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

ABSTRACT

The aim of this study is to identify ways to improve the effectiveness of enterprise resource planning (ERP) system implementation in Japanese firms, taking into consideration their unique style in management and information systems development including their tendency to use customized software. The paper presents a statistical analysis of the degree of satisfaction regarding the structure of ERP implementation using a model constructed by the authors that is based on the characteristics of Japanese firms. An ERP system is one way to implement an enterprise information system (EIS) that responds to business issues, such as creating or sustaining competitive advantages or improving business operation efficiency. An ERP is frequently implemented with business process re-engineering (BPR) and business process standardization. The success of an ERP system depends on effective implementation; hence, the critical success factors (CSFs) of ERP implementation have become an important subject for study. Although CSFs are generally common among countries throughout the world, some CSFs differ because of a country's economic growth status or information system history and trends of the country. This situation is true for Japanese firms as well as firms in other countries.

Keywords: Enterprise resource planning (ERP) system, satisfaction structure, critical success factors (CSFs), Japanese management style

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1. RESEARH BACKGROUND AND PURPOSE

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. …

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