Quality of Services in Healthcare Centers by Deploying the Platform of (ERP)

administrativesciences Article
Enterprise Resource Planning Systems: Digitization
of Healthcare Service Quality
Muhammad Fiaz 1, Amir Ikram 2,3,* and Asad Ilyas 1
1 Institute of Business & Management, University of Engineering & Technology, Punjab 54890, Pakistan;
[e-mail] (M.F.); [e-mail] (A.I.)
2 School of Management, Xi’an Jiaotong University, Xi’an 710049, China
3 Department of Business Management, National College of Business Administration & Economics,
Lahore 54660, Pakistan
* Correspondence: [e-mail]
Received: 9 May 2018; Accepted: 28 June 2018; Published: 27 July 2018





Abstract: The purpose of this study is to evaluate the perception of healthcare professionals in
improving the quality of services in healthcare centers by deploying the platform of Enterprise
Resource Planning (ERP). Individual attributes, organizational impression, information, and the
system quality of ERP have been used to evaluate the overall influence of integrated planning
systems on health care service quality. A mixed methods approach is used to collect and examine
data through triangulation. Data for the empirical study was collected from 279 medical professionals
of five healthcare organizations operating in the city of Lahore, Pakistan, through a self-administered
questionnaire. Descriptive statistics squared multiple correlations and reliability coefficients were
used as data analysis tools. Moreover, the goodness of fit test of the structural model was conducted
through AMOS 20. All given dimensions of ERP are postulated to have a positive effect on healthcare
service quality. The results reveal that the use of an enterprise planning system has a positive
impact on individuals, organizational information quality, and system quality in healthcare services.
The study further concludes that a well implemented ‘Enterprise Resource Planning System’ results in
better system output and enables healthcare professionals to provide better healthcare service quality.
Keywords: enterprise resource planning; information systems; healthcare; service quality
1. Introduction
Database management systems and information analytics ensued widespread improvements of
quality and efficiency in almost every sphere of life. Moreover, the healthcare sector is no exception,
where technological advancements and information systems are transforming the sector with the
orientation of integrated systems. Most of the transformations about healthcare systems are primarily
focused on health care quality and the minimization of cost. Healthcare professionals and institutions
lack the adequate systems required to deliver strategic change. Thus, there is a sense of urgency on
their part to make use of information technology (Cucciniello et al. 2016). However, the adoption
rate of the IT-based integrated system in the healthcare sector is quite slow as compared to other
sectors, such as commerce and finance, especially in the case of emerging economies. This calls for an
empirical investigation of the healthcare sector concerning problems being faced in the implementation
of the Enterprise Resource Planning (ERP) system. ERP software can integrate all the departments
of an organization and functions into a unified system (Somers and Nelson 2001). ERP primarily
offers two welfares to the organization that are usually not prevalent in an organization with a
non-integrated system; i.e., (a) Unified database for ERP systems where all the transactions of an
organization are entered, stored, handled, and reported. (b) A single enterprise business view that
Adm. Sci. 2018, 8, 38; doi:10.3390/admsci8030038 www.mdpi.com/journal/admsci

Adm. Sci. 2018, 8, 38 2 of 12
covers all departments of an organization and its functions. Achieving a competitive edge is considered
another reason for implementing ERP systems in healthcare organizations (Al-Mashari et al. 2003).
The design of ERP systems is based on the advancement of the ability of an organization to
generate accurate and timely information, thereby enhancing the competitiveness of an organization
(Singla 2008). These systems are complex and incur the high cost of implementation in an organization.
Therefore, organizations need to reconsider their ERP system purchasing and implementation plan
(Razi and Tarn 2015). The ERP system has substantial benefits, but it can also be responsible for
causing troublesome changes to an organization and the rate of failure of the ERP system varies.
Healthcare is a very complex sector comprising a large number of departments and patient care
systems (Acharyulu 2012). Studies have advocated that there exist a positive relation of investment in
an information system with health care service productivity (Menon et al. 1996). The reliability of the
healthcare system is increasing due to the implementation of an information system for the help in
the diagnosis of disease, improved management, and better services (Adler-Milstein and Bates 2010).
Information system (IS) in healthcare is explained as an enormous system of integration that has the
capability to support the colossal information need of the healthcare system covering the financial,
clinical, auxiliary, and patient management (Roussel et al. 2006). Implementation of IS in healthcare
has resulted in enhanced patient care quality, improving the management of health services, and access
to knowledge for decision making in administration and clinical processes (Parr and Shanks 2000).
Integral systems are requirements of healthcare for the procedure development and application of
patients at the same time considering the requirement of capacity. In the healthcare system, the ERP
system use has improved the material management process.
There is hesitation on the part of practitioners in accepting new technologies, especially in the
public sector of developing economies such as Pakistan. Many rely on persisting with the traditional
way of doing things, and that is truer for the public healthcare sector. However, the private sector
in developing countries is relatively technology privy because of their commercialized nature. ERP
is widely implemented in private sector, and there are few queries of its implementation in public
healthcare, particularly in emerging economies. Hence, this paper aims to enrich the debate concerning
public healthcare by investigating one of the first applications of it in the emerging economy of
Pakistan. The rest of the article is structured as follows: the next section reviews the literature on
enterprise resource planning and its implementation in the public healthcare sector with specific
reference to developing economies. Following that, the theoretical model and hypotheses development
are discussed. In the next section, the research methodology and framework is elaborated upon in
the research design section. Conclusions, research implications, and provocative questions for future
study bring the discussion to a close.
2. Literature Review
Healthcare service quality is the result of a collaboration between the healthcare agent and the
patient. Thus, personal characteristics of the provider and the patient and organizational factors affect
the overall service quality (Mosadeghrad 2014). Jawaid (2016) analysed recent studies about violent
incidents against doctors in South Asian countries and suggested that such incidents are triggered
by a lack of communication between healthcare professionals and the patient, reduced image of
the medical profession, and below par quality of care. A proper ERP system can take care of these
problems. In the medical and healthcare profession, there often occurs a scenario where a doctor
lacks knowledge regarding a particular disease, and this is especially common among young doctors.
For instance, Al-Arifi et al. (2016) observed that healthcare professionals lack knowledge regarding
warfarin interactions with drug and herbal medicines. Another advantage of the ERP system is that it
can accommodate for the lack of information regarding a specific disease or medicine on the part of
doctors. Bharati and Ganguly (2013) noted that the South East Asian region has the highest number of
malaria cases. They suggested that increased monitoring, surveillance, and cross-border collaboration
can alleviate this problem. Balkrishnan et al. (2013) proposed that active Comparative Effectiveness

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Research (CER) systems nurture the sharing of resources, skills, and capabilities. ERPs can be helpful
in this regard as they can enable regional networking and data-sharing among all stakeholders in
real time.
Rouhani and Mehri (2018) investigated ERP benefits through a survey by defining 31 empowering
benefits for this enterprise system based on reviewing the literature and classifying it into four groups
of empowering benefits including informative, communicative, growth and learning, and strategic
benefits. The results indicated that the communicative, strategic and informative empowering benefits
are significant advantages. Tasevska et al. (2014) conducted a survey on 30 SMEs in the Republic of
Macedonia. The findings revealed that SMEs implemented common project planning practices, although
they did not consider the planning process as a distinct phase of the ERP implementation. Considering
the success of the ERP implementations, this study established that most of the representatives perceive
the undertaking as useful regarding client satisfaction and perceived quality measures. By using a
multi-method approach, Cucciniello et al. (2016) conducted comparative case studies of two different
hospitals to examine the adoption and implementation of identical medical record systems and found that
healthcare organizations benefited from deploying the integrated medical system regarding information
quality, data sharing, and cost efficiency. The ERP system has the capability of integrating information
that is used by human resources, manufacturing, distribution, and accounting departments into a single
computer system (Umble et al. 2003). ERPs provide a holistic view to organizations about every business
process ongoing in the organization. It provides one software application, a unified database, and a single
interface to the organization. The ERP system can provide enhancement in service quality, productivity,
service cost decrease, and efficiency (Shaul and Tauber 2013). The earlier target of the ERP system was
not the services sector, but instead, the ERP system vendors focused on the manufacturing companies
(Botta-Genoulaz and Millet 2006).
The Enterprise Resource Planning system emerged in 1960, beginning with material requirement
planning (MRP). After that there was an advancement in the system and it was transformed into MRP
II (Basoglu et al. 2007). From 1960 to 1970, there was a paradigm shift from inventory control to MRP
improvement, and this was accepted by a lot of manufacturing companies for the efficient calculation
of the materials they required for the manufacturing process. Then the MRP system further evolved
into a system that was more sophisticated and included detailed capacity planning, master scheduling,
long-range planning, capacity planning, and resource planning (Xue et al. 2005). MRP II systems further
included planning related to operations and sales, as well as a financial interface. The MRP II system
was a useful tool for planning for all types of resources present in an organization. It was logical for the
planning of materials and production processes, but organizations realized the need for the incorporation
of customer satisfaction and profitability (Wallace and Kremzar 2002). The latest form of the ERP system
present today is capable of handling with various business units covering management of customer
relationship, human resource, purchasing, finance and accounting, manufacturing, processing of the
order, management of materials and planning of operation and sales (Botta-Genoulaz and Millet 2006).
As a result, a large number of organizations have already adopted ERPs, and its implementation is
fast increasing in the services sector (Acharyulu 2012). The services sector has dominated its share in
the Growth Domestic Product (GDP) of developed countries. Therefore, the progress of technology,
globalization trends, and communication technologies have exerted pressure on the service sector for
their new competition offerings (Costa 2015). The organizations are interested in information system
acquiring for the adoption of modern technology and making it accessible for the users. The adoption
of information technology in the healthcare system is complicated as the Enterprise Resource Planning
system in healthcare is concerned with the lives of humans (Bazhair and Sandhu 2015). The acquiring of
this system is further influenced by various actors that have multiple interests and backgrounds. There
are chances that stakeholders in health care will resist in the adoption of information system and there is
need that it should be managed carefully, as these actors will be involved in information system adoption
and implementation (MacLennan and Van Belle 2014). Various success factors make implementation of

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ERP system successful. The perspective includes setting up of an ERP system, implementation phase,
evaluation step, success of ERP system and its profit (Botta-Genoulaz and Millet 2006).
Twenty-two critical success factors for ERP system implementation at various implementation
phases have been presented by Somers and Nelson (2001). Successful implementations of the ERP
system have also been linked with the management of the project, support of top management,
teamwork, program of change management, and composition of ERP system team. The culture of
an organization, economic environment, and regulation of the government also offer challenges for
the implementation of Enterprise Resource Planning system (Ward and Peppard 2016). The practical
implementations of an ERP system offers many benefits. The benefits may be intangible or tangible;
e.g., improvement in cash flow, order management, system integration, reduction of inventory,
logistics management, and information quality enhancement (Botta-Genoulaz and Millet 2006). Some
organizations have improved their position by ERP system implementation in their business processes;
for example, a company known as Earthgains implemented an ERP system and, as a result, there was an
enhancement in their operating margin from 2.4–3.3%. Similarly, on-time delivery was also heightened
to 99% (Hong et al. 2012). The ERP system implementation is a very complex process, and organizations
encounter different types of problems while adopting ERP system phases (Kumar et al. 2003). In many
cases, the implementation of an ERP system has failed because of the enormous implementation
costs. The failure rate of implementation of an ERP system has resulted in better ERP system process
understanding (Hung et al. 2014). ERP systems have a problem, the very high cost of implementation
sometimes provides inadequate results because the individuals using the ERP system are not aware
of proper ERP system functioning and working (Altamony et al. 2016). The failure rate of Enterprise
Resource Planning system has been greatly publicized, however, it has not detracted organizations
from investing money into ERP system implementation (Scotti et al. 2007). The cost of integrating an
ERP into the business process system is 3 to 10 times higher than the original cost of the ERP software.
This increase is due to the high costs charged by system consultants and the persons involved in
system integration (Karimi et al. 2007). As well, there is cost related to the replacement of the existing
information system in the organization into the system required for ERP.
There are quite a few studies that analysed the digitization of healthcare service quality with
the help of ERP. Almajali et al. (2016) conducted an empirical analysis of 175 Jordanian healthcare
organizations and examined the data using structural equation modeling. They found a significant
relationship between antecedents of ERP and its implementation success and further suggested that
user satisfaction plays a significant mediating role between ease of use and ERP implementation success.
Chiarini et al. (2018) investigated ERP implementation in public healthcare and suggested that benefits
can be classified into four theoretical categories: patients’ satisfaction, stakeholders’ satisfaction,
operations efficiency, and strategic and performance management. While issues surrounding ERP
implementation include the complexity of the project, process re-engineering, and staff involvement.
As per Du (2017), the performance of the healthcare service includes quality and efficiency, so there
is inevitably an association between them. In general, it is believed that there is a trade-off between
quality and efficiency; however, Du (2017) suggested that it can not be completely accurate.
One of the methods of curtailing cost and capitalizing on competitive advantage is the
implementation of an ERP system. With respect to developing economies, there is hesitation on the
part of practitioners in accepting new technologies and there is a tendency to persist with traditional
ways of doing things. Discourse on ERP systems acceptance is prevalent among policymakers and
researchers as they intend to understand the underlying psychological and social aspects inducing user
adoption behavior. Researchers also seek to answer why the application of ERP among organizational
stakeholders remains at a perfunctory level (Lim et al. 2005). Amoako-Gyampah and Salam (2004)
proposed an extension to the technology acceptance model and empirically investigated it in an ERP
implementation setting. It was shown that both project management and training influence the shared
views that users form about the assistances of the technology and how shared philosophies affect
the perceived expediency, ease of use, and know-how. There are numerous aspects that affect the