Enterprise Systems Report: Drivers, Performance, and Change Management

This report provides a comprehensive overview of enterprise systems, examining the principal drivers behind their adoption by businesses, such as the need for global competence, responding to dynamic environments, and improved information sharing. It explores the contribution of enterprise systems to organizational performance at various levels, including restructuring at the organizational level, improved coordination at the functional level, and strategic decision-making at the managerial level. The report also delves into methods for measuring the contribution of enterprise systems, including the expectation-benefit framework, measurement models, and the balanced scorecard. Furthermore, it emphasizes the importance of organization change management for successful adoption and implementation of enterprise systems, highlighting strategies such as top management support, transparent planning, and effective communication. The report concludes by stressing the significance of change management in ensuring the successful implementation of enterprise systems to achieve desired results and benefits.

Table of Contents
S.No. TOPICS Page Number
Executive Summary 1
I Introduction 2
II Principal Drivers Behind Businesses Adopting Enterprise Systems 2
III Enterprise Systems and Organization Performance 3
IV Measuring The Enterprise System’s Contribution 5
V Organization Change Management for Successful Adoption of
Enterprise Systems
6
VI Conclusion 7
References 8

EXECUTIVE SUMMARY
The report highlights the key aspects of adopting Enterprise Systems. Adoption and
implementation of an enterprise system require planning and preparation. The report discusses
the principal drivers behind businesses adopting enterprise systems and their contribution to
organization performance along with their evaluation methods. The report also focuses on the
essential aspects of introducing and managing change in an organization for successful
implementation of an enterprise system.
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I. Introduction
The organizations are working hard to increase their efficiency and productivity with lean
systems. The prime objective of every business is to perform efficiently with optimum allocation
and utilization of resources. Organizations are operating at the global level and for sustenance, a
high degree of integration and collaboration among all the global units are required. The
following sections throw light on the role of enterprise systems in organization sustenance and
the major driving factors for their adoption.
II. Principal Drivers Behind Businesses Adopting Enterprise Systems
i. Developing integral competence at a global level
The business firms today are expected to rapidly adapt to the market dynamics elements like
evolving customer demands, continual financial analysis, and cutthroat price competitions.
Responding and adapting to these mechanisms at a global level helps the business to develop an
integral competence (Seethamraju and Sundar, 2013). This is one of the prime reasons for
businesses adopting enterprise system.
ii. Responding to the dynamic environment
It is equally crucial for a firm to cope up with an ever-increasing size of the data, respond to the
environment changes, customer demands, organizational changeovers and equipping the human
resource with the competent capabilities. The swiftness and ease with which a firm responds to
these challenges define the firm’s dexterity (Lu and Ramamurthy, 2011). This is another major
reason for firms adopting enterprise system.
iii. Sharing of information and collaborating
Organizations today have a matrix structure with cross-functional teams operating across the
globe. Sharing of information and collaborating is a challenge. The information has become a
strategic resource requiring judicial management (Morin and Hovav, 2012). The enterprise
systems play a crucial role in data sharing and connecting the heterogeneous systems at multiple
levels.
iv. Functional coordination and process re-engineering
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System integration is many times inhibited by power and interdepartmental conflicts, high cost,
long term and intangible return on investment (Soliman and Karia, 2017). Hence, firms switch to
enterprise systems which focus on the process rather than functions. Enterprise systems are
equipped with many processes for a wide variety of business functions. It helps in logical and
physical integration by focusing on organizational goals instead of functional goals (Qian,
Baharudin and Kanaan, 2016).
v. Technology revolution
There is an increasing demand for business intelligence for problem solving and analysis. These
help in accurate forecasting and storing the existing data for future reference. The objective has
transformed from merely achieving goals to maximum utilization of digital technology in every
possible organizational operation. This creates the digital core which encourages adopting
enterprise systems (Rashvanlouei, Thome and Yazdani, 2015).
vi. Achieving supply chain management efficiency
Enterprise systems further enhance the business processes that lead to better customer
satisfaction, cost minimization and optimum allocation of resources to the value chain activities.
Global brands like Amazon, Dell, Nike, Deloitte are examples of firms with effective supply
chain management augmented by effective implementation of enterprise systems (Briggs, 2017).
vii. Enhancing service delivery to customers
Firms today are focusing on enhanced customer service delivery across the globe. Enterprise
system mechanizes the process of service delivery to customers that ensures uniformity and
coherence in the delivery process. This also takes care of customer data security and service
convenience (Albadri, 2012).
III. Enterprise Systems and Organizational Performance
The prime objective of implementing enterprise systems is to have logical assimilation and
coordination of data between the various functional units of an organization. This leads to
restructuring and planning of the firm’s external and internal activities (Ignatiadis and
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Nandhakumar, 2009). Enterprise systems contribute to organizational performance at many
levels.
Organizational Level- Restructuring
Enterprise systems enhance the organizational decision-making process by transforming the
structure into a more horizontally integrated. The mechanized nature of the enterprise systems
flatten the traditional hierarchies thereby creating avenues for better communication and flow of
information (Matilla, Nandhajumar, Hallikeinen and Rossi, 2011).
Functional Level
The major role of the enterprise system is to coordinate and consolidate data for all the functional
units and across the operational, management and strategic levels of an organization. This
promotes better decision making across the organization. Employees can better align their
responsibilities with organization values, strategic goals, vision and offerings (Mattila et al.
2011).
Managerial and Strategic Levels
Enterprise system brings out the different roles of management for its successful implementation.
A consultant team is formed which comprises of employees with expertise in enterprise
planning, business processes, and information system. This team is formed by the top
management and it also has enterprise systems experts from outside the organization. The top
management takes the strategic decisions of implementing ERP and analyses it by defining the
major objectives of adopting an enterprise system (Almgren and Bach, 2014). The management
is highly committed right from decision making and adoption to implementation.
Operational Level
Enterprise systems lead to the efficient management of projects with the help of precise
identification and comprehension of the objectives. This is further supported by organizational
resource planning (Lokuge and Sedera, 2017). There is an increased uniformity across various
functions which reduce manual maneuvers and employee training. This in-turn enhances
productivity and cross-functional activities. The operational model is defined by the business
processes. Organizations scrutinize existing processes and identify the scope of re-engineering
and orientation (Revenaugh and Muretta, 2013). This is required for developing a competitive
advantage which further increases the efficiency of the overall value chain activities (Almgren
and Bach, 2014).
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IV. Measuring the Enterprise System’s Contribution
Earlier the only way to measure the contribution of enterprise systems in the organization’s
performance was by analyzing the financial results. Later number of researchers objected to
measurement based on one parameter hence some comprehensive measurement systems were
proposed and validated which are mentioned below (Hart and Snaddon, 2014).
1. The expectation-benefit framework
This framework is designed to evaluate and measure the organization performance after
implementation of an enterprise system at four different levels (Williams and Schubert, 2010).
i) Business Level comprises of organization strategies and processes. The major
parameters for measuring the role of enterprise systems at this level are
mechanization, clarity, intricacy, competence, capability, and efficacy.
ii) Management Level comprises of the various resources related to products,
employees, finance and knowledge. The critical evaluation parameters are expertise,
expenses, capacity, achievements, employees and time.
iii) Functional Level comprises of all the functional units that are part of the value chain
activities like marketing, sales, procurement, research and development, supply chain
and human resources. The parameters for measurement are processes, negotiations,
sales revenues, innovations.
iv) Information systems and technology level comprises of the technology prospect of
the organization with respect to information systems and enterprise systems. The
critical measurement parameters are issues pertaining to coordination, adequacy,
utility, flexibility and stability.
2. A Measurement model for enterprise system performance
The DeLone/ McLean Information System Success Model and The Gable et.al Model
were used to measure the performance of information systems (Kronbichler, Ostermann
and Staudinger, 2010). Both these models were revised and updated for enterprise
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systems for mapping the net benefit with the organization impact. Thereafter the
Extended ERP Systems Success Measurement Model was proposed in 2006. This model
considers the factors like quality of ERP vendors and system, quality of information and
know-how along with the effect of employees and organization on the success of the
enterprise systems.
3. Balanced Scorecard for enterprise system measurement
The Balanced Scorecard for enterprise planning has been in practice since 1999. This is
the perfect amalgamation of the traditional methodology of measuring financial
performance with three further prospects: customer service, business process, and
learning and development. These activities are measured using balanced scorecard and
the results are used as inputs for strategic planning and system development
(Kronbichler, Ostermann and Staudinger, 2010).
V. Organization Change Management for Successful adoption of Enterprise System
Successful adoption and implementation of an enterprise system is a challenging and daunting
task for organizations. Not every time enterprise system implementation is successful. Research
data suggest that approximately half of the enterprise systems project fail to deliver expected
results and benefits. The prime reason for this is inadequate attention being paid towards
prerequisite changes for implementation. Hence, change management is essential and
recommended for preparing the organization for the new system and processes (Alballa and
Almudimigh, 2011).
Nine strategies for organization change management were identified for successful adoption and
implementation of enterprise systems by Trieu in 2010.
1. Support of top management is essential at all levels.
2. Teams working for the projects should work in cohesion to introduce change
management without much resistance.
3. Champion of the project acts as an influencer of change management across the
organization.
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4. Transparent and systematic planning with clear objectives for the required change
management.
5. Large scale participation by the employees in change management and during the
implementation of the enterprise system.
6. Effective communication across the organization for better comprehension of change
management and implementation of the enterprise system.
7. Effective feedback system to identify the resistance, if any.
8. Effective training to equip the employees with the knowledge of the enterprise system, its
usability, and implementation.
9. Rewards and incentives motivate to accept change management and adopt new
technology and systems.
VI. Conclusion
Organizations are adopting enterprise systems for competing at a global level and establishing an
edge over global competitors. Enterprise systems play a key role in organization performance by
contributing at various levels and creating a panoptic business environment. There are methods
identified to measure these contributions which act as benchmarks for future implementation. A
lot of planning and preparation is required for successful adoption and implementation of an
enterprise system or else the entire endeavor often fails to deliver desired results and benefits.
Hence organization change management is an inevitable aspect of successful adoption of
enterprise systems.
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