Exploring the acceptance of enterprise resource planning systems by small manufacturing ...

215 Pages·2011·2.29 MB·English

EXPLORING THE ACCEPTANCE OF
ENTERPRISE RESOURCE PLANNING SYSTEMS
BY SMALL MANUFACTURING ENTERPRISES

by

RUBINA ADAM

submitted in accordance with the requirements
for the degree of

MASTER OF SCIENCE

in the subject

INFORMATION SYSTEMS

at the

UNIVERSITY OF SOUTH AFRICA

SUPERVISOR: PROF P. KOTZÉ

CO-SUPERVISOR: PROF A. J. VAN DER MERWE

NOVEMBER 2010
In Appreciation
__________________________________________________________________________________

“Only one who devotes himself to a cause with his whole strength and soul can be a true master.
For this reason mastery demands all of a person.” ~ Albert Einstein

Research is not an individual undertaking. It is a grand endeavour that is supported by a „dream
team‟ made up of a multitude of individuals that inspire one to master their abilities. Words alone
cannot express my sincere gratitude to everyone who has touched my life and made this journey a
memorable and rewarding one.

Thank you to my patient and endearing supervisors Prof Paula Kotzé and Prof Alta van der Merwe,
without you this dissertation would never have been completed. Your mentoring, guidance,
enlightenment, counseling, experience, ideas and life‟s lessons inspired me on all occasions. Thank
you for embracing me under your supervisory wings, for your patience and insightful interactions.

Thank you to my research family at SAP Research Centre Pretoria, especially Mr Danie Kok,
Director and Prof Jan Eloff, Research Director, for supporting me and giving me countless
opportunities to reach the finish line. Thank you to my mentors, managers, and colleagues for the
support and spirited motivation to strive on.

I would also like to thank SAP Research and the SAP Meraka Unit for Technology Development
(UTD) for giving me the opportunity to conduct this research. It should be noted that the work and
views portrayed in this dissertation are those of the researcher and do not necessarily reflect the
views and opinions of SAP Research or SAP Meraka UTD.

A special thank you to my parents for their extraordinary support, inspirational wisdom and
enduring dedication that guided me throughout the research process.

Thank you to information specialist, Dr Filistea Naude, UNISA, for keeping me informed of the
latest research trends in information systems research. Your frequent email alerts helped me to keep
abreast of the latest research.

Thank you to all the small manufacturing enterprises and ERP consultants who agreed to
participate, without you this research would not be possible. I appreciate your time and commitment
to the study.

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Finally, thank you to my friends and family who shared many moments of joy and angst over the
past years. I will always remember your support and encouragement during the challenging times
and the many celebrations we shared after significant milestones were reached.

With heartfelt gratitude,

___________________

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Abstract
___________________________________________________________________________

The use of enterprise resource planning (ERP) systems by small enterprises is proliferating.
Traditionally used by large enterprises, ERP systems are now considered important enterprise
management aids, which may contribute to the sustainability and growth of small enterprises.
Although varying acceptance factors may impact on the acceptance of ERP systems, there is no
consolidated list of ERP system acceptance factors specific to small enterprises. In this study, the
strategic, business, technical and human factors that influence the acceptance of ERP systems in
small manufacturing enterprises in South Africa is presented. These influencing factors may guide
future initiatives aiming to ensure the acceptance of ERP systems by small manufacturing
enterprise. A combined quantitative and qualitative data analysis approach was used as an analytical
lens to interpret responses gathered from small manufacturing enterprises. Recommendations are
made for future research on ERP system acceptance and adoption within the broader spectrum of
small enterprises.

Keywords
___________________________________________________________________________

Enterprise resource planning systems, small and medium enterprises, small enterprises, small
manufacturing enterprises, technology acceptance model, unified theory of technology acceptance
model, enterprise resource planning acceptance factors

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Table of Contents
________________________________________________________________________________

CHAPTER 1: INTRODUCTION ................................................................................................. 13
1.1 INTRODUCTION ............................................................................................................... 14
1.2 BACKGROUND ................................................................................................................. 14
1.3 THESIS STATEMENT AND PURPOSE OF STUDY ...................................................... 16
1.4 RESEARCH OBJECTIVES AND QUESTIONS ............................................................... 17
1.5 THE SCOPE AND CONTEXT OF THE STUDY .............................................................. 18
1.5.1 Scope of the study ......................................................................................................... 18
1.5.2 Delineation of the study ................................................................................................ 18
1.6 RATIONALE BEHIND STUDY ........................................................................................ 19
1.6.1 Personal rationale .......................................................................................................... 19
1.6.2 Scientific rationale ......................................................................................................... 19
1.7 SIGNIFICANCE AND POTENTIAL CONTRIBUTION OF THE STUDY ..................... 20
1.8 RESEARCH APPROACH .................................................................................................. 21
1.9 ETHICAL CONSIDERATIONS ......................................................................................... 21
1.10 DISSERTATION STRUCTURE ...................................................................................... 22

CHAPTER 2: THEORETICAL FRAMEWORK ......................................................................... 24
2.1 INTRODUCTION ............................................................................................................... 26
2.2 UNDERSTANDING TECHNOLOGY ACCEPTANCE AND TECHNOLOGY
ADOPTION ......................................................................................................................... 26
2.2.1 Technology Acceptance Model ..................................................................................... 27
2.2.2 UTAUT Model .............................................................................................................. 29
2.3 ERP SYSTEMS ................................................................................................................... 31
2.3.1 Defining ERP systems ................................................................................................... 31
2.3.2 Evolution of ERP systems ............................................................................................. 32
2.3.3 Components of ERP systems ........................................................................................ 35
2.3.4 Benefits and challenges of using ERP systems ............................................................. 38
2.3.4.1 Benefits of using ERP systems .............................................................................. 38
2.3.4.2 Challenges of using ERP systems .......................................................................... 39
2.3.5 Examples of small enterprise ERP systems .................................................................. 40
2.4 SMALL MANUFACTURING ENTERPRISES ................................................................. 41
2.4.1 Defining small manufacturing enterprises .................................................................... 42
2.4.2 Manufacturing industry in South Africa ....................................................................... 43
2.4.2.1 Challenges of the manufacturing industry ............................................................. 44
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2.4.2.2 Classification of the South African manufacturing industry ................................. 44
2.5 TECHNOLOGY ACCEPTANCE OF ERP SYSTEMS ..................................................... 45
2.5.1 Strategic acceptance factors .......................................................................................... 49
2.5.2 Business acceptance factors .......................................................................................... 50
2.5.3 Technical acceptance factors ......................................................................................... 51
2.5.4 Human acceptance factors ............................................................................................. 52
2.6 CURRENT STATUS OF RESEARCH ON ACCEPTANCE OF ERP SYSTEMS BY
SMALL MANUFACTURING ENTERPRISES ................................................................. 53
2.7 SUMMARY ......................................................................................................................... 54

CHAPTER 3: RESEARCH METHODOLOGY .......................................................................... 56
3.1 INTRODUCTION ............................................................................................................... 58
3.2 THE RESEARCH PROCESS ............................................................................................. 58
3.2.1 Research philosophy ..................................................................................................... 59
3.2.2 Research approach ......................................................................................................... 60
3.2.3 Research strategy ........................................................................................................... 62
3.2.4 Time horizon ................................................................................................................. 64
3.2.5 Data collection method .................................................................................................. 65
3.3 APPLIED RESEARCH PROCESS ..................................................................................... 67
3.3.1 Research philosophy ..................................................................................................... 67
3.3.2 Research approach ......................................................................................................... 67
3.3.3 Research strategy ........................................................................................................... 69
3.3.3.1 Sampling frame ...................................................................................................... 69
3.3.3.2 Sampling technique ................................................................................................ 69
3.3.3.3 Response rate and non-response ............................................................................ 70
3.3.3.4 Sample size ............................................................................................................ 70
3.3.4 Time horizon ................................................................................................................. 70
3.3.5 Data collection method .................................................................................................. 71
3.4 QUESTIONNAIRE DESIGN ............................................................................................. 71
3.4.1 Questionnaire layout and structure ................................................................................ 72
3.4.2 Question types and response format .............................................................................. 72
3.4.3 Question content and wording ....................................................................................... 76
3.4.4 Validity and reliability .................................................................................................. 83
3.4.5 Pre-test and pilot ............................................................................................................ 83
3.5 INTERVIEW DESIGN ....................................................................................................... 84
3.5.1 Type of interview .......................................................................................................... 84
3.5.2 Researcher‟s role and identity ....................................................................................... 84
3.5.3 Interview preparation .................................................................................................... 84
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3.5.4 Scheduling ..................................................................................................................... 86
3.5.5 Recording ...................................................................................................................... 86
3.5.6 Seating and equipment .................................................................................................. 86
3.5.7 The interview ................................................................................................................. 86
3.5.8 Transcribing .................................................................................................................. 87
3.6 QUALITATIVE AND QUANTITATIVE DATA ANALYSIS ......................................... 87
3.7 DATA TRIANGULATION ................................................................................................ 88
3.8 ETHICS ............................................................................................................................... 89
3.9 SUMMARY ......................................................................................................................... 90

CHAPTER 4: SAMPLE OF SMALL MANUFACTURING ENTERPRISES SURVEYED ..... 91
4.1 INTRODUCTION ............................................................................................................... 93
4.2 SAMPLE SURVEYED ....................................................................................................... 93
4.3 MANUFACTURING SECTORS ........................................................................................ 94
4.4 YEARS OF ENTERPRISE OPERATION .......................................................................... 95
4.5 NUMBER OF EMPLOYEES .............................................................................................. 96
4.6 SUMMARY ......................................................................................................................... 96

CHAPTER 5: EXPERIENCES OF USING ERP SYSTEMS ...................................................... 98
5.1 INTRODUCTION ............................................................................................................. 100
5.2 FAMILIARITY WITH ERP SYSTEMS ........................................................................... 101
5.3 FACTORS THAT INFLUENCE THE USE OF ERP SYSTEMS .................................... 102
5.3.1 ERP systems implemented .......................................................................................... 102
5.3.2 Perceived computer skills of ERP system users .......................................................... 104
5.4 FACTORS THAT INFLUENCE THE ACCEPTANCE OF ERP SYSTEMS ................. 105
5.4.1 Perceived factors of acceptance of ERP systems............................................................ 105
5.4.1.1 ERP system brand reputation ............................................................................... 106
5.4.1.3 Importance of strategic and business acceptance factors ..................................... 107
5.4.1.4 Top two most important ERP system acceptance factors .................................... 110
5.4.2 Evaluated factors of acceptance of ERP systems ........................................................ 110
5.4.2.1 Performance expectancy ...................................................................................... 112
5.4.2.2 Effort expectancy ................................................................................................. 112
5.4.2.3 Social influence .................................................................................................... 113
5.4.2.4 Facilitating conditions .......................................................................................... 114
5.5 SUMMARY ....................................................................................................................... 115

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CHAPTER 6: EXPECTATIONS FOR USING ERP SYSTEMS .............................................. 116
6.1 INTRODUCTION ............................................................................................................. 118
6.2 FAMILIARITY WITH ERP SYSTEMS ........................................................................... 119
6.3 FACTORS THAT INFLUENCE THE ACCEPTANCE OF ERP SYSTEMS ................. 120
6.3.1 Perceived factors of acceptance of ERP systems ........................................................ 120
6.3.1.1 ERP system brand reputation ............................................................................... 120
6.3.1.2 Features that an ERP system should deliver ........................................................ 121
6.3.1.3 Importance of strategic and business acceptance factors ..................................... 123
6.3.1.4 Top three most important ERP system acceptance factors .................................. 125
6.3.2 Evaluated factors of acceptance of ERP systems ........................................................ 126
6.3.2.1 Performance expectancy ...................................................................................... 127
6.3.2.2 Effort expectancy ................................................................................................. 128
6.3.2.3 Social influence .................................................................................................... 129
6.3.2.4 Facilitating conditions .......................................................................................... 130
6.4 SUMMARY ....................................................................................................................... 131

CHAPTER 7: DISCUSSION OF RESEARCH FINDINGS ...................................................... 132
7.1 INTRODUCTION ............................................................................................................. 134
7.2 TRIANGLUATION EXERCISE ...................................................................................... 134
7.3 ERP SYSTEM ACCEPTANCE FACTORS ..................................................................... 136
7.3.1 Strategic acceptance factors ........................................................................................ 136
7.3.2 Business acceptance factors ........................................................................................ 138
7.3.3 Technical acceptance factors ....................................................................................... 142
7.3.4 Human acceptance factors ........................................................................................... 143
7.4 UTAUT ACCEPTANCE FACTORS ................................................................................ 145
7.4.1 Performance expectancy ............................................................................................. 146
7.4.2 Effort expectancy ........................................................................................................ 146
7.4.3 Social influence ........................................................................................................... 147
7.4.4 Facilitating conditions ................................................................................................. 147
7.5 PERCEIVED FACTORS INFLUENCING THE ACCEPTANCE OF ERP SYSTEMS
BY SMALL MANUFACTURING ENTERPRISES ........................................................ 149
7.6 SUMMARY ....................................................................................................................... 152

CHAPTER 8: CONCLUSION.................................................................................................... 153
8.1 INTRODUCTION ............................................................................................................. 155
8.2 SUMMARY OF KEY CHAPTERS .................................................................................. 155
8.3 REFLECTION OF KEY FINDINGS ................................................................................ 156
8.4 REFLECTION ON EMERGING THEMES ..................................................................... 159
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8.5 SIGNIFICANCE AND CONTRIBUTION OF RESEARCH ........................................... 161
8.6 LIMITATIONS OF RESEARCH ...................................................................................... 163
8.7 RECOMMENDATIONS FOR FURTHER WORK ......................................................... 163
8.8 CONCLUDING STATEMENTS ...................................................................................... 166

Bibliography................................................................................................................................ 168

Appendices .................................................................................................................................. 177
APPENDIX A: RECRUITING RESEARCH PARTICIPANTS ............................................ 177
APPENDIX B: RESEARCH QUESTIONNAIRE .................................................................. 180
APPENDIX C: RESEARCH INTERVIEW ............................................................................ 201
APPENDIX D: SMALL MANUFACTURING ENTERPRISE RESEARCH
PARTICIPANTS ........................................................................................... 206
APPENDIX E: ERP SYSTEM CONSULTANT RESEARCH PARTICIPANTS ................. 209
APPENDIX F: INTERVIEW RESPONSES ........................................................................... 210

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List of Figures
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Figure 1: Use of ERP systems at different levels of enterprise maturity ........................................... 15
Figure 2: Contribution to Information Systems research discipline .................................................. 20
Figure 3: Dissertation structure .......................................................................................................... 23
Figure 4: Technology acceptance and technology adoption .............................................................. 27
Figure 5: TAM ................................................................................................................................... 28
Figure 6 : UTAUT Model .................................................................................................................. 29
Figure 7: Milestones of ERP systems development........................................................................... 33
Figure 8: Anatomy of an enterprise system ....................................................................................... 35
Figure 9: Components of an ERP system for a manufacturing enterprise ......................................... 36
Figure 10: Research Process Onion, adapted from ............................................................................ 59
Figure 11: The process for inductive reasoning ................................................................................. 61
Figure 12: The process for deductive reasoning ................................................................................ 61
Figure 13: Deductive reasoning, adapted ........................................................................................... 68
Figure 14: Data Triangulation ............................................................................................................ 89
Figure 15: Adopted research process onion ....................................................................................... 90
Figure 16: Years of enterprise operation ............................................................................................ 95
Figure 17: Number of employees ....................................................................................................... 96
Figure 18: Familiarity with ERP systems ........................................................................................ 102
Figure 19: Perceived computer skills of users of ERP systems ....................................................... 105
Figure 20: ERP system brand reputation ......................................................................................... 106
Figure 21: ERP system features required by users .......................................................................... 107
Figure 22: Performance expectancy ................................................................................................. 112
Figure 23: Effort expectancy ............................................................................................................ 113
Figure 24: Social influence .............................................................................................................. 113
Figure 25: Facilitating conditions .................................................................................................... 114
Figure 26: Familiarity with ERP systems ........................................................................................ 119
Figure 27: ERP system brand reputation ......................................................................................... 121
Figure 28: ERP system features required by potential users ........................................................... 122
Figure 29: Performance expectancy ................................................................................................. 128
Figure 30: Effort expectancy ............................................................................................................ 128
Figure 31: Social influence .............................................................................................................. 129
Figure 32: Facilitating conditions .................................................................................................... 130
Figure 33: Comparison and confirmation of research findings ....................................................... 135

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