an exploratory study of enterprise

8/14/2019 An Exploratory Study of Enterprise

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An exploratory study ofenterprise resource planningadoption in Greek companies

S.C.L. Koh, M. Simpson and J. PadmoreManagement School, University of Sheffield, Sheffield, UK, and

N. Dimitriadis and F. MisopoulosSouth East European Research Centre, Thessaloniki, Greece

Abstract

Purpose To examine enterprise resource planning (ERP) adoption in Greek companies, and explorethe effects of uncertainty on the performance of these systems and the methods used to cope with

uncertainty.Design/methodology/approach This research was exploratory and six case studies weregenerated. This work was part of a larger project on the adoption, implementation and integration ofERP systems in Greek enterprises. A taxonomy of ERP adoption research was developed from theliterature review and used to underpin the issues investigated in these cases. The results werecompared with the literature on ERP adoption in the USA and UK.

Findings There were major differences between ERP adoption in Greek companies and companies inother countries. The adoption, implementation and integration of ERP systems were fragmented in Greekcompanies. This fragmentation demonstrated that the internal enterprises culture, resources available,skills of employees, and the way ERP systems are perceived, treated and integrated within the businessand in the supply chain, play critical roles in determining the success/failure of ERP systems adoption. Awarehouse management system was adopted by some Greek enterprises to cope with uncertainty.

Research limitations/implications A comparison of ERP adoption was made between the USA,

UK and Greece, and may limit its usefulness elsewhere.Practical implications Practical advice is offered to managers contemplating adopting ERP.

Originality/value A new taxonomy of ERP adoption research was developed, which refocused theERP implementation and integration into related critical success/failure factors and total integrationissues, thus providing a more holistic ERP adoption framework.

Keywords Uncertainty management, Greece, Resource management

Paper type Research paper

1. IntroductionMany enterprises are adopting enterprise resource planning (ERP) systems forimproving information flow and order processing efficiency. In the past, ERP wasgenerally adopted by larger enterprises. Today, the adoption of ERP is no longerrestricted to larger enterprises and increasing numbers of small- and medium-sizedenterprises (SMEs) have started to adopt ERP systems (Loh and Koh, 2004). Companiesin less well developed economies have begun to use ERP systems to solve some of theirmanufacturing management problems. Very little research is available on this topic

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0263-5577.htm

The authors are grateful for funding from the University of Sheffield, Social Science DevolvedResearch Fund for this project. The authors would like to thank all the managers from the casestudy enterprises for providing data for this research.

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and it appears from those studies which are available (Ioannou and Papadoyiannis,2004; Spathis and Constantinides, 2003; Towers et al., 2005) that there are somedifferences in the way that ERP systems are adopted and implemented when comparedwith the USA and UK companies. In addition, AMR reported that many medium sized

enterprises were still using applications developed in the 1980s that are technologicallyobsolete and do not support emerging business practices (Woodie, 2005). Thus,consolidation and replacement of ageing material requirements planning (MRP)systems with ERP systems will be major factors driving the sales of new ERP licenses.

These combined circumstances, i.e. smaller businesses adopting ERP, companies indeveloping economies adopting ERP and companies with obsolete systemsadopting moresophisticated systems such as ERP, closely reflect the general business conditions in lesswell developed economies such as Greece. Greece is a particularly good example of a lesswell developed economy because it has one of the lowest gross domestic products (GDP)per capita (i.e. 21,689 USD) in Europe, relatively low disposable income per capita (i.e.15,346 USD) and high unemployment rates (i.e. 10.5 per cent) (OECD, 2005). Thus, thisexploratory research focuses on the adoption of ERP systems in Greek companies.

2. Aims and objectivesThis research examined ERP adoption in Greek enterprises and explored the effects ofuncertainty on the performance of these systems and the methods of coping withuncertainty. The specific objectives were to:

. carry out an analysis of the literature on ERP adoption and create a framework ofanalysis;

. develop an understanding of the type of systems adopted by Greek enterprises;

. develop an understanding of the way these systems operate and provide benefitsto these enterprises;

.

determine if these systems are able to perform under uncertainty;. determine the methods used to cope with uncertainty adopted by these enterprises;

. evaluate the critical problems in ERP adoption; and

. evaluate the applicability of lessons learnt from successful ERP adoption in theUSA and UK to Greek enterprises.

3. Research methodologyThe methodology included literature review, interviews, observations, and casestudies. Secondary data was obtained from company reports, accounts and materialsavailable in the public domain. The literature review examined the methods, newframeworks, directions, problems and issues related to ERP adoption.

Six Greek small, medium and large enterprises were investigated in the exploratoryphase of a larger study. The enterprise size definitions of the UK Department of Tradeand Industry (DTI) (Karaev, 2006) and the European recommendation (EuropeanCommission, 2003) were used.

Enterprises were chosen from various industries to allow for some analysis onwhether industry differences were important for ERP adoption. In-depth interviewswith senior managers in enterprises in northern Greece were conducted using asemi-structured questionnaire based on the adoption-focussed research (Figure 1).

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Figure 1.ERP adoption research

taxonomy

ERP adoption

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This area of Greece was chosen because the researchers had access to a large numberof enterprises in Thessaloniki, the second largest city in Greece. The questionnaire wasadministered during company site visits where opportunities for observation of thebusinesses were afforded. Documentary evidence from these enterprises, where

available, was also used. This approach tackles the issues of construct validity andreliability of a case study and allows for data triangulation and thorough investigationof the issues raised (Yin, 1993, 1994). The data from the interviews were then analysedqualitatively.

4. Literature review4.1 Integration, uncertainty and implementation issues of ERPAn ERP system is an integrated application program for enterprise organisation,management and supervision (Davenport, 2000). ERP technologies were designed toaddress the fragmentation of information across an enterprises business and tointegrate both intra- and inter-enterprise information (Sharif et al., 2005; Gulledge,

2006). Considering ERP integration between enterprises the differences in the types ofERP system adopted by suppliers and customers in the supply chain could createincompatibility issues. In order to overcome these problems, the concept of an extendedenterprise (or ERP II) was developed. ERPII could be operationalised by using anextended enterprise application (EEA) and/or enterprise application integration (EAI)to integrate different ERP systems in a supply chain (Loh et al., 2006).

An enterprise should not simply rely on ERP to manage the supply chain (Koh et al.,2006). ERP has a rigid system design and is unable to deal with uncertainty (Koh et al.,2004; Koh and Saad, 2004; Moon and Phatak, 2005). Other systems and/or technologiessuch as radio frequency identification (RFID), mobile technology, wireless technology,intelligent agent-based knowledge management system and so on could help toimprove order, part and product traceability in a supply chain (Koh and Gunasekaran,

2006). This may reduce the problems of uncertainty since a more accurate view of theflows of order, part and product could be achieved.

ERPs predecessors, MRP and manufacturing resource planning (MRPII), are still verypopular, particularly amongst SMEs (Loh and Koh, 2004). MRP and MRPII are mainlyused for production planning in manufacturing enterprises. For businesses wishing tointegrate their operation with suppliers and customers in the supply chain, supplierrelationship management (SRM) and customer relationship management (CRM) havebeen adopted (Burn and Ash, 2005). Some enterprises combine these systems in order toprovide the best performance in logistics and supply chain management (SCM).

4.2 ERP adoption in the USAExtensive research on ERP in the USA could be identified in the literature. The most

dominant is the work of Willis and Willis-Brown (2002), which identified two distinctphases of ERP adoption: ERP implementation and ERP integration. Recent research inthe USA has focussed on ERP implementation or on ERP integration, rather thanconsidering these issues together. To address this research gap, the present studyapplies Willis and Willis-Browns framework of ERP adoption and considers bothimplementation and integration.Gulledge and Simon (2005) described the ERP implementation methodology of SAP,whilst Gulledge et al. (2004) examined SAP implementation in the US Navy and provided

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an analytical approach that could be used to analyse convergence possibilities forstandalone SAP solutions. It must be noted that different sizes of enterprise and differentbusiness environments require different types of ERP system. Mabert et al. (2003) foundthat enterprises of different sizes approach ERP implementation differently across a range

of issues, and larger enterprises report improvements in financial measures, whereassmaller enterprises report better performance in manufacturing and logistics. Theseresults are not surprising given that larger enterprises measure success based on return oninvestment (ROI) and business benefits, whilst smaller enterprises focus on the directoperational benefits. It is likely that many of the smaller enterprise implementations wereMRPII or MRP.

Changes are inevitable in any ERP implementation because an ERP system that fitsa business completely simply does not exist in the first instance. Hence, changemanagement, business process re-engineering (BPR) and customisation are importantparts of ERP implementation. Gattiker and Goodhue (2002) explored the impact of ERPsoftware-driven process changes on manufacturing enterprises. Standard packagedERP systems generally demand that organisational sub-units adapt their businessprocesses to fit the needs of the software. The best practice line of thinking suggestedthat the ERP-driven business process changes will yield positive organisationalimpacts. The trustworthiness of the vendor is equally important to determine asuccess/failure of ERP system customisation. Gefen (2002) examined how ERP vendorsand consulting enterprises could increase their clients perception of engagementsuccess through increased client trust brought about through responsive anddependable customisation during the implementation process.

Tarn et al. (2002) studied the integration of ERP and SCM to enable informationsharing in a supply chain. Anussornnitisarn and Nof (2003) suggested that under thee-work environment, the next generation ERP systems will be based on totalintegration in a supply chain, including competitors. It is clear that little ERP

integration work has been carried out and that the future research direction is towardsERP integration in the supply chain.

4.3 ERP adoption in the UKUsing Willis and Willis-Browns (2002) phases of adoption, it can be noted that muchresearch on ERP implementation has been carried out in the UK. Loh and Koh (2004)developed a framework that serves as a guideline for ERP implementation in SMEs.Issues concerned with customisation, change management, BPR, project management,and the selection of a suitable system for a specific business environment and size ofenterprise, are amongst the factors in the framework. While Yusufet al. (2004) conducteda case study of ERP implementation in Rolls Royce and found that the principal reasonfor ERP implementation failure is often associated with poor management of the

implementation process. Combinatorial systems implementation has also been proposedand Newell et al. (2003) explored the simultaneous implementation within a singleenterprise of two contemporary managerial information systems, i.e. ERP andknowledge management. It was confirmed that the two systems could be implementedin tandem to good effect.

Research on ERP implementation is relatively more mature than research onERP integration in the UK and is similar to the situation in the USA. Only a few ERPintegration research papers could be found. These included the work of Gao et al. (2003)

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on new software to integrate product data management with ERP. The tool aims toovercome the lack of analysable product information at the conceptual stage of productdesign and manufacturing evaluation, along with the integration of such a design toolwithin a distributed environment. Gao et al.s research clearly links with performance,

evaluation, information and knowledge management for ERP integration. While Kohand Saad (2002) developed a business model for diagnosing the underlying causes ofuncertainty within ERP environments, it was envisaged that the business model couldbe integrated with ERP to enable better performance.

4.4 ERP adoption in GreeceThe pace and outcome of research on ERP in developed and developing economies arevery different. It is difficult to find research on ERP adoption in Greek enterprises(Towers et al., 2005), particularly research on ERP integration as defined by Willisand Willis-Brown (2002). Ioannou and Papadoyiannis (2004) and Spathis andConstantinides (2003) studied aspects of system implementation, benefits of and

drivers for ERP implementation in Greece. Using the theory of constraints, a coherentmethodology for handling bottlenecks and effectively planning the code developmenteffort during the system implementation was proposed, and trade-offs were derivedbetween successful and on-time ERP implementations with managerial enforcement ofbest practices fully functional within major ERP systems (Ioannou and Papadoyiannis,2004). Spathis and Constantinides (2003) found that increased flexibility in informationgeneration, improved quality of reports/statements and easy maintenance of databasesare amongst the major benefits resulting from ERP. The drivers for ERPimplementation were increased demand for real-time information and the need forinformation for decision-making.

Stefanous (2001) study is the only research identified related to ERP integration.Stefanou argued that ERP evaluation in Greek companies should extend its scope

beyond operational improvements arising from the ERP software/product per se to thestrategic impact of ERP on the competitive position of the enterprise. This is clearlylinked to performance and evaluation of ERP integration. It was concluded that byproviding a framework of the key issues involved in the selection process of ERPsoftware and the associated costs and benefits could assist ERP evaluation. From this,it can be seen that Stefanous notion tries to link the implementation and integrationaspects for ERP adoption.

5. Results, analysis and discussion5.1 Literature review analysis and taxonomy developmentLiterature review showed that research on ERP implementation was relatively more

mature than research on ERP integration in the USA and UK. The limited amount ofliterature on ERP integration had led to an imbalance in the research on ERP adoption,based on the framework suggested by Willis and Willis-Brown (2002). The literaturereview also demonstrated that research on ERP adoption in developed economies(i.e. the USA and UK) had been carried out for some time and had reached a relativelymature stage compared to that in developing economies (e.g. Greece). It was clear thatlessons could be learnt and knowledge could be transferred on aspects of ERP adoptionfrom the USA and UK to Greece. A taxonomy of ERP adoption research was developed

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using the key findings from aspects of ERP implementation and ERP integration(Figure 1).

Aspects related to ERP implementation were grouped under critical success/failurefactors, whilst aspects related to ERP integration were grouped under total integration.

The critical success/failure factors for ERP implementation lie in some key areas,namely: getting the right type of system for the right type of business and the right sizeof enterprise; ensuring excellent project management, change management, riskmanagement and people management programmes are in place; managing BPR bychanging the business process to fit the system process; and managing the process ofhardware and software installation, data transfer and collection, and customisation ofmodules for specific functional requirements (system implementation andcustomisation), understanding the benefits of and drivers for ERP implementation. Incontrast, aspects related to ERP integration covered issues including operationalisation,uncertainty management; performance and evaluation; information and knowledgemanagement; and intra-enterprise integration of ERP with other functions andinter-enterprise integration in a supply chain.

The taxonomy of ERP adoption research comprised of ERP implementation andERP integration. The taxonomy clearly highlights the imbalance between the researchon ERP implementation and integration. Little research was found relating tooperational and performance issues of ERP adoption, despite some evidence ofresearch that focused on integration. An ERP adoption study was identified butfocussing on the process of ERP adoption in Canadian companies (Kumar et al., 2002).Bose (2006) studied how management data systems are used for enterpriseperformance management, but the study was based on a literature review. It mustbe noted that we may have discounted other related research that has been carried outin different settings in the review. However, the majority of those researches havemainly focused on intra-enterprise cases, with minimal identification of lessons learnt

for future development for other countries. Furthermore, little research studied thefragmentation of ERP adoption.

The terminology used in the literature such as implementation, adoption, use,operationalisation and so on seem to be used interchangeably without considering themeaning of the issues involved. Analysis of the literature review also suggested thatimplementation and integration focussed research, target quite a different set ofoutcomes. With implementation focussed research issues related to project management(Loh and Koh, 2004), system implementation (Trimi et al., 2005), BPR (Gattiker andGoodhue, 2002; Okrent and Vokurka, 2004), and change management (McAdam andGalloway, 2005) are examined. With integration focussed research, issues related topost-implementation: operational (i.e. use), integration and performance are examined(Loh and Koh, 2004). The latterfocuses more on howERP is operationalisedand integrated

into the business process. ERP adoption does not end immediately after the systemimplementation; the ongoing challenge is how an enterprise could operationalise andintegrate ERP into the business. ERP adoption is a continuous journey and the realoperating costs are actually centred on its integration rather than implementation.

The review suggests that little research has been undertaken on ERP adoption,considering both ERP implementation and ERP integration. In this research, weadapted the ERP adoption framework developed by Willis and Willis-Brown (2002)and refocused the ERP implementation and ERP integration into related critical

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success/failure factors and total integration issues, thus providing a more holistic ERPadoption taxonomy. Although other taxonomies exist in the literature (Al-Mashari,2002; Al-Mashari et al., 2003) they do not consider integration. Our taxonomy providesboth the critical success/failure factors and aspects for total integration, which need to

be considered by companies adopting ERP.The Greek market consists largely of SMEs, and Rizopoulos (2001) argued that

SMEs have the same needs as larger enterprises, but may not have the financialresources or capabilities for a successful ERP adoption. The new taxonomy provides amore complete description of the factors involved in ERP adoption and may proveuseful for Greek managers in understanding the whole ERP adoption process.

5.2 Case studiesThe six manufacturing enterprises all had ERP systems and ranged in size from30 employees with a turnover of e5 million to 400 employees with a turnover ofe400 million. These enterprises had widely differing products, manufacturing modes

and product complexity and were considered ideal for exploratory research (Table I).5.2.1 Company A. The assistant director of finance and supplies and the ITmanager were interviewed. Company A is a manufacturer of plastic items for variousmarkets such as garden, beach and poolside furniture and bathroom accessories.The company also produced moulds for injection moulding of plastic products. Thecompany employed 135 people and had a turnover of approximately e12.3 million.

The company used three separate systems for managing the business: an ERPsystem for accounting/finance and commercial information processing, an MRP systemfor production which was not integrated with the ERP system and a new warehousemanagement system (WMS) which has been operating since January 2004 (Table II).Although the ERP system provides the company with its own MRP module, thecompany was still using a separate MRP system. The ERP and WMS were integrated

but the customised MRP was not. The reason for using two separate systems (MRP andERP) was that the customised MRP gave to the company a much better picture than theMRP output offered by the ERP. The customised MRP gives details that are crucial toproduction while the ERP gives only general information. Inputs to the MRP are forproduction purposes while the data for the ERP are for accounting/finance purposes.The company was hoping that the WMS would help to integrate the MRP with the ERPand assist production in general because the customised MRP did not provide enoughdetailed information on inventory for decision-making. There was no integration withsuppliers. There was some forward integration with two important customers whereorders and invoices were exchanged through electronic data interchange (EDI).

5.2.2 Company B. The accounting and logistics assistant (the team leader of theERP implementation team) and the IT vendor and consultant (the ERP system vendor)

were interviewed. Company B is a manufacturer of high technology electronics, firedetection and security systems. The company employed 123 people and had a turnoverofe7.5 million. The company used three systems: an ERP system, an Excel application(built in-house) for production control and a WMS. Integration was achieved within thecompany and with each branch of the company in various parts of the country and thiswas a major improvement on the original DOS based system used previously. It wasnow possible to have real-time information flows between the branches of thecompany. However, integration in the supply chain had not been achieved.

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Comp

anyA

CompanyB

CompanyC

CompanyD

CompanyE

CompanyF

Typesofsystem

used

ERPLogicDIS

since

mid1999.

WMS

Aberonby

Optim

umsinceJan.

2004.

Customised

MRP

Makenaby

Delectronfor

produ

ction.

Not

integratedwithERP

ERPSingular

Enterprise.

Excel

applicationbuilt

in-housefor

production.

WMS

system

ERPSingular

Enterprisesince1

January2003.

Customised

databaseonOracle

forproduction

management

ERPLogicD

IS

since1January

2001.

Customised

MRPMakenaby

Delectronfor

production.Not

integratedwiththe

ERP

ERPSAPfully

operatingsince

1/1/2002.

MRPin

Excelruninparallel

(ERPmodulenot

usedduetono

assembly).ERP

integratedinternally

ERP

Momentum

fromLo

gismossince

1998.Customised

systemsrunfor

production,not

linkedtoERPor

eachother.

Productionis

completely

automatedand

manage

dbythese

systems.Excelused

forforecasting

demand

eachmonth

andfor

developinga

safetys

tock

Customer

delivery

performance(per

cent)

On-time:50early:15

late:35

On-time:90early:5

late:5

On-time:85early:10

late:5

On-time:90ea

rly:5

late:5

On-time:95early:5

late:0

On-time:95early:0

late:5

Supplierdelivery

performance(per

cent)

On-time:20early:5

late:7

5

On-time:80early:0

late:20

On-time:70early:5

late:25

On-time:85ea

rly:7

late:8

On-time:90early:5

late:5

On-time:99early:0

late:1

Qualityof

products

acceptable(per

cent)

Outgoing:97

incom

ing:95

Outgoing:98

incoming:99

Outgoing:85

incoming:70

Outgoing:97

incoming:95

Outgoing:99

incoming:97

Outgoin

g:99

incomin

g:95

Work-in-progress

(e)

N/A

300,000(4percentof

turnover)

300,000(6percentof

turnover)

730,000(2.4percent

ofturnover)

18,0

00,0

00(4.5per

centofturnover)

1,200,00

0(5percent

ofturnover)

(continued)

Table II.Types of ERP systemadopted and theirperformance

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CompanyA

CompanyB

CompanyC

CompanyD

CompanyE

Compan

yF

Inventorylevel

(e)

N/A

1,00,0

00(13.3per

centofturnover)

1,800,000(36per

centofturnover)

1,200,000(4pe

rcent

ofturnover)

100,000,000(25per

centofturnover)

Itisalw

ays

changin

gdueto

seasonalityof

productsandgood

yearsofproduction

(fortheirsuppliers).

Approximately25

percentto35per

centofturnover

(e6,000,000-to

8,000,00

0)

Driversfor

adoptingERP

Abilitytoperform

morefunctions

(accou

ntingand

comm

ercial).Ability

tostoreandprocess

ahugeamountof

divers

einformation

andin

creased

numberofusers

Needtoimprove

information

processingtimesfor

betterdecision

making.

Needfor

bettercostingfor

morecomplicated

products

OlderDOS-based

systemwasnot

goodenoughfor

producingdetailed

informationfor

taxationpurposes.

Alsocouldminimise

inventory

OlderDOS-bas

ed

systemwas

outdatedandE

RP

couldprovidea

completesolution

forthecompan

ys

needs

Itwasthemost

advancedsolution

forthecompanyand

hadmanyextra

features,whichwere

considereduseful

Wanted

toadoptthe

mostad

vanced

solution

thatwill

assistth

ecompany

initspr

esent

activitie

s,anditwill

serveas

abasisfor

B2Bapplicationsin

thenear

future,s

ince

theoverseas

custome

rsare

askingforit

(continued)

Table II.

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CompanyA

CompanyB

CompanyC

CompanyD

CompanyE

Compan

yF

Problems

encountered

Twoseparate

system

s(MRPand

ERP)require

repeatedtypingfor

datae

ntry.

No

integrationwith

suppliers.

Limited

integrationwithtwo

important

custom

ersviaEDI.

Inventoryis

increa

singprobably

dueto

introduction

ofnew

products

Mostemployees

cannotusethe

systemeffectively,

therearealotof

mistakesbeing

madeonsimple

taskssuchasdata

entry

Effortandexpertise

requiredto

implementthe

systemare

significant.

Personnelreacted

negativelytothe

decisionto

implementERP

Manyemploye

es

werecomputer

illiterateandthe

companyhadto

makethempla

yPC

gamestofamiliarise

themwith

computers.Ini

tially

decisionmade

to

retrainexistingstaff

butnowneeda

full-timepersonto

runERP

Ittook9monthsto

implementwith

increasingcostsfor

continuingservices

offeredbythe

vendor.

Really

neededtotrainan

internalteamatthe

beginningofthe

project.

Nowforced

tohirethreemoreIT

personneltorunthe

ERPsystem

Justafe

wpeopleare

usingth

esystem(in

theheadquarters).

Problem

sare

expectedtooccur

whenth

eywilltryto

fullyintegratethe

systemwiththe

otherso

ftware

Majorbenefits

Quantityand

qualityofdata,

ability

torespondto

custom

errequests

andordersfaster

andm

oreaccurately.

Moreefficientand

moreeffectivethan

previo

ussystem

Quantityand

qualityoffinancial

informationand

moreaccurate

costing.

Quadrupled

theamountof

information

processed

Betterinformation

appearstohaveled

toanincreasein

productivity.

Quotationsare

deliveredfaster,

moreorganisedand

betterdesigned

Increased,

integratedand

consistent

informationthat

leadstobetter

decisionmakin

g.

Excelalsousedto

givebetterdec

ision

makingability

basedondata

from

ERPsystem

Improvedthelevel

offastandaccurate

information

available.Expectsto

seeimprovementin

2or3yearstime

wheneveryoneis

fullyfamiliarwith

thesystem

Informa

tion

provisio

nand

qualityof

informationhas

dramatically

increase

d.

Costingis

morereliableand

accurate.Positive

effectss

eenon

managingsupplies,

warehouses,

productionand

resulted

incost

savings

Table II.

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The company was starting to grow and the reasons for adopting ERP were to improvethe information processing time for better decision-making, to obtain better qualityinformation and develop better costing procedures because the companys productswere becoming more complicated and the number of different products produced was

increasing. The company also needed better analysis of information at all levelsincluding branch level.

5.2.3 Company C. The head of accounting/finance (in charge of ERPimplementation at the company) and the IT vendor (ERP provider) were interviewed.The company is a manufacturer of rolling shutters from aluminium and PVC, garagedoors, mosquito nets, gears and profiles from plastic materials. The company had aturnover ofe5 million and employed 30 people. The company had one system, the ERPsystem. However, the company also used a customised Oracle database for productionmanagement. The need to purchase and implement an ERP system was because theolder (DOS-based application) system was not capable of producing detailedinformation for taxation purposes. The complexity of the business and the need togenerate this detailed information required ERP to replace the older system. The closerelationship with the vendor was seen as a critical success factor for the implementationof ERP in the company. However, after discussion with the vendor the company realisedthat it could have other benefits such as minimising inventory due to improvements inproduction planning and control. The system was not integrated externally but it wasintegrated internally and the ERP database was linked directly with the customisedapplication database.

5.2.4 Company D. The chief accountant (in charge of the ERP implementation)and the procurement manager were interviewed. Company D is a manufacturer ofcanned food and drink and concentrated on canned seafood such as sardines, tuna fish,mackerel, octopus, etc. The company had a turnover ofe30 million and employed 280people. The company had two discrete systems operating together but not integrated

in any way: one was an ERP system and the other was a customised MRP system.The reasons for adopting an ERP system were that the older DOS-based system

was outdated and that ERP could provide a complete solution for the companys needs.The ERP system was mainly used for accounting/costing and was the reason why thecompanys accountant was leading the ERP implementation. The main benefit of theERP system was the increased, integrated and consistent information that could begenerated for better decision-making. The accountant had also developed his ownapplication in Excel, which takes data from the ERP and had increased help fordecision-making. The most significant problem encountered in the implementation hadbeen the lack of computing skills in some employees. As a result, the companyemployed new full-time staff to run the ERP system.

5.2.5 Company E. The IT manager (in charge of the ERP implementation) and the

procurement manager were interviewed. Company E is in the steel processingindustry with a turnover of e400 million and a workforce of 400 employees. Thecompany operated two systems in parallel: an ERP system and an MRP system run inExcel. These systems replaced an old IBM system. The managers argued that they didnot need the MRP module in the ERP system because they did not do any assembly inthis industry. The ERP system was fully integrated internally within the company anda number of developments were being considered such as integration with a CRMsystem.

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The company believed that the ERP system was the most advanced solution for thecompany and that it offered many extra features that were useful. The most importantmodules were considered to be the financial, costing and maintenance ones. However,all the modules had helped the company to improve quality and speed of information

processed. It was argued that it was too early to experience any competitive advantagefrom the system, however the managers expected it to start paying off in two to threeyears time.

5.2.6 Company F. The IT manager and the production manager were interviewed.The company operates in the food industry and produced bakery yeast, tomato products(sauces), ready meals, appetisers,pastes, spreads, dips, etc. Thecompany had a turnover ofe24 million and employed 380 people in two plants in northern Greece. The company hadan ERPsystem, which wasused internally. Therewas no backward or forward integrationin the supply chain. However, the company intended to implement a business-to-business(B2B) e-commerce system in the near future due to requests from customers abroad forsuch a facility. The production manager used Excel to forecast and determine the safetystock level. The provision of information within the company had dramatically increasedand improved because of the ERP system. Costing was much more reliable and accurateresulting in better management of supplies, warehouses and production.

5.3 Drivers for adopting ERPThe drivers for adopting ERP systems varied widely (Table II) but a common threadwas the need to store and process large amounts of information which was then used toimprove management decision-making (Spathis and Constantinides, 2003). Productionplanning and control or reducing inventory was often a secondary consideration.

Company C was interested in the detailed information that the ERP system couldproduce for taxation purposes. All the enterprises reported that the decision to adoptERP was internally driven rather than imposed or expected by customers or driven by

the need to keep pace with competitors and was consistent with the opportunity of themoment reason suggested by Buonanno et al. (2005). Some enterprises were able toexert a greater degree of control over both their suppliers and customers as a result ofadopting the ERP system but this was not the initial driver for adopting ERP. Mostenterprises were upgrading from DOS-based systems and were seeking additionalfeatures and solutions for particular problems (Woodie, 2005).

5.4 Benefits obtained from adopting ERPIncreased quality and quantity of information available and the increased speed andaccuracy of order processing were the major benefits for these businesses. Someenterprises reported other improvements: greater accuracy and reliability in costing,increased productivity, faster delivery of quotations and more efficient and effective

management of the business (Mabert et al., 2003).Company F reported positive effects on managing supplies, warehouses and

production with resultant cost savings. Company E expected to see major benefitsfrom the system in 2 or 3 years time despite the fact that 85 per cent of managers in theenterprise were satisfied with the system. This was much longer than the three to fourmonths reported by Yu (2005) or the eight months reported by Al-Mashari et al. (2003).The reason given was that it takes time for everybody to become fully familiar with theprogram and for all the modules to become fully integrated with each other.

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5.5 Operationalisation issues and problems encounteredAll of these enterprises showed a good deal of complexity and fragmentation of ERPsystems adoption, and there was very little intra-enterprise integration and almost nointer-enterprise integration. This was a cause for concern when the ideas of competitive

advantage were considered. Company A had some limited integration with twoimportant customers via EDI but no integration with suppliers. Operating two or moreseparate systems from different vendors for the same business required repeated dataentry, resulting in many inaccurate data. Without an appropriate interface (Trimi et al.,2005), such as an EAI, repeated data entry was costly, time consuming and inevitablyled to inefficiencies which could affect the ability of these enterprises to competeeffectively in their market place.

Several enterprises pointed out that competitors also had a fragmented approach,suffered from the complexity of multiple system adoption and very little integration ofsystems or supply chains (Trimi et al., 2005). While this might offer a temporary respitefrom high performing competitors, the situation in Greece could change quickly as aresult of one competitor making a concerted effort to adopt a suitably powerful andfully integrated ERP system. Thus, these enterprises could become vulnerable toincreased competition from more agile, efficient and effective competitors offeringquicker response, better on-time delivery performance and possibly lower costs.

Human factors were a major problem, particularly for SMEs (Loh and Koh, 2004).Many employees were not trained to use these systems and many were unfamiliar withcomputers. This had led to a number of issues and problems such as errors in dataentry, poor use of these systems, increasing costs of training services offered by thesystem vendors, employee resistance to integration of the ERP system into thebusiness process and the need to hire information technology personnel.

Some solutions offered by these enterprises were interesting. Company D used PCgames consoles to help its employees become familiar with computers. The initial

objective was to retrain existing staff to use the system but eventually the enterprisedecided to employ a full-time person to run the ERP system. Company E recognisedthat implementation and integration of the ERP system could have been better if theyhad trained a team at the beginning of the project and let this team implement andintegrate the system in co-operation with the vendor.

5.6 Impact of ERP on uncertainty and the supply chainThere was a good deal of pessimism about the ability of ERP systems to deal withuncertainty. Company A used multiple systems to deal with different uncertainties.Supplier driven uncertainties and inventory were managed by the WMS; MRP wasused for production and ERP for accounting, commercial issues and managingcustomer orders. Integration of these systems in the business was thought to increase

control over their suppliers because the enterprise had more information on the ordersbeing processed, due dates and quantities involved. However, the managers did agreethat better co-operation in the supply chain could minimise uncertainties. It was feltthat the systems alone had limited ability to deal with uncertainties if people did notperform their roles effectively. Training existing staff and hiring new staff was vitalfor success because of the complexity of these systems (Loh and Koh, 2004).

There was an increase in pressure and demands on suppliers to deliver the correctmaterials on time. There was a clear impact on the relationship these enterprises had

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with their suppliers and management of the supply chain had become a major issue forsome enterprises. Some enterprises saw these systems as complementary to retainingeffective relationships with suppliers and others saw these systems as a way ofcontrolling their suppliers. Some enterprises were able to evaluate the performance of

their suppliers as a result of adopting the ERP system. This suggested that theseenterprises were not using the latest developments in collaborative supplierdevelopment (Handfield and Nichols, 2002).

Company B felt that the potential for the system to have an impact on uncertaintywas great because the ERP system could incorporate scenarios after a delivery wasmade in order to foresee problems and help the enterprise develop coping mechanisms.However, Company B had not yet implemented the MRP module and so this couldnot be done. They felt that the most important modules that dealt with uncertaintywere the MRP and logistics/SCM-related modules. ERP cannot deal with uncertainty(Koh and Saad, 2004) and Company B should modify its expectations of thesesystems.

Company E suggested that the ERP system could have an impact on relationshipswith suppliers in two ways. The first way was via the Workflow module by which thecompany could send orders to suppliers directly by email. Approximately 70 per centof suppliers could be contacted this way but the managers felt that this did not alter therelationship the company had with its suppliers. The second way was by the qualitycontrol module that has a specific function for dealing with suppliers that ifimplemented would have an impact on the relationship Company E would have withtheir suppliers. The company was carrying out a feasibility study to identify the costsand benefits of implementing such a function.

The impact of systems on the supply chain led Company D to believe that since ithad better information on payments to suppliers and from customers it had changed itsbehaviour towards some customers and some suppliers. Company C was clear that

the ERP system had not had any effect on the companys relationships with suppliersbut it had changed the companys relationships with customers in that quotations weredelivered to customers much faster, were better designed and organised. This wasinteresting because ERP is supposed to lead to better management of the supply base(Davenport, 2000).

5.7 Uncertainty management and competitivenessThe main uncertainties experienced by these enterprises were machine breakdowns,materials shortages, labour shortages, supplier late deliveries, customer changes orderbefore delivery, poor quality of supplied items, unstable supplies of raw materials andfluctuating prices of raw materials (Table III). Some uncertainties were due to theindustry in which these enterprises operated, e.g. supplies of fresh fish to Company D

was dependent upon the weather and all enterprises in this industry suffered from thesame problem. While supplies of fresh ingredients to Company F were dependentupon the weather and the growing season for various vegetables and other produce,this did have a negative impact on the enterprises competitiveness because theircompetitors were Chinese, Italian and Spanish enterprises with different weatherpatterns.

Coping mechanisms under these diverse circumstances were a mix of applyingsystematic buffering (e.g. safety stock) and dampening mechanisms (e.g. safety

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Com

panyA

CompanyB

CompanyC

CompanyD

CompanyE

CompanyF

Uncertainties

Machine

brea

kdowns

Materialsshortage

Machine

breakdowns

Unstablesupplyof

fishduetoweather

MachinebreakdownAvailab

ilityoffresh

ingredients

Labourshortages

Customerchanges

orderbefore

delivery

Customerchanges

orderbefore

delivery

Supplierlate

delivery

Priceso

fraw

materia

ls

Supplierlate

deliv

ery

Poorqualityof

supplieditems

Volatilepriceofraw

materials(steel)

Machinebreakdown

Customerchanges

orde

rbefore

deliv

ery

Copingwith

uncertainties

Plan

nedproactive

maintenanceand

servicesupport

Specialised

materialscancause

delays

Developinggood

relationswith

suppliersand

technicianstoreact

promptlyto

machine

breakdowns

Keepshigh

inventorylevels

Usesthe

maintenance

moduleoftheERP

system

Keepsh

igh

inventorylevels,

safetys

tockof15

percent

Backuppersonnel

areusedtokeep

core

equipment

runn

ing

Companykeeps

someinventoryto

copewithchanges

tocustomerorders.

Butthesearenotso

important

Companypolicyis

thatitacceptsthe

costofamendments

evenifitisthefault

ofthecustomer

ERPhasaminimal

impactonsuppliers

behaviour

App

lyWMSto

prev

entproduction

proc

essstarting

untilallmaterials

available

Hasanumberof

alternative

suppliersandkeeps

higherinventory

levels

Usescapital

resourcesto

increaseinventory

levelswhenever

pricesarelow

(continued)

Table III.Coping with uncertainty

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Com

panyA

CompanyB

CompanyC

CompanyD

CompanyE

CompanyF

Earlychangesmade

imm

ediately.

Late

chan

gescanonlybe

acco

mmodatedin

futureorders

Impactof

uncertaintieson

competitiveness

Negativeeffects

prov

ides

opportunitiesto

improvethe

prod

uctionsystem

inclu

dingbuying

new

machinery.

Com

panywouldnot

beabletocompete

and

wouldneed

morepeopletodo

theworkofthese

systems

Uncertaintiesarea

featureindustry

wideinGreeceand

arefacedbyalltheir

competitors.Itdoes

nothaveany

negativeimpacton

thecompanys

competitiveness

Supplierscanhavea

majorimpacton

competitiveness

Allcompetitors

sufferfromthesame

problem.

Itdo

esnot

affect

competitivene

ss

significantly.

Leaderinsardines

inGreeceand

2ndin

tuna

Machinebreakdown

hasa5-10percent

impactoncosts

Badorfluctuating

weathercan

decreasethe

compan

ys

competitiveness

significantly

comparedto

Chinese

,Italianand

Spanish

competitors

Impactofsystems

onuncertainty

Allthreesystems

areimportantin

prov

iding

information.

WMS

helpsmanage

supp

lierdriven

unce

rtainties,

Mak

enafor

prod

uction,

ERPfor

acco

untingand

commercialissues

inclu

dingmanaging

customerorders

ERPcouldbeused

tohelpthecompany

developcoping

mechanisms.

However,

theMRP

modulehasnotbeen

implementedyet

andsothis

approachisnot

availabletothe

companyatpresent

Thereisnothingthe

systemcando

becausethecauseis

oftenexternaltothe

company,suchas

wrongmaterials

delivered

TheERPsystem

cannothavea

ny

impactonthis

uncertainty.B

utit

hasallowedthe

companytom

ake

morerational

and

accuratedecis

ions

Planned

maintenancehas

improvedthe

situation

Thecom

pany

believesthereis

nothing

theERP

system

candosince

theirmost

significant

uncertaintyisthe

weather

(continued)

Table III.

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Com

panyA

CompanyB

CompanyC

CompanyD

CompanyE

CompanyF

Impactofsystems

onsupplychain

Thesesystems

increasecontrol

over

suppliersdue

tom

oreinformation

availableondates

and

quantities.

Few

supp

liersare

implementingthese

systemsdespite

pressurefromsome

customersonthe

company

TheERPsystem

hasmadethe

companymore

demandingon

supplierssinceall

documentsmust

havetherequired

codesandnumbers

Thereisnoeffecton

suppliersbutorders

tocustomersare

deliveredfasterare

betterdesignedand

betterorganised

Impactsonrelations

withsuppliersand

customerssin

cethe

companyhas

better

informationon

paymentsto

suppliersand

from

customersandthus

theycanbe

controlledbetter

ERPcanhavean

impacton

relationshipswith

suppliers.70per

centofsuppliers

couldreceiveorders

viaemailgenerated

bythemodulecalled

Workflow.

Quality

controlmoduleis

notfully

implementedbut

willbeableto

impactonsupply

chainrelationships

Duetobetter

informa

tionon

costing

foreach

productthe

compan

ycan

evaluatesuppliers

betterthanbefore

Methodsofdealing

withuncertainty

Limited.

Uncertaintieswill

alwa

ysbepresentin

theGreekbusiness

environmentand

cann

otbeaddressed

throughsystems.

Agreedthatbetter

co-operationinthe

supp

lychaincould

minimise

unce

rtainties

Integrationof

systemsinternally

andexternally,

improvementofthe

systemsthemselves

andbetter

relationshipswith

suppliersand

customers.

Companyalso

wantstoincreasein

sizetoincreaseits

powertorequest

bettertermswithits

partners.CRMis

seenasthenextstep

Limited.

ERPmight

beofhelpwhen

dealingwith

uncertaintieswithin

thecompanybut

onlyafewmodules

arebeingused

currently.

Improved

communication

betweenthe

companyand

supplierscouldlead

tofewerproblems

Limited.

TheERP

systemismainly

usedforinternal

information.It

cannotcopew

iththe

impactofthe

externalworld

ERPcanhelpwith

internal

uncertaintiesbut

notexternal

uncertainties.

Needs

acostbenefit

analysisbeforefully

implementingthe

qualitycontrol

module

Limited

atpresent.

Determinedto

develop

thesystem

further.

System

needstobeusedina

holistic

way.

The

HRMm

oduleisseen

ascrucialbutthey

donothavethat

module

yet

Table III.

ERP adoption

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lead-time) (Koh et al., 2002). Planned proactive maintenance and service support wereused by Company A to ensure that the injection moulding machines operatedcontinuously. Company A was also using a WMS to cope with delays in delivery ofraw materials and components. The WMS prevented the production process starting

until all the materials for a particular job were available. The enterprise expected thatthe WMS would lead to better integration of the MRP system with the ERP system andwould assist in production control. In our view this was a fragmented approach to ERPadoption and was likely to increase complexity and difficulty for the company due tothe use of three different systems without proper integration. ERP was designed to becapable of planning the availability of resources for production, and hence the use ofthe production planning module within ERP could be a replacement for the MRPsystem, whilst the use of the materials management module within ERP could be analternative to the WMS.

The relationship between uncertainties, coping mechanisms and competitivenessvaried from the convenient to the expedient. For example, Company B had found thatmaterial shortages were a major problem facing the enterprise and the industry ingeneral. Many of these raw materials and components were rather specialised and hightechnology in nature and often in short supply generally in Greece. In addition, thematerials in that industry often changed in specification and quality required and sothe system needed constant maintenance and support. The enterprise took the viewthat uncertainties were a feature of the whole industry in Greece and their competitorswere all facing the same problems. The enterprise realised that many of these materialsand components were costly to stock and had some stocks to deal with some specificproblems on some materials. Such an approach is vulnerable to a proactive new entrantinto the market with good relationships with suppliers and good SCM practices. Thisfinding suggested that a structured and systematic approach was vital to manageuncertainty in order to create competitive advantages in such a difficult business

environment (Koh and Saad, 2002).Company C was taking a reactive approach to dealing with machine breakdowns

and had developed good relationships with suppliers and technicians to react quickly.Company C also used several suppliers and kept higher inventory levels thannecessary to cope with supplier late deliveries. The enterprise took the view thatsuppliers could have a major impact on the competitiveness of the enterprise and it wasnecessary to keep some high inventories and have alternative suppliers available. As aresult the enterprise had developed very good relationships with a number ofalternative suppliers. This could be deemed a type of dampening technique, but it wasa dangerous strategy because playing one supplier off against another does notencourage true supplier partnership and collaboration (Handfield and Nichols, 2002).However, the enterprise was well aware that this approach did not offer a long-term

solution to their problems and was actively seeking a solution. The managers atCompany C were resigned to the idea that the ERP system could do nothing to dealwith externally caused uncertainties but the ERP system might be of help whendealing with uncertainties within the enterprise. However, the company was using alimited number of modules that were not operating to their full potential. It isunderstood that ERP cannot operate well under uncertainty (Koh and Saad, 2004) andhence the finding from this study showed the mixed understanding of the capabilitiesof ERP by these companies. Managers at Company C thought that improved

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communication between the enterprise and its suppliers could lead to better mutualunderstanding and deal with some uncertainties.

5.8 Suitability of the systems and integrationAll of these enterprises had several systems (Table II) running in parallel and were notproperly integrated, either internally with other functional areas or externally in asupply chain. Inter-enterprise and intra-enterprise integration issues were found to beubiquitous (Burn and Ash, 2005; Sharif et al., 2005), but interestingly this findingcontrasted with Spathis and Constantinides (2003) finding, which suggested that ERPcould increase integration of applications. Although Company E claimed that theirERP system was integrated internally with other functional areas, the presence oflegacy systems was found to be prevalent in all these case enterprises. This had led tosome incompatibility and difficulties working with these systems.

ERP systems were generally not used for production planning and separate MRPsystems were employed. This finding showed a lack of understanding of the capability

of ERP as a holistic system for an enterprise (Spathis and Constantinides, 2003).Companies A andB used a WMSand, remarkably, this wasseen by theseenterprisesas a way to harmonise their other systems within the enterprise. Company A had acustomised MRP program called Makena produced by Delectron that was not integratedwith the ERP system or WMS. This program was specially designed for Company Aas a pilot program by taking into account the needs of that particular industry.The system has since become very successful and more enterprises are buying it.

5.9 General findings and comparison to the USA and UK ERP adoptionsAll the enterprises followed the same evolutionary process in adopting ERP (Table IV)and had similar drivers for adopting these systems. These enterprises had similarpessimistic attitudes concerning the ability of these systems to deal with uncertainties

(Koh et al., 2006). The main difference between these enterprises was that largerenterprises, in terms of number of employees, used customised applications programsfor decision making at a higher level in the enterprise and it was clear that decisionmaking was becoming formalised within these enterprises. While in smallerenterprises ERP was not used for advanced decision making but for operationaldecision making largely concerned with financial and accounting information,contrasting sharply with the findings of Mabert et al. (2003) on the benefits of adoptingERP by SMEs in the USA.

It would be uneconomic and very difficult to adopt all the methods of coping withuncertainty simultaneously. There was a lack of effort in identifying the relativelyimportant uncertainties, through which finite resources could be used to deal with themand this meant that enterprises could not achieve an optimal result when coping with

uncertainty. Even with sufficient resources, without a comprehensive and/or holisticview of uncertainty it was impossible for an enterprise to prepare for all types ofuncertainty. When enterprises can find proper approaches to deal with uncertainty, theunderlying causes of the uncertainty often remain unknown. This was found to be theproblem in many enterprises (Koh and Saad, 2002), and it was the case in this study.

When considering production, tactical and strategic decision making in largerenterprises, customised applications were preferred rather than off-the-shelfcommercial ERP systems. Managers at both the vendors and the enterprise argued

ERP adoption

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CompanyA

CompanyB

CompanyC

CompanyD

CompanyE

CompanyF

Early

1990s

DOS-based

application

DOS-based

application

DO

S-based

app

lication

DOS-based

application

IBMAS400COBOL

M-HOUSE

DOS-based

application

Late1990s

ERP-custom

ised

MRP

ERP-customised.

Excelusedfor

Production

management

CustomisedMRP

CustomisedMRP

CustomisedMRP

CustomisedUnix

system.

Databases

forcusto

mersand

suppliers

Early

2000s

Warehouse

managementsystem

(WMS).ERP

andthe

WMSareintegrated

butthecustomised

MRPisnot.

CombinesM

RPand

ERPsystem

s

Warehouse

managementsystem

(WMS)

ERP.

Customised

dat

abaseonOracleis

use

dforproduction

management

ERPnotcompletely

integrated.

Productionuses

customisedsystems

notintegratedwith

theERPsystem

ERPfullyintegrated

system

ERPnot

completely

integrate

d.

Productionuses

customis

edsystems

notinteg

ratedwith

theERP

system

Current

ERP

modules

used

Accounting/financial

andcommercial

modulesuse

d.

The

useofcombined

systemsisb

ecause

theMRPoff

eredby

theERPsystemgives

onlygeneral

information,

the

customisedMRP

givesmuch

better

detailedinfo

rmation

forproduction

Finance,accounting,

commercial,

MISand

MRPLogisticsand

SupplyChain

Managementmodule

implemented.

Plans

forane-business

moduletobe

implementedin

future

Fin

ance,

acc

ounting/costing

and

commercial

module

Finance,

accounting/costing,

commercialmodu

le,

suppliersmodule

andHRM

Finance,sales,

productionplanning,

plantmaintenance,

accounting/costing,

HRMandpayroll,

materialmasterand

controlling,quality

management,

workflowand

businesswarehouse

Accounting,costing,

finance,procurement

andcommercial

modules

Table IV.Systems evolutionpattern

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that ERP systems offer holistic solutions but the solutions actually adopted were farfrom holistic. ERP systems were not used alone in any of the enterprises studied andthe ERP system was rarely found to be fully integrated. It was unclear if this was aproblem that had been created by the vendors and the enterprises adopting these

systems in our sample or if this was a wider problem in the context of Greekenterprises in general. It may be that legacy systems were hard to eliminate in theseenterprises and that they were attempting to work with what they already understoodwhile trying to catch up with the latest technology available (Woodie, 2005).

Compared with the literature on ERP adoptions in the USA and UK, this researchclearly showed that ERP adoption in Greek companies was fragmented. The degree offragmentation lies in the lack of a systematic approach guiding the process of ERPadoption. This was often the case for the UK ERP adoption (Koh and Saad, 2002).Hence, Greek companies should consider a systematic approach in future.

There was an absence of a clear strategic expectation from ERP adoption in Greekcompanies (Stefanou, 2001). This was often associated with the need to solve specificproblems, e.g. providing information to all departments using a centralised database(Spathis and Constantinides, 2003), which then leads to a lack of understanding of whatERP could provide to the enterprise. The literature review showed that ERP adoptionin the USA often started with a clear strategic expectation and hence more benefitscould be derived from adopting ERP. This was not the case for ERP adoption in Greekcompanies. However, such practices could be adopted in Greek enterprises.

The case studies showed that ERP adoption in Greek companies focused more onthe basic functions as compared to the advanced and strategic adoption approachtaken in the USA. Some enterprises have started to integrate with their customers andsuppliers, e.g. integration of ERP and SCM (Tarn et al., 2002) and next-generation ofERP (Anussornnitisarn and Nof, 2003). These approaches may prove useful in thefuture for Greek enterprises.

6. ConclusionsAnalysis of the literature found that most research on ERP was implementationfocussed, and the integration focussed research was very limited. A taxonomy ofERP adoption research was developed to highlight the critical success/failure factorsexamined in the implementation focussed research, and the total integration issuesexamined in the integration focussed research. However, not all of these issues wereinvestigated in all of the exploratory case studies. It was not possible to investigate theissue of knowledge management in these companies partly because of the early stage ofadoption of ERP in most companies and partly from the fact that the interviews wererelatively short and exploratory in nature.

This research showed that the adoption and performance of ERP systems was

fragmented and differed between countries, industry sectors, business types, andsystem types. The drivers for adopting ERP systems were similar, i.e. for improvinginformation flow and order processing efficiency.

Greek enterprises showed some unique characteristics in that as many as threedifferent systems were used concurrently to manage the business. This approachindicated the non-holistic thinking of Greek managers where ERP adoption wasconcerned. It also indicated that managers had limited understanding of the strategicnature of the adoption of ERP systems and this contrasted sharply with the generally

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strategic approach used by managers in the USA and UK (Yusufet al., 2004; Gulledgeand Simon, 2005). Greek managers had a less well-developed understanding of thesesystems, their capabilities and limitations. Some managers did not fully understand thattheir ERP systems could not be used to cope with uncertainty and many had devised

alternative strategies and tactics for coping with uncertainty, such as the use of a WMS.Fragmented ERP adoption was identified in Greek enterprises and also in the

supply chain. Greek enterprises did not have a systematic approach in adopting ERP.Fuzzy strategic expectations from these systems were apparent, and a specificfunctional view of ERP was taken for its adoption. There was no doubt that ERP couldenable better financial and accounting operations, improve inventory management,assist SCM, improve materials management, and other production related functions.However, there were other more wide ranging functions available within these systemsthat could be used to exploit the full benefits of adopting ERP. Most enterprises tried tomanage uncertainty reactively. Some enterprises attempted to cope with uncertaintyusing a WMS. Some even expected ERP systems to cope with uncertainty. Thisshowed some mixed understanding of the capability of these systems. The practice of

total integration was limited in these case studies. This contrasted with ERP adoptionsin the UK where a strategic and holistic approach predominates (Koh and Saad, 2002).

To adapt the successes of ERP adoptions from the USA and UK to Greece will notbe easy or straightforward. It will require careful customisation of the systems andtailoring of the implementation procedures to the local culture, economic, social andpolitical environments in which these enterprises operate. The taxonomy developed inthis research could be beneficial for informing managers of the critical success/failurefactors during implementation and the integration issues required for total integration.

7. Managerial implicationsThe results from this research led to some advice on the adoption of ERP systems for

Greek managers:. Enterprises need not rely solely on ERP in managing their businesses, and other

systems, e.g. a WMS could be used to complement its role.

. The capabilities of ERP should not be over-estimated. ERP cannot deal withuncertainty.

. There are plenty of potential benefits to be achieved from adopting ERP when itis integrated well within the enterprise and the supply chain.

. The more systematic approaches of ERP adoption in the USA and UK couldprovide useful examples for Greek enterprises, but these approaches requirecareful customisation to tailor them to the local culture, economic, social andpolitical environments. This comment also applies to other developing countries.

. ERP implementation and ERP integration are not identical. The former deals thewhat why and who issues, e.g. project management, whilst the latter dealswith the how issue, i.e. how can an enterprise integrate the ERP system into thebusiness?

8. Further researchFurther research will involve a questionnaire survey to a large number of manufacturingcompanies in Greece covering all aspects of the taxonomy of ERP adoption.

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The questionnaire will explore both the theoretical developments on adoption researchand the practical issues of adoption, performance and the understanding of managersinvolved with implementing and integrating these systems. The use of multiple systemsto overcome uncertainties will also be investigated. Future research will identify

explanatory cases to illustrate certain points or issues and exemplary cases where bestpractice ERP system implementation and integration has been employed and convertedinto a successful business.

References

Al-Mashari, M. (2002), Enterprise resource planning (ERP) systems: a research agenda, Industrial Management & Data Systems, Vol. 102, pp. 165-70.

Al-Mashari, M., Mudimigh, A. and Zairi, M. (2003), Enterprise resource planning: a taxonomy ofcritical factors, European Journal of Operational Research, Vol. 146, pp. 352-64.

Anussornnitisarn, P. and Nof, S.Y. (2003), e-Work: the challenge of the next generation ERPsystems, Production Planning & Control, Vol. 14, pp. 753-65.

Bose, R. (2006), Understanding management data systems for enterprise performancemanagement, Industrial Management & Data Systems, Vol. 106, pp. 43-59.

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Further reading

EBN (2002), Global ERP market still growing, EBN, available at: www.ebnonline.com(accessed 25 May 2002).

Nah, F.F.H., Zuckweiler, K.M. and Lau, J.L.S. (2003), ERP implementation: chief informationofficers perceptions of critical success factors, International Journal of Human Computer

Interaction, Vol. 16, pp. 5-22.

Corresponding authorS.C.L. Koh can be contacted at: [email protected]

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