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Enterprise Resource Planning (ERP) Systems and ERP Quality

   

Added on  2022-08-18

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Enterprise Resource Planning (ERP) Systems and ERP
Quality Factors: A Literature Review

Abrar Ullah*, Rohaizat Bin Baharun† Khalil MD Nor‡,
Muhammad
Siddique
§ and Mansoor Nazir Bhatti**
Abstract

Enterprise Resource Planning (
ERP) systems are the largest software
packages
of Information System (IS) adopted by many organisations to
seek improvement in their
employee’s productivity and gain
competitive advantage
. The purpose of the study is to highlight the
current state of literature on ERP system with spec
ific focus on ERP
quality factors representing System Quality (SQ), Information Quality

(IQ), Service Quality (SRQ). The study also highlights the
exemplary
measures (scale)
applied in various studies to evaluate ERP systems in
many settings.
The study will enable the researchers to understand ERP
quality factors and its impact while utilizing and evaluating the ERP

system.
Lastly, the study summaries recent empirical work on each
quality factor and
based on these studies recommendations are
pr
ovided for future research.
Keywords:
Enterprise Resource Planning (ERP) Systems, ERP Quality
Factors, System Quality
(SQ), Information Quality (IQ), Service Quality
(SRQ),
Review
Introduction

Enterprise Resource Planning (ERP) systems are business management

systems, comprising of a set of comprehensive
software of Information
System (IS)
designed to integrate and manage all business functions
within an
organization, these set include applications for human
resources, financial and accounting, sales and distribution, project

management, material management, supply chain management (SCM),

quality management
(Shehab, Sharp, Supramaniam, & Spedding, 2004).
The main theme of ERP system is the centralization of

information through centralized database. ERP system are Information

system softw
are modules sharing a central database and information is
*
Abrar Ullah, PhD Scholar, Faculty of Management, Universiti Teknologi
Malaysia, Johor Bahru, Malaysia
.
Dr. Rohaizat Bin Baharun, Faculty of Management, Universiti Teknologi
Malaysia, Johor Bahru, Malaysia

Dr. Khalil MD Nor, Faculty of Management, Universiti Teknologi Malaysia,
Johor Bahru, Malaysia

§
Muhammad Siddique, Department of Business Administration, University of
the Punjab, Gujranwala Campus, Pakistan

**
Mansoor Nazir Bhatti, Faculty of Management, Universiti Teknologi
Malaysia, Johor Bahru, Malaysia

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flown between them, which contain functionalities for sales and
marketing, development and product design, field service, production,
inventory control, distribution, process design, management, and
procurement industrial facilities management, quality, manufacturing,
human resource, finance and accounting, and information services
(Upadhyay & Dan, 2008; Xu, Yu, Lim, & Hock, 2010). Moreover, ERP
systems are the most comprehensive business information systems that
has come to surface, and provide solid informational foundation for
operational processing as well as decision making with the condition to
implement successfully(Fadlalla& Amani, 2015).

ERP system implementation has led to better performance
(Chung, Hua Tan, Lenny Koh, Law, & Ngai, 2007). These systems
brought enormous benefits to organizations such as increased
productivity, improve access to accurate and timely information, enhance
work flow, reduce reliance on paper, knowledge sharing, tight control,
(Bhamangol, Nandavadekar, & Khilari, 2011), as well as automate
business processes by coordinating and integrating the information
across departments (Monk, 2009). And these benefits are clear evidence;
why larger organizations with large amount of data are attracted to these
systems.

Literature review in academic field is considered to be very
useful to look at the whole research field, to underline the important
studies and provide guidelines for future research. Thus, the objective of
this paper is to shed light on the ERP systems literature focusing on ERP
quality factors representing system quality, information quality, service
quality.
The study will enable the researchers to understand ERP quality
factors and its imp
act while utilizing and evaluating the ERP system.
Literature Review

The purpose of this section is to place our literature review in
line with existing knowledge about ERP systems in general and ERP
systems quality factors in particular. Then the set of ERP quality factors
i.e. system quality, information quality and service quality will be
discussed separately.

Enterprise Resource Planning (ERP) Systems

Enterprise Resource Planning applications are packages of
Information System (IS), designed to establish the sharing of
organizational data resources. (Klaus, Rosemann, & Gable, 2000).
According to (Grabski, Leech, & Schmidt, 2011; Kumar, Maheshwari,
and Kumar, 2003; Ngai, Law, & Wat, 2008; Umble, Haft, and Umble,
2003) ERP systems are integrated, complex innovations. Historically,
the name of Enterprise Resource Planning (Kumar, Van Hillegersberg, &
Experiences) was originated from material requirements planning (MRP)

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and Manufacturing resource planning (MRPII). In 1970s MRP were
developed to plan the product or parts requirements according to the
master productions schedule. Following this, in 1980s manufacturing
resource planning (MRP II) was introduced. MRP II included areas like
project management, shop floor and distribution management,
engineering human resource, and finance.

With the enhancement of these systems ERP came to surface in
late 1980s and early 1990s. MRP, MRP II and ERP integrated business
processes such as manufacturing, project management, financial,
distribution, inventor management, human resource, maintenance and
service, accounting and transportation providing visibility and
consistency to the enterprise. In 1990s more functions and modules were
added by vendors leading to the birth of extended ERPs (Rashid,
Hossain, & Patrick, 2002) and they have become more among
practitioners (Davenport, 1998). According to (Nizamani, Khoumbati,
Ismaili, & Nizamani, 2014) now a days the term extended ERP systems
are introduced. The nature of these systems is efficient and advance to
process sales, human resources, procurement, manufacture, finance,
CRM, operating planning, inventory management and material
management. The concepts are ERP systems are summaries in table 1.

Table 1: Summary of ERP concepts

Concept / Definition
Author (s)
ERP system is a business management system comprises
of set of software that integrate and manage all business
functions within organization

(Zornada &
Velkavrh, 2005)

Enterprise Resource Planning systems are integrated and
complex innovations

(Grabski et al.,
2011; Umble et
al., 2003)

ERP are comprehensive information system that support
the information needs of all the business functions, in real
time, including human resources, finance, marketing,
operations, customer information, sales and supply chain

(Seng Woo, 2007)

ERP is generally termed as a system that automate key
business functions through integration and support
decision making accordingly

(Razmi, Sangari,
& Ghodsi, 2009)

A set of business modules or applications, that links
organization’s units like humane resource, finance,
manufacture, accounting into one single integrated system
providing a platform for flow of information across all
units of the business with the use of internet as medium.

(Beheshti, 2006)

ERP systems are configurable information system
packages, which are design to integrate business functions.

(Wu & Wang,
2006)

ERP system are set of software designed to integrate all
business functions within organization.

(Shehab et al.,
2004)

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ERP is an integrated system where a unique database
provide flow for information continuously and consistently
for the entire company.

(Wadate, 2014)

ERP system is a customizable enterprise wide packages
able to integrate all organization’s functions to single
system with a common database.

(Cardoso,
Bostrom, & Sheth,
2004)

ERP systems are business software packages which
integrate all needed information of the organization and
efficiently and enables them to use resources effectively
and efficiently (human resources, financial, material etc.)

(Fui-Hoon Nah,
Lee-Shang Lau, &
Kuang, 2001)

A packaged business software that automate and integrate
the business processes of an organization, manage a
common database across enterprise and access information
in real time environment.

(Marnewick &
Labuschagne,
2005)

ERP Quality Factors

In Information System (IS) related literature, quality itself is
relatively ―ill-defined‖ (Nelson, Todd, & Wixom, 2005). Many authors
argue that quality factors are self-defined or empirically derived(Dawi,
Jusoh, Nor, & Qureshi, 2016; Qureshi, Khan, & Zaman, 2012).
According to Rai, Lang, and Welker (2002) system quality is ― the
degree to which a system is user friendly‖, information quality is ― the
degree in which information generated possess content, accuracy, and
format‖, and service quality is ― human delivered service quality‖. Petter,
DeLone, and McLean (2008) describe SQ is ―performance of the IS in
terms of reliability, convenience, ease of use, functionality, and other
system metrics‖, IQ is ―characteristics of the output offered by the IS,
such as accuracy, timeliness, and completeness‖ and SRQ is ―support to
users by the IS department, often measured by the responsiveness,
reliability, and empathy of the support organization‖.

Ding (2010) provide a unified view of IS quality concepts from
marketing exchange perspective. They explained that quality in
information systems is a capability that can provide benefits to users in
tangible or intangible manners and define them as IQ: ―the capability of
information output to benefit users‖, SQ: "the capability of an IT object
to process and deliver information for benefit of users‖ and SRQ: ―the
capability of a service to benefit users‖. Recently, the quality factors are
used in conjunction to evaluate the IS success in different context and
settings such as m-banking (Tam & Oliveira, 2016), ERP benefits (Yeh,
Yang, & Lin, 2007), IT outsourcing (Gorla & Somers, 2014),
organizational impact (Gorla, Somers, & Wong, 2010), E-learning
(Mohammadi, 2015), e-portfolio (Abdullah, Ward, & Ahmed, 2016),

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human resource information system (Shahibi, Saidin, & Izhar, 2016),
library (TandiLwoga, 2013).

The quality factors for this study are based on Delone and
McLean (2003) IS success model and they recommend that system
quality, information quality and service quality be assessed. These
factors are explained individually in the next section.

ERP System Quality (SQ)

System quality is defined as the degree in which the
functionalities of the system can satisfy the needs of the users, with ease
and encountering minimal problems.(Chang, Li, Hung, & Hwang, 2005;
Delone & McLean, 2003). Bravo, Santana, and Rodon (2016) define SQ
as the technological factors regarding the extent to which IS is simple to
understand and use and how the system performs from a technical and
design perspective. These functionalities are: consistency of the user
interface, ease of use, ease of learning, quality of documentation, and the
quality and maintainability of the program code, ease of learning (Chang
et al., 2005; Delone & McLean, 2003; Wang & Liao, 2008; Wang,
2008). System quality is desirable characteristics of an information
system (Petter et al., 2008), because its enable the system to provide easy
and prompt information access (Schaupp, Carter, & McBride, 2010),
reflect good quality design (Hsieh, Huang, & Yen, 2013), ensure secure
and reliable function (Teo, Srivastava, & Jiang, 2008), provide system
infrastructure support (Venkatesh, Sykes, & Venkatraman, 2014), ability
to fulfil expected performance (Weerakkody, El-Haddadeh, Al-Sobhi,
Shareef, & Dwivedi, 2013), and improve efficiency and effectiveness
(Karkin & Janssen, 2014).

A common measure of SQ is ease of use used in studies.
However, many other studies proposed and used different measures to
capture SQ construct as a whole shown in table 2.

Table 2: Exemplary measures of System Quality

Studies
Measures
DeLone and McLean
(1992)

―realization of user expectations, response time,
Flexibility of system, perceived usefulness of IS,
usefulness of DSS features, usefulness of specific
functions, stored record error rate, system
accessibility, resource utilization, investment
utilization, IS sophistication (use of new technology),
reliability, Convenience of access, ease of learning,
ease of use, integration of systems

Seddon (1997)
bug in the system, user friendly, consistency of the
user interface, ease of use, ease to learn, quality of the
program code, response rate in interactive system,
documentation of the program code, maintainability

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of the program code

McKinney, Yoon, and
Zahedi (2002)

Access, ease of use, interactivity, navigation,

Delone and McLean
(2003)

ease-of-use, functionality, reliability, flexibility, data
quality, portability, integration, importance,
adaptability, availability, response time, usability (e-
Commerce)

Sedera and Gable
(2004)

Access, Customization, Ease of Learning, ease of use,
Flexibility, Integration, sophistication, system
accuracy

Iivari (2005)
Convenience, Flexibility, Integration, response time,
Nelson et al. (2005)
Reliability, Flexibility, Accessibility, response time,
integration

Gable, Sedera, and
Chan (2008)

Access, Customization, Data Accuracy, Ease of
Learning, ease of use, efficiency, Flexibility,
Integration, reliability, sophistication, system
accuracy

Tsai, Chen, Hwang,
and Hsu (2010)

Data Accuracy, Database content, Data Currency,
System Accuracy, Response time

Urbach, Smolnik, and
Riempp (2010)

Navigation, Search-ability, structure, usability,
functionality, accessibility

Previous literature exists on the importance of system quality to
evaluate the IS success, acceptance and performance in conjunction with
other constructs. In this regard, Tam and Oliveira (2016) investigate the
functionalities of the ERP factors of D & M IS success model (1992,
2003) and factors from TTF as direct and moderating affect to evaluate
the impact of mobile-banking on individual performance. The result
reveal that use and user satisfaction are key precedents of individual
performance and also TTF has moderating effect over use to user
performance. Moreover, user satisfaction is affected by ERP quality
factors IQ, SQ, SRQ providing new insight to managers to apply
strategies for retention of users or attract new potential users. The study
further pave ways for integration of IS models for better investigation of
ERP systems.

While predicting ERP adoption and satisfaction determinants,
Costa, Ferreira, Bento, and Aparicio (2016) propose a model comprising
of variables from D&M and TAM with training and Management
support aiming to investigate determinants effecting user satisfaction,
adoption and understand ERP user perspective on such matters. The ERP
system adoption constructs: Perceived Ease of Use (PEOU), Perceived
Usefulness (PU), Actual Use (USE) and Behavioural Intention (BI) were
included from TAM, while System Quality (SQ) and User Satisfaction
(US) from D&M IS success model. The outcome shows the validation of
the model and predict that training, and top management support has

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