Interactions between Organizational Size, Culture, and Structure and Some it Factors in the Context of ERP Success Assessment: An Exploratory Investigation

Abstract

Enterprise Resource Planning (ERP) systems are packaged information technology (IT) suites that are increasingly becoming the price of entry for running a business, and such systems are gaining popularity worldwide. Researchers have discussed their adoption and implementation. Few have investigated the impacts of size, culture, and structure of the adopting organization on ERP system success evaluations. There is also a dearth of research on the effects of organizational IT issues or factors such as IT assets and resources (i.e., the IT department's value, the IT department's size, and the sophistication of the in-house IT professionals, among others) on ERP systems success. To our knowledge no study has investigated the interactions between these organizational IT issues and other contingency factors. To fill this gap in research, we designed an exploratory study to investigate the impacts of the aforementioned factors in the context of ERP systems success evaluations. Rather than considering the impacts of the three contingency factors on ERP success assessment alone, we incorporated the interacting effects of a few organizational IT issues which were selected for illustration purposes. Surveys were conducted in Finland and Estonia — two small technologically advanced Northern European countries. We obtained empirical data from 62 respondents in 44 diverse, private, and industrial organizations in the two countries. Using the structural equation modeling technique to examine the relationships, our analysis confirmed six of the eight hypotheses formulated. The data revealed positive relationships between organizational size, structure, and culture, on the one hand and ERP systems success, on the other. Also, IT resources (comprising of measures such as the IS budget size and size of the IT department) as a moderator in the relationships between the main contingency factors and ERP success was found be significant. The implications of the findings for both practice and research are discussed, and fruitful areas for future research outlined.