Int. J. Production Economics 9

syAn

Hu

ong U

sity ocFaculty of Business Administration, Northeastern University, Shenyang 110004, P.R. China

implemented or are in the process of implementingan ERP system. IDC predicts that ERP software

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Corresponding author. Tel.: +86 021 64482867; fax:

sales in Greater China, comprising China, HongKong, and Taiwan, will grow at an annual rate of

0925-5273/$ - see front matter r 2004 Elsevier B.V. All rights reserved.

doi:10.1016/j.ijpe.2004.09.004

+86 021 62933262.

E-mail address: zhangz27@hotmail.com (Z. Zhang).Keywords: ERP; Business process reengineering; ERP systems implementation; Critical success factors; Case study

1. Introduction

Kumar and Hillegersberg (2000) dened enter-prise resource planning (ERP) systems as cong-urable information systems packages thatintegrate information and information-based pro-cesses within and across-functional areas in anorganization. In information systems (ISs) area,

implementation is dened as the process thatbegins with the managerial decision to install acomputer-based organizational information sys-tem and is complete when the system is operatingas an integral part of the organizations informa-tion system (Burns and Turnipseed, 1991). ERPis probably the most rapidly growing system areain operations today. Thousands of companies haveAvailable online 11 November 2004

Abstract

Enterprise resource planning (ERP) system is one of the most widely accepted choices to obtain competitive

advantage for manufacturing companies. However, the successful implementation rate is low and many rms did not

achieve intended goals in China. This study develops an ERP implementation success framework by adapting the Ives

et al. information systems (ISs) research model and DeLone and McLeans IS success model to identify both critical

success factors and success measures. Qualitative case study research methodology is used to collect data and Atlas/ti

program is used to facilitate data analysis. Discussion is made nally and suggested ERP systems implementation

methodology is given at the end.

r 2004 Elsevier B.V. All rights reserved.Received 1 December 2003; accepted 18 September 2004A framework of ERPsuccess in China:

Zhe Zhanga,, Matthew K.O. Leeb, PeiaSchool of Management, Shanghai Jiao T

bDepartment of Information Systems, City Univer8 (2005) 5680

stems implementationempirical study

anga, Liang Zhangb, Xiaoyuan Huangc

niversity, Shanghai 200052, P.R. China

f Hong Kong, Kowloon, Hong Kong, P.R. China

www.elsevier.com/locate/dsw

Fin

2.

Baca

Umble et al., 2003; Yusuf et al., 2004).

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ction Eco24.2%, up from US $84.5 million in 1998 to US$243.3 million by 2003. According to CCIDReport (2004), ERP sales in Mainland Chinareached US $226.9 million in 2003, and will reachUS $652.8 million in 2008, at an estimated growthrate of 23.5% over the next 5 years. Signicantbenets such as improved customer service, betterproduction scheduling, and reduced manufactur-ing costs can accrue from successful implementa-tion of ERP systems (Ang et al., 1995).However, ERP systems are expensive and time-

consuming, and once ERP systems are implemen-ted, management should evaluate whether it issuccessful. A recent Standish Group report onERP implementation projects reveals that theseprojects were, on average, 178% over budget, took2.5 times as long as intended and delivered only30% of promised benet. Nearly 1000 companiesin China have implemented MRP, MRP II or ERPsystems since 1980. The successful implementationrate is extremely low at only 10% (Zhu and Ma,1999). The large difference of ERP systemsimplementation success rate between Westerncountries and China produces a need of researchto examine generic and unique factors that affectERP implementation success in China sinceforeign ERP vendors have more than 90% ERPmarket share (IDC, 1998) and more than 80% in2000 (http://www.sina.com.cn) in China. Further-more, Chinese culture is quite different fromWestern countries in terms of the four dimensionsof national culture developed by Hofstede (2001)and the dimension of uncertainty avoidance ishighly relevant to ISs implementation. Organiza-tional culture is imbedded within national cultureand it is regarded as the unique factor affectingERP systems implementation success.In Section 2, literatures on both determinants of

ERP systems implementation success and successmeasures including IS literature are reviewed tofacilitate understanding of current research status.The proposed conceptual framework and proposi-tions are developed in Section 3. Section 4introduces the research methodology of multiple-case study. Targeted interviewees and data collec-tion method are described in this chapter. Afterthat, data analysis is conducted in Section 5 and

Z. Zhang et al. / Int. J. Produresearch ndings are discussed in Section 6.(2) Lack of top management support, data accu-racy, and user involvement can attribute tosystem implementation failures (Al-Mashariimplementation unavoidably lack theoretical sup-port (see Appendix A). Thus, in this study ISsliterature is reviewed in an attempt to nd theoriesthat could be adapted to the ERP eld.

2.1. ERP systems implementation literature

Limited studies have been conducted to identifycritical factors affecting ERP systems implementa-tion success with many of them focused on single-case study of how we implemented ERP systemsin our company (Ang et al., 1995; Bingi et al.,1999; Cox and Clark, 1984; Holland and Light,1999; Mandal and Gunasekaran, 2002; Motwaniet al., 2002; Sum et al., 1997; Wilson et al., 1994;Yusuf et al., 2004). Moreover, most studies thathave measured ERP implementation success usedonly one or two surrogates of ERP implementa-tion success (Ang et al., 1994, 1995, 2002; Burnsand Turnipseed, 1991; Malbert et al., 2003; Umbleet al., 2003; Wilson et al., 1994).The literature varies regarding what variables

are required for implementation success or re-sponsible for failure. It suggests that problemswith the implementation of ERP systems occur fora number of reasons. These reasons include:

(1) The need for business process change duringthe implementation of an ERP system isneeded (Al-Mashari et al., 2003; Bingi et al.,1999; Burns and Turnipseed, 1991; Hong andKim, 2002; Malbert et al., 2003; Mandal andGunasekaran, 2002; Motwani et al., 2002;menpubLiterature review

y comparison to ISs research and otherdemic elds, theories on ERP systems imple-tation have been given less attention. Mostlished articles on the eld of ERP systemssum

ally, the study makes a conclusion with amary on the study.

nomics 98 (2005) 5680 57et al., 2003; Ang et al., 1994, 1995, 2002; Bingi

We199adaand

Ation(19ERsatiER200

ERimp(WcorER

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impERam

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ction1982). White et al. (1982) dened successfulP implementation along two dimensions: (1)roved performance and (2) user satisfactionhite, 1984; Yusuf et al., 2004). Predeterminedporate goals were used recently to measureTural.,different from that of Western countries.s for how to dene ERP systems implementa-success, there is no agreed measures. White

84) created ABCD Checklist that classiedP implementations into four categories. Usersfaction is also used to serve as a surrogate forP implementation success (Al-Mashari et al.,3; Ang et al., 1994, 1995, 2002; Burns andnipseed, 1991; Markus et al., 2000; White etexpfarecting the value priorities of the culture instern countries (Kumar and Bjorn-Anderson,0). There is growing evidence that failures topt ERP packages to t different organizationalnational cultures leads to projects that are

ensive and late. Moreover, Chinese culture iset al., 1999; Cox and Clark, 1984; Hong andKim, 2002; Malbert et al., 2003; Sum et al.,1997; Umble et al., 2003; Wilson et al., 1994;Yusuf et al., 2004).

(3) Education and training are frequently under-estimated and are given less time due toschedule pressures, and less understanding ofcross-functional business processes are oftenreported (Al-Mashari et al., 2003; Ang et al.,1994, 1995, 2002; Bingi et al., 1999; Cox andClark, 1984; Malbert et al., 2003; Mandal andGunasekaran, 2002; Sum et al., 1997; Umble etal., 2003; Yusuf et al., 2004).

(4) When adopting an ERP system, there is a needto recognize the unique Asian context con-cerning cultures while the existing businessmodels typically reect Western practices (Al-Mashari et al., 2003; Hong and Kim, 2002;Motwani et al., 2002).

Based on Appendix A, culture factor was givenmore attention only in recent 2 years (Al-Mashariet al., 2003; Hong and Kim, 2002; Motwani et al.,2002; Yusuf et al., 2004) which could be a veryimportant factor when ERP systems developed inWestern countries are implemented in Chinacontext since ERP systems have built-in value biasre

Z. Zhang et al. / Int. J. Produ58P implementation results (Al-Mashari et al.,delivery time and budget, rms may still thinktheir ERP implementation is a success. Whilesystem acceptance and usage are inappropriateonce the use of an ERP system is required. Thus,only user satisfaction, intended business perfor-mance improvements, and predetermined corpo-rate goals could be used as success measures.However, the latter two success measures could becombined into one success measure due to theirERPpreion is not suitable in nowadays ERP systemlementation in that most rms implementedP systems could achieve rough integrationong ERP system modules. Meanwhile, even if

system implementation exceeds contractedmencatal., 2003; Umble et al., 2003; Yusuf et al.,2004).

n the above measures of ERP system imple-tation success, Oliver Whites ABCD Classi-(7)System acceptance and usage (Ang et al., 1994,1995, 2002; Yusuf et al., 2004).Predetermined corporate goals (Al-Mashari et(6)Within budget (Al-Mashari et al., 2003; Hongand Kim, 2002; Malbert et al., 2003).(5)On time (Al-Mashari et al., 2003; Hong andKim, 2002; Malbert et al., 2003).(4)(Burns and Turnipseed, 1991; Wilson et al.,1994).(3)Markus et al., 2000; White et al., 1982; Yusufet al., 2004).Oliver Whites ABCD Classication Scheme2003; Umble et al., 2003; Yusuf et al., 2004).Markus et al. (2000) argue that the denition andmeasurement of ERP success are thorny mattersand success depends on the point of view fromwhich you measure it. From previous ERPimplementation success literature review (Appen-dix A), there are seven measures used as surrogatesof ERP implementation success:

(1) User satisfaction (Al-Mashari et al., 2003; Anget al., 1994, 1995, 2002; Burns and Turnipseed,1991; Mandal and Gunasekaran, 2002; White,1984; Yusuf et al., 2004).

(2) Intended business performance improvements(Al-Mashari et al., 2003; Hong and Kim,2002; Mandal and Gunasekaran, 2002;

Economics 98 (2005) 5680dened nature.

2.2. Information systems literature

A large number of studies have been conductedduring the past two decades to identify thosefactors that contribute to ISs success. However,the dependent variable of IS success is difcult todene and a cumulative research is not easy tocome into being. Not until 10 years ago was thedependent variableIS success identied by De-lone and McLean (1992) that has been considered

have positive or negative impact on the other. Useand user satisfaction are direct antecedents ofindividual impact. Lastly, this impact on indivi-dual performance should eventually affect organi-zational performance.It is clear that actual use, as a measure of IS

success, only makes sense for voluntary or discre-tionary users as opposed to captive users Lucas(1978). Moreover, in an involuntary situation ofusing an IS, user satisfaction leads to use rather

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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 59use of the product of an IS.(5) Individual impact: The effect of information on

the behavior of a receipt.(6) Organizational impact: The effect of informa-

tion on organizational performance.

In Fig. 1, system quality and informationquality singularly and jointly affect both use anduser satisfaction. While use and user satisfaction

SystemQuality

InformationQuality

UserSatisfaction

Use(4)Use: The receipt consumption of the productof an IS.User satisfaction: The receipt response to the(3)Information quality: The desired characteristicsof the product of an IS.(2)System quality: The desired characteristics ofan IS itself.(1)g. 1 illustrates their IS success model):

fyin(Fist important IS conference proceedings, classi-g dimensions of ISs success into six categoriespubmoensive literature review on 180 empirical studieslished in six top IS journals and one of thea suitable foundation for further empirical andtheoretical research, and has met with generalacceptance (Garrity and Sanders, 1998).Delone and McLean (1992) conducted an

extFig. 1. DeLone and McLeathan use stimulating user satisfaction Baroudi andDavis (1986). Thus, for Delone and McLean(1992), when the use of IS is mandatory orrequired, the previous measures of system quality,information quality, and use become less useful.That means whether the quality of the system itselfand the information outputs are satisfying or not,and whether users want to use the system or not,there is no choice for the user, users have to acceptand use the IS. Secondly, DeLone and McLeansmodel has a causal and temporal relationshipbetween each stage. They claim that the causalrelationships that exist between the stages ofcommunication also pertain to the categories ofmeasurement. However, this does not have tofollow. If this were so, then one need only besuccessful at the rst stage. Furthermore, ISresearch now accepts that technical system qualityis necessary but not sufcient to ensure IS success;yet the DeLone and McLean model might be seenas suggesting that technical system quality issufcient.User satisfaction is dened as the extent to

which users believe the information system avail-able to them meets their information require-ments (Ives et al., 1980). Many authors have

Individual Impact

OrganizationalImpactns IS success model.

suggested time, cost, and user specication assuccess criteria. Wateridge (1998) points out thatthis implies that if projects do not meet time,budget, and specication they will be seen asfailures, but projects can still be successful even ifthey have not met timescales and budget. Thus, itis not appropriate to dene IS success by time,budget, and specication.Based on descriptions and evaluations of ve

existing MIS research frameworks, Ives et al.(1980) proposed a more comprehensive researchmodel partially validated by mapping 331 MISPh.D. dissertations into the framework. There arethree IS environments, three IS processes, and theinformation subsystem itself, all of which existwithin an organizational environment and anexternal environment. In their model (Fig. 2), Ives

characteristics of the user, users organization,and users task. (4) IS development environment,which includes the development methods andtechniques, design personnel and their character-istics, and the organization and management of ISdevelopment and maintenance. (5) IS operationenvironment, which incorporates the resourcesnecessary for IS operations.The information subsystem represented by a

circle is the output of the development process.The processes comprise the interactions betweenthe IS and the environments. The classes ofprocess variables are: (1) Use process, whichfocuses on usage of the IS by the primary userand is usually measured by task accomplishmentleading to an effect on productivity and decision-making quality. (2) Development process, which

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l Env

ationa

e Userocess

eveloroces

The tion P

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 568060et al. claimed that the environmental character-istics dene the resources and constraints, whichdictate the scope and form of each informationsubsystem (Ives et al., 1980).Five classes of environmental variables were

delineated: (1) External environment, which in-cludes legal, social, political, cultural, economic,educational, resource, and industry/trade consid-erations. (2) Organizational environment, which ismarked by the organizational goals, tasks, struc-ture, volatility, and management philosophy/style.(3) User environment, which is described by

The Externa

The Organiz

UserEnvironment

ISDevelopmentEnvironment

ISOperations

Environment

ThP

The DP

OperaFig. 2. Ives, Hamilton, and Dyields the IS by selecting and applying organiza-tional resources within environmental constraints.(3) Operation process, which is the physicaloperation of the IS and is primarily a function ofthe operations resource, with interfaces at theboundaries of other environments in the form ofpersonal interaction. The process can be measuredby resource use (e.g., time, cost), performance,quality of life and satisfaction of secondary users,and the service to users (e.g., turnaround time,response time for user requests, availability, errorrates).

ironment

l Environment

pment s

rocess

The Information Subsystem

(ISS)aviss IS research model.

3. The conceptual research framework

Based on the ERP literature and the IS researchmodel proposed by Ives et al., factors that affectsuccessful ERP implementation in China havebeen identied in this research. From DeLone andMcLean IS success model the dependent variablesthat measure ERP implementation success aredened. The theoretical bases for this studyinclude Ives et al.s IS research model combinedwith prior ERP literature to serve as the basis forindependent variables identication, and theMcLean and DeLones IS success model to serveas the basis for dependent variables denition inthat the environmental groups are quite suitable tothe ERP implementation success factors. They areadapted and combined with critical success factorsidentied in prior ERP studies to form criticalsuccess factors for this study. While the threeprocess groups used in Ives et al.s model are not

to this research in that IS success is measured fromdifferent angles. Furthermore, ERP systems arealso one kind of ISs.With specic objectives in this study, through

combining and adapting the Ives, Hamilton, andDavis model with ERP and IS success literatures,the research framework is developed and depictedin Fig. 3. The IS development environment and theIS operations environment are replaced withsystem environment and ERP vendor environ-ment. Moreover, the three process measures of theuse process, the development process, and theoperation process are not completely suitable tothe ERP implementation context. Almost all ofenterprises in China purchase off-the-shelf ERPpackages from outside ERP vendors rather thandevelop an ERP system in-house. Thus, thedevelopment process is not applicable. Further,the operation process is overlapping with the useprocess in the ERP implementation context, thus

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Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 61applicable to the context of ERP system imple-mentation in that Ives et al.s model focuses ondevelopment and operation processes that are thenext stage of ERP implementation. DeLone andMcLeans IS success model, which is widelyaccepted model for study of IS success, is suitable

ERP Vendor EnvironmentERP Vendor Quality

Organizational EnvironmentTop Management Support Company-Wide SupportBusiness Process Reengineering Effective Project ManagementOrganizational Culture

System EnvironmentERP Software Suitability Information QualitySystem Quality

User EnvironmentEducation &TrainingUser InvolvementUser CharacteristicsFig. 3. Conceptual resethese two processes are modied and combinedwith ERP success measures such as user satisfac-tion, individual impact, and organizational im-pact. Moreover, the unique ERP success measureof intended business performance improvement isincluded to make the success measures complete.

ERP Implementation Success User Satisfaction Individual ImpactOrganizational ImpactIntended BusinessPerformanceImprovementarch framework.

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ctionThe interactions among these success measures arebeyond the focus of this study and not studied as aresult.In this study, since the use of an ERP system is

required, the previous measures of system quality,information quality, and use become less useful.That means whether the quality of the system itselfand the information outputs are satisfying or not,and whether users want to use the system or not,users have no choice but to accept and use the IS.The researcher proposes the following researchpropositions serving as guidelines for this research.

Proposition 1. Organizational environment is asso-ciated with the ERP implementation success in

China.

Proposition 2. User environment is associated withthe ERP implementation success in China.

Proposition 3. ERP system environment is asso-ciated with the ERP implementation success in

China.

Proposition 4. ERP vendor environment is asso-ciated with the ERP implementation success in

China.

3.1. Organizational environment

Five dimensions of organizational initiativeproposition are identied including top manage-ment support, reengineering business process,effective project management, company-wide sup-port, and organizational culture.

3.1.1. Top management support

Many studies have stressed the importance oftop management support as a necessary ingredientin successful ERP implementation (Al-Mashari etal., 2003; Ang et al., 1994, 1995, 2002; Bingi et al.,1999; Cox and Clark, 1984; Sum et al., 1997;Umble et al., 2003; Wilson et al., 1994; Yusuf etal., 2004). Since ERP is a highly integrated IS, itsdesign, implementation, and operation require thecomplete cooperation of line and staff membersfrom all segments of the business. Top manage-ment support can play a useful role in settlingdisputes and in providing clear direction. Mean-

Z. Zhang et al. / Int. J. Produ62while, implementing an ERP system is not amatter of changing the software systems; ratherit is a matter of reengineering the company andtransforming the business practices to the bestbusiness practices.

3.1.2. Reengineering business processes

Business process reengineering (BPR) is denedby Hammer and Champy as the fundamentalrethinking and radical redesign of business pro-cesses to achieve dramatic improvements incritical, contemporary measures of performance,such as cost, quality, service and speed (Hammerand Champy, 2001). Implementing an ERP systeminvolves reengineering the existing business pro-cesses to the best business process standard (Bingiet al., 1999; Burns and Turnipseed, 1991; Hollandand Light, 1999; Mandal and Gunasekaran, 2002;Miles and Huberman, 1994; Yusuf et al., 2004).One of the principal reasons why ERP and otherlarge technologically sophisticated systems fail isthat organizations simply underestimate the extentto which they have to change and reengineeringthe existing business processes in order to accom-modate their purchase.

3.1.3. Effective project management

According to Lock (1996), project manage-ment has evolved in order to plan, coordinate andcontrol the complex and diverse activities ofmodern industrial and commercial projects.ERP systems implementation is a set of complexactivities, involving all business functions andoften requiring between 1 and 2 years of effort,thus companies should have an effective projectmanagement strategy to control the implementa-tion process, avoiding overrun of budget andensuring implementation on schedule. There areve major parts of project management: (1) havinga formal implementation plan, (2) a realistic timeframe, (3) having periodic project status meetings,(4) having an effective project leader who is also achampion, and (5) having project team memberswho are stakeholders.

3.1.4. Company-wide commitment

Since ERP systems are enterprise-wide ISs thatintegrate information and information-based pro-

Economics 98 (2005) 5680cesses within and across all functional areas in an

organization, it is imperative to get support fromall functional segments of the organization (Ang etal., 1994, 1995, 2002; Cox and Clark, 1984; Sum etal., 1997; Wilson et al., 1994; Yusuf et al., 2004).Every person and department is responsible/accountable for the overall system and key usersfrom different departments are ensured to committo the project implementation without being calledback to their prior functional job positionfrequently.

draw a conclusion that Chinese culture is basicallydifferent from that of Western countries. Accord-ing to Hofstede (2001), the dimension of uncer-tainty avoidance concerns with use of technologymost. The inclination of members of a culture toavoid uncertainty and ambiguity profoundlyaffects the way in which institutions are organizedand managed. Consistent with this logic, uncer-tainty avoidance will also likely affect the way inwhich individuals use ISs. In Western countries

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, 200

alism

ore

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 5680 633.1.5. Organizational culture

Densley (1999) revealed that adapting theimplementation to the prevailing cultural stylewas one important cause of project implementa-tion failures. A company who implements an ERPsystem has to change its business processes to theERP best-practice processes. The change bothimpacts on the customers culture and is con-strained by it (Krumbholz and Maiden, 2001).Kumar and Bjorn-Anderson (1990) concludes thatIS design methodologies have built-in value biasesreecting the value priorities of the culture inwhich they are developed. Since Baan IV usercompanies are studied only in this research and itis developed in the Netherlands and applied inChina context, it is necessary to check whethercultural difference between the Netherlands andChina exists or not. Based on Hofstede (2001)denition of national culture, four dimensions ofpower distance, collectivism vs. individualism,femininity vs. masculinity, and uncertainty avoid-ance can be used to make comparisons.From Table 1, we can learn that China is

obviously different from the other three countriesexcept in the dimension of masculinity. It is safe to

Table 1

International comparison data on cultural dimensions (Hofstede

Country Power distance

index score

Individu

index sc

USA 40 91

Germany 35 67

The Netherlands 38 80

China 80 20with high score of uncertainty avoidance, peopleare inclined to be tolerant of uncertainty, theyneed more clear information and tend to deployISs across departments within an organization,sharing the information to assist decision-making.However, in the low score holder of uncertaintyavoidance such as China, people are more tolerantof unclear information, they are inclined to shareinformation with others and reluctant to use ISsthat require real time information entry andinformation sharing across different departments.Cabrera et al. (2001) and Yusuf et al. (2004)

argue that successful technological innovationsrequire that either the technology be designed to tthe organizations current structure and culture orthat the organizations structure and culture bereshaped to t the demands of the new technology.While organizational culture is embedded withinnational culture and it is used as the unique criticalfactor that affects foreign ERP package (BaanERP) implementation in China context.Culture is dened by Schein (1992) as a pattern

of shared basic assumptions that the group learnedas it solved its problems of external adaptation andinternal integration, that has worked well enoughto be considered valid and, therefore, to be taught

1)

Masculinity

index score

Uncertainty avoidance

index score

62 46

66 65

14 53

66 30

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ctionto new members as the correct way to perceive,think, and feel in relation to those problems.According to Hofstedes (2001) study, six maindimensions of organizational culture are identiedto nd their relationships with the implementationof ERP systems: (1) process vs. results orientation,(2) employee vs. job orientation, (3) parochial vs.professional identity, (4) open vs. closed commu-nication system, (5) loose vs. tight control, and (6)normative vs. pragmatic mentality.

Process vs. result orientation refers to whether anorganization is more concerned with the meansand procedures that must be followed to carry outthe work or with the goals that are pursued withthat work. Process orientation is typical ofmechanistic or bureaucratic organizations rich inrules and procedures, whereas results orientation istypical of organic, risk-taking organizations, inwhich mistakes are well tolerated and innovationis valued.

The employee vs. job orientation reects whetherthe organization is more concerned with the well-being of the person or with getting the job done.Groups or committees often make the importantdecisions in employee-oriented cultures, and aneffort is made to help new members adjust. On thecontrary, job-oriented cultures tend to rely onindividual, top-down decision-making.

The parochial vs. professional dimension reectsthe weight that is given to the occupationalcultures of the members of the organization. Inparochial organizations, employees identifystrongly with their organization, whereas inprofessional cultures employees identify more withtheir profession. In hiring new employees, paro-chial organizations rely on social and familybackground information, whereas professionalcultures hire on the basis of job competence alone.Sociology has long known this distinction aslocal vs. cosmopolitan. The former cultureis less concerned with external competition, whichresults in passive attitude toward advanced man-agement technique adoption such as ERP systems.

An open or closed system refers to the commu-nication climate within the organization. In opensystem culture information ows easily throughthe organization, whereas closed cultures are more

Z. Zhang et al. / Int. J. Produ64secretive. However, the deployment of an ERPsystem requires transparent information owacross the whole company. People within theclosed system would think they are going to beconstrained by the ERP system, which inevitablyleads to resistance to the ERP system.

Loose vs. tight control system reects the degreeto which organizations exert control over indivi-duals. Tightly controlled cultures may observestrict meeting times and show a strong cost-savingconsciousness. Loose control organizations aremore permissive about individuals preferences.ERP system requires timely input of data, other-wise the output of the information about products,inventory level cannot be ensured accurate andtimely in that ERP system integrates everydepartment seamlessly. The deployment of ERPsystems in a loosely controlled company wouldproduce resistance from the people.

Normative vs. pragmatic mentality refers to theextent to which organizations conform to institu-tional pressures. Pragmatic organizational culturesare more market driven and are open to ad hocsolutions, while normative cultures are moreconcerned with following institutional rules. Meet-ing customer needs is a major objective inpragmatic cultures while normative cultures aremore interested in adhering to the correctprocedures as a way of obtaining legitimacy(Hofstede, 2001).This study focuses on the three dimensions of

parochial vs. professional, open vs. closed system,and loose vs. tight control in that they are mostclosely linked with ISs implementation.

3.2. User environment

People element is one of the most importantfactors affecting organizational ISs implementa-tion and deployment. Lack of care about stake-holders within organizations will result in disaster.As such, lack of user education and training anduser involvement in the process of ERP systemsimplementation also leads to failure.

3.2.1. Education and training

Education and training refers to the process ofproviding management and employees with the

Economics 98 (2005) 5680logic and overall concepts of ERP system (Mandal

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ctionand Gunasekaran, 2002; Sum et al., 1997; Yusuf etal., 2004). Thus, people can have a better under-standing of how their jobs are related to otherfunctional areas within the company. The user isthe people who produce results and should be heldaccountable for making the system perform toexpectations. Outside consultants/trainers havemore experience of implementing ERP systemsand they can help users to understand expertise ofspecic ERP systems. While in-house training ismore effective in combining specic ERP systemfeatures with actual operational issues in thecompany.

3.2.2. User involvement

User involvement refers to participation in thesystem development and implementation processesby representatives of the target user groups. SomeIS researchers suggest that user involvement in thedevelopment (i.e., purchase, design, modication,or implementation) of an IS is integral to thesuccess of the system (Baroudi and Davis, 1986;Mandal and Gunasekaran, 2002; Yusuf et al.,2004). System implementation represents a threatto users perceptions of control over their workand a period of transition during which users mustcope with differences between old and new worksystems. User involvement is effective because itrestores or enhances perceived control throughparticipating the whole project plan.

3.2.3. User characteristics

According to the Ives et al. research model, thecharacteristics of different users may also affectthe ERP implementation success including educa-tion levels, characters, technical-oriented or busi-ness-oriented, etc.

3.3. System environment

Organizations cannot afford to neglect oftechnical aspects of ERP systems implementationin the following three perspectives. ERP vendorsadopt different programming languages and focuson different business sectors to retain their corecompetence. Enterprises have to nd the mostsuitable ERP packages in the market to ensure the

Z. Zhang et al. / Int. J. Produperfect match between the ERP system and theirspecic business industry and requirements. More-over, the maturity of the ERP system and itsinternal logic as well as the systems strength andweakness should be fully understood to increasethe chance of success.

3.3.1. ERP software suitability

Most large foreign ERP vendors have come toChinas ERP market include SAP, Oracle, J.D.Edwards, Baan, PeopleSoft, FourthShift, QAD,SSA, Symix, etc. They have taken up more than90% market share in Chinas market (IDC, 1998).These ERP vendors use different hardware plat-forms, databases, and operating systems. Andcertain ERP packages are only compatible withsome companies databases and operation systems.Thus, companies should conduct requirementsanalysis rst to make sure which problems needto be solved and select the ERP systems that mostt their requirements. The hardware then isselected according to the specic ERP systemsrequirements.ERP packages provide generic off-the-shelf

business and software solutions to customers.More or less they cannot fully meet the companysneeds, especially when the business processes ofthe company are unique. Thus, customizing theERP system to t the companys needs isnecessary. It is important for the company tochoose those ERP systems that are easy tocustomize so that the cost and time consumed inthe customization can be reduced as much aspossible. Moreover, upgrade of the ERP system isnecessary because the technical advance resultsoccur continuously.

3.3.2. Information quality

Since ERP system modules are intricately linkedto one another, inaccurate data input into onemodule will adversely affect the functioning ofother modules. Garbage in garbage out. Thus,information quality is a major determinant of ERPsuccess (Duchessi et al., 1989; Sum et al., 1997;Yusuf et al., 2004).

3.3.3. System quality

System quality of a specic ERP system also

Economics 98 (2005) 5680 65affects the implementation success. Dimensions of

success measures are not studied.

(1988) and Delone and McLean (1992).

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ctionsystem quality include exibility of the system,reliability, ease of use, usefulness of specicfunctions, response time (Bailey and Pearson,1983; Yusuf et al., 2004).

3.4. ERP vendor environment

Since most Chinas companies purchase ERPpackages from foreign ERP vendors and useoutside consultancy service, it is important to getthe vendor support. Management needs to askquestions about the vendor, such as its marketfocus (for example, midsize or large organization),track record with customers, vision of the future,and with whom the vendor is strategically aligned.For a foreign vendor, it is important to ensure thattheir products have been customized into Chineselanguage and make sure the ERP vendor has thesame version of the software in all the countriesthe company is implementing the system. Vendorclaims regarding global readiness may not be true,and the implementation team may need to crosscheck regarding the availability of the software. Ingeneral, management must make sure that thesoftware vendor provides continuous supportthroughout the implementation.

3.5. ERP vendor quality

Three dimensions of vendor quality are classi-ed: (1) service response time of the softwarevendor; (2) qualied consultants with knowledge-ability in both enterprises business processes andinformation technology including vendors ERPsystems; and (3) participation of vendor in ERPimplementation. It is important for the vendorsstaffs to be knowledgeable in both businessprocesses and ERP system functions. Also, theconsultants should possess good interpersonalskills and be able to work with people. Softwarevendors should be carefully selected since they playa crucial part in shaping the ultimate outcome ofthe implementation.

3.6. ERP implementation success measures

Based on Delone and McLeans (1992) IS

Z. Zhang et al. / Int. J. Produ66success model and ERP literature, user satisfac-3.6.2. Individual impact

The individual impact variable refers to theeffect of information on the behavior of a receiptin DeLone and McLeans IS success model. In thisstudy, individual impact is adapted as the effect ofthe implementation and use of an ERP system onthe behavior of a receipt, i.e., an ERP user. Severaldimensions are used to measure individual impactincluding improved individual productivity, taskperformance improvement, decision effectiveness3.6.1. User satisfaction

According to Delone and McLean (1992), usersatisfaction describes the receipt response to theuse of the product of an IS. In this study of ERPsystems implementation success, user satisfactionis adapted as the receipt response to the imple-mentation and use of a certain ERP system.Mostly, the use of an ERP system is required.Thus, system quality, information quality, andsystem use are inappropriate for measuring ERPsystems success. Meanwhile, even though DeLoneand McLean classied system quality and infor-mation quality as dependent variables in theirmodel, they described the impact of these twovariables on the other dependent variables of useand user satisfaction. Therefore, system qualityand information quality are inappropriate to serveas ERP implementation success measures. In thecontext of ERP system implementation, the usersatisfaction measure concerns overall satisfactionand specics satisfaction with the system imple-mentation adapted from Doll and Torkzadehtion, individual impact, organizational impact,and intended business performance improvementare selected as ERP systems implementationsuccess measures (see Fig. 3) at both individualand organizational levels. Since the objectives ofthis study are to explore factors that affect theERP implementation success in China and vari-ables that could be used to measure and evaluatewhether an ERP implementation success is asuccess or a failure, the interactions among these

Economics 98 (2005) 5680and quality, and time to make decision.

business performance improvement could serve as

m

co

co

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ctionan ERP implementation success measure. MostERP adopters set performance objectives of theERP projects which include cost reduction, busi-ness processes integration, time, cost, etc. Differ-ent enterprises have different objectives toimplement ERP systems.Since a mix of measures is used to evaluate

whether an ERP system implementation is asuccess, only when all the four measures are givenpositive answers by the organization can we call ita success. And when all the four measures aremarked as negative, the implementation is classi-ed as a failure. Otherwise, the implementationsuccess is difcult to determine.

4. Research methodology

4.1. Multiple-case study research design

A case study examines a phenomenon in itsnatural setting, employing multiple methods ofdata collection to gather information from one ora few entities (people, groups, or organizations)(Benbasat et al., 1987; Yin, 1994). By its denition,case study research is well suited to the study of ISimplementation, especially when context is impor-tant and the phenomenon is contemporary, whichthe researcher has no control over, the research islargely exploratory and it addresses the how andwhy questions (Benbasat et al., 1987; Yin,3.6.3. Organizational impact

Organizational impact concerns the effect ofinformation on organizational performance inDeLone and McLeans IS success model and inthis study it is adapted as the effect of theimplementation and use of an ERP system onorganizational performance. The dimensions oforganizational impact include the impacts of anERP system implementation and use on theorganizations operating cost, overall productivitygains, customer service level, and the realization ofspecic ERP implementation objectives.

3.6.4. Intended business performance improvement

Based on White et al.s (1982) research, intended

Z. Zhang et al. / Int. J. Produ1994). Multiple cases are suggested to increasevalidity of the information collected can beobtained. To increase the reliability of theinformation in the study, several methods or stepsare taken. First, sufcient citation to the relevantportions of the case study database are made byciting specic documents, interviews, and/or ob-servations; second, the database would reveal theactual evidence (herein means the intervieweesresponses) and also indicate the circumstances(the four ERP user rms) under which theevidence was collected; third, these circumstancesbyprowould be more convincing and accurate. Moreover,using replication logic of the same interviewtocol in multiple-case studies, the externaltio

nverging lines of inquiry, a process of triangula-n. Thus, the construct validity of the case studyeac

ultiple measures of the same phenomenon inh setting resulting in the development ofphOne advantage of using multiple sources ofevidence (documents, archive records, open-endedinterviews, focused interviews, observations, andysical artifacts) lies in its capability of providingthe methodological rigor of the study throughstrengthening the precision, the validity andstability of the ndings (Miles and Huberman,1994). Contrary to common misconception thatcase studies provide little basis for scienticgeneralization, case studies are generalizable totheoretical propositions, not to populations oruniverses (statistical generalization) (Lee, 1989;Yin, 1994). Research questions of this studyinclude what, why, and how questions asfollowing:

What are the critical factors that affect ERPsystems implementation success in China?

Why are these factors critical for successful ERPimplementation in China?

How can ERP systems be implemented success-fully in China?

How can an ERP systems implementation bemeasured and dened as a success or a failure inChina?

4.2. Validity and reliability

Economics 98 (2005) 5680 67uld be consistent with the specic procedures

between the content of the protocol and the initial

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ctionstudy questions. Thus, the ultimate chain ofevidence is built and the reliability of theinformation in the case studies can be increased.

4.3. Subjects of the case study

We dene an ERP user company as one that hasinstalled at least the basic modules of the threemajor integral parts of Baan ERP system. Thesemodules are manufacturing, sales and distribution,and nance. Moreover, the ERP system installedshould have gone live no more than 2 years for thereasons of personnel change and difculty ofrecalling past implementation process. The unitof analysis is the selected ERP user company. Ineach of these ERP companies, one or two personswho participated their rms ERP system imple-mentation as a major team member (CIO, projectmanager) are interviewed.

4.4. Data collection

The target ERP user companies are obtained atthe recommendation of Baan Company. From therecommended ERP user companies, we screenthem and delete those companies that did not meetthe criteria of the research. Finally, we focus onfour ERP user companies that implemented BaanIV ERP package no more than 2 years. The samecompany size and the same business industrybelonged allow the researcher to compare the ERPsystem implementation issues. The interview pro-tocol is translated into Chinese and the transcriptsare back translated into English to be coded andanalyzed. Both digital recorder and tape recorderwere used to avoid contingency conditions.

5. Data analysis

Unlike quantitative research, which could usestandard statistics software to accurately analyzeand questions contained in the case study proto-col, to show that the data collection followed theprocedures stipulated in the protocol; nally, areading of the protocol should indicate the link

Z. Zhang et al. / Int. J. Produ68the collected data according to the formerlyproposed research model, qualitative researchinvolves more text work. In this research, we usethe software of ATLAS/ti to assist data analysis.The four cases selected and interviewed are locatedin the richest areas of Mainland China, the PearlRiver Delta area (Cases A and B) and the YangtzeRiver Delta area (Cases C and D).Since the transcripts obtained from the subjects

are mainly audio les recorded and they arerepeatedly listened to ensure no omissions andwritten down in paper. With coding scheme andcodes formulated according to the research frame-work proposed and its components on hands, theyare entered into the program of Atlas/ti. Afterthat, the manuscripts translated into English aretyped into Atlas/ti and make correlations betweenthe sentences and the specic codes. The codingprocess is an iterative one, some codes can becondensed into one code in this process accordingto interviewees responses, which leads to thedimensions of the proposed framework to beconsolidated. Meanwhile, through reviewing inter-viewees responses, new dimensions can be foundand added to the framework easily in this processsince no relevant codes can be linked to thesentences. Atlas/ti program assists the researcherto nish the coding process visually in an efcientway. After the coding process, we got thepreliminary tables on success factors and measuresbased on the interviewees responses and dataanalysis as deliverables. These deliverables arereturned back to the relevant interviewees for theirconrmation via emails and post mails, and thenal conrmed ones come into being as illustratedin the following sections.Table 2 illustrates the differences between the

four rms concerning the IT infrastructure beforeimplementing the ERP system. Company Adeveloped an MRP system in-house that runsquite well, but was incapable of processing largeamount of data. Companies B and C bought anMRP II package and ERP system, respectively.Company B had to update its MRP II system inorder to exchange data with its overseas head-quarters and branches while Company C at-tempted to switch its small ERP system to alarger and more powerful ERP system to keep

Economics 98 (2005) 5680competence. These three rms had very good

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nics

nadi

II sys

01

enta

RP v

ctionTable 2

ERP implementation background comparison

Background dimensions Case A Case B

Industry Home appliance Electro

Number of staff 1000 900

Ownership State owned JV (Ca

Sales revenue (billions RMB) 2 2

IT infrastructure MRP system was

developed in-house

MRP

ISO certicate conditions ISO 9001 ISO 90

Reasons to adopt ERP Incremental change Increm

Implementation service provider The ERP vendor The E

Z. Zhang et al. / Int. J. ProduIT infrastructure. However, Company D hadno ISs installed and computer usage was verylimited. Moreover, Companies A, B, and Crecognized the importance of using ERP systemsto maintain their competitive advantage. TheERP system was implemented by the ERP vendor,while Company Ds top management did notrecognize the ERPs role in business and wasforced to implement an ERP system as a trial site.Unfortunately, a third party was invited toimplement the ERP system whose consultantswere inexperienced with the Baan IV system,

ERP package implemented Baan IV Baan IV

Table 3

Cross case effects matrix

Factors effects on ERP implementation Case A

Top management support +++

Company-wide support +++

Business process reengineering ++

Effective project management +++

Organizational culture +

Education and training +++

User involvement +++

User characteristics +++

ERP software suitability +++

Information quality +++

System quality +++

ERP vendor quality +++

+, Weak positive impact; ++, average positive impact; +++, st

negative impact; , strong negative impact.Case C Case D

Electronics Home appliance

400 400

an) JV (German) State owned

0.8 1

tem installed ERP system installed No ISs used

ISO 9002 ISO 9002

l change Top-down strategy Top-down by dictate

endor The ERP vendor The vendors partner

Economics 98 (2005) 5680 69which indicates the future problems with theERP system implementation.Table 3 illustrates the extent to which different

factors proposed have affected Baan IV systemimplementations in the four rms. Based oninterviewees responses, the researchers determinedrelationships in Table 3 rst and post mailed backthem to all subjects for correction, nally theabove relationships were conrmed by all subjects.In terms of the 12 factors impact on the Baan IVsystem implementations in the four rms, nonegative impact was found in Cases A, B, and C.

Baan IV Baan IV

Case B Case C Case D

+++ +++ +

+++ +++ + ++ +++

+++ +++ +++

+++ +++ +++ +++ +

+++ +++ +

+++ +++ +++ +++ +++

+++ +++ +++

+++ +++ +++

+++ +++

rong positive impact; , weak negative impact; , average

In these three companies, most factors have strongpositive impacts on the Baan IV system imple-mentations except two factors, BPR and organiza-tional culture. Cases A and C have the sameimpact of BPR on the ERP implementation at thelevel of average positive impact since Case A is astate-owned enterprise that may need more BPReffort before or during the ERP program. Case C

tern organizational culture and ERP productsfocus on open, professional, and tightly controlledculture, which show a perfect t between theorganizational cultures and the ERP systemimplementation requirements. Thus, organiza-tional culture in Companies B and C has verystrong and positive effect on ERP system imple-mentation. While Company A is neutral in the

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nal

stem

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 568070is a joint venture (JV) that had installed a relativelysmall ERP system, FourthShift, which maybe alittle different from the large one, Baan IV. Thus,the business processes need to be changed for BaanIV implementation. Company B is a JV that hadinstalled the MRP II system of Baan productseries, which necessitates relatively little change onthe current business processes to update to theERP system of Baan Company.Based on the subjects responses (see Table 4),

Case D has parochial, closed, and loose controlsystem climate. According to Hofstede (2001),these three dimensions have a negative effect on ITdeployment success. Parochial culture focuses onlocal competition rather than external, whichmeans only local ERP implementation conditionsare considered. Thus, it is difcult for Case D toadopt advanced technology to improve its compe-tence. While the closed system discourages infor-mation sharing among team members, people insuch system regards information as proprietary.While ERP operation requires high degree ofinformation sharing across departments to ensureinventory, production scheduling, and procure-ment information updated timely as much aspossible. Furthermore, ERP systems requiretimely data input to ensure end product of thesystem timely, useful, and accurate.Both Companies B and C are JVs that have

quite advanced organizational culture. Both Wes-

Table 4

Cross case matrix on three dimensions of organizational culture

Dimensions of organizational culture concerned Case A

Parochial vs. professional Professio

Open vs. closed system Open sy

Loose vs. tight control system Neutraldimension of loose vs. tight control system due toits management reform in past several years. Thisalso affects ERP system implementation posi-tively.Among the four companies interviewed, only

Company D shows negative impact on Baan IVsystem implementation. Furthermore, evidenceshows that two signs of strong negativeimpact of organizational culture and ERP vendorquality, one sign of adequate negativeimpact of user characteristics, and one ofweak negative impact of company-wide supporton the ERP system implementation. Moreover,only ve +++ signs of strong positive impactof effective project management, BPR, ERP soft-ware suitability, information quality, and systemquality on Baan IV implementation in CompanyD. Three + of weak positive impact of topmanagement support, education and training, anduser involvement exist.Company D is a state-owned enterprise that

relies on top managers personal experience andintuition to make decisions. Communicationbetween departments is limited and orders arepassed verbally, which results in low accountabil-ity recourse. People tend to be tolerant of unclearinformation. The characteristics of Company Dsculture affected the ERP system implementationstrongly and negatively. Since the third party wasinexperienced with Baan IV implementation and it

Case B Case C Case D

Professional Professional Parochial

Open system Open system Closed system

Tight control Tight control Loose control

and all the four propositions get support from thestudy (see Table 3). Meanwhile, culture as the

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ctionwas the rst time experience with systemimplementation. The implementation servicequality was poor and affected the ERP imple-mentation strongly and negatively. Since the ITusage level in Company D was quite low and it isdifcult to nd the best key user candidates, thekey user characteristics was another factor thataffected the ERP project negatively. While thedepartment heads unwillingness to provide sup-port and less attention on the ERP projectalso posed the negative impact. Furthermore,education and training and user involvementwere not strongly supported by either the vendoror the key users. It is the top-down dictate fromthe headquarter that decides to adopt the ERPsystem, which made the top management inCompany D simply to accept the order and adoptthe ERP system. They did not recognize itsimportance of applying an ERP system in theircompany and consequently they did not giveenough support to this big project. Based on thenegative responses plus nal suspension of BaanIV system even though it successfully went live, theimplementation of Baan IV system in Company Dwas a failure.From Appendix B we present the interviewees

opinions about the ERP implementation results.Both Companies A and C show adequate satis-faction with the ERP system implementationand the remaining B and D show weak satis-faction with the ERP system implementation.Company A shows strong evidence in the otherthree proposed success measures of individualimpact, organizational impact, and intended busi-ness performance improvement. Company Cshows strong evidence in organizational impactand intended business performance improvement,but adequate evidence in individual impact.Company B shows adequate evidence in bothorganizational impact and intended businessperformance improvement, but weak in usersatisfaction and individual impact. However,Company D shows weak evidence in all the fourproposed success measures with further suspensionof using the ERP system. Thus, we could drawconclusions that even though Companies A, B,and C achieved different level of evidence in the

Z. Zhang et al. / Int. J. Produproposed four areas of success measures, theirunique critical success factor has been conrmedby this study. Based on Hofstede (2001), threedimensions of organizational culture includingparochial vs. professional, open vs. closed system,and loose vs. tight control are more closely linkedwith IT deployment in general and ERP imple-mentations in specic than the other three dimen-sions. Chinese people are more tolerant to unclearinformation, relying more on personal experience,keeping more information among themselves thantheir Western counterparts. However, the ERPsystem deployment requires clear and accuratedata/information, focuses on business processesand inter-department cooperation, which is in-compatible to Chinese organizational culture.Thus, in order to obtain ERP systems implemen-tation success, Chinese enterprises should taketheir organizational culture into account and try toERP projects could be said successes in that theERP system has been used as one integrated partof these rms. However, Company Ds ERPproject could be classied as a failure due to thefact of its suspension of use.Moreover, only one company, Company C,

developed its own success measures of a quasi-Oliver Whites ABCD Classication Scheme toevaluate its ERP implementation result. The otherthree rms did not assess their ERP projects veryseriously. They simply formulated ERP implemen-tation objectives at the very beginning of the ERPproject when analyzing their business require-ments. However, those objectives would be toobroad, immeasurable and not suitable to evaluatethe complicated ERP system implementationresults.

6. Discussion

From above analysis, we get more detailedinformation about ERP systems implementationissues in China context. This study explains andconrms that critical success factors identied inWestern countries are applicable to China context

Economics 98 (2005) 5680 71change their culture to the modern management

user rms, only Company C developed a set ofsuccess measures like Oliver Whites ABCD

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ctionClassication Scheme to evaluate its ERP imple-mentation result. However, the other three com-panies did not have their own success measures.Companies A and B did not evaluate their ERPimplementations results. Based on the fact thatmost rms in China do not have specic andquantiable success measures, this study does playan important role in narrowing the gap of currentstatus of success measures shortage in Chinaenterprises and conrms that ERP success factorsused in Western countries are applicable to Chinacontext. Furthermore, the success measures de-ned in this study are quite comprehensive onthe one hand and concise on the other hand inthat the four success measures can be used tomeasure different aspects of an ERP systemimplementation.

6.1. Implications for academic researchers

This study derives its theoretical foundationfrom the Ives, Hamilton, and Daviss ISresearch model and the DeLone and McLeansIS success model. An ERP implementation successframework has been developed and four proposi-tions are developed based on the associationsbetween four environmental factors and ERPsystem implementation success. This conceptualresearch framework gets support from the abovetwo models and the empirical results obtainedfrom this study provide support to the fourrequirements in terms of the three dimensionsparticularly.Other factors that have been overlooked by

prior studies can be classied as critical successfactors in China context such as existing ITinfrastructure of the company, ownership, andreasons to adopt ERP systems. Among the fourcompanies, no MRP system was used in Case Donly. It is the order from the headquarter toimplement an ERP system in Case D. Theimplementation of Baan IV system in Case Dwas classied as a failure.As for the success measures used in ERP

Z. Zhang et al. / Int. J. Produ72propositions.Based on the data analysis, we found thatthe variables of information quality and systemquality from the DeLone and McLeans successmodel should be modied greatly consideringthe specic condition of a large mature off-the-shelf ERP package implemented in manufac-turing enterprise. Information quality refers toproduct of an IS in DeLone and McLeansmodel. However, in the environment of ERPsystem, only when the input data were correctcan the end users get accurate output information.Moreover, since an ERP system is used inorganizations daily business, it is natural thatthe information output is timely. Thus, only theintegrity of raw input data in information qualityaffects the ERP system implementation result.As for the system quality in the ERP eld, italso should be modied in that ERP systempackages have been developed for many yearsand used in many sites, which enable the packagesto be very mature and reliable. Of course,usefulness should be the rst must for any ERPpackage in that the ERP vendors have to updatetheir ERP packages more frequently to surviveintense competition.Organizational culture has been overlooked in

prior studies. However, it does affect an ERPsystem implementation especially in a fully differ-ent cultural environment. Empirical evidence fromthis study suggests that organizational culture is animportant unique factor for ERP system imple-mentation success.As for the success measures, system use

should be another success measure in that eventhough Company D encountered many problemsin implementing the ERP system, nally thesystem went live. However, the ERP systemeventually was suspended, which is denitely afailure case of ERP system implementations.System use in this context means once the ERPsystem implementation has been completed it isused in daily business.This study develops a conceptual framework

with theoretical support from the IS eld whichshould be taken into consideration when research-ers are studying ERP implementation issues. Thisframework could be applied into other countries

Economics 98 (2005) 5680to test its applicability.

tical success factors identied in Western countriesQualitative research methodology is used in thisstudy due to the research question. To makecomparison possible, the researcher uses one set of

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ctionare conrmed applicable in China context andculture is an important unique factor when anERP system is implemented in Chinese rms.Meanwhile, reasons to adopt an ERP system,existing IT infrastructure, and company owner-ship should be taken into consideration inChina context. ERP vendor quality should begiven more attention in China context in that CaseD selected a less experienced third-party consult-ing rm to lead the ERP system implementationand the ERP project in Case D was classied as afailure.Once the ERP project goes live, enterprises

should evaluate its implementation result tosee what the ERP system could do to improvetheir business performance in that the ERP projectis a large program that involves many people,money, and time investment. With correctevaluation of the ERP project, enterprises couldnd where they should spend more time andeffort to improve and what places they succeed sothat they could elevate their rms operationalperformance.In Appendixes C and D, we recommend a

map to successful ERP system implementationand operation in China. Three stages of anERP project are classied and different cri-tical success factors should be given more atten-tion in these stages. Following this map, thechance to succeed in adopting and implementingan ERP system in China context can be improvedgreat.

7. Conclusion

This study aims to improve understanding ofboth generic and unique critical factors thataffect ERP implementation success in China andestablish measures to assess the extent to which6.2. Implications for business practitioners

The implementation of a foreign ERP systemin Chinas rms involves the issue of orga-nizational culture, BPR, and standardization ofthe enterprises operational processes. The cri-

Z. Zhang et al. / Int. J. Produan ERP system implementation can be denedcase study protocol and interview questions instudying four ERP user rms that have imple-mented the same ERP system, Baan IV, going liveno more than 2 years. Four ERP user rms wereselected and interviewed based on the same sizeand business industry. The result of this researchstudy can contribute to both the academic eldand business industry.We collected much information from the four

ERP user companies including intervieweesresponses, periodic status meeting minutes,ERP implementation plans, and ERP projectproposals drafted by the Baan Company fortriangulation, however, only in Case A twointerviewees cooperation is obtained and onlyone person in the other three rms, respectively, isavailable to accept the interview. It would beideal if more interviewees from different positionswithin one rm could be available for the inter-view. The case study protocol could be used tostudy different ERP packages implementationto examine variations between different ERPsystems and vendors. The conceptual frameworkcould be used in other countries to test itsapplicability by further studies. Moreover, re-searchers could focus on more specic areas suchas people resistance or organizational cultureimpact within one rm so that more detailed andin-depth information or deep-rooted failure rea-sons could be identied.

Acknowledgements

The authors are very grateful to two anonymousreferees for their constructive and helpful com-ments which helped to improve the presentation ofas a success or a failure. We developed aconceptual research framework to guide theresearch and four propositions concerning theassociations between the proposed critical factorsand ERP implementation success are developed.

Economics 98 (2005) 5680 73the paper considerably.

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Appendix A

Concept matrix: Critical success factors and ERP success measures mentioned in the literature

Critical success factors

and success measures

Al-Mashari

et al. (2003)

Ang et al.

(1994, 1995,

2002)

Bingi

et al.

(1999)

Burns and

Turnipseed

(1991)

Cox and

Clark

(1984)

Hong and

Kim (2002)

Malbert

et al.

(2003)

Theoretical

support

Top management support O O O O NoClear goals and objectives O NoCompany-wide support O O NoCommunication O O O NoVisibility of implementation O NoTraining and education O O O O O NoVendor support O O O NoBPR O O O O O NoSuitability of hardware and

software

O O O O No

Project management O O O O NoData accuracy and integrity O O O O NoCompany expertise in IT O O O NoUser characteristics O O O O NoUser participation O O O O NoCultural t O O NoSuccess measures

User satisfaction O O O NoIntended business performance

improvement

O O No

Whites ABCD Classication

Scheme

O No

On time O O O NoWithin budget O O O NoSystem acceptance and usage O NoPredetermined corporate goals O No

continued on next page

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Critical success factors

and success measures

Mandal and

Gunasekaran

(2002)

Motwani

et al.

(2002)

Markus

et al.

(2000)

Sum

et al.

(1997)

Umble

et al.

(2003)

White

et al.

(1982)

Wilson

et al.

(1994)

Yusuf

et al.

(2004)

Theoretical

support

Top management support O O O O NoClear goals and objectives O O NoCompany-wide support O O O NoCommunication O NoVisibility of implementation O NoTraining and education O O O O NoVendor support O O O NoBPR O O O O NoSuitability of hardware and

software

O O O No

Project management O O O NoData accuracy and integrity O O NoCompany expertise in IT O NoUser characteristics O NoUser participation O NoCultural t O O NoSuccess measures

User satisfaction O O O NoIntended business performance

improvement

O O O O No

Whites ABCD Classication

Scheme

O No

On time No

Within budget No

System acceptance and usage O NoPredetermined corporate goals O O O No

Appendix A (contd.)

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Appendix B

ERP implementation success measures matrix

ERP implementation

success measure

Case A Case B Case C Case D

Strong Adequate Weak Strong Adequate Weak Strong Adequate Weak Strong Adequate Weak

User satisfaction O O O OIndividual impact O O O OOrganizational impact O O O OIntended business

improvement

O O O O

Planned budget vs.

actual costs

No budget: 3 millions RMB No xed budget No xed budget N/A: 1.5 millions RMB

(1USD=8.3RMB)

Planned time vs.

actual time

1:1.5 years No time frame No time frame 8:8 months

Suggested success

measures 1. More efcient information

ow than before.

2. Top management could

monitor organizational

operational performance

24 h/day.

3. Capable ERP experts

are cultivated to maintain

the ERP system.

1. No success measures

were used.

2. Inventory level did

decrease, manufacturing

lead-time also

became shorter,

and customer service

level improved.

1. Quasi-Oliver Whites

ABCD Classication

Scheme.

2. Inventory level

lowered, account

receivables

decreased, and

manufacturing

lead-time became

shorter, etc.

1. ERP implementation

objectives.

2. User satisfaction.

3. ERP going live

does not represent

a success.

4. The ERP system

should be one of

the rms integrated

parts.

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A recommended map to successful ERP system implementation and operation in China

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Impact of critical success factors across successful ERP system implementation stages

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ARTICLE IN PRESS

Z. Zhang et al. / Int. J. Production Economics 98 (2005) 568080

A framework of ERP systems implementation success in China: An empirical studyIntroductionLiterature reviewERP systems implementation literatureInformation systems literature

The conceptual research frameworkOrganizational environmentTop management supportReengineering business processesEffective project managementCompany-wide commitmentOrganizational culture

User environmentEducation and trainingUser involvementUser characteristics

System environmentERP software suitabilityInformation qualitySystem quality

ERP vendor environmentERP vendor qualityERP implementation success measuresUser satisfactionIndividual impactOrganizational impactIntended business performance improvement

Research methodologyMultiple-case study research designValidity and reliabilitySubjects of the case studyData collection

Data analysisDiscussionImplications for academic researchersImplications for business practitioners

ConclusionAcknowledgementsReferences