Academic journal article Interdisciplinary Journal of Information, Knowledge and Management

Critical Success Factors for ERP Systems Implementation in Public Administration

Academic journal article Interdisciplinary Journal of Information, Knowledge and Management

Critical Success Factors for ERP Systems Implementation in Public Administration

Article excerpt

Introduction

Looking for ways to increase efficiency, reduce costs, improve product quality, and increase customer satisfaction and shareholder value, organizations have realized that the source of success in this area lies in the performance of their processes. It turned out that it is not enough to look at an organization in terms of its functional structure, but also as a network of interrelated business processes. This led to the formulation of new management concepts, such as business process orientation (BPO) (Cieslinski, 2011; McCormack & Johnson, 2001), process-based organizations (PO) (Hernaus, 2008; Levi, 2002; Seltsikas, 2001) and business process management (BPM) (Jeston & Nelis, 2008; Lu, Sadiq, & Governatori, 2009; Smith & Finger, 2003; Trkman, 2010; Weske, 2007).

The process approach is based on an assumption that the optimization of an organization is focused on optimizing processes rather than optimizing functional units. As organizations move away from the process of grouping resources and expertise in hierarchical functional units, in order to move to the process level, a hierarchical structure of an organization is replaced by a horizontal process-oriented structure, which foundations lie in the identified processes. The process organization is a set of mutually inter woven processes that need to be effectively and efficiently managed (Smith & Finger, 2003). Studies show that process management ensures more dynamic activities and allows for better use of resources (material, financial, and human) in the era of the economy based on knowledge, including knowledge resources (Han & Park, 2009; Savvas & Bassiliades 2009).

The process approach has already been used for a long time, but only in the production industry, and its aim was to enhance and improve the manufacturing processes (Hammer & Champy, 1994; Jokiel, 2009). In contemporary organizations, a crucial role is not only played by the manufacturing processes but also by processes related to strategic management, communication with customers, cooperation with suppliers, workforce development, maintenance of machinery and equipment in motion, logistics, etc. (APQC, 2012).

Currently, the BPM principles and practices are used in public administration (Batko, 2011). This is due to the fact that government agencies as well as business organizations are evaluated in terms of competitiveness and attractiveness for the beneficiaries of their services. Every society and economy depends on the smooth and efficient operation of government agencies (Bhuiyan, 2011; Hwang & Akdede, 2011; Pillania, 2011). The implementation of BPM in government agencies means the reconstruction and improvement of internal processes and administration processes related to the provision of government services for citizens, enterprises, and employees (Weerakkody, Janssen, & Dwivedi, 2011). Its goal is to improve the efficiency and transparency of government services as well as increase in the participation of citizens and enterprises in the process of government decision making. Some researchers, due to the specific nature of government processes, introduce the concept of government process management (GPM) (Tregear & Jenkins, 2007).

The application of a process approach and process management in organizations always requires the support of information systems (IS) and information technology (IT) (Taylor & Williams, 1991). A key role is played here by Enterprise Resources Planning systems (ERP) (Umble, Haft, & Umble, 2003). ERP systems incorporate best business practices and IT (Westrup & Knight, 2000). Moreover, their implementation results in reducing cost and time cycle and in improving productivity, quality, and customer service benefits (Shang & Seddon, 2002). ERP capability is expected to result in:

* business process efficiency (by reducing cost and time cycle, increasing productivity of the production process, and improving quality and customer service);

* effectiveness (by improving decision making and planning, and resource management and delivery); and

* flexibility (by building flexibility into IT infrastructure to reduce IT cost, by differentiating products and services, and by establishing and maintaining external linkages to customers and suppliers) (Karimi, Somers, & Bhattacherjee, 2007). …

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