Impact of ERP System on Performance and Productivity of Employees

The assignment content explores the impact of Enterprise Resource Planning (ERP) system implementation on employee performance and productivity. It highlights that a well-guided approach is crucial for employees to understand the importance and efficient use of ERP systems. The study aims to assess the effects of ERP implementation on individual capabilities, which ultimately aids in achieving organizational vision and mission.

Running head: BUSINESS RESEARCH REPORT
business research report
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Table of Contents
Abstract............................................................................................................................................2
CHAPTER 1 Introduction...............................................................................................................2
The Variables...............................................................................................................................3
Research Question........................................................................................................................3
Hypothesis....................................................................................................................................4
CHAPTER 2 Literature Review......................................................................................................4
CHAPTER 3 Data Collection and Analysis..................................................................................14
CHAPTER 4 Discussion of Results..............................................................................................17
CHAPTER 5 Conclusion And Future Work.................................................................................18
BIBLIOGRAPHY..........................................................................................................................19
APPENDIX....................................................................................................................................21

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Abstract
The system of ERP are the application packages at the wide level of enterprises that are
formulated and designed to offer integrated support of information system to various functions of
business. Although there are multiple benefits of ERP to the organization, the implementation of
ERP involves multiple amendments I the processes of business and configuration of software for
improved compatibility. The system of ERP integrates the solution of software that helps to
support and ease out all the flow of information which leads to changes in the organization. An
emerging and clear channel in the system of ERP is implementation. Employees face the
challenge of using system of ERP because of its complexity. This study will address the
implementation problems of unfounded ERP which can also aid to lay a blueprint for using the
ERP Systems and its impact on the productivity. The researcher outlines the research proposal
which concerns the use and implementation of system of ERP in the organization. The researcher
has presented various issues concerning the usage and implementation of ERP by taking the
organizational perspective of knowledge and information from consultant and management
aspects. The researcher ends the paper with the discussions regarding the work of the future.
CHAPTER 1 Introduction
System of Enterprise Resource Planning is a package of Information technology which provides
the opportunity in real terms for modern cooperation to integrate the functions and processes of
the businesses. By establishing the environment of ERP, all the transactions become the part of
the business processes which are inter linked with each other. As per a researcher, ERP is
considered as a software which can be put to use for integrating all the functional information of
a corporation to mechanize the processes of business of the corporation, i.e., a system of business
management that consolidates all the faces of business. Another researcher defined ERP as

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systems which are designed for the processing of transactions of organization and also facilitate
the real time and integrated customer response, production and planning. The system of
enterprise can consolidate the processes of business which are significant for the growth and
success of the corporation into one consolidated system software that permits the flow of
information seamlessly in the organization. It is also defined as a package information system
that is configurable and is integrated by the processes based in information within all the areas of
functions in the organization. Enterprise Resource system helps to drive the orientation of
process, improvements of business processes, and overall changes in the organization. The
structure that will be followed in this paper begins with a theoretical framework to the situational
problem, followed by a meeting by the researcher with a company who is using system of ERP
in the organization. Some of the research is conducted in the organizational problem area and
after that the suggestions and response for designing of research are developed. In last, the
researcher has concluded and discussed the performance and designing of the proposed research.
The Variables
In the research proposal, the researcher has identified two variables namely dependent and
independent variables. The productivity of employees of the organization are dependent
variables and the effective implementation and use of ERP system are independent variables.
The selection of variable are on the basis of their importance, for instance, the productivity of
employees in an organization are not eligible to be modified while the performance of
organization is completely based on the effective utilization of system of ERP within the
organization.
Research Question
There are multiple research questions which are addressed in this paper:
 How implementation of system of ERP does helps to impact the productivity of employees,

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 The various approaches of ERP which may help to improve the productivity of employees in
the organization,
 Value of business in ERP System,
 Evidence of all statistics which are available in regarding the employee’s efficiency in the
sector
 Employees in sale department of Australian industry for telecommunication which can help
to strive the sale increase by using the software of ERP,
 The model of input process output for implementing ERP and how it can impact the future.
Hypothesis
The researcher is conducting the research in order to examine and evaluate the below mentioned
hypothesis:
H1: Implementation of ERP system improve the productivity of employees in the organization.
H2: Implementation of ERP system does not improve the productivity of employees in the
organization.
CHAPTER 2 Literature Review
Topic 1: Impact of enterprise resource planning implementation on employees’ productivity
Literature Review:
Chen, Law & Yang (2009) argued that the impact of enterprise resource planning could be
different for different organizations and the impact could be different in short term and long
term. One of the objectives of ERP implementation is to increase the employee’s’ productivity in
long term. The fresh implementation of ERP system can pose some problems relating to the
ability of organizations to collaborate with stakeholders in horizontal relationships. As Daft

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(2015) points out, leaders who are unable to create collaborative, trusting relationships with
others often fail and essentially the productivity of employees could depend on this
collaboration. The interaction with organizations in the external environment, may introduce
cultures and business strategies that function in opposition to the organizations historical view.
Knutsen and Brock (2014) extrapolate that an organization cannot be independent of its
environment, but interacts through influencing and being influenced. It is true that the use of
ERP systems has become the norm in today’s business environment. It is expected that the
leaders would be able to manage the change arising from the implementation of ERP systems
and this would ultimately have a positive impact on employees’ productivity. It is important to
mention that the implementation of ERP could be a big change in the organization and the
employees’ productivity could also depend on the way organizational managers and leaders
manage the change (Tran, 2013). Lack of leadership in ERP implementation causes so much
stress and confusion for organizations. Leaders must be able to help guide his team to the
successful implementation of the changes. The communication in the organization during the
course of ERP implementation is also a key driver of employees’ productivity. Communication
is key in any organization productivity and ERP implementation. Topic 2: Necessary approach
of ERP in increasing the employee’s productivity in an organization
Literature Review:
The necessary approach to the implementation of ERP in increasing the employees’ productivity
in an organization should focus on two key aspects. These are change management and
transformation. According to Dibrell & Davis (2008) the implementation of ERP creates a
transformation between the organization and the environment where the environment becomes
an essential part of the organization instead of a perceived external variable. The researchers

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described the symbiotic relationship between environment and organization creates a depth of
adaptiveness where the organization continually adjusts according to changes in the
environment. The researchers recognized the challenges of transformation in a participatory
organization that operates with an open systems approach. According to Dibrell & Davis (2008)
the challenges included “inertia, managerial ‘bounded rationality’, political constraints and
institutional ‘embeddedness’, and weak organizational learning mechanisms” (p. 185). Ke &
Wei (2008) argued that the approach to improve employees’ productivity with the
implementation of ERP should also include the system of feedback and employee engagement.
The organization outcome and feedback from the organization’s environment are very important
when it comes to evaluate, improve, or measure the implementation of ERP. The feedback helps
to evaluate and improve the input and the process of the transformation. With the ERP
implementation, organization is considered as a system of transformation in which the
environment put the input and the organization transforms it into output for the use of the
environment, and the feedback from the environment is welcome. Welch, Bednar, Milner, (2011)
suggested, “the purpose of knowledge management within an organization is creation of vehicles
to support people to create and share their individual, contextually-dependent understandings”
(P. 3). The technology products like employee resource planning helps the organization learning
from its environment and improving its products. Many of success companies like Avon, Exxon,
Microsoft, Ford, General Motors, Toyota, and Nissan used the benchmarking which is similar to
the open system. This used the external criteria to evaluate and improve its products. However,
certain companies prefer used the internal system analysis to improve their technology products
like ERP products.
Topic 3: Business value of ERP system

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Literature Review:
There are various benefits and business value of using ERP system. In simple terms it can be said
that the use of ERP system creates and open, effective and transparent culture in the
organization. According to Starnes, (2000). “Open systems theory argues that organizations
must interact with the environments in which they operate in order to be successful.
Organizations that attempt to be self-sufficient without interacting with the environment are
referred to as closed systems” (P. 15). With the use or ERP systems, organization can actually be
open and effective in nature. It would result in the business value of cost optimization, increased
revenue and improved profitability. It can be said that the organization’s success depends only
on the degree on which the organization considered open systems and use technology as a
business integrator. However, with today environment with its cyber security problems, the cross
cultural challenges, and the lack of inputs material and the organization good tool of
transformation, the open system theory presented more challenges in management. The use of
ERP system would also enable the organization to track down the quality of products and
services. This is the reason that organizations have started to integrate ERP systems with the
supply chain management solutions. With the implementation of ERP systems, the focus of
management is to create a platform of Total Quality Management. It helps organizations to
create a culture in the organization where all the stakeholders are aware of the goals and
objectives. The use of technology products like ERP systems also helps the large organizations
like Coca-Cola to manage the teams that are spread in different parts of the world. With the
CRM (Customer Relationship Management) module of ERP the organizations can also manage
customers in an effective manner. It is important that the organizations should develop goals and
objectives with respect to ERP implementation. The organizations would be able to derive

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maximum benefits from ERP implementation only when business values map with the defined
goals and objectives.
Topic 4: Statistical evidence available regarding efficiency of employees’ in the sector?
Literature Review:
The statistical evidence regarding efficiency of employees in the telecommunication sector could
be seen with the key metrics like employee satisfaction index, customer satisfaction index,
employee productivity index, etc. The statistical evidence could also be observed in terms of the
stability index of the organizations in this sector. This evidence, assumes that an organization
exists in a stable environment, that it does not need to adapt to its environment, and that it does
not interact with its environment in a substantive way. Knutsen and Brock (2015) further note
that an organization utilizing a close system approach is likely to have a strong, vertical
hierarchy and a mechanistic structure. Given the speed at which change occurs in the
contemporary business environment, particularly in the area of communications technologies,
and the already significant changes to the business environment that have been caused by
globalization, it seems to me that employing elements of open systems theory, at least to some
extent, is virtually essential. And yet there remain successful organizations that operate
primarily or in part as closed systems. Brynjolfsson & Saunders (2010) discussed the importance
of using various metrics to measure the efficiency of employees. It is believed that
implementation of ERP system should start with an assessment phase. In the assessment phase

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the organization should establish the key metrics that would be used as a goal with the ERP
implementation. The implementation of ERP could be termed successful only when there is a
significant improved in the metrics that were established in the assessment phase. For example, it
is expected that the customer satisfaction index should increase after ERP implementation.
Likewise the statistical evidence could be found in other metrics like employee satisfaction
index.
Topic 5: Sale employees of telecommunication industry in Australia can strive for increase in
sales performance by using ERP software.
Literature Review
Organizational leaders must manage the feedback received and adapt organizational operations
through ERP system in a manner that can optimize organizational processes (Karata & El-Rayes,
2015). Karata and El-Rayes (2015) posted that managers must include in organizational
operations specific steps or sessions that identify those points raised from various stakeholders as
warranting attention and action. Without purposefully incorporating work sessions or planning
sessions focused on stakeholder feedback, organizations fail to benefit from the rich intelligence
provided by key constituents. In the interactive stage the organizational response to stakeholders
input is most effective. This is because Lawrence and Weber (2014) state that in the interactive
stage the organization has an ongoing relationship and line of communication with stakeholders
continually to maintain respect and open communication. With this being so, the organization
can more effectively communicate responses or concerns to stakeholders being that trust and
loyalty has been established. Lawrence and Weber (2014) share that the inactive stage is where
stakeholders are ignored. This can be seen as the least desirable stage. With this being so a
response from the organization can be very valid being that communication is becoming active

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between both the organization and stakeholders. Also, because this can be seen as effort being
put forth where stakeholders are not being ignored and both parties are coming together for the
greater good regardless of the lack of communication or relationship that exists. Momoh & Roy
(2010) highlighted that the sales performance of the company would depend on number of
factors. The organizations must figure out the interaction of ERP with the sales cycle or customer
touch points. It is expected that the sales performance would include if the implementation of
ERP products can improve customer touch point. The sales performance could also be improved
if the ERP system can improve the communication levels in the organization. Therefore, one of
the key objectives of ERP implementation is to overcome the communication barrier and have a
system of effective communication at workplace.
Topic 6: Input process output model for the implementation of ERP and its future impact
Literature Review:
Cereola, Wier & Norman (2012) outlines the input-output theory of ERP implementation and the
idea that it has become the most well know of all the theories of ERP implementation. It focuses
on the fact that all organizations are unique and have several subsystems that are not equally
important in organizational development and that issues within the organizations should be
handled based on this idea. This may pose a problem for some organizations in that no
subsystem is likely to be considered as being unimportant by them to the whole organization. In
other word the open systems theory can be seen as diminishing the relevancy of every subsystem
that exists within an organization. Many times a blended approach is taken on by organizations
because they have to implement different organizational strategies when changes occur in the
competitive circumstances, structural design, and experiences. Powell & Riezebos (2013) argued

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that organizations could also use the ambidextrous approach to implement the input process
output model. It is the model used by a firm to simultaneously achieve decentralization as well as
centralized controls during the ERP implementation. Ambidexterity is viewed as a structural
issue targeting certain levels of achievements. Organization uses this approach to put in place
dual structures to alignment while closely focusing on the adaptations of ERP (Daft, 2015). In
established companies, ERP implementation is only a disruptive innovation in a separate unit
that can be pursued. The ambidextrous approach assists in the creation of a separate unit for
examining and pursuing new opportunities as well as keeping the same management to be able to
manage both the parent company and the new unit of innovation (Stemberger, 2008). In this
approach, the management or leadership should possess the ability to attend to the already
existing procedures, services, products and all models as well as processes while still giving
support to the innovations that will eventually drive the organizations future (Daft, 2015). Daft,
(2015) provides examples of organizations such as Google releasing imperfect or unfinished
experiments to try and improve the existing business processes with ERP implementation. This
approach entails continual overseeing the key business while protecting the emerging venture
concurrently as it develops and grows. Executive leadership can apply this approach to form
segregated business units that will help to explore and develop a breakthrough of innovations
while at the same time managing the existing business uninterrupted with (Saunders, 2010). The
teams that manage the project are encouraged to form their own processes, cultures and
structures but still connected to the other organization. Through this approach, new opportunities
are developed and presented to the market by the team of executive as new business units and
therefore slowly introduced into the existing units (Bober, 2014). Introduction of another
approach can only be useful if it does not interfere with the processes in place immediately, the

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existing management and the people (Daft, 2015). This approach should be spontaneous but not
prompt development and implementation (Eldabi, 2008). If it may interfere with the gradual
acceptance of the new innovation to any organization, then it is not appropriate.
As a conclusion it can be said that the approach to improve employee productivity should focus
to take employees together to a desired state of ERP implementation. It is important that the
employees should be communicated about all the aspects of change management that arises from
ERP implementation.
Theoretical Framework of ERP
The system of Enterprise Resource Planning offers multiple benefits to the organization. At the
same time, if this project of ERP fails, it can threaten the presence and establishment of the
organization as wrong selection of ERP Project can lead to the weakening and failure of the
system which can cause adverse results on the performance of the company. Many big
organizations and corporations initially installed the system of ERP and later abandon the
implementation of that system. The main reason behind the failure of projects of ERP in the
organizations are mismanagement and mishandling of the project. Implementing the system of
ERP is very complex because it drives the significant ratio and portion of the efforts for
implementing the development code to configure software packages that are already existing and
also the complexity which evolve from technical factors to organizational aspects. It also involve
the amendments of processes of business and configuring the systems for good and improved
compatibility. The system of ERP is not much technological practice because it is regarding the
revolution of the organization as it interacts and interrelates with the organizational actors. Thus,
it is critical and significant for the corporation to possess as much knowledge as possible before
embarking the project of ERP and also require the assessment of ERP.

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The techniques and methodology used for collection of data will be secondary sources and all
quantitative method for the research will be used to finish the study which is related to the
initiatives regarding development and learning effectiveness. Quantitative method also aids for
collection of data for verifying the hypothesis. Questions which are close ended are used by
applying the deductive approach to test and verify the hypotheses in the most effective and
efficient manner. The survey by using questionnaires was used to conduct the research and to
gather the information at maximum level. The research which is conducted for this study is
exemplary in nature. The research which is done at primary level is conducted on over 100
respondents to study the topic in depth and gather maximum authenticated information regarding
this study. Analysis of data is done by using the software of MS Excel where multiple graphs are
used to assess and analyze the information. The survey by using questionnaire is used for
conducting the survey and the questions used in the questionnaires are close ended which are
used in order to find out the answers which are required for the questions. The use of Likert
Scale helped to measure the correct answers which are gathered from the respondents. The
researcher make use of all the 100 respondents in order to conduct the successful research who
had used the software of ERP and they are randomly chosen by the organization for the sample
accuracy. Sampling method used to randomly select the respondents is convenient sampling by
making use of non-probabilistic method. The questionnaire consists of 10 questions which
relates to the application of ERP software and its visible outcome in respect of the productivity
of the employees efforts. In this research proposal, the impact of ERP System on the productivity
of the employees of an organization and various approaches for implementing ERP system
successfully are discussed. Furthermore, the value of business in ERP System, evidence of all
statistics which are available regarding the employee’s efficiency in the sector, employees in sale

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department of Australian industry for telecommunication which can help to strive the sale
increase by using the software of ERP, the model of input process output for implementing ERP
and how it can impact the future are discussed in the succeeding paragraphs of the study.
CHAPTER 3 Data Collection and Analysis
With the aim of complying with data storage and ethical policies, data is defined as the
information in its original form which gathered, stored, retrieved and used during the research
course. The methods of research include the gathering of data which can be analyzed or
interpreted to draw the answers for the questions of research or raise the knowledge of topic of
the research study. This information can be collected in various ways like critical text appraisal,
work or literature of art work, observation, experiments, surveys and interviews. The quantitative
and numerical information is obtained from the methods of research like population surveys or
experiments which are repeatedly conducted. It is significant to include the information that is
explained deeply like place of collection, date, measurement methods, and measurement unit to
reduce all kinds of confusion. Qualitative information are recorded while taking the interviews of
the participants either on audiotapes or video. Other information which interprets and describes
the artefacts or texts may be recorded in either written or oral form and are stored in word files or
index cards. The information and data which is collected is in mess format (numerical data
spreadsheets, interview transcripts, artefacts description) which should be analyzed, interpreted
and summarized before any conclusion is drawn. Summarization of content helps to compare the
information in the format of standardization so that it does not get sorted through much
information in order to make the comparisons. The data should be presented clearly using all the
figures like graphs, maps, photographs and diagrams and tables like numerical or written
information and may demonstrate the arguments clearly. Also the specimen, photographs and

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data tables can be presented appropriately. Since this study is aimed for the organizations that
have implemented the system of ERP, this survey administered to those employees who were a
part of process of ERP implementation as end user. Three basic criteria that guides the selection
of this study are: the company selected should be into manufacturing operations, should be using
the system of ERP for minimum one year and that system for ERP must be applied to two key
business processes. The intensity of success of project must be examined by keeping in mind 5
significant components that significantly require to produce the information system based on
computer i.e., hardware, software, people, data and procedure resources. As determination of the
ERP effect is a complex process and it requires a deep understanding of the real context, it is
appropriate to employ the qualitative methodology. Therefore, the paper will focus on the
intangible and operational gains which results from implementing ERP. The indicators of
performance were taken by the ERP vendors and managers by taking their interviews along with
the review of literature. In order to measure the ERP effect on the performance of user, a list
comprising 12 items was created. Since the study used those tools which were completely new to
the research of information system, there was a need to retest those tools to examine the
robustness over the different set of population of a company. The techniques and methodology
used for collection of data will be secondary sources and all quantitative method for the research
will be used to finish the study which is related to the initiatives regarding development and
learning effectiveness. Quantitative method also aids for collection of data for verifying the
hypothesis. Questions which are close ended are used by applying the deductive approach to test
and verify the hypotheses in the most effective and efficient manner. The survey by using
questionnaires was used to conduct the research and to gather the information at maximum level.
The research which is conducted for this study is exemplary in nature. The research which is

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done at primary level is conducted on over 100 respondents to study the topic in depth and gather
maximum authenticated information regarding this study. Analysis of data is done by using the
software of MS Excel where multiple graphs are used to assess and analyze the information. The
survey by using questionnaire is used for conducting the survey and the questions used in the
questionnaires are close ended which are used in order to find out the answers which are required
for the questions. The use of Likert Scale helped to measure the correct answers which are
gathered from the respondents. The researcher make use of all the 100 respondents in order to
conduct the successful research who had used the software of ERP and they are randomly chosen
by the organization for the sample accuracy. Sampling method used to randomly select the
respondents is convenient sampling by making use of non-probabilistic method. The
questionnaire consists of 10 questions which relates to the application of ERP software and its
visible outcome in respect of the productivity of the employees efforts. , there are multiple issues
that should be considered by the researcher like there must be significant skills for analyzing,
simultaneously selection of methods for data collection and appropriately analyzing the facts,
drawing of unbiased inferences, inappropriate analysis of sub group, determining the
significance of statistics, lack of evidently defined and outcome measurements of objectives,
providing accurate and honest analysis, the way to present the data, contextual and
environmental issues, methods for recording the data, validity and reliability and analytical
extent. In order to arise confidence and security in the succeeding analysis, there was an
execution of pilot survey before conducting the significant survey in order to analyze whether the
model that is proposed to analyze the success of ERP was suitable and well developed. It is
decided to employ the PLS Graph to arrive at meaningful outcomes. In order to test the
hypothesized links between the variables of study because PLS is considered as an estimation

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procedure that is non parametric in its approach. Its conceptual principal is a repetitive
combination of analysis of principal components which relates to constructive measures and
analysis of path which captures the constructive structural models. This model signifies the
indirect and direct relationships that are causal among the available constructs. It is used to
estimate and analyze the models that make use of both formative and reflective indicators that
are more appropriate and perfect to analyze the effects which are moderate as techniques which
are traditional cannot be accounted for the error in measurement in constructs that are
exogenous. Alongside this, it also permits the modelling of latent constructs under the conditions
which are not normal and is appropriate and fit for medium and small sample sizes. There are
two levels of confidence that are accepted to signify the result of the test. The first one is level of
95% which indicates that the results of the experiment are almost 95% assured and certain to
reject the null hypothesis. The second level is of 99%, which is not very common, but it indicates
significantly high support level to reject the null hypotheses and favor the alternative hypothesis.
The level or accuracy of confidence can be guaranteed only by the repetitive experiments
because the accurate results are not obtained by applying a single experiment. If an experiment
develops an outcome in which P is equal to 0.1, the significance of results cannot be established
but it does show that improvement in research design or hypothesis can better yield the results.
For instance, if any of the experiment uses small group of samples, a large study may develop
high confidence level. On the other side, if the value of P is 0.5%, which gives probability of
50%, it shows that the results were only due to a chance and the hypothesis or the experiment are
completely flawed. It is also preferred to pursue any other research line. These levels of
confidence are arbitrary in nature and they also constitute a good base to accept the proof.

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CHAPTER 4 Discussion of Results
Implementation of ERP plays a significant role in improving the performance and productivity of
employees in the organization. The ERP system implementation must aim to improve the
understanding and knowledge of the employees which indirectly and directly contributes for the
organizational profitability and productivity. The organizational must learn to handle the
resistance and difficulties faced by the employees by providing the necessary training regarding
use of System of ERP. Leaders in the organization must critically develop the instinct in the
employees regarding the significant benefits of using ERP System which can improve their
productivity which is beneficial for the growth of both organization and employees.
CHAPTER 5 Conclusion And Future Work
The Proposal ends with a conclusion that implementing the system o ERP in the organization can
improve the performance of employees in the organization. The research is done by using
method of primary research and also the data is gathered by using the qualitative research to
gather maximum data by using close ended questions. The sample of this research is more than
100 respondents who are using the system of ERP in the organization for more than one year to
gather accurate outcome. As per the previous study, it is depicted that system of ERP influence
the capabilities of the individual which aids to achieve the vision and mission of the
organization. The attempts in this study are made to assess the impact of implementation of ERP
system in the organization on the performance and productivity of the employees. A proper
guidance should be given to the employees regarding the importance of ERP system and how to
use it efficiently.

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APPENDIX
ERP Implementation Process Can Be Shown As:
Figure 1 ERP Implementation Process

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BUSINESS RESEARCH REPORT
The Key Business Benefits Of ERP Systems are Shown Below:
Figure 2 Significant Business Benefits of ERP System

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BUSINESS RESEARCH REPORT
Various Modules Of ERP System Are Shown Below:
Figure 2 Modules of ERP System