model adds to the existing literature and
this analysis will allow various stakeholders such as government, Internet Service Providers (ISP), business
consumers and public organisations to make more informed decisions on broadband infrastructure investments.
Keywords: broadband, South Africa, broadband benefits, broadband usage, broadband impact
1. Introduction
South Africa is considered one of the world’s leading emerging economies and is part of the Brazil,
Russia, India, China and South Africa (BRICS) group of emerging economies (BRICS, 2012).The
country has vast opportunities within the telecommunications sector and has seen much technological
advancement, yet it has been undermined by low internet penetration rates below 14%
(InternetWorldStats, 2012). The South African government has stated that the Information and
Communication Technologies (ICT) industry is fundamental to the country’s development; however,
regulations and policies have not always supported this stance (Francis, 2010). Moreover, once
regarded as a telecommunication powerhouse, South Africa is slowly losing ground to its African
counterparts such as Botswana, Zambia and Kenya due to stagnant inland infrastructure
developments (Balancing-Act, 2010). While the demand for broadband is high, the adoption of the
technology is lower than anticipated and this particularly within the households of consumers (Muller,
2010). Figures for broadband adoption in 2011 were a mere 3.6%; with fixed wired connections 1.6%;
multiple times lower than the OECD countries average of 25% (Department of Communications,
2011; Muller, 2011b; OECD, 2012).
Various studies and models have aimed to explain the adoption of broadband services in several
countries. Large-scale qualitative studies of the barriers to broadband adoption in the United States
analysed broadband adoption among low-income communities (Dailey et al., 2010; Powell, Bryne and
Dailey, 2010) and recommended a renewed focus on factors that sustain home broadband access
and usage (Powell, Bryne and Dailey, 2010). Broadband access is seen as a requirement of socio-
economic inclusion and that while usage is impacted by high monthly fees, there are also concerns
around hardware costs, hidden fees, billing transparency, quality of service, and availability (Dailey et
al., 2010). An economic study in the United States recommended targeted programs that educate
households about broadband benefits (Rosston, Savage and Waldman, 2010). In their study they
noted that experienced broadband users are more aware of Broadband benefits.
There has been little research focus on broadband adoption within the African continent and even
less on the use and impact of broadband services in African countries after the adoption process
occurs. To address this need, this research investigates the use and impact of broadband services in
South Africa. The research started with a literature review, followed by a qualitative study which was
Reference this paper as: Lisa F Seymour and Mogen Naidoo “The Usage and Impact of Broadband: A South
African Household analysis” The Electronic Journal Information Systems Evaluation Volume 16 Issue 2 2013,
(134-147) , available online at www.ejise.com
subsequently validated by a quantitative study. Through a review of the literature various models to
understand household broadband use and impact were identified and reviewed so as to propose a
model for broadband use and impact.
2. Literature review
Broadband is widely used as shorthand for high-speed Internet access (Kim, Kelly and Raja, 2010;
Sacks, 2002). Broadband can also be defined in terms of the technology used, in terms of the
transmission capacity provided, or in terms of the functionality enabled (Kim, Kelly and Raja, 2010;
Sacks, 2002). Compared to traditional narrowband connections, broadband access is immediate.
Large volumes of data can be instantly transmitted, waiting times are reduced and efficiency for users
is improved. In contrast narrowband connections are slow where it is estimated that one third of user
time online is spent waiting (Spurge and Roberts, 2005). For the purpose of this research broadband
is regarded as “an always available, multimedia capable connection with a download speed of at least
256 kbps” as defined by the South African Department of Communications (Department of
Communications, 2010:7). Broadband technologies are divided into fixed line technologies, fixed
wireless technologies and wireless mobile technologies (Corning, 2005). Fixed line technologies
include digital subscriber lines (DSL), cable modems, broadband over power lines (BPL) and fibre
optics such as fibre to the home (FTTH). Fixed wireless technologies include satellite, wireless fidelity
(Wi-Fi) and worldwide interoperability for microwave access (WiMAX). Wireless mobile technologies
include 3G and its evolutionary paths 3.5G, high speed data packet access (HSDPA), high speed
packet access plus (HSPA+) and 4G or long term evolution (LTE). ADSL is the most popular of the
fixed line technologies while Wi-Fi and 3G/HSDPA are the most popular of the fixed wireless and
mobile wireless technologies respectively (Corning, 2005).
2.1 Broadband benefits and impact

Broadband technologies are able to provide a mix of data, voice, and video services over one “pipe”.
Some advantages include faster access to the internet, 'always on' and making calls while surfing the
Internet. Disadvantages include security threats, higher service fees than dial-up and lack of
availability in rural areas. Broadband is seen as a requirement for “Digital citizenship” which is defined
as the skills, access, and education needed for participation in the information age (Mossberger,
Tolber and McNell, 2008). The benefits to consumers include improved access to online education,
economic opportunities and civic services. Wieck and Vidal (2011) have reviewed research that
indicates a positive relationship between broadband investment and both economic growth and
employment. Yet, Middleton and Chang (2008) comment that research showing the positive economic
evidence of broadband usage is preliminary and that there is little evidence to justify these claimed
benefits. Middleton (2009) argues that broadband usage could have negative consequences in terms
of increasing energy usage through the increased usage of broadband devices.
2.2 Broadband in South Africa

The most advanced country in terms of broadband penetration is South Korea (Bernabé, 2010).
Factors that contributed to this include infrastructure competition from a supply side and high demand
from the demand side (Akamai, 2010). Low broadband penetration in developing countries has been
as a result of limited fixed line infrastructures, high costs of international bandwidth and monopolies
held by telecommunication companies (Goldstuck, 2010; Kim, Kelly and Raja, 2010). In South Africa
the top broadband players include semi-privatised and state owned Telkom for fixed lines, iBurst for
fixed wireless, the first, second and third largest mobile operators Vodacom, MTN and Cell C
respectively for mobile wireless. The price of broadband dropped significantly in a 3 year span from
2006 to 2009 mostly due to the introduction of the new SEACOM and WACS cables bringing in more
international bandwidth to the country (Goldstuck, 2010). Compared to international standards, these
prices are still exceptionally high and not affordable by many consumers. South Africa was placed
rd
103 (Muller, 2011a) in the world in broadband speed rankings taking into consideration the cost to
speed ratio.
This poor performance in broadband uptake needs to be looked at in contrast with repeated promises
from Government to deliver on supporting broadband infrastructure. Recently, the South African
Communications minister, Dina Pule, in her 2012 budget speech, stated that “the Department of
Communications remains committed to delivering 100% broadband penetration by 2020 and
delivering a million jobs by 2020” (Muller, 2012). However similar promises have been made by the
Government since 2006 and analysts have criticised the government for lack of delivery and too much

consultation (Muller, 2012). The Department of Communications has budgeted R1.2-billion on

broadband and Internet access for 2010/11 and this has been criticised as being inadequate,
especially considering that the Internet economy is estimated to contribute 2% to South Africa’s gross
domestic product (GDP) and this contribution is rising by around 0.1% a year (Vorster, 2012).
Goldstuck in (Vorster, 2012) states: “The message to government is equally clear: invest more
actively in the Internet economy, and the benefits will spill over directly into the overall economy.”
2.3 Broadband diffusion theories

Over the past two decades, an increasing body of work attempted to explain and predict user
acceptance/adoption of new technologies. Some of the most commonly used ones include the
Technology Acceptance Model (TAM) by Davis (1989), the Innovation Diffusion Theory (IDT) by
Rogers (1995) and the Decomposed Theory of Planned Behaviour by Taylor & Todd (1995). Other
theoretical models, which have been used, include the Theory of Reasoned Action (TRA), proposed
by Ajzen & Fishbein (1980) and the Theory of Planned Behaviour (TPB) by Ajzen (1991). For the
needs of IS research these theories were modified, extended and integrated in order to understand
and predict technology adoption and usage. Examples include Taylor and Todd’s (1995) decomposed
TPB where the Theory of Planned Behaviour has been modified and integrated with the Diffusion of
Innovations constructs and Venkatesh and Brown (2001) modification of the TPB to study technology
adoption issues in the household. Subsequently, there have been various theoretical frameworks
proposed on the subject of broadband adoption. Some of these were from emerging economies, such
as Pakistan (Dwivedi et al., 2007) India (Dwivedi et al., 2008) and Malaysia (Ooi et al., 2011).
Yet, Shih and Venkatesh (2004) state that previous diffusion studies have focused mostly on the
adoption perspective. There are limitations to the adoption diffusion (AD) of technology and though
the diffusion processes cannot be understood without studying the nature of adoption, to complete the
diffusion story, use-diffusion processes also need to be examined (Shih and Venkatesh, 2004). Shih
and Venkatesh’s (2004) research extends the diffusion concept further with a systematic study of
post-adoption usage. In their model, the variable of interest is use or, more specifically, rate of use
and variety of use. The theoretical elements for their model are the evolving nature of use (rate and
variety), sustained continuous use and technology outcomes (technology integration, perceived
essentialness of technology, impact of technology, and user proneness to adopt new technologies)
(Shih and Venkatesh, 2004). Choudrie and Dwivedi, (2004a) argued that researchers have
demonstrated the impact of various technologies such as the Internet on a user’s daily life and
considering that broadband offers an alternative way of work and entertainment, it is likely to impact a
user’s daily activities. According to Choudrie and Dwivedi (2004b), broadband users are different from
narrowband users in terms of the time spent on the Internet and the activities conducted using the
Internet.
2.4 A proposed model for broadband use and impact in South African households
Figure 1: Proposed model for broadband use and impact in the household
Using the Model of Adoption of Technology in the Home (Venkatesh and Brown, 2001), removing the
adoption components and combining literature outcomes, the proposed model was formulated (Figure

1). A feedback loop was included, as through the continued use of broadband the outcomes of
broadband usage has a continued changing effect on the rate and variety of use of broadband by the
user. In the case of rate and variety of use, the effect can cause a user to move within the topology.
An example would be where a limited user can move to become a specialised or an intense user. It
therefore becomes necessary to investigate how the impact of broadband affects the rate and variety
of use through the feedback loop.
3. Research questions and approach
This study attempts to answer the following questions:
 How do South African consumers use broadband?
 What impact does broadband have on South African consumers and their interest in future
oriented technologies?
The overall research study makes use of multiple philosophies i.e. an interpretative and a positivist
philosophy. Each philosophy when used independently in research has its advantages as well as its
disadvantages. Therefore in order to attain accurate findings in any study it becomes necessary to rid
the study of the disadvantages inherent in a particular philosophy (Lee, 1991). Therefore taking Lee’s
(1991) framework into consideration, this study first uses an interpretative qualitative approach
followed by a positivist quantitative approach and then integrates them to ensure that the benefits of
each study are realised. The qualitative study attempted to expand and enhance through semi-
structured interviews the proposed model provided by the initial literature review. The data analysis
compiled the data collected into patterns and themes and structured the data into a framework
(Attride-Stirling, 2001). Using the input from the qualitative analysis, hypotheses were developed. The
next step was to validate the model through the use of the developed questionnaire. Participants in
South Africa were sent questionnaires and the data obtained was analysed quantitatively using
statistical techniques. Relationships between the different variables within the model were tested to
develop a model of broadband use and impact in households of South Africa. While the qualitative
study preceded the quantitative study the results will be discussed together in this paper.
4. The qualitative study
To select interviewees, a purposive sampling method was used with selection criteria developed with
the research questions in mind. Interviews were conducted with 16 respondents, six adopters who
were also users (C1-6), one user (U1) and nine non-adopters (N1-9) (Table 1). All respondents had
formal education ranging from university degrees to college diplomas. Most of these formal
educations made way for their occupational roles. Occupational roles within the IT industry ranged
from being lecturers of IT, systems architects and software developers to students in IT. The
respondents were therefore given the title of either IT or non-IT depending on their occupational
classification. The respondents who were in the high and medium income brackets had professional
occupations while those in the lower income bracket were university students or casual workers in
retail.
The study followed an inductive approach to analyse the data collected resulting in categories
(Thomas, 2006). Constant comparative analysis (Anfara, Brown and Mangione, 2002) was performed
to ensure coherence. To ensure that the data collected was reliable and valid, a triangulation of
interviews was performed with audio tapes and notes taken. The qualitative study also provided a
general idea of whether the issues are comparable to those experienced in other countries and
provided an indication of the expected relationship between variables. Furthermore, it was expected
that some factors would correlate with those identified in the literature survey and some additional
new factors/constructs would be discovered.

Table 1: Demographics of individual respondents

ID Age Disposable Formal Occupation IT Related Access
Group Income(R) Education
C1 50+ 20000-30000 B. Proc LLB Magistrate Non-IT 4Mb ADSL
C2 18-30 5000-10000 Masters Degree Student IT 384Kb 3G
C3 31-40 >30000 Honours Systems IT 1Mb IBurst
Architect
C4 50+ 20000-30000 Masters Degree Lecturer IT 4Mb ADSL
C5 18-30 5000-10000 Diploma in IT Sales Non-IT 384Kb ADSL
Assistant
C6 50+ 10000-20000 PhD Lecturer IT 384Kb ADSL
U1 18-30 < R5000 B.Bus. Sci. Postgraduate Non-IT 4Mb ADSL
Student
N1 18-30 5000-10000 Masters PhD Student Non-IT Home dial-up
N2 18-30 5000-10000 Masters PhD Student Non-IT Home Dial-up
N3 18-30 <5000 Honours Masters IT None
Student
N4 31-40 5000-10000 Technikon Proprietor Non-IT None
N5 18-30 10001-20000 Diploma Software IT Home Dial-up
Developer
N6 41-50 20001-30000 PhD Assoc. IT Home Dial-
Professor up/Work LAN
N7 18-30 10001-20000 Masters Lecturer IT Work LAN
N8 18-30 20001-30000 Honours Equity Non-IT None
Derivatives
Broker
N9 31-40 20001-30000 PhD Lecturer IT Dialup/Work
5. The quantitative study

The quantitative study was cross-sectional in that it analysed responses at a single point in time in
2009. While past as well as future behaviour and attitudes are of interest, it is believed that the
experience of change over time could be relayed by the respondents. Based on the model derived
from both the literature review and qualitative study, research hypotheses were proposed. To validate
the feedback loop requires that the study be longitudinal in order to assess the changes of usage over
time. Therefore, as this was a cross-sectional study, the feedback loop fell out of scope. Survey
questionnaires were deemed suitable as they allow objective data to be collected from a large sample
in a standardised way.
A pilot questionnaire was devised to resolve any difficulties that respondents faced when completing
the questionnaire and was then initially sent to 20 respondents who have experience in research
studies. For the final sample, a stratified random sample was used to look at distinct sub groups
based on age, occupation and income of adopters and non-adopters. The demographics of the
respondents are shown in Table 2. Of the 177 respondents, 155 had Internet access at home and 22
did not. Only one respondent had a dialup or narrowband connection while the rest had a broadband
connection. It should be noted that of the 154 respondents that did have a broadband connection, 32
respondents had more than one type of broadband connection in their household.

Table 2: Profile of survey respondents

Categories Frequency Percentage
Age 18-25 75 42.4%
26-30 55 31.1%
31+ 47 26.5%
Total 177 100.0%
Education Matric Ex./High School Diploma 67 38%
Degree/Technikon Diploma 44 25%
Honours Degree (Postgraduate) 53 30%
Masters and PhD (Postgraduate research) 13 7%
Total 177 100.0%
Occupation Legislators, Senior Officials, Directors, 13 7.3%
Managers & Owner Managers
Professionals 61 34.5%
Technicians & Associate Professionals 77 43.5%
Clerks & Administrative Workers, Service & 26 14.7%
Sales Workers, Skilled Agricultural & Fishery
Workers, Skilled Workers, Craft & Related
Trades, Plant & Machine Operators &
Assemblers, Labourers & Elementary
Occupations
Total 177 100.0%
Income < R5000 50 28.2%
R5000 – R10 000 43 24.4%
R10 001 – R20 000 50 28.2%
R20 001 + 34 19.2%
Total 177 100.0%
Internet Access Yes 155 87.6%
as Home No 22 12.4%
Total 177 100.00%
Type of Internet Dial-up 1 0.6%
Access at Home WiFi 8 4.5%
WiMAX 3 1.7%
Broadband with DSL/ADSL 113 63.8%
Mobile 3G/HSDPA 57 32.2%
Other 5 2.8%
Total 187 105.7%
6. Broadband usage findings

Showing the recent uptake of broadband, the majority (64%) of respondents had broadband
subscriptions for less than 3 years (Figure 2) and almost half (46%) only having broadband for less
than two years. Of the 154 adopters, consumers mostly used their broadband connection for
downloading files, music and videos. This was followed by time spent communicating online. The third
largest category was time spent streaming video or music online. This was followed by time spent
working from home, online shopping, creating web content and settling accounts online (Figure 3).
Multiple technologies can access broadband connections and in this sample 227 technologies were
used by the 154 respondents. Most consumers had personal computers accessing their broadband
connection (Figure 4). The second largest category was consumers with laptops followed by mobile
phones. The smallest category coded as other was predominantly PDA's.

Figure 2: Length of broadband subscription
Figure 3: Hours spent on online activities by broadband consumers
Figure 4: Complementary technologies used by broadband consumers

6.1 Usage patterns

The average rate of broadband use was calculated by counting the amount of hours that consumers
had used their connection on average per week. These were then grouped into four categories in
multiples of 56 hours per week. It should be noted that those respondents that used their subscription
for more than 168 hours per week was due to their connection being always on and they had
performed many different online activities concurrently. As a result the total hour for each respondent
was an accumulation of the hours spent for each activity unless otherwise stated. The variety of use
was calculated by counting the amount of technologies and online activities that consumers used with
their broadband subscription. By utilising usage rate and variety of use, four possible types of use
diffusion patterns can be identified (Shih and Venkatesh, 2004). Data gathered in the form of number
of hours per week spent performing various online activities from South African consumers were
grouped into the use diffusion patterns topology and shows that South African broadband users are
classified predominantly as experimental users, with lesser intense users and a small percentage of
limited users (Figure 5). One reason for users falling mostly within the experimental category is that
broadband was a relatively new technology at the time, hence users may have been experimenting
with the various online activities that could be performed with the technology.
Figure 5: Use diffusion patterns of South African broadband adopters

7. Qualitative findings on impact of broadband usage
Qualitatively analysing the data acquired, the researcher attempted to expand and enhance the
proposed model of broadband use and impact in the household. The responses of each consumer
was analysed which determined the factors within each phase of the model. The results discussed
are supported by occasional interview quotes.
Four lifestyle changes were identified in the interviews:

 Easier communication with the family,
 Saving on time to do more of other activities,
 Cost savings and
 Ease of working from home.
One respondent in particular mentioned that broadband has become such an integral part of his
lifestyle that he doesn’t go a day without performing e-activities:
“Broadband has a major impact on my lifestyle. I’m actually restless if I don’t have
internet access. In fact e-activities as I call it have become an integral part of life. I
don’t go a day without checking email, even on holiday” (C2).
In contrast to broadband users in the US (Mossberger, Tolber and McNell, 2008), no
respondents mentioned using online education or accessing government services.

In terms of satisfaction, respondents felt that broadband allowed them to have more control over their
lives, they were less frustrated than when they used the slower dial-up connections as it makes life
easier and gets things done.
“It’s just great to have that, but come to think of it perhaps it is. It’s not frustrating. If
you want to know something you can search for it” (U4).
Five respondents showed interest in future technologies. This was mostly interest in faster
connections as well as interest in wireless connections as respondents C3 and C5 mentions
respectively:
"Well, I am a techno junkie. I would like to see what the future holds in terms of speed
in terms of how fast the connections going to be in the future. If I had money right now
I would get myself a 4Mb connection to see what is going on" (C3).
"I wouldn’t mind trying 3G. I would like to enquire more about it but about getting more
knowledge about it. I think it needs to be more widely exposed here. It has taken off
overseas but has taken us quite a while to adopt it here" (C5).
One respondent, however, explained that she is satisfied with her current broadband service and that
she currently has no interest in future technology:
"At the moment I don’t need faster or other technologies as its suits me fine" (C1).
From the interviews interest in the following six future technologies was identified:
 higher speed lines
 unlimited bandwidth
 IPTV
 High speed wireless
 VOIP
 Interactive online communication
8. Quantitative findings on impact of Broadband
The six hypotheses derived from the literature and the qualitative finds were:
 H1: The greater a user’s rate and variety of use, the easier it is for users to communicate with
distant families. [Lifestyle: Communication]
 H2: The greater a user’s rate and variety of use, the more a user will be able to save time and
hence commence with other life activities. [Lifestyle: Life Activities]
 H3: The greater a user’s rate and variety of use, the more a user will be able to save on costs.
[Lifestyle: Costs]
 H4: The greater a user’s rate and variety of use, the easier a user will be able to perform work
related activities at home. [Lifestyle: Work Activities]
 H5: The greater a user’s rate and variety of use, the more satisfied a user will be with the
technology. [Satisfaction]
 H6: The greater a user’s rate and variety of use, the higher the level of interest in acquiring
futuristic-oriented technologies. [Future technologies]
Table 3 and Table 4 present the means and standard deviations of aggregate measures for the
quantitative analysis. Respondents seemed to have a medium agreement (scores between 5.5 and
6.5) with the satisfaction factor and two lifestyle factors, namely work activities and communication
(Table 3). Respondents showed weak agreement for the remaining two lifestyle factors, cost and life
activities. Respondents showed interest (scores greater than 3.5) in future technologies such as
higher speed lines, unlimited bandwidth with no shaping, paradigm shift from traditional to IPTV and
high speed wireless connections(Table 4). Respondents were somewhat interested (2.5 to 3.5) in
VoIP and interactive online communication systems.

Table 3: Summary of descriptive statistics for lifestyle and satisfaction factors (items were scaled from
1 being strongly disagree to 7 being strongly agree)
Rank Construct/Items Items Respondents Mean Standard
deviation
1 Work Activities 1 154 5.84 1.4
2 Communication 1 154 5.75 1.5
3 Satisfaction 2 154 5.67 1.5
4 Costs 1 154 5.30 1.7
5 Life Activities 1 154 4.89 1.8
Table 4: Summary of descriptive statistics for interest in future technologies (items were scaled from 1
being not at all to 4 being very interested)
Rank Construct/Items Items Respondents Mean Standard
deviation
1 Higher speed lines 1 154 3.97 0.2
2 Unlimited bandwidth no shaping 1 154 3.95 0.3
3 Paradigm shift from traditional TV to 1 154 3.57
0.8
IPTV
4 High speed wireless 1 154 3.56 0.8
5 Voice over IP 1 154 3.37 0.9
6 Interactive online communication 1 154 3.23
1.0
systems
8.1 Hypothesis testing

The aim of the testing was to determine whether the UD patterns of consumers are able to predict the
impact that broadband has on consumers lives. A Reliability Test (Cronbach Alpha) and Confirmatory
Factor Analysis was used to validate the multi-item satisfaction construct. The Cronbach Alpha for
both items yielded an alpha of 0.60 and loaded highly on component 1 with coefficients 0.83. Due to
having moderate alpha and high loadings, both items were kept. To test whether the data collected
was normally distributed; the Kolmogorov-Smirnov and Shapiro-Wilk tests were performed. Results
showed that data was not normal and non-parametric tests were deemed appropriate. The non-
parametric Spearman’s Rho (rs) test was deemed appropriate as it determines whether there is a
relationship between the use diffusion patterns which are nominal (categorical) in nature and are
made up of two categories (rate of use and variety of use) and the impact variables (the dependent
variables) which are also ordinal in nature. The dependant variables included the four lifestyle factors,
satisfaction and the six interests in future technology factors.
Four (H2, H4, H5 and H6) of the six hypotheses were partially supported by the data that explained
broadband's impact on consumer’s lives (Figure 6). The hypotheses that were partially supported
were due to the data either only supporting a consumer’s rate of use or variety of use. The supported
results are listed below.
 Since variety of use has a significant relationship with consumers saving time and hence being
able to commence with other life activities, the lifestyle impact hypothesis H2 is partially accepted.
 The lifestyle impact hypothesis H4 is partially accepted due to users having a high rate of use
performing work related activities at home using their broadband subscription.
 Since there is a significant relationship between a consumer’s rate of use and satisfaction with
their broadband subscription, the satisfaction hypothesis H5 is partially accepted.
 Since there is a significant relationship between a consumer’s rate of use and interest in
interactive online communication, higher speed wireless technologies, IPTV, VOIP and unlimited
bandwidth, the hypothesis H6 is partially accepted.
The results show that broadband usage impacted lifestyle, satisfaction and interest in future
technologies. South African consumers perceive that they have a more comfortable lifestyle when
using broadband, are more satisfied and show an interest in future-oriented communication
technologies.

Figure 6: Overall impact of usage and impact factors

These results confirm that broadband consumers are able to have improved access to economic
opportunities as they save time and can work from home. Moreover, in the near future, an increasing
number of people will begin working from home and this may benefit the organisation through cost
savings and the workers time savings providing better convenience and comfort (Dwivedi, 2008).
However in contrast to other studies (Mossberger, Tolber and McNell, 2008), we were not able to
confirm whether the South African broadband consumer is using broadband to access online
education or government services.
Literature states that how consumers make use of technology directly impacts the nature and level of
their perception regarding the technology. In terms of consequences of diffusion, intense users show
a greater degree of satisfaction (Shih & Venkatesh, 2004). The quantitative study showed a significant
relationship between a user’s rate of use and satisfaction with the technology. This shows that
consumers that are specialised and intense users are more satisfied with the technology. This is in
line with the qualitative findings that suggested that consumers who use the technology more for a
number of tasks and longer time are more satisfied with the technology
Literature states that intense use diffusion pattern will result in the highest level of interest in acquiring
futuristic-oriented technologies, followed by experimental use. In addition, adopters with higher levels
of use-diffusion are also more interested in adopting future technologies (Shih & Venkatesh, 2004).
This study confirmed this with the strongest interest being shown for interactive online communication.
This indicates that South African consumers are communication orientated. Since this study many of
the future technologies, such as VOIP have had a strong uptake in South Africa, confirming the
interest shown in this study (Reed, 2011). The exception is IPTV which has had a slow due to a lack
of sufficient broadband and infrastructure. (Shibeshi, Terzoli and Bradshaw, 2011).
9. Conclusion
This research adds to the existing literature on broadband usage and impact and proposes and
validates a model relevant to the South African context. The research built on the literature to further
the understanding and successes of broadband use and its impact in residential households. The
study extends the Shih and Venkatesh (2004) model of use diffusion that analysed post-adoption
factors to determine broadband usage and impact. The Shih and Venkatesh (2004) study was based
on semi-structured interviews. Their study recommended that researchers go one step further and
employ a survey research for validating the diffusion model. This study not only responded to their call
but also used interview analysis to inductively extend their proposed model. Although the constructs
utilised in this study were adapted from prior models, the survey questionnaire to study broadband
diffusion had not been developed or validated and this instrument therefore also contributions to
scientific practice in the field (Straus et al., 2004) and can be used by further studies. Theoretical
contributions can also be attributed to the utilisation of theoretical constructs such as the rate and
variety of use of technologies that examine the usage patterns of broadband consumers. This study
essentially addressed limitations of previous studies. Firstly, past studies lacked theoretical
underpinnings as they were data driven and exploratory in nature (Dwivedi, 2008). Secondly, the
Choudrie and Dwivedi (2004a, b) and Dwivedi (2008) studies only adapted usage constructs from the
use diffusion model to examine the differences in use between broadband and narrowband users. In
contrast, this study included the use diffusion model as a separate phase within the diffusion process

in order to examine the usage behaviour of consumers after they had adopted the technology. Due to
time constraints a cross-sectional study was performed. It is therefore recommended that for future
research a longitudinal study be performed. As a result, limitations to fully study the impact of
broadband would be overcome. In particular the feedback loop which was out of scope of this
research study. In addition, longitudinal research will also help in identifying in greater detail the actual
usage habits of broadband users over time.
From a practical viewpoint this research provided an analysis into the usage of broadband in
residential households that may be beneficial for various stakeholders such as government, Internet
Service Providers (ISP), business consumers and public organisations. The categorising of adopters
into the four use-diffusion categories provides an effective way to segment markets for high-tech
products. South African consumers were still found to be experimental users.
Over the years the impact of broadband has become a very broad area of research, while much
research has been done to look at the economic effects of broadband usage, this study looks at the
impact on individuals. Broadband use was shown to enable working from home and resulted in
increases in time saving; confirming previous studies on digital citizenship. However future research
to assess whether consumers are starting to access online education and online government services
would be valuable. There is also a need to research specific areas such as new communication
applications and downloads and entertainment, in order to determine the real impact of broadband.
Moreover, other specific areas such as the diffusion and sustainability of broadband technology,
family and work life, social networks and online security and privacy will need to be explored.
Due to a high mobile phone penetration rate in South Africa, there are large number of people who
are accessing mobile broadband data services in the rural areas of South Africa. These users may not
have the same income and education levels as the sample of this study. As such, future research may
be deemed important to investigate the use of mobile broadband data services in more rural parts of
South Africa.
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Usability Evaluation of a Medium-sized ERP System in Higher
Education
Brenda Scholtz, André Calitz and Charmain Cilliers
Nelson Mandela Metropolitan University, Port Elizabeth, South Africa
brenda.scholtz@nmmu.ac.za
andre.calitz@nmmu.ac.za
charmain.cilliers@nmmu.ac.za
Abstract: The critical importance of Enterprise Resource Planning (ERP) systems in modern
business has created a demand for ERP consultants with the appropriate competencies to implement,
maintain and support these systems. Education and training programmes have been implemented in
order to provide ERP specialists and graduates with the required industry relevant ERP
competencies. The majority of these education and training programmes utilise large ERP systems for
instructional purposes, however users of these systems encounter usability issues whilst learning to
use the systems. The use of medium-sized ERP systems has been proposed for educational
purposes as they are less complex and easier to learn than large ERP systems. Empirical studies on
the usability of ERP systems, particularly for medium-sized ERP systems are limited. This paper
reports on empirical research on the usability evaluation of a medium-sized ERP system. The study
identified three categories of criteria and 10 criteria which can be used for usability evaluations of
medium-sized ERP systems. The criteria were used in a case study to evaluate the usability of a
medium-sized ERP system and to obtain qualitative feedback on the usability of the system. The most
frequently reported positive usability features of the ERP system were the tree-structure of the menus
and the grouping of logically related items. Negative features which were reported included the clutter
of the user interface and difficulties with finding information and controls. These results can provide
valuable insight into the ERP learning process for university educators and researchers. The usability
evaluation results can assist ERP designers with improving ERP usability, which can improve the
quality of ERP training and education programmes and ultimately ERP project success. The usability
evaluation results provide considerable insight into the usability problems encountered by students
when learning to use ERP systems in their university courses and provide a valuable contribution to
usability theory and in particular frustration theory.
Keywords: ERP usability, learning ERP; navigation of ERP systems; ERP education; ERP system
evaluation
1. Introduction
An Enterprise Resource Planning (ERP) system is defined as ‘a highly unified, consolidated and
reliable network of business systems, built on a single integrated platform’ (Vaman, 2007). The
removal of barriers to sharing information between functional divisions and the holistic management
of processes have enabled ERP systems to increase the operational processes, profitability and
productivity of organisations (Magal and Word, 2012; McGauhey and Gunasekaran, 2007). In spite of
the economic recession over recent years, ERP systems are dominant in the marketplace and this
trend is expected to continue (Forrester, 2011). Small to medium enterprises (SME) have
implemented ERP systems and vendors have introduced less complex, medium-sized ERP systems
such as Sage, SYSPRO and Softline Accpac, to suit the requirements of these organisations. Large
ERP systems are often too sophisticated and complex for smaller organisations, although vendors
such as SAP and Microsoft have introduced new or scaled down versions aimed specifically at the
SME market (Winkelmann and Matzner, 2010).
ERP implementation success can be affected by the level of appropriate specialised competencies
within the ERP project team (Ifinedo and Nahar, 2009; Rothenberger et al., 2010). Organisations that
recruit ERP specialists require graduates who have industry-relevant ERP competencies. The ERP
competencies related to the various ERP systems must be acquired by ERP specialists and
graduates of undergraduate Information Systems (IS) degrees, in order to implement and support
business applications (Boyle and Peslak, 2010; Scholtz et al., 2011). An increased demand for ERP
specialists with the appropriate competencies exists internationally (Beer, 2010; Law et al., 2010;
Ngai et al., 2008) and in South Africa (Scholtz et al., 2011; Seymour et al., 2006).

Reference this paper as: Brenda Scholtz, André Calitz and Charmain Cilliers, “Usability Evaluation of a Medium-
sized ERP System in Higher Education” The Electronic Journal Information Systems Evaluation Volume 16 Issue
2 2013, (148-161) , available online at www.ejise.com
In response to the demand for ERP specialists, several ERP training and education programmes
have been developed which incorporate ERP systems for instructional purposes (Hustad and Olsen,
2011; Seethamraju, 2007; Surendran and Somarajan, 2006). However, the practical use of the ERP
systems in these educational programmes is often accompanied with students experiencing learning
difficulties when learning to use these complex ERP systems (Seethamraju, 2007; Theling and Loos,
2005) which are not designed to support teaching (Shtub, 2001). Surendran and Somarajan (2006)
reported that the adoption of an ERP system in the curricula in higher education improved student
competencies but the ease of use of the ERP system was rated poorly by the students. Another study
by Seethamraju (2007) showed that students had an improvement in transactional competencies but
struggled to understand the underlying business process flow of the ERP system tasks due to the
complexity of the user interface. Studies into the usability of ERP systems used by students in higher
education can improve the usability of these tools.
Several studies in industry have revealed that the complexity of ERP systems has resulted in user
interfaces (UIs) which suffer from poor usability (Singh and Wesson, 2009; Yeh, 2006) and user
frustration (Matthews, 2008; Topi et al., 2005). The poor usability makes it difficult for users to interact
with the ERP system and to complete required tasks, which further impacts the time taken to learn the
system (Topi et al., 2005). Usability problems with ERP systems, similar to those reported in industry,
have also been encountered by training and education institutions (Surendran and Somarajan, 2006).
The learning curve for students is usually steep as students have to master the many menu paths
within a single ERP system (Theling and Loos, 2005). Studies of ERP system adoptions in higher
education programmes have reported that medium-sized ERP systems are less complex and easier
to use than large ERP systems (Hustad and Olsen, 2011; Winkelman and Matzner, 2010). However
these studies have been largely qualitative.
The potential benefits of ERP systems for organisations can be increased by improving the usability of
ERP systems which can, in turn, reduce the length of the training time and increase employee user
satisfaction (Topi et al., 2005). Continued research into the improvement of ERP system’s usability is
required in order to provide user interfaces for ERP systems which are easy to use, easy to learn and
support the user’s tasks. In particular field studies which focus on users’ perceptions of ERP systems
are required which can improve the understanding of the factors that affect usability. Research into
improving the usability of ERP systems in education is required in order to address the complexity and
learning curve problems of ERP systems.
Usability evaluation is any analysis or empirical study of the usability of a prototype or system (Foltz et
al., 2008). Several studies (Costa, 2010; Singh and Wesson, 2008; Van Norren, 2009) have proposed
usability criteria which can be used for usability evaluations of ERP systems. However all of these
studies have taken place in industry and not in a higher education environment. The level of
experience of an undergraduate student is not the same as a person in industry, therefore their
perceptions of usability may differ. Existing studies of ERP adoption in the IS curricula are focused
primarily on the pedagogical aspects and have not explored the usability or ease of use of the ERP
system. Empirical research relating to the ease of use or usability of ERP systems is required (Topi et
al., 2005), particularly with regards to the evaluation of the ease of use of medium-sized ERP systems
in educational environments (Hustad and Olsen, 2011).
This paper investigates how IS students experience the usability of a medium-sized ERP system
which forms part of an IS educational program. The investigation aims to propose a set of usability
criteria for evaluating the usability of ERP systems used for instructional purposes and to report on the
usability evaluation of a medium-sized ERP system using these criteria. The usability criteria are
intended to support the identification and classification of usability issues that occur while learning to
use ERP systems in higher education. This paper will contribute to the improvement of the usability of
ERP systems for students who need to use these systems as part of their undergraduate IS courses.
The investigation aims to address the following research questions:
1. What usability criteria and heuristics can be used to evaluate the usability of a medium-sized
ERP system during the learning process?
2. How do students rate the usability of a medium-sized ERP system whilst learning to use it?
3. What features of the user interface of a medium-sized ERP system do students like the least
and which features do they like the most?

This paper is structured as follows: Section 2 will discuss ERP systems and ERP usability criteria and
heuristics used in usability evaluations. Section 3 will explain the research methodology adopted and
the participants involved in the study. The results of the study are presented in Section 4 while
Section 5 analyses and discusses the findings. Conclusions and recommendations are made in
Section 6.
2. Usability criteria for ERP systems used in the learning process
In the late 1990s, many organisations that had not previously adopted ERP systems became
motivated to do so because of the Y2k problem and the introduction of the Surbanes-Oxley Act in
2002 (Vaman, 2007). The Surbanes-Oxley Act legislates that top management are now liable for
certifying the accuracy of financial information (Monk and Wagner, 2009). Several reports have cited
the growing dominance of ERP systems in the business, academic and medical community
(McGauhey and Gunasekaran, 2007; Mohamed and McLaren, 2009). Even small to medium-sized
organisations have implemented ERP systems (Esteves, 2009; Koh et al., 2009). Despite the current
economic and business climate, there is still a positive forecast for the ERP market and according to a
report from Forrester, the global ERP system market will increase to $50.3bn by 2015 (Forrester,
2011).
Shaul (2005) proposes that an ERP system can be classified according to the size of the organisation
that it is designed to support. There are four tiers in this classification with Tier 1, the Enterprise level,
addressing the needs of the largest organisations with incomes of over $200 million (Figure 1). Tier 1
ERP systems include SAP, Oracle, Microsoft and SageERP (SYSPRO, 2010). Vendors have also
introduced medium-sized ERP systems which are specifically designed for organisations in Tier 2
(upper mid-market) and Tier 3 (lower mid-market). Organisations in Tier 2 are usually in the $20
million to $200 million income bracket and ERP systems in this tier include those in Tier 1 as well as
SYSPRO, Softline ACCPAC, SAP Business All-In-One and others. Tier 3 software is designed for
single site organisations of under $40 million income and with five to 30 users. ERP systems for small
to medium organisations are classified as Tier 4 software which are comprised of basic accounting
systems such as Pastel, Accpac and Quickbooks.
.
Figure 1: ERP Systems by Tier (SYSPRO, 2010) {Figure not referred to in the text?}
The global demand for ERP systems has increased the demand for ERP competencies and several
IS education programmes have adopted the hands-on use of ERP systems for instructional purposes
with successful results (Hustad and Olsen, 2011; Wang et al., 2009). Surendran and Somarajan
(2006) report that the market value of students increases when exposed to an ERP system that has a
high market share. A large percentage of studies exposing students to the hands-on use of an ERP
system, reported an improvement in knowledge by the students and positive learning outcomes
(Surendran and Somarajan, 2006; Wang et al., 2009; Winkelmann and Leyh, 2010). However, the
adoption of ERP systems in education programmes is often hindered by the poor usability of complex
ERP systems (Surendran and Somarajan, 2006).

Several studies on the use of ERP systems in industry, report on their poor usability (Singh and
Wesson, 2009; Yeh, 2006) and difficulties with learning to use these systems (Topi et al., 2005).
Similar findings are reported in higher education, where students find that ERP systems are a
challenge to learn and the complexities of the UI often force them to focus on the completion of the
tasks without understanding how the tasks contribute to the underlying business concepts (Wang et
al., 2009; Winkelmann and Leyh, 2010).
Working with medium-sized ERP systems that are less complex than large scale systems such as
SAP can still provide students with an understanding of the basic capability of an ERP system (Ask et
al., 2008; Hustad and Olsen, 2011; Winkelmann and Leyh, 2010). This alleviates the problem of
student frustration encountered while learning the ERP system (Scott and Walczak 2009). The Hustad
and Olsen (2011) study reported that students were more satisfied with the lower learning curve of the
Microsoft Navision ERP laboratory assignments compared to the assignments on the large, complex
SAP system. Microsoft Navision is a Tier 2 ERP system and therefore classified as a medium-sized
ERP system.
The usability of a system has been defined by the International Organisation for Standardisation (ISO)
as the “extent to which a product can be used by specified users to achieve specified goals with
effectiveness, efficiency and satisfaction in a specified context of use” (ISO, 1997). This standard
identifies the three criteria of usability as the effectiveness, efficiency and satisfaction with which users
within the organisation are able to accomplish their task before selecting a final solution. Nielsen
(1993) describes usability as: “the quality attribute that assesses how easy user interfaces are to use”.
According to Nielsen (1993) the components (or criteria) of usability are learnability, efficiency,
memorability, errors and satisfaction.
Studies of ERP system usability evaluations propose several usability criteria which can be used in
the evaluation process (Costa, 2010; Van Norren, 2009). Usability criteria can be used to analyse the
user experience and can help reveal patterns that may be hard or even impossible to see (Tullis and
Albert, 2008). A usability criterion can be converted into several related heuristics which are
guidelines or general principles that can guide a UI design decision or that can be used to evaluate a
decision that has already been made (Nielsen, 1993). A literature review of studies of usability
evaluations was undertaken with particular reference to ERP system usability evaluations and the
criteria and heuristics used for these evaluations. Three criteria for testing the usability of open-source
ERP systems in industry were proposed by Costa (2010) are the three proposed by ISO (1997)
namely: effectiveness, efficiency and satisfaction. In another study of ERP systems usability in
industry, Van Norren (2009) used the criteria of learnability, efficiency, memorability, errors and
satisfaction; however the focus of this study was on cultural differences with regards to usability.
A study by Singh and Wesson (2009) identified existing usability issues with a medium-sized ERP
system, SAP Business One, by means of a heuristic evaluation using five categories of criteria,
namely: navigation, presentation, task support, learnability and customisation. The Singh and Wesson
(2009) study was the only study found which proposed and validated usability criteria for medium-
sized ERP systems, and each of the five criteria recommended in this study is supported by several
other studies. Navigation has been reported as a primary design issue in several other ERP usability
studies (Calisir and Calisir, 2004; Mathews, 2008; Surendran and Somarajan, 2006; Topi et al., 2005),
besides the Singh and Wesson (2009) study and can therefore confidently be used as a criterion for
evaluating the usability of ERP systems. Navigation problems have been identified as one of the main
barriers that prevent ERP systems from delivering their potential benefits to organisations (Matthews,
2008). The criterion of Navigation and Access to Information and its related heuristics aim to
determine the ability to identify and access appropriate information, menus, reports, options and
elements accurately and effectively. Presentation of Screen and Output, and its related heuristics aim
to determine the appropriateness of the layout of the ERP system menus, dialogue boxes, controls
and information on the screen for data entry and output generation (Singh and Wesson, 2009). Issues
identified in usability studies of ERP systems relating to presentation include problems with the
complexity of the screen display and problems in understanding and interpreting output from the ERP
system (Costa, 2010; Singh and Wesson, 2009; Topi et al., 2005; Wang et al., 2009; Winkelmann and
Leyh, 2010). The presentation criterion for ERP systems include consideration of how well the visual
layout is designed.

Learnability is the criterion used to determine the degree of effort required to learn how to use the
system efficiently and effectively (Nielsen, 1993; Preece et al., 2006) and can be used as one criterion
to evaluate ERP system usability (Singh and Wesson, 2009; Wang et al., 2009; Winkelmann and
Leyh, 2010). Learnability is one of the most important criteria of usability and refers to the capability of
the system to enable the user to learn to use the application (Nielsen,1993). Customisation relates to
the ability of the ERP system to be customised according to the specific needs of an organisation
(Singh and Wesson, 2009). Customisability is a measure of the extent which the system can be
adapted, either by the user or by the system. Appropriateness of Task Support aims to establish if
there is an accurate alignment between the system and the real world, in order to ensure effective
task support and efficient task completion (Singh and Wesson 2009).
The results of the literature review as well as an analysis of the five criteria proposed by Singh and
Wesson (2009) revealed that three of these criteria are most suited for evaluating the usability of ERP
systems used for instructional purposes in introductory ERP courses, namely navigation, presentation
and learnability (Table 1). These three criteria were validated in the highest number of related studies
in similar environments. A further motivation for eliminating the criterion of task support was due to
the fact that the tasks performed by the students are prescribed by the instructor and are therefore
mandatory. In addition students are novices in terms of business task knowledge so are not qualified
to rate the system in terms of task support. Since customisation tasks are generally not included in
introductory ERP education programmes, the criterion of customisation is also not required for
evaluating ERP systems in education
Table 1: ERP Usability Criteria (Adapted from Singh and Wesson, 2009)
NAVIGATION
Navigation and Access to Information
Information can be easily accessed
Functionality can be found quickly and easily
The user interface supports efficient and accurate navigation of the system
There is a correlation between the searched item and the required item.
PRESENTATION
Presentation of Screen and Output
The visual layout is well designed

The information provided by the system is timely, accurate, complete and understandable
The layout of menus, dialog boxes and controls are easy to understand and interpret and are well structured
LEARNABILITY
Degree of ease to learn how to use the system effectively
A user can learn how to use the system without a long introduction
The various functions of the system can be identified by exploration
There is sufficient on-line help to support the learning process
3. Research context and methodology

The use of a combined case study and survey strategy was used to address the research questions
listed in Section 1. The survey strategy was used by administering usability questionnaires to the
students in order to gain empirical feedback. The case study strategy can penetrate situations in ways
that are not always susceptible to numerical analysis and provide analytic rather than statistical
generalisation (Benbasat et al., 1987). A case study strategy is particularly well-suited to IS research
(Benbasat et al., 1987; Lee, 1989) and can be a useful tool for gathering requirements, evaluating
interfaces and understanding how users complete tasks (Benbasat et al., 1987). Case studies often
rely on multiple data sources and collection techniques to act as sources of corroborating evidence
which can increase confidence in the data (Yin, 2003). Qualitative data and data analysis are usually
emphasised in case studies and the focus is primarily on questions that help describe or explain
behaviour and have considerable ability to generate answers to the ‘Why?’, as well as the ‘What?’
and the ‘How?’ questions. This makes it suitable for this study where the research questions relate to
“What features of the user interface do students like/dislike? (RQ3 )”, “Why do students have
problems with the usability of ERP systems?” and “How do students rate the usability of an ERP
system? (RQ2)”. The answers to the research questions are not purely quantitative values. The case

study strategy is therefore a suitable strategy to use for this study where the objective is to evaluate
the usability of a medium-sized ERP system and in particular to identify the features (positive and
negative) of the UI of a medium-sized ERP system.
A single case study approach was used for this research and the case study selected is the Nelson
Mandela Metropolitan University (NMMU) in South Africa, where a Management Information Systems
(MIS) course aims to establish a sound theoretical knowledge of management information systems
and ERP systems, as well as the attainment of transactional competency of ERP systems. The three
core competencies addressed in the ERP section of the MIS course are Business Process
Management (BPM); ERP Theory and Concepts and ERP Transactions. The ERP system which was
adopted into the course for instructional purposes was the medium-sized ERP system, SYSPRO,
which has been identified as one of the best ERP solutions in the Tier 3 category (Kristine, 2011).
Students in the MIS course are required to attend three lectures and four practical sessions where
they perform hands on tasks on the SYSPRO ERP system (Table 2). The practical sessions were one
hour long and took place once a week for three weeks. Four usability questionnaires (P1 – P4) were
administered to participants, one at the end of each practical session in order to obtain quantitative
and qualitative feedback regarding the usability of the SYSPRO ERP system. All four usability
questionnaires comprised of the same set of questions and consisted of two sections. The first section
of the questionnaire required the participant to rate 10 usability criteria on a 5-point Likert scale.
These criteria are grouped into the three usability criteria categories proposed (Table 1), namely:
navigation, presentation and learnability. The second section of the questionnaire included several
open-ended questions, which enabled the users to give feedback on their perceived positive and
negative features of the SYSPRO system.
Table 2: Lectures and Practical Sessions in ERP
Week Lecture Competency Practic Research Instrument
al (Usability
Sessio Questionnaire)
n
Week 1 Lecture 1 ERP Theory and Concepts Prac 1 P1
Week 2 Lecture 2 Business Process Prac 2 P2
Week 3 Lecture 3 ERP Transactions Prac 3 P3
Prac 4 P4
Face validity of the questionnaire was established since the questions were derived from and agreed
on by literature, whilst content validity was confirmed by means of a pilot test where the research
instruments were refined. Cronbach’s alpha coefficients for the summated scores derived from the
four usability questionnaires (P1 – P4) were calculated (Appendix A). Nine of the 10 criteria were
within the acceptable range for Cronbach’s alpha which means the internal consistency is high
(Nunnally, 1978). Learnability in the usability questionnaires P1 ( = 0.55) and P2 ( = 0.6) obtained
values in the range 0.50 to 0.69, the interval deemed acceptable in the early stages of basic research.
The only item which had a low Cronbach’s alpha was presentation in P1 ( = 0.45). The related
results should therefore be treated with caution. One sample t tests were performed (Rosenthal and
Rosnow, 2008) on the usability ratings in order to calculate the significance of positive or negative
scores, where the following interval ranges apply: Negative = [1 to 2.6); Neutral = [2.6 – 3.4]; and
Positive = (3.4 – 5].
The research study, abided with the procedures of the Research Ethics Committee (Human) of the
NMMU and ethical approval for this study was awarded by the NMMU Ethics Committee. In line with
this, the researchers made explicit to the student participants that their interests would be
safeguarded and that they would remain anonymous. The cohort of MIS students that consented to
participate (n = 36) was a convenience sample and are representative of students that typically enrol
in the course every year. The MIS course is a core module in a 3 year undergraduate IS degree. All
the students are full time students with no industry experience. The data for 8% of participants (n = 3)
was eliminated due to missing values, resulting in a sample size of 33 which could be used for
analysis. The majority of participants (79%) fall in the age group 21 to 25 years and are female (Table
3). The fact that the majority of students in the sample were female could be considered as a possible
limitation due to potential gender bias.

Table 3: Participant Profile

n %
Male 7 21
Gender Female 26 79
TOTAL 33 100
<21 3 9
21-25 26 79
Age
>25 4 12
TOTAL 33 100
4. Results
The analysis of the quantitative data (Section 4.1) revealed that participants viewed the usability of
SYSPRO positively. A qualitative data analysis provided more in depth, rich content regarding the
types of features which participants liked and disliked (Section 4.2).
5. Quantitative results
Six of the 10 usability criteria were rated in the neutral range, four were in the positive range and none
were in the negative range (Appendix B), where the following interval ranges apply: Negative = [1 to
2.6); Neutral = [2.6 – 3.4] and Positive = (3.4 – 5]. A one-sample t test was performed on the four
positive usability criteria to determine if they were significantly positive (Table 4). The highest rated
criteria was ‘There is a correlation between the searched item and the required item’ ( = 3.83), and
the second highest was ‘Information provided by the system is timely, accurate, complete and
understandable’ ( = 3.75). These were the only two significantly positive rated criteria (where p <=
0.01) and are indicated in red in Table 4.
Considering the overall usability ratings for all four practical sessions (Figure 2), presentation had the
highest score ( = 3.51), with navigation second ( = 3.44) and learnability lowest ( = 3.33).
Presentation and navigation both had scores in the positive range, whilst the learnability score was in
the neutral range.
Table 4: Positive Usability Criteria for SYSPRO
Usability Criteria Mean t d.f. p-value
NAVIGATION
There is a correlation between the searched item and the required item. 3.83 3.37 25 .002
PRESENTATION
Information provided by the system is timely, accurate, complete and
3.75 3.24 25 .003
understandable.
The layout of menus, dialog boxes, controls are easy to understand,

3.50 0.93 25 .363
interpret and are well structured.
LEARNABILITY
The various functions of the system can be identified by exploration. 3.42 0.13 26 .898
6. Qualitative results
Qualitative data analysis of the open-ended responses from the usability questionnaires, was
performed using content analysis whereby the text is categorised or coded into themes or categories
(Kolbe and Burnett, 1991). The text responses were analysed and coded according to themes where
the three usability criteria were used as pre-existing (apriori) themes. Within these existing themes,
content was analysed again and in more detail, coded and then similar codes were grouped into sub-
themes. The number of responses per theme was then calculated in order to determine the highest
and lowest frequencies within a theme. The responses related to the question regarding the features
most liked were coded as “positive” responses (Section 4.2.1), whereas the responses to the question
regarding the features least liked were classified as “negative” responses (Section 4.2.2). .

Positive
Figure 2: Mean Plot of Overall Usability for all Practical Sessions

7. Positive qualitative responses
The usability criterion which had the highest frequency of related positive responses was navigation.
The most frequently rated features identified by the participants related to SYSPRO’s main menu
design and structure. The tree structure was cited by several participants as a positive feature which
enabled easy navigation and drill down. One participant stated that ‘The tree view menu let’s you drill
down to specific information very quickly’, whilst another participant liked ‘The tree view on the left. It
shows the programs that are used often (because of recently used items)’.
Users also liked the general structure of the menu which enabled easy navigation and some
examples of responses which related to this theme are:
 The menu structure is logically laid out and easy to navigate;
 All options (Accounts Payable, Accounts Receivable) are grouped into folders and tree structures,
making navigation of the companies accounting records easy to obtain.
The usability criterion with the second highest count of responses for positive features was
presentation. One aspect of presentation which the users liked was the layout of the SYSPRO
interface. Several participants liked the logical layout and grouping of information and how structured
various parts of the user interface are. One user reported that ‘All information is grouped according to
orders, suppliers and customer information, instead of having it all together.’
The ability to hide information that is not being used was also reported as a positive feature in the
presentation theme. Another user expressed this as follows, ‘Information can be hidden or visible and
as such if I don’t want to see it but don’t want to close it I can just hide it’. Another aspect of the
presentation criterion cited by participants is the attractiveness of the interface. The concept of
attractiveness is similar to the concept of aesthetic and minimalist design identified by Nielsen (1994),
a key criterion for UI design.
In the learnability theme, several users reported that they found SYSPRO’s user interface familiar and
similar to the Microsoft interface and that this assisted them with learning SYSPRO. One user stated
that ‘Menu bars and menu items are easy to understand. They are similar to other familiar
applications' menus’. Familiarity is a factor of learnability and is the extent to which a user’s
knowledge and experience in other real-world or computer-based domains can be applied when
interacting with a new system (Compeau and Higgins, 1995).

8. Negative qualitative responses

Participants were asked to identify and describe one feature of SYSPRO that they liked the least.
These are referred to as negative responses. The highest frequency of negative responses was
related to the presentation criterion. Some participants expressed their difficulties with the cluttered UI
and too many open windows, and some example comments in this theme are:
 Too many windows, every action performed seems to open another window;
 The way the windows seem to overlap. Creates a cluttering sense of being lost;
 Every time I had to cancel what I had opened I found that irritating as I could have many pages
open.
One participant stated that ‘For a first time user, the amount of menu/windows can be overwhelming.
Creating an introductory interface for first time users would assist the learning curve.’ Some
participants struggled to focus on more than one activity (screen, function, option), and reported
confusion as a result of too many open windows, features and open tabs. As stated by one
participant, ‘The main window gets cluttered with all the open tabs. That will make a novice user of
this program very confused’.The second most frequent negative feature was related to navigation and
in particular consisted of problems with the hidden controls in SYSPRO such as the tabs and
scrollbar, which sometimes caused confusion of the users. Several participants struggled to find the
relevant data, functions and controls, for example scrollbars, in screens such as the purchase order
screen (Figure 3). Comments included:
 Hard to find something right in front of you;
 Can't always see the scrollbars;
 Having certain functions of the system hidden from the user, upon clicking they will appear, i.e.
the automatic hide tabs;
 The tabs although useful for navigation sometimes, cause confusion when looking for specific
information;
 The toolbar on the right side which is hidden when not used, I preferred it pinned.
Scroll bars
Tabs
Figure 3: SYSPRO Purchase Order Entry Screenshot

Several problems related to the learnability criterion were reported, specifically to the lack of guidance
provided by the system. One participant stated, ‘Difficult to determine where to go and what to do the
first time I used the system’.
9. ERP design guidelines
The results of the usability evaluation of the medium-sized ERP system, Syspro, revealed that overall
the aggregated quantitative usability criteria of presentation and navigation were rated positively.
Learnability was the lowest criteria, but was still not rated negatively as the mean ratings were in the
neutral range. However this could be improved so system developers and designers need to consider
improving the learnability of ERP systems when designing them for instructional purposes. The
highest rated issue related to the finding of required items which suggests that it is critical to consider
this criteria and related heuristics when designing the UI of an ERP system.
Several qualitative negative responses related to the lack of guidance provided by SYSPRO were
received which confirmed findings of a related study reporting that an introductory interface should be
provided by an ERP system to cater for novice users learning to use the system (Topi et al., 2005),
and that an ERP system should provide guidance for novice users in order to improve navigation
(Surendran and Somarajan, 2006).
The most popular features of SYSPRO related to navigation and the main menu design and structure.
The tree structure of SYSPRO’s menu and its drill down feature was cited by several participants as a
positive feature which enabled easy navigation. This confirms the principle that user interfaces should
provide a tree view menu that enables drilling down to specific information very quickly (Shneiderman
and Plaisant, 2005). A tree structure is recommended when a collection of menu items grows and
becomes difficult to maintain under intellectual control. Designers of ERP systems should take into
account the principle that broad and shallow menu structures should be provided, rather than narrow
and deep ones (Norman and Chin, 1988).
The additional frequently cited positive features related to the presentation and layout of the SYSPRO
interface, specifically the menu and the grouping of information. The familiarity of the SYSPRO
interface was also identified as a feature that the participants viewed positively. This supports findings
of related studies (Galitz, 2007; Hustad and Olsen, 2011; Koh et al., 2009) stating that ERP systems
that employ familiar concepts and use a language that is familiar to the user can improve the ease of
learning. It can be deduced that these principles should be incorporated into the design of ERP
systems used for instructional purposes.
The most frequently cited negative features of SYSPRO related to the presentation criterion and was
connected to the cluttered UI as a result of too many menus and windows which caused confusion.
This confirms Shneiderman and Plaisant’s (2005) theory that the incorrect use of tree structures in
menus can occasionally lead to confusion or disagreement. The reported experience of confusion by
users of ERP systems has not been identified by any previously related studies of ERP use in
education, but could however be related to the concept of frustration experienced by ERP users as
reported by Topi et al. (2005). These findings also support other research reporting the problems with
the complexity of the UI and the need to cater for novice users (Topi et al., 2005). This problem could
be avoided by adhering to the user interface design principle of simplicity which states that a dialog
should consist of the minimum and should be natural and logical for the user to use (Nielsen, 1993).
Hidden controls such as scroll bars in several windows in the SYSPRO user interface, was another
frequently reported negative feature. This supports the principle that functionality can be placed in
context-sensitive controls or hidden user interfaces, but that this should not be the only way in which
the function can be invoked (Johnson, 2000). Less visible or hidden methods can be provided, but
these should always be secondary methods, with more visible methods being primary. SYSPRO
designers could therefore investigate other methods of offering the functionality provided by the
hidden controls.
10. Conclusions
The research questions of this paper have been successfully addressed. The results indicate that the
three categories of criteria of navigation, presentation and learnability, together with their related
heuristics, can be used to evaluate medium-sized ERP systems in higher education (RQ1). The
usability of the medium-sized ERP system, SYSPRO was generally rated positively by the students;

therefore the second research question has therefore been answered. Several qualitative feedback
was provided by students in terms of the features they liked they most and those they liked the least,
which provided an in depth analysis of students’ experience of learning to use a medium-sized ERP
system. The third research question relating to the positive and negative features of SYSPRO
encountered by users while using a medium-sized ERP system have thus been successfully
addressed.
The results show that medium-sized ERP systems can be successfully used in education; however
their usability can still be improved further The findings confirm other related studies reporting the
importance of navigation in ERP systems used in industry and in education. Whilst several navigation
problems were encountered, there were also several aspects of the user interface which the students
liked, such as the tree view and menu structure. Several students cited ‘confusion’ due to the
complexity of windows. The importance of using a system that is familiar was also reported. Therefore
several practical, key contributions have been made in this paper for designers of ERP systems. ERP
designers should take into account the results of the analysis of the usability related responses in
order to assist them when designing an ERP system which is intended for instructional use. The
reviewing case study results reported in this paper has provided issues relating to the usability of ERP
systems that might be of interest to a wide range of users and technology experts. Several design
guidelines for ERP systems for instructional purposes were provided (Section 5). The most important
guideline relates to providing guidance for novice students and the need for an introductory interface.
Other guidelines proposed relate to the use of familiar interfaces, languages and concepts; the use of
broad and shallow menu structures; the use of hidden controls as secondary methods and the
avoidance of clutter and complexity in ERP UIs. The contributions can therefore facilitate the
improvement of the usability of ERP systems. ERP educators can also benefit from the results
presented in this paper by taking into account the proposed criteria and guidelines when planning
which ERP system to use and when evaluating potential systems. In addition they should consider the
benefits of implementing a medium-sized ERP system which may be less complex than a large ERP
system.
The insights provided by this case study provide important contributions to Human Computer
Interaction (HCI) researchers, ERP researchers and other researchers and can assist with a deeper
understanding of other similar cases or situations. The use of mixed methods data analysis using both
quantitative and qualitative data analysis in a case study strategy provided insight into understanding
how users complete tasks while learning to use an ERP system that would not have been possible
with only a positivistic approach using purely quantitative data analysis.
This study formed part of a larger study which investigated the competencies required for ERP
graduates as well as the different learning approaches. Future research could explore various ERP
system alternatives for ERP educational purposes and do a comparison of the usability of large ERP
systems, medium-sized ERP systems and simulated ERP systems. The results of this study have
highlighted the need for an ERP system used for instructional purposes, which is not as complex as
existing industry ERP systems but can still provide the required competencies. Additional research on
the usability of medium-sized ERP systems is recommended which can explore the design of an ERP
system that can support teaching and provide improved user guidance, especially for novice users.
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Appendix A: Cronbach’s Alpha for the Usability Questionnaires

Practical
Criteria Instrument Cronbach’s Alpha
Session
Prac 1 P1 0.76
Prac 2 P2 0.80
Navigation
Prac 3 P3 0.89
Prac 4 P4 0.87
Prac 1 P1 0.45
Prac 2 P2 0.67
Presentation
Prac 3 P3 0.70
Prac 4 P4 0.86
Prac 1 P1 0.55
Prac 2 P2 0.6
Learnability
Prac 3 P3 0.81
Prac 4 P4 0.91

Appendix B: Descriptive Statistics for the Usability Criteria for all Practical
Sessions
n Mean SD Min Median Max
NAVIGATION
Information can be easily accessed 26 3.28 0.80 0.75 3.50 4.50
Functionality can be found quickly and easily 26 3.23 0.73 1.50 3.38 4.50
The user interface supports efficient and accurate navigation of the

26 3.35 0.66 1.75 3.38 4.50
system
There is a correlation between the searched item and the required +
26 3.83 0.65 2.50 3.75 5.00
item
PRESENTATION
The visual layout is well designed 26 3.25 0.70 1.50 3.25 4.50
Information provided by the system is timely, accurate, complete and

26 + 0.55 2.50 3.75 4.50
understandable 3.75
The layout of menus, dialog boxes, controls are easy to understand,

26 3.50+ 0.55 2.50 3.50 4.50
interpret, and are well structured.
LEARNABILITY
A user can learn how to use the system without a long introduction 27 3.22 0.88 1.75 3.25 4.50
The various functions of the system can be identified by exploration 27 3.42+ 0.80 1.25 3.50 4.50
There is sufficient on-line help to support the learning process 27 3.31 0.63 1.75 3.25 4.50
+
Positive range

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Editorial to Volume 16 Issue 2 of EJISE coming soon

Keywords: Information Technology Department, Strategic Contingency, Resource Dependence, Dysfunctional

2.1 Power of IT Departments

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2.2 Strategic contingency

2.3 Resource dependency and political sources of power

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3.1 Coping with uncertainty

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The use of information technology continues to become increasingly commonplace in society.

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3.3 Centrality in workflow

3.4 Provide resources

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3.5 Affecting decision processes

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3.7 Interrelation of power sources

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4.1 Interrelation of Power Sources

important step is to recognize when these power-gaining activities are occurring.

4.2 Future research

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Keywords: ERP systems, organizational performance, organizational benefits, non-financial

The implementation of an ERP-system in an organization is often accompanied by substantial

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We will focus on ERP-systems as a particularization of ES-systems, which is not uncommon in the

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LOGMSALES= 0 + 1FINHEALTHt + 2PEUt + 3 GOLIVE + t

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Variable Coefficient t-statistic (p-

Constant 16.765 18.857 (.000)

FINHEALTH .056 .512 (.615)

PEU -.026 -.169 (.868)

GOLIVE -.047 -.320 (.753)

Variable Coefficient t-statistic (p-

Constant 17.558 27.679 (.000)

FINHEALTH -.066 -.746 (.467)

PEU -.091 -.588 (.565)

SIC-code Total number of Number of ERP-adopting Number of non-ERP

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Wilcoxon test p-value Mean (median)

Difference in .030 ERP-adopting

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Wilcoxon test p-value Mean (median)

Difference in .001 ERP-adopting

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An alternative view on the relation between ERP-implementations and organizational performance

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Appendix 1: Relevant survey questions

very very don’t

completely substantially disagree agree substantially completely don’t

Perceived environmental uncertainty [Vluggen 2006]

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