Academic journal article International Journal of Business and Information

Satisfaction Structure of the Implementation Effect of Enterprise Resource Planning (ERP): An Analysis from the Management Style Perspective of Japanese Firms

Academic journal article International Journal of Business and Information

Satisfaction Structure of the Implementation Effect of Enterprise Resource Planning (ERP): An Analysis from the Management Style Perspective of Japanese Firms

Article excerpt

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The use of an enterprise information system (EIS) as a tool to support the competitive advantages of an enterprise has increased worldwide in step with increases in environmental change.

In Japan, however, survey results have shown a high level of dissatisfaction among top management with regard to the EIS used in their firms. Specifically, 51.7% of top management surveyed in Japanese firms said they were "rather dissatisfied," and 13.0% said they were "definitely dissatisfied," in response to a question (4-point scale) about EIS [ERP Forum Japan, 2012]. Furthermore, although Japanese firms tend to spend a lot more on improving business operational efficiency than firms in Western countries [Higano, 2009], the results seem less than effective. The contribution of information, communication, and technology (ICT) capital services to value-added growth among Japanese firms is low [Higano, 2009; Iizuka and Suematsu, 2013]. Although improving operational efficiency is one of the main aims of Japanese firms, the low IT investment effect on improving operational efficiency might impact the low satisfaction rate regarding EIS.

It has been said that, in comparison with firms in the United States and other Western countries, firms in Japan tend to use more custom-made software and are more cautious regarding the installation of packaged software [Cusumano, 2004; Iizuka and Tsuda, 2006; Tanaka, 2010]. Although the percentage of enterprise resource planning (ERP) systems implemented in Japanese firms has increased to almost 50% of the total, only limited modules are implemented in most cases (e.g., finance modules, 43.1%; sales modules, 25.7%; purchasing modules, 24.3%) [Taguchi et ah, 2013]. The low rate of packaged software installations might affect high IT investment. In addition, even though Japanese firms may implement an ERP system, there have been some cases where firms have not achieved the desired level of efficacy in their ERP systems because the implementation methods were not adequate.

The fact is that implementing an ERP system, in and of itself, is not enough to achieve the desired implementation effect. Research has shown, however, that there is a way to achieve the desired effect. A number of so-called critical success factors (CSFs) were identified by researchers overseas more than a decade ago. The situation in Japan, however, is different. Although Japanese organizations emphasize process management, Japan's geographic/regional location and its IT culture constrain ERP use. Japanese organizations emphasize employee loyalty and use all means to retain employees. To place business process engineering (BPR) before the implementation of ERP violates this belief and further restricts the use of ERP. Instead, Japanese firms generally build systems in-house or customize existing software [Huang and Palvia, 2001]. The situation is changing in Japan, however, in regard to the standardization of business and information systems because of increases in global expansion, leading to actions such as transferring production overseas in order to reduce labor costs.

Although Japanese firms tend to use custom-made software, research has shown that firms that have succeeded in implementing and using ERP systems are starting to improve their effectiveness. Also, the satisfaction indexes of ERP users are higher than those of users of custom-made software [ERP Forum Japan, 2012].

The aim of this paper is to search for ways to improve the effectiveness of ERP system implementation in Japanese firms, taking into consideration their unique characteristics and business

Section 2 is a literature review focusing on CSF trends in various regions of the world over time and on the characteristics of Japanese firms in particular. Literature pertaining to the characteristics of Japanese firms is reviewed from the standpoint of factors that seem to affect ERP implementation and the reasons that the ERP implementation status of Japanese firms is so different from that ofWestem countries. …

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