Segmenting and mining the ERP users’ perceived benefits using the rough set approach

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Abstract

Enterprise Resource Management (ERP) systems are viewed as a promising and powerful information technology solution for dealing with the impact of competition advancements and enabling corporations to improve productivity and to operate more efficiently. Although implementations of ERP are complex and costly, corporations may actively adopt and engage in such ERP implementations if perceived benefits exceed perceived risks and costs. A number of studies have contributed to discussion of important factors related to ERP introduction or implementation. Other studies have listed various potential benefits which may be obtained when implementing ERP systems. However, few studies attempt to deepen the analyses of the ERP users’ perceived benefits in order to gain meaningful findings for promoting ERP implementations. Typically, elements of a set of ERP benefits do not necessarily share the same importance. Moreover, a given ERP benefit may be accorded a variety of very different levels of importance by different corporations. This paper attempts to segment the ERP users into two subgroups according to the notion of Herzberg’s Motivation-Hygiene theory, and further, to uncover imperative perceived benefits for distinct subgroups of ERP users employing the rough set theory. The results of this study should provide better understanding and knowledge of strategic implications for both ERP system adopters and vendors, and thus advance the scope of ERP implementations.

Introduction

Enterprise Resource Management (ERP) systems are viewed as promising and powerful information technology solutions that enable corporations to improve productivity and to operate more efficiently. According to Su and Yang (2010), the ERP system is a combination of business processes and information technology, constituting an integrated enterprise computing system designed to automate the flow of material, information, and financial resources among all functions within an enterprise on a common database. Moreover, ERP systems can assist corporations in automating and integrating corporate cross-functions such as inventory control, procurement, distribution, finance, and project management (Tarn, Yen, & Beaumont, 2002). In order to meet the impact of advancements in such competitive areas as shorter lead-time, higher quality, competitive prices, and improved customer service, corporations are increasingly interested in adopting ERP systems.

Due to competitive pressures resulting from globalization, corporations increasingly need more effective total enterprise solutions like the ERP system. The ERP system enjoys its present popularity because of its apparent capacity to improve operational efficiency and business efficacy (Chou & Chang, 2008). Aydin and Tunali (2007) suggest that the ERP system is evolving and integrating many advanced applications, including Supply Chain Management (SCM), Customer Relationship Management (CRM) and E-Procurement. Today’s ERP systems integrate the main business and management processes within and beyond a firm’s boundary, as well as supporting most commercial activities, including purchasing, sales, finance, human resources, and manufacturing resource planning (MRP) for modern corporations (Shiau, Hsu, & Wang, 2009). The report of Exact Software. (2005) notes that the evolution of the ERP system, which rose in the 1990’s from its beginning as a tool for materials planning, and has grown over the years, can be divided into three differently-featured phases: (1) the traditional ERP phase (1990’s) which was characterized primarily by the capability to service materials planning, order entry, distribution, general ledger, accounting, and shop floor control; (2) the extended ERP phase (2000–2004), in which it expanded to handle such issues as scheduling, forecasting, capacity planning, e-commerce, warehousing, and logistics; and (3) the ERP II phase (from 2005) which offers further advanced solutions, covering project management, knowledge management, workflow management, SCM, CRM, human resource management, portal capability, and integrated financials. However, it must be noted that ERP implementations are complex and costly, even though advanced ERP systems have evolved several highly favorable features such as: more wide intensive and extensive coverage; better flexibility in handling functions; and web-centric application.

Cebeci (2009) remarks that ERP implementations are the most difficult investment projects because of their complexity, high cost and adaptation risks. Ge and VoB (2009) point out that the successful implementation rate is still low, and many corporations have not achieved full potential benefits from ERP systems. Saatcıoglu (2007) comments that ERP systems, extremely complex pieces of software, are costly, and ERP implementations require large investments of money, time and expertise. Su and Yang (2010) point out that, nevertheless, because the potential ERP benefits are large, many corporations are willing to undertake the difficult process of introducing these expensive and risky ERP systems. Thus, although ERP implementations are complex and costly, corporations may actively adopt and engage in ERP implementations if perceived benefits exceed perceived risks and costs. In other words, corporations are motivated to adopt ERP systems because ERP implementation may well result in a set of attractive potential benefits. Shiau et al. (2009) note that ERP systems provide a multitude of benefits to businesses, such as: inventory reduction, data integration, and cost reduction. Ge and VoB (2009) note that an ERP system is a highly integrated enterprise information system helping us to manage all aspects of an enterprise’s business operations, including production, purchasing, engineering design, manufacturing, sales, marketing, distribution, accounting, and customer service; and once the ERP systems are successfully implemented, significant benefits may be obtained in such areas as improved customer service, better production scheduling, and reduced manufacturing costs.

A number of studies have discussed significant factors for ERP implementation, as well as listing various potential benefits which may result from implementing ERP systems. However, although users’ perceived benefits can, indeed, be an imperative predictor, few studies have seriously looked at ERP users’ perceived benefits. Even with high perceived risks and costs, if perceived benefits are sufficiently attractive, corporations may still actively engage in ERP implementation. Thus there is an increasing need to deepen our analyses of ERP users’ perceived benefits, in order to gain meaningful findings for promoting ERP implementation. Unfortunately, the previous literature has contented itself with listing a miscellaneous set of ERP benefits which do not necessarily share the same importance. It is evident that the importance of one ERP benefit may be evaluated quite differently by different corporations. Therefore, this paper attempts to address the issue of how to go about segmenting and mining the ERP users’ perceived benefits. To this end, segmenting methods and data mining techniques are applied in this study. The remainder of this paper is organized as follows. In Section 2, a literature review is conducted. In Section 3, research design and results are presented. Finally, based on the findings of this research, conclusions and implications for management are presented.

Section snippets

Issues of ERP implementations

For purposes of achieving a successful ERP implementation, there are some important issues that must be considered such as: identifying the motivations for ERP adoption; checking the ERP competences for a successful ERP adoption; realizing the importance of integration in implementing ERP systems; selecting a suitable ERP system; comprehending critical factors of ERP implementation; and measuring ERP performance and impact.

Identifying the motivations or needs for ERP adoption is the starting

Research design and results

For the purpose of segmenting and mining the ERP users’ perceived benefits, this study segments the ERP users into two subgroups (satisfaction and dissatisfaction) based on the concept of Herzberg’s Motivation-Hygiene theory, and then explores the perceived benefits for these two subgroups using the RST. The RST was firstly introduced by Pawlak, 1982, Pawlak, 1984, and is a valuable mathematical tool that can be used to deal with vagueness and uncertainty (Pawlak, 1997). In the RST, any vague

Conclusions

ERP implementation is viewed as a crucial solution for corporations aiming to meet increased competitive pressures and globalization. A number of studies have addressed various important issues for successful ERP implementation. However, few studies devote sufficient attention to ERP users’ perceived benefits, in terms of ERP implementation. This paper highlights the importance of the fact that corporations are willing to continue conducting ERP implementations if perceived benefits surpass

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