Impact Of Enterprise Resource Planning (ERP) System Misfit On Information Quality : A Moderated Model Of Alignment Strategies
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Date
2012-07
Authors
Tan, Shiang Yen
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
Businesses have moved away from “in-house developed” software systems to packaged systems developed by vendors for businesses in general since the past decade. One of the most prevalent packaged systems is Enterprise Resource Planning (ERP) system. ERP systems are now recognized as the enabler for businesses to achieve data integration, improve operational performance, and attain strategic advantage. However, more than half of the ERP implementations are reported as failed and did not achieve the expected benefits. Researchers have asserted that the failures are mainly attributed to ERP misfits, i.e. the misalignments between the ERP system functionalities and the organizational requirements. Modification of the ERP system and adaptation of the business processes have been posited as the means to enable better system-process alignment. But very little empirical evidence exists to demonstrate that the potential of these alignment strategies have been realized. Thus, the objective of this research is to examine the impacts of ERP misfits on the information quality of ERP systems and how they are affected by the alignment strategies, namely system modification and organizational adaptation. In this study, ERP misfit is decomposed into input misfit, process misfit, and output misfit to provide detail information about the intensity of their impacts. A total of 305 sets of questionnaire are collected from the ERP system users in manufacturing sector in industrial hubs throughout Malaysia based on purposive sampling. Using Structural Equation Modeling (SEM) analysis approach, the findings reveal that each component of the ERP misfits carries different weights in influencing the information quality of ERP systems. Process misfit is found to have greatest negative impact on information quality, followed by input misfit and they are both found to be reduced more effectively by system modification.
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Keywords
Impact of enterprise resource planning , system misfit on information quality