the collection

news in the news

subscribe

rss feeds news releases

faculty only

submit news members web site

sites of interest

streaming audio/video

IT Business Initiatives Often a Bust – Why?

Information technology has often been characterized as “innovative” and “enabling” technology connected with efficiency and success. However, many implementations have turned out to be a barrier, rather than an enabler for economic or competitive gain. CBU professor Sherry Finney wanted to find out why.

Often when we’re dealing with large companies, we feel as if the right hand doesn’t know what the left is doing.  And often we’re right—large companies and organizations have multiple departments, and each department can have completely different ways of organizing information.  Sometimes they can have trouble communicating with other departments in the same organization.  This can lead to confusion and make large companies less efficient overall.

To improve communication and efficiency, companies can implement an Enterprise Resource Planning (ERP) program.  This software is designed to standardize each department’s computer software.  So now, instead of running on completely different systems, people in finance, for instance, might be using the same program that people in shipping or human resources are using.  Information is more easily accessible, reporting capacity improves and there is less duplication of administrative functions.  Sherry Finney studied the effectiveness of these programs and found that despite how useful the concept seemed, many ERPs were not successful.  Before long, some companies had switched back to the old way of doing things.  Considering that these programs could often cost millions of dollars to implement, an unsuccessful ERP can be a huge waste of corporate resources. 

Professor Finney was particularly interested in the factors that contributed to the success of ERPs.  After extensive reading of the literature on the topic, she made a surprising discovery—all of the previously identified success factors were from the perspective of managers, and only managers.  Obviously this was only a part of the story—while managers’ views are important, the views of the developers, IT staff and users of the systems would be equally important to the success of the software.  Finney then initiated a three-year mixed-method case study of a post-secondary educational institution in which she examined the success of an ERP implementation from various stakeholder perspectives—the program developers, the managers of the companies that implemented them, the company’s IT professionals and the employees that used the programs.

Results of the study revealed that stakeholders have differing views on success factor understanding, particularly in regard to change management, training and communication methods.  The differing views on change management were most interesting. The system users felt that change management was about selling the new system and obtaining “buy-in”, while the IT staff and managers appeared to have a very reactionary understanding. They felt that it was about dealing with resistance and handling issues that arose because of the change. It was only the developers who believed change management was about anticipation and planning.  Based on these findings, it can be concluded that each group has its own unique set of requirements when it comes to addressing the change instituted by such a program.

Finney suggests that there needs to be a clear understanding surrounding an internal marketing/communication program directed to the users. Further, managers and IT staff and developers will need specific training on handling resistance and planning for change.  The stark differences in stakeholder views didn’t stop there, however.  Finney’s research also revealed contention surrounding the subject of training.  Specifically, she found the users at odds with the views of developers.  Survey results revealed that users reported significantly lower levels of satisfaction with the training when compared to the developers.  This too is obviously a cause for concern.  Finally, on the topic of communication strategy, there were several areas of dissension.  One such example related to the matter of initial communication surrounding the project and the building of acceptance.  Managers believed that initial communication about the project should not come from them.  ERP users and developers, on the other hand, expected just the opposite.  One can only speculate as to why managers had this feeling and how it affected their behaviour, but the reality is that any kind of breakdown in communication could potentially cause many problems when it comes to gaining acceptance or “buy-in” of the system.

Finney concluded that obviously the management of ERP projects is not as simple as a “one size fits all” approach.  Therefore, once these differing views were uncovered, her research set out to discover suggested strategies and tactics, again from a stakeholder viewpoint, something that had not yet been done in this particular field of study.  Professor Finney hopes that this research will help enhance the effectiveness of ERP implementations in the future.  “If you know beforehand what each group finds important and how they believe such projects should be handled, you can address that before you begin the implementation”.  By understanding what each group expects from the ERP implementation process, companies can make more informed decisions of how they can do that most effectively.  Professor Finney’s work, entitled “ERP Implementation:  A Compilation and Analysis of Critical Success Factors”, was recently published in the June 2007 edition of the Business Process Management Journal.