Transformational Leadership as a Critical Success Factor for Enterprise Resource Planning System Implementation

Abstract

The successful implementation of an enterprise resource planning (ERP) system has been described as a challenging strategic initiative for many organizations in varied business settings and different organizational cul-tures. During the past two decades, there has been massive investment in adopting ERP system, in addition to a substantial increase in focusing on the importance of users’ acceptance of utilizing such technological technique. Despite the many advantages of successful installing of ERP system demonstrated in literature but still the failure rate of ERP projects is re-markably high. Leaders of ERP implementation projects have the challenge of displaying effective leadership skills and traits to justify strategic and operational decisions taken during implementation of ERP system. To provide better understanding of what may positively influence a successful implementation of ERP system, this research study is an attempt to inves-tigate whether leadership style especially transformational leadership has a significant impact on successful implementation of ERP systems. The theory of transformational and transactional leadership was the foundations for the researched leadership style in this study. A quantitative, non-experimental correlational empirical research strategy examined the degree of significance of the direct relationship between the independent variable of transformational leadership style and the dependent variable, perceived as ERP success. Projects’ leaders, executives, information technology, business managers, and end users who involved in adopting and using ERP system within their Egyptian organizations representing various business settings, were the targeted population of this research. Structural Equation Modeling (SEM) was conducted to test the research hypotheses and analyze the findings and results. The results of the study supported the existence of a significant relationship between transformational leadership style and successful implementation of ERP system.