ERP Selection

Abstract

Previous studies have shown that Enterprise Resource Planning (ERP) systems have significantly impacted positively on the productivity of the organization. However, there exists a cost-failure paradox. ERP systems are very expensive and constitute a huge budgetary component, yet the failure rate of ERPs is very high. The selection process of ERPs is a critical success factor. This study focuses on the product and organizational constructs that affect the selection of ERP systems. The authors utilized an extension of technology acceptance model (TAM) by elements of the information systems (IS) success model. The study evaluated the impact of system quality, information quality, service quality, and support quality as key determinants of cognitive response, which influences ERP system purchase/use. Industry, firm size, buying center, and product experience were introduced as organizational constructs. The results of the study indicate that system quality, information quality and software support are significant product qualities that affect an organization’s decision to adopt an ERP product. Among the organizational constructs, only firm size was found to be statistically significant. The results also indicate that multi department committees and the IT department are the major buying centers responsible for vendor selection. In terms of information source, vendor reference and adverts are major information sources, while government standards and popularity/experience of vendors are important considerations in vendor selection.