ERP assimilation and benefit realization: Analyzing the influence of leader characteristics

Abstract

As ERP was believed to provide a lot promising benefits, many companies try to implement it in their business processes. By implementing ERP, they expect to get those promised benefits. In fact, although many companies have successfully implemented ERP systems, not all companies get the benefits of ERP system since ERP systems have not been able to diffuse in the routine of the organizations. A lot of researches have studied why these failures happened by analyzing ERP critical success or failure factors. Many studies found that top management support (leader characteristics) has an important role in benefit realization, but there has been little research specifically discussed the influence of leader characteristics on benefit realization. This study examined the influence of leader characteristic on enterprise resource planning (ERP) benefit realization through ERP assimilation process. A conceptual model was developed based on leader characteristics in diffusion of innovation (DOI) theory. The developed model was tested using structural equation modeling (SEM) method by comparing the developed model with empirical data gathered using questionnaires, from ERP users working in a number of divisions in 73 companies. The data processing was done with the support of Lisrell 8.7 statistical software. The results of hypotheses testing show that top management support, CEO innovativeness, and CEO's IS knowledge significantly influence overall ERP benefit through ERP assimilation process.