Amsterdam Business School
ERP use affected by manager’s behaviour
Name: Asmae Bihaki Student number: 10282203 Date: 20 June 2015
Paper: C
Word count: 12973
MSc Accountancy & Control, specialization: Control
Statement of originality
This document is written by student Asmae Bihaki who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The faculty if Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Acknowledgements
The last couple of months I worked intensively on written my thesis. It was a period where I learned a lot and I really enjoyed researching this subject. I would like to thank the people who supported me and encouraged me during this process.
First I would like to thank my mentor Ed Jansen who supported me during my thesis. I would also like to thank my colleagues from Deloitte for their cooperation. They have supported me and were always willing to help me. Finally I would like to thank Mr. Sanjay Bissessur for the classes regarding the thesis and his guidance during the writing of my research proposal.
Dear all, thank you very much!
Asmae Bihaki
Abstract
Deloitte is the company where this research will be conducted. Deloitte is one of the Big four professional services firm. Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services. Deloitte uses SAP as an ERP system, which is implemented in 2004. The use of SAP within the consulting area is the central question in this research. By using the Theory of Planned behaviour and the institutional framework, the researcher will clarify why the SAP usages is not to its fullest extent.
Contents
Introduction ... 7
1 Literature theory ... 8
1.1 Background ERP system ... 8
1.2 ERP general critical success factors ... 10
1.3 Research Critical Success Factors (CSF) ... 13
1.3.1 Critical success factors: ... 13
1.4 Theory ... 18
1.4.1 Theory of planned behavior ... 18
1.4.2 Institutional theory ... 21
1.4.3 Theory conclusion ... 25
2 Research methodology ... 26
3 Deloitte ... 27
3.1 Background ... 27
3.2 Deloitte’s ERP system ... 27
3.3 Deloitte Consulting ... 28
3.4 Client Finance Management ... 28
4 Findings ... 29
4.1 User training and education & User acceptance ... 29
4.2 Change management and interdepartmental communication ... 31
4.3 Summary of the findings based on the theory ... 33
4.3.1 Summary of the findings ... 33
4.3.2 Findings explained by theory ... 34
5 Conclusion ... 37
References ... 39 Appendix ... 43
Introduction
The researcher adopted a research within Deloitte Netherlands, focusing on the ERP system, which is SAP. Especially focusing on the use and satisfaction of it among the managers of Deloitte Consulting. For many years SAP has not been used by all the intended users. The usage and satisfaction of SAP are mixed. As a result of low usage of SAP, additional processes are being created, which leads to unnecessary extra work. Since offshoring the administrative work to India, the usage of SAP has decreased even more.
By using the Theory of Planned Behavior and the Institutional Theory the researcher would like to examine why the managers are not using SAP to its full extent.
The main research question is
Why is SAP not used to its full extent by the managers of Deloitte Consulting.
Answering this research question will make it possible to evaluate the lack of usage of the ERP system among the managers. To give answer on this research question there will be an empirical study carried out by conducting interviews. For the preparation and support of this question there will be a literature study, in which the following sub-question will be investigated. The sub research questions are distracted from the main research question:
What is an ERP system?
What are the critical success factors for a successful implementation of an ERP system? What influences ERP usages?
As a research method the researcher has conducted semi-structured interviews, conducting them within the Consulting department with different stakeholders and analyzed available documents. The interviews has been semi-structured, because this gave the researcher the opportunity to give the interviewees a direction but at the same time gives them the opportunity to tell their story in an open way. Both methodologies are suitable for a case study (Yin, 2010).
The research will contribute to prior literature because it will provide new data concerning one of the big four auditors. There are different studies done on the ERP usage but no study found in this particular setting. The reason to conduct this research is because the lack of ERP usage is an ongoing issue within Deloitte Consulting. For a long time, employees of consulting are not using SAP to its fullest extent, although they are willing to use SAP but do not feel capable to use it.
1 Literature theory
In the following section the researcher will describe previous literature regarding ERP systems and the theories which will be used to interpret the findings, which are the Theory of Planned Behaviour
and the Institutional Theory. The two theories are used because they will help explain the behaviour of employees regarding the use of an ERP system. The Theory of Planned Behaviour suggests that a person’s behaviour is determined by the intention to perform the behaviour. The institutional theory will help explain how rules and routines become established in social behaviour. The literature will be described by the formulated sub-questions mentioned in the introduction.
1.1 Background ERP system
During the past years many companies have invested in the implementation of an enterprise resource planning (ERP) system. ERP is a software package that attempts to integrate all departments and functions of a company into a single computer system that can serve all different department’s needs (Botta-Genoulaz and Millet, 2005).
An ERP system is a set of business applications or modules, which links various business units of an organization such as financial, accounting, manufacturing, and human resources into a tightly integrated single system with a common platform for flow of information across the entire business. To take advantage of the competitive capabilities of ERP systems, managers and employees must understand the basic principles of an ERP system so that it can be used to its fullest potential (Beheshti, 2006).
The adoption of an ERP system is motivated by management’s need for timely access that consists information across the diverse functional areas of a company (Grabski, Leech and Schmidt, 2011). Typical motivations for ERP adoption include regulatory compliance, upgrading legacy systems, business process reengineering, integration of operations and management decision support (Robey et al, 2002). According to Bendoly and Cotteleer (2008) ERP systems have several benefits. They increase the transparency of work processes and all outcomes across an organization. ERP systems reduces the variation in processes, time and errors and they increase the predictability of processes which will help with the operational and strategic planning (Bendoly et al, 2008). Yusuf et al (2004) mentioned that implementing an ERP system means one central database with no duplication of data. Shang and Seddon (2000) mention several ERP benefits which they divide into several dimensions. They mention productivity and quality improvement as operational benefits. An example of managerial benefit is that the
decision making process improves due to the use of an ERP system. A strategic benefit is the support of business growth and building better business innovations (Shang and Seddon, 2008)
From the perspective of the firm, ERP systems are usually the largest and most
demanding information systems implemented. Typically, an ERP system implementation is the largest single IT investment that impacts the greatest number of individuals, and is the broadest in scope and complexity (Chang et al, 1999). From the individuals perspective, ERP demands a broader set of information systems (IS) and business knowledge (Sein et al, 1999), changes job role definitions, increases task interdependencies (Kang and Santhanam, 2003), restricts flexibility in job tasks (Park and Kusiak, 2005) and has been shown to lower job satisfaction (Butler and Gray, 2006). Bendoly and Cotteleer (2008) argue that a critical issue is the fit between the needed process (ERP system) and prescribed protocols. Another critical issue according to Bendoly and Cotteleer (2008) is the fact that individuals who feel uncomfortable with the ERP system, will seek alternatives in their work process. This means that the congruence between the system and the users must be a focus area in order to have a successful ERP implementation and avoid resistance from end users.
Despite the significant benefits that ERP software packages provide, they also have some disadvantages. ERP systems often cost millions of dollars to buy, several times to install, and they often require disruptive organizational changes. Some companies have experienced considerable advantages while others have had to reduce their initiatives and accepts minimum payoffs, or even relinquishing ERP implementation altogether. Time and cost can be enormous. Soh et al (2000) observed that ERP implementations involve a large number of stakeholders and that the hidden costs during the ERP life cycle dramatically increases the total implementations cost. Many large organizations have installed an ERP system but had to abandon their
implementation (Soh et al, 2000).
Wagle (1998) believes that ERP systems will reduce the need for accounting personnel in both financial reporting and the provision of management information. Anastas (1997) claims that systems will enhance the role of management accountants and financial managers, and that they will become advisers or internal consultants to other managers. He argues that ERP systems are likely to reduce the number of people in the finance and accounting function, as line
managers will have the facility and knowledge to manage their own costs and budgets. Nevertheless, according to Anastas (1997), there will still be a need for at least some management accountants and financial managers to advise and support these managers.
According to Morton & Hu (2008) one of the most frequent causes of ERP failures is that the integration and standardization of most ERP systems are not suitable for all type of businesses. This leads to a misfit between the characteristics of the organization and the adopted ERP system. Hong and Kim (2002) argue that although they belief that the fit between the
characteristics of an organization and the ERP system is critical for ERP success, little research has done regarding this subject. They (Hong and Kim) also found that the fit between the organization and the ERP system depends on the continent where the organization is
established. Commitment form management and end users is a critical factor for having system success (Scott 1999). Many ERP systems still face resistance from end users (Hawari and Heeks, 2010). According to Yusuf et al (2004) technical problems can also be the reason of project failure. Technical problem that, for example, Rolls-Royce had to face, was the accuracy and duplication of data. Another major risk which can cause project failure, is inadequately educating the end users to work with the new system and providing inadequate and ongoing support after implementation (Yusuf et al, 2004).
1.2 ERP general critical success factors
There are several critical success factors for implementing an ERP system. In this section the general critical success factors will be reviewed.
For a successful implementation of an ERP system commitment of management is necessary (Somers and Nelson, 2001). This commitment needs to be incorporated into the business culture and employee population through the use of training programs, team building efforts, and recognition of each success. The failure rates of ERP projects are relatively high and could lead to the bankruptcy of the corporation. To successfully implement an ERP system and to avoid failure, the firm must conduct a careful preliminary analysis and develop a plan for ERP acquisition and implementation. The most important success factors for ERP implementation include top management support, training and education, commitment to the system
(acceptance), and viewing ERP as a business solution. Factors such as inadequate technology planning, user involvement and training, budget and schedule overruns, and unavailability of adequate skills are considered reasons for ERP failures (summer, 2000; Umble and Umble, 2002; Wright and Wright, 2002).
Figure 1: ERP research studies (Grabski, Leech and Schmidt, 2011)
There is a significant amount of ERP studies which focusses on the identification of the critical factors to successfully implement an ERP system. Figure one shows the different ERP research areas. The ERP CSF (1) area examines the different topics, ranging from system implementation, user acceptance and adaption to specific ERP factors such as country and culture. The second research area; ERP Organizational Impact (2) discusses business processes, management control, security, regulatory and organization change issues. The final research area; ERP Economic Impact (3) focusses on the economic impact of ERP systems both internal and external. This research will be focusing on the first research area.
Implementing an ERP system is very expensive, complex, and it impacts the whole organization. Failing in the implementation of an ERP system can lead to a higher failure rate of the organization itself. Critical success factors (CSF) have been defined as those few things that must go well to ensure success for a manager or an organization (Boynton and Zmud, 1984). Critical success factors were developed to help identify critical areas of concern and provide measures that would aid in the management of those areas (Boynton and Zmud, 1984).
Many studies consistently identified a set of core factors that are critical to the success of ERP implementation, such as top management support, education and training, commitment to the system (acceptance), change management, internal communication, commitment from top management and employee training on the new system must be considered to ensure successful implementation. Some researcher developed a framework that groups the CSFs of the ERP implementation. For example Holland and Light developed a framework divided in strategic and tactical factors.
Figure 2: A critical success factors model with strategic and tactical factors (Holland and Light, 1999).
Holland and Light (1999) based their framework on a review of the literature and the experiences of the organizations in the different studies. They find their approach particularly suitable for the analysis of ERP projects because it includes the influence of tactical and strategic factors. Their framework will help managers guide their implementation strategy and make the necessary decisions. The strategic factors balances the focus of an organization with specific ERP requirements. The tactical factors are important for the alignment of the business processes and the ERP software during the implementation.
Researchers have observed that the critical success factors appeared to be highly correlated and changes in any one of them would influence the others (Akkermans and van Helden, 2002). Somers and Nelson (2001) identify critical success factors as elements that are necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of a company or an organization.
Research has been done on the effect of the ERP implementation process and the probability of success. This has been identified in IT implementations and failures and business
process reengineering literatures. Among the most important factors for a successful ERP implementation are top management support and involvement, user training and change management (Nelson and Somers, 2001).
In the following section a list of four critical success factors, associated with
project/system implementations, which will be used to analyze the findings. These factors are derived through a process that involved identification and synthesis of those critical
requirements for successful ERP implementation. These factors have been recommended by practitioners and academicians through an extensive review of the literature.
Each of the following critical success factors are identified to have an impact on ERP implementations. These factors will be described based on relevant literature that support their influence in project implementations in general.
1.3 Research Critical Success Factors (CSF)
In this section the selected critical success factors for this research concerning an ERP implementation will be described which will be used to help answering the research question.
1.3.1 Critical success factors:
- Change management - User training and education - User Acceptance
- Interdepartmental communication
Change Management:
Change management is a primary concern of many involved in ERP implementations. Change management is a critical success factor for ERP implementation (Grabski, Leech and Schmidt, 2011). ERP systems are very complex and introduce large-scale change that can cause resistance, confusion, errors and redundancies. Half of ERP implementations fail to achieve the expected benefits because organizations underestimate the efforts involved in change management.
Research has shown that effective change management is critical to successful ERP implementations (Nelson and Somers, 2001). Organizational change management is a structured process which manage individuals affected by change and recommends tactics to get ‘readiness for change’, offers training programs, job redesign, and organizational structures modifications (Grabski, Leech and Schmidt, 2011). It is very important to have a well-designed change management program to address project risks in order to avoid them and increase the potential
of project success. Aloini, Dulmin and Mininno (2007) found that the most frequent risks occur in the early conceptual phase are those of lacking strategic thinking and poor ERP selection. The second set of risks which cause implementation problems are those of inadequate change
management and lack of adequate training. An example of project failures is that of FoxMeyer Drugs’ ERP implementation. This case (FoxMeyer Drug) showed that one of the main reasons driven them to bankruptcy is that they failed in customer mandate, which is about the
commitment of the users and top management. Also the execution of the project was not a success due to the unskilled and shortage of knowledgeable personnel (Scott, 1999). Other examples of ERP failures such as Dell, Kellogg’s and Mobil Europe have spent millions of dollars on their ERP system (Chen, 2006). According to Chen (2006) planning issues are the major barrier to implement these systems effectively.
Change management and educational approaches are often used to reduce resistance and encourage effective usage of the new ERP system. Sociotechnical systems are designed to anticipate on the resistance from intended end users and strives to jointly optimize technology and people when there is a redesigning of organizational structures and work processes (Grabski et al, 2007).
By providing a clear purpose and addressing the need to achieve work quality, this approach will motivate participants to embrace change. To overcome resistance of users there need to be looked at the functional barrier of use, value and risk, along with the psychological barriers of tradition and image (Ram and Sheth, 1989). There are different framework proposed that include the phases of knowledge formulation, strategy implementation, and status evaluation (Aladwani, 2001). A critical factor for ERP implementation is the resistance to change (Hong and Kim, 2002). Aladwani (2001) mentioned in his research that resistance can be overcome if top
management analysis the sources of resistance and set new strategies to counter these resistance. He identified three focus areas for top management to deal with the resistance; analyze the structure and need of end users; use the appropriate strategies and techniques to successfully introduce the ERP system; and evaluate the status and efforts of change management. According to Lapointe and Rivard (2005) behaviour is the primary cause of resistance. When individuals expect threatening consequences of the introduced system, it will lead to resistance behaviour. This resistance can lead from uncooperative behaviour to sabotaging the process.
Other researchers use the guidance of Bridges and Brides (2000), where the ERP system transforms the new processes. The transformation takes a significant period, as participants need to undergo three specific processes: saying goodbye, shifting into neutral, and, finally, moving forward.
User training and education:
To move forward on the previous critical success factor, education and training are often the focus of ERP change management (Ip, Lai and Lau, 2004). The aim of education is to equip the users to successfully utilize the system and motivate employees to accept the ERP system. To accomplish this, change management has incorporated the need for education because it
addresses both knowledge and behavioral change. This is called the three steps model according to Lewin Kurt’s change theory; unfreezing phase, moving phase and refreezing phase.
Many studies which focused on ERP selection and implementation mention that initial user training is an antecedent variable to ERP success (Grabski et al (2011). Also a lot of research which is done on critical success factors has identified that the user training factor and communication factor are critical for ERP implementation success and acceptance (Umble and Umble, 2003, Grabski et al 2011). Umble et al (2003) has stated that if a company would spend 10-15 percent of the total ERP implementations budget on training and education, it would give the organization an 80 percent change of implementation success.
Somers and Nelson say that training is a key antecedent of ERP’s strategic fit in many different types of firms (Somers and Nelson, 2003). Despite the fact that training is identified as a critical factor, organizations often fail to provide adequate user training (Markus and Tanis, 2000). What organizations also fail to do is to continue training and support after the initial ERP implementations. This will cause dilution of knowledge and eventually lower the usages within the ERP system (Santhanam et al, 2007).
An ERP implementation is complex because the adoption of it requires the implementation of cross functional, integrated end-to-end business processes. This means that it is not a simple application which will affect one business area. That is why training and education is essential and a basic traditional information systems training will not be sufficient enough. A good ERP education process must include coverage of the collaborative nature of user tasks and the inter-related effects when a user fails to use the system correctly (Grabski, Leech and Schmidt, 2011).
Due to the fact that an ERP system does not affect one business area but is impacting the business cross-functional, it is important that next to an in-depth operational skills training, users also need to learn business process knowledge, cross functional problem-solving skills, and an understanding of task interdependence (Sein, Bostrom and Oflman, 1999, Grabski et al, 2011). Operations, managerial, strategic and organizational knowledge needs to be learned on a broader scope (Grabski, Leech and Schmidt, 2011).
To move forward on the ERP training, the training should not be viewed as one-time preparation for the initial ERP use but rather should be viewed as an ongoing set of
communication, education and as a learning experiences. Learning experience is valuable because it learns how to deal with problem solving situations. According to Kang and Santhanam (2007) user’s knowledge must continue to expand after implementation to increase productivity.
An integrated perspective on user and management education addresses training and education and change management (Robey, Ross and Boudreau, 2002) across all phases of the ERP lifecycle. As mentioned before, due to the fact that ERP systems are complex, integrated and dynamic, new education approaches are needed.
To provide ERP education it is important to determine which individual level
interventions are the most beneficial to improve ERP acceptance and use. ERP education should utilizes a functional ERP business environment to develop the problem solving skills,
understanding of the cross functional operations and to accelerate development of ERP expertise (Grabski, Leech and Schmidt, 2011). Lack of training and understanding of how enterprise applications affect business processes are frequently appearing as the responsible factors of ERP implementations problems and ERP failures.
So it is important while implementing an ERP system coupled with business process reengineering, to educate the members of the organization, who will be affected by the changes. This will help the organization to meet the goals and to win the support of all the members within the organization.
User Acceptance:
The ERP literature focusses in general on implementation and other technical issues. There is a relative lack attention given to the social context, which is, user acceptance (Dery et al 2006a, Grabski et al 2011). This is unfortunate, as Chang et al 2008 mentioned that the social factors have been demonstrated as the strongest significant effect on ERP system usage (Chang, Cheung, Cheng and Yeung, 2008). Because this fact, Dery et al (2006a) mentioned that the research variety is changed and is more focused on human social structure and the interaction with the ERP system.
Knowledge and skill development are very important for ERP success, that’s why there is a growing need to examine the ERP resistance. What actions can the management take to lower/counter the resistance? These are questions that could help to develop initiatives and approaches to modify the user’s behaviour and improve the ERP usage and acceptance. To accomplish this, it is likely that this will occur through improved education and ongoing training for the users. According to Santhanam et al (2007), it is important to question if there are advantages in treating ERP training as an ongoing process and also integrating with ongoing technical support functions.
Interdepartmental communication:
Communication can be seen as the oil that keeps everything work properly. Communication is essential within a project team, between the team and the rest of the organization and with the client (Sumner, 1999). Interdepartmental communication represent an important CSF in a study done of MRP (material requirements planning) implementations (Somers and Nelson, 2001). Poor communication between reengineering team members and other organizational members was found to be a problem in business process reengineering implementations (Somers and Nelson, 2001).
Communication belongs to one of the causes of project failures. Sumner (1999)
mentioned in his paper that poor technical methods is only one of the causes for project failures, but is relatively minor compared to larger issues such as a failures in communication. As
communication is an important critical success factor, it is important to tell everyone in advance what is happening within the organization, including the scope, objectives and activities of the project or change (Sumner, 1999). Al Mashari et al (2002) also point out that communication is one of the most challenging and difficult tasks in any ERP project (Al Mashari, Al Mudimigh and Zairi, 2002).
A communication plan is recommended to cover the scope, objectives and tasks of an ERP implementation (Kumar, Maheshwani and Kumar, 2003). To avoid any communication failures, an open information policy should be introduced. Such a policy can be a good e-mailer system and in case of serious problems that need to be discussed, can be done by telephone or, preferably, face to face (Al Mashari et al, 2002).
1.4 Theory
This section will describe two theories which will be used to interpret and evaluate the findings, namely; the Theory of Planned behaviour and the Institutional Theory. During the literature review there were other theories which also helped to explain the behaviour of individuals. For example the Social Cognitive Theory, which claims that the behavioral change is determined by the environmental, personal, and behavioral factors (A. Bandura, 1991). According to Gagne (2005) Self-determination theory suggests that autonomy and controlled motivations differ in their processes and their experience. Self-determination Theory also suggest that behaviour is characterized by the fact in which an individual feels autonomous versus controlled. The autonomous and controlled motivation are both intentional and are a contrast of a-motivation, which means a lack of intention and motivation. Janz & Becker (1984) describe the Health Belief Model components where behaviour depends mainly on two variables; the value that an individual places on a particular goal and the second variable which is, the likelihood an individual has of achieving that particular goal.
Ajzen (2006) describes in his Theory of Planned Behaviour that particular behaviour addresses how individuals can be motivated to behave in a certain way. He (Ajzen) describes three variables which are essential in the intention to perform a particular behaviour; the attitude, norm and control variables. According to Scott (2004) the Institutional Theory is about the establishment of guidelines for social behaviour. These include the process of structures, schemes, norms and routines.
For this research the Theory of Planned Behaviour and the Institutional Theory will be used because of the setting of the research which allows the researcher to use these two theories.
1.4.1 Theory of planned behavior
The theory of planned behavior addresses how people can be motivated to behave in certain ways. More specifically it can be used to predict, explain, and change various kinds of behaviors. The part of the theory of planned behavior which is used in this research is the part which says that people’s intention to perform any particular kind of behavior is dependent upon three variables:
- Their attitude towards performing the behavior (“attitude’’ )
- The amount of social pressure they feel to perform the behavior (“norm”) - The extent to which people feel capable of performing the behavior (“control”)
According to the theory of planned behavior, people’s behavior can be changed by directing an intervention at one or more of these antecedents (Ajzen, 2006).
The theory of planned behavior is an extension of the theory of reasoned action (Ajzen & Fishbein, 1980; Fishbein & Ajzen, 1975). This theory is made necessary due to the original model’s limitations in dealing with behaviours over which people have incomplete volitional control (Ajzen, 1991). As in the original theory of reasoned action, a central factor in the theory of planned behavior is the individual’s intention to perform a given behavior. Intentions are assumed to capture the motivational factors that influence a behaviour, they are indications of how hard people are willing to try, of how much of an effort they are planning to exert, in order to perform the behaviour. As a general rule, the stronger the intention to engage in a behaviour, the more likely should be its performance. It should be clear, however, that a behavioral
intention can find expression in behavior in question is under volitional control, i.e., if the person can decide at will to perform or not perform the behavior.
Although some behaviors may in fact meet this requirement quite well, the performance of most depends at least to some degree on such non-motivational factors as availability of requisite opportunities and resources (e.g., time, money, skills, cooperation of others; see Ajzen, 1985). Collectively, these factors represent people’s actual control over the behavior. To the extent that a person has the required opportunities and resources, and intend to perform the behavior, he or she should success in doing so.
According to the theory of planned behavior, perceived behavioral control, together with behavioral intention, can be used directly to predict behavioral achievement (Ajzen 1991). At least two rationales can be offered for this hypothesis. First, holding intention constant, the effort expended to bring a course of behavior to a successful conclusion is likely to increase with perceived behavioral control. For instance, even if two individuals have equally strong intentions to learn to ski, and bot try to do so, the person who is confident that he can master this activity is more likely to persevere than is the person who doubts his ability. The second reason for expecting a direct link between perceived behavioral control and behavioral achievement is that perceived behavioral controls can often be used as a substitute for a measure of actual control. This depends on the accuracy of the perceptions. Perceived behavioral control may not be particularly realistic when a person has relatively little information about the behaviour, when requirements or available resources have changes or when new unfamiliar elements have entered into the situation. Under those conditions a measure of perceived behavioral control may add little to accuracy of behavioral prediction.
The idea that behavioral achievement depends jointly on motivation (intention) and ability (behavioral control) is by no means new.
The assumption is usually made that motivation and ability interact in their effects on behavioral achievement. Thus intentions would be expected to influence performance to the extent that the person has behavioral control, and performance should increase with behavioral control to the extent that the person is motivated to try.
There are several models which provide a theoretical means of measuring beliefs and attitudes for predicting future behaviour patterns. Such models are; The Theory of Reasoned action (TRA) of Fishbein and Ajzen (1975) and the Technology Acceptance Model (TAM) of Davis (1989).
The technology acceptance model (TAM) is one of the most used models for explaining the behavioral intention and actual usage. This technology acceptance model was adapted from the TRA (Theory of Reasoned Action) and provided a basis for previous research which is related to behavioral usages and intention. This technology acceptance model can improve the understanding of how influence on actual usage could help increase the probability of successful ERP implementation. In the technology acceptance model (TAM) there are two particular beliefs, namely perceived usefulness (PU) and perceived ease of use (PEOU). These two beliefs are crucial in this model because they help predict in information technology user acceptance behaviour (Shih and Huang 2009). Davis (1989) identified perceived usefulness (PU) as the
degree to which individuals believe that using a particular system can enhance their job performance. He identified perceived ease of use (PEOU) as the degree to which individuals believe that using a particular system will be effortless.
Recent studies have also focused on the influence of external variables on user beliefs regarding ERP systems (Shih & Huang 2009). Previous studies have considered different external variables, but only used the individual perspectives, like user beliefs. Not only
individual’s perspectives could impact actual usages of an ERP system, but also organizational factors, like management support, communication or training and education (Akkermans and van Helden 2002).
Moon (2007) conducted an ERP literature review, where he found out that almost 40 % of the total ERP studies are based on human factors. Results demonstrated that both training and project communication influence the user’s belief regarding the benefits of the technology. Also the perceived usefulness and the perceived ease of use are influenced by shared beliefs. Self-efficacy is related to individual’s belief in their ability to perform a task and is expected to influence task effort (Bandura 1977). According to Oliver and Shapiro (1993) individuals with high efficacy expectations are more likely to succeed in a given task. High self-efficacy
individual’s work harder and longer compared with low self-efficacy individuals (Wood and Bandura 1989). So the higher the self-efficacy the more performance gets improved (Shih and Huang 2009). Perceived usefulness and perceived ease of use are partially affected by (computer) self-efficacy.
Regarding the technology acceptance model (TAM), perceived usefulness strongly and directly affects the behavioral intention, but insignificant and directly affects actual usage (Shih and Huang 2009). Behavioral intention is also directly affected by perceived ease of use and behavioral intention positively and directly affects actual usage (Shih and Huang 2009).
1.4.2 Institutional theory
Institutional theory is about the processes by which structures, including schemes, rules, norms and routines, become established as authoritative guidelines for social behavior (Scott, 2004). Management accounting can become institutionalized when, over time it becomes the ‘taken-for-granted’ way of thinking and doing in a particular organization (Mouritsen, 1994).
Institutions define the relationship between and the activities of, the members of a particular social group or community. In the process of routinization, rules may become modified as a group finds mutually acceptable ways of implementing those rules.
One of the important characteristics of institutions is that they seem to have a normative and objective character. These characteristics define the behavioral patterns which are expected in the particular social group. Defined patterns show that members of a group will behave in the same way and just assume that this is the way thing are. According to Tolbert and Zuker (1996) not all behavioral patterns as set by the institutions are institutionalized to the same extent.
Each institution can differ in terms of length in time and to what extent the institution is accepted by a collectivity. The institutions which are more likely to be vulnerable to challenge and less likely to influence action are the ones that did not manage to gain widespread acceptance and are relatively short-lived (Barley and Tolbert, 1997).
Figure 3: the process of institutionalization
The framework set out in figure 3 combines three connected parts: the top (institutional Realm), the middle (Routines and Rules) and the bottom (Realm of Action). The framework is a combination of both synchronic and diachronic elements. The synchronic process is illustrated by the A and B arrows whereas the diachronic process is illustrated by the C and D arrows.
Institution contains and shapes actions at a certain point in time and is therefore the synchronic element. Action produces and reproduces institutions in a cumulative way are the diachronic element. Both the top and bottom of the framework, which are the realms, are an ongoing process of change through time. This is shown by the solid lines at the top and bottom of the figure. The middle part of the framework consists of rules and routines which are the elements which link the institutional realm and the realm of action. The rules and routines are both part of a cumulative process of change. New rules and routines may over time be introduced or emerge in a more discrete way. This is illustrated by the two separate boxes in the middle.
The first arrow (A) which is the first process within the framework starts with the encoding of institutional principles into rules and routines.
The second process which is illustrated by arrow B is the moment when the actors are enacting the routines and rules which encode the institutional principles. When new rules and routines challenge existing meanings and values in combination with the presence of actors who have sufficient power to intervene in the process, the enactment of rules and routines could possibly be subject to resistance.
The third process (arrow C) shows the reproduction of the routines due to repeated behavior. The reproduction can be in the form of a conscious change or an unconscious change. When change is likely to occur if only actors with power question existing rules and routines, we speak of a conscious change. When actors misunderstand or not accept the rules and routines, we speak of unconscious change. This occurs in absence of systems to monitor the execution of the routines.
The final arrow D which illustrates the final process, includes the institutionalization of rules and routines which have been reproduces through the behavior from individual actors. In this way the rules and routines become simply the way things are, the so called taken-for-granted way of thinking and doing. This then becomes the institution and will be encoded into the ongoing rules and routines and will shape new rules (Burns and Scapens, 2000).
To summarize the above, rules may be introduced and become implemented through the establishment of routines or the rules can emerge out of the established routines. Important to notice is that the whole process will be shaped by the prevailing institutions. Institutions will always exist prior to any attempt by the actors to introduce change, and will therefore shape the processes of change (Bhaskar, 1989).
Habits are defined as more or less self-actualizing dispositions or tendencies to engage in previously adopted or acquired forms of action. Routines may encompass groups of individuals, but habits are personal. The patterns of thought and action which are habitually adopted, represent the routines by a group of individuals. Organizational routines have a very important role in the relationship between actions and institutions (Burns and Scapens, 2000).
Rules are necessary and very important to control actions and give guidance to a group of individuals. In order to avoid difficulties and costs of undertaking explicit assessment on every occasion of available alternatives, rule-based behaviour may result from selected rules. However, by repeatedly following rules, particular behaviour may result in programmatic actions/behaviour. This programmatic rule-based behaviour can be described as the routines represented by the habits of a particular group. These are the routines that can be defines as the way in which ‘things are actually done’ (Burns and Scapens, 2000).
When planning an organizational change it is important to have a good understanding of the underlying context of an organization. This goes further than only knowing the formal systems, it means understanding the habits of the members of an organization. This also include the taken for granted assumptions in the day-to-day activities. Change can cause conflicts and difficulties with existing routines and institutions, which will lead to resistance against it. According to Burns and Scapens (2000), there are three forms of resistance;
- Formal and over resistance due to competing interest
- Resistance due to lack of capability (knowledge and experience) to cope with such change.
- Resistance due to mental allegiance to established ways of thinking and doing, embodied in existing routines and institutions
Burns and Scapens (2000) say that change can be introduces in different ways. The success of an implementation of change depends on the acceptance of the actors. If the actors are powerful enough they can cause resistance which can lead to the failure of an implementation.
1.4.3 Theory conclusion
The Theory of Planned Behaviour and the Institutional Theory are the theories used in this research and are briefly explained in the previous section 1.2. The relationship between these theories and the Critical Success Factors, mentioned in section 1.3 , is that all critical success factors are in line with the used theories. Starting with the first critical success factor Change management, this factor is about getting individuals ready for organizational change. However change comes with particular behaviour. Some individuals can show resistance and some can show interest in the new process. These intentions are explained by the theory of planned behaviour. The variables of the Theory of Planned Behaviour discuss that individuals can feel an amount of pressure in performing a particular behaviour. On the other hand it is important that an individual can feel capable of performing a particular behaviour. As change management discusses that an individual can adjust his behaviour when they have the right tools, like training programs, and are well educated and informed. The attitude towards performing a particular behaviour is also very important. Institutional theory recalls the attitude as the factor that can becomes the ‘taken for granted way of thinking and doing’. Training and education, and communication are critical success factor which are often the focus of change management. These factors are in line with all the variables within the theory of planned behaviour. This because training and education offers an individual a feel of capability, this because they will be educated and will have the right tools to behave a certain way. This will also change their attitude towards a particular change. If training programs are offered and will be continued after an organizational change, it will prevent dilution of knowledge and non-preferable behaviour. Communication should therefore be the oil that keeps everything work properly. Without communication there is risk in successfully system implementations. The link between this critical success factor and the institutional theory is that individuals who are trained and educated the same way, will all have the same way of thinking an doing. This will result in rules and routines that are applicable for everyone. The risk of behaviour is that individuals will have their own way of thinking/doing and will form their own rules. This can cause difficulties and resistance from powerful individuals. This resistance comes from user acceptance. User acceptance is an important and strong effect on, for example, ERP usage. User acceptance determines an individual’s behaviour towards an ERP system. If individuals show resistance because they are not accepting the change, it will change their attitude and intention to use a system. This will cause individuals forming their own routines to avoid the system.
2 Research methodology
The type of research is a case study based on Deloitte Consulting. The research has been conducted in the form of interviews and available documents analysis. The documents are for the factuality and the interviews for the opinions. Reason for using interviews is because the researcher wanted to orient broadly and discover the opinions of the interviewees which the researcher thinks could not be done by surveys.
Chapter one starts with a literature overview which provides a theoretical basis and serves for internal validity. This chapters provides a clear understanding regarding ERP systems. Validity regarding the interviews is further increased by asking respondents only question that relate to their experience. Chapter three described the background information of Deloitte. The data obtained from the interviews will be transcribed and categorized. The interviews are semi-structured because this will create the opportunity to give the interviewees a direction but at the same time give them the opportunity to tell their story in an open way. The interviews have been held with consulting employees from different services areas and function levels. All interviewed employees are involved in working with SAP. After the interviews, data has been collected and analyzed. By using the data from the interviews the research question could be answered, as described in the findings (chapter 4) and in the conclusion (chapter 5) of this paper. Finally the references and the interview questions can be find in the appendix.
3 Deloitte
In this section the researcher will provide some background details about the company where this research has been conducted, Deloitte Consulting.
3.1 Background
According to Starreveld (Westra, 2010), Deloitte is a company that sells man-hours. Deloitte is the brand under which thousands of professionals in independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, tax, and related services to clients. These firms are members of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (‘DTTL’). Each DTTL member firm provides services in particular geographic areas and is subject to the laws and professional regulations of the
particular country or countries in which it operates.
Each DTTL member firm is structures in accordance with national laws, regulations, customary practice, and other factors, and may secure the provision of professional services in its territory through subsidiaries, affiliates, and other related entities. Not every DTTL member firm provides all services and certain services may not be available to attest clients under the rules and regulations of public accounting.
DTTL and each DTTL member firm are legally separate and independent entities, which cannot obligate each other. DTTL and each DTTL member firm are liable only for their own acts and omissions, and not those of each other. DTTL (also referred to as ‘Deloitte Global’) does not provide services to clients.
3.2 Deloitte’s ERP system
SAP is Deloitte Netherlands standard software (since 2004) solution to facilitate business processes and managing operations e.g. engagement, procurement, financial accounting & controlling, HR, business intelligence and process integration. SAP is used to register hours and expenses, customer- and project accounting, HRM and purchase processes. Deloitte Netherlands SAP team is located in Rotterdam, Amsterdam and Hyderabad. They are responsible for maintenance and support, development and change management.
3.3 Deloitte Consulting
Consulting is one of the function areas of Deloitte. Consulting can be divided into three sub areas; Technology, Strategy and Operations (S&O) and Human Capital.
Deloitte’s Technology service area helps clients to identify and solve their business technology problems. Deloitte’s strategy and operations teams use their expertise to survey and analyses markets, trends, competition, customers and organizations. The human Capital team of consulting helps organizations to optimize their human capital.
3.4 Client Finance Management
The Client Finance Management (CFM) team is a support department which helps the manager’s and partners with their administrative activities and responsibilities. They offer support during the entire process from the first time the manager or partner has contact with the client until invoicing the worked hours. The support offered by CFM includes support regarding; Customer Relationship Management (CRM) process, the invoicing process, financial management and remaining tasks such as offering trainings, coaching and monitoring CFM India and serving as a source for questions regarding administration and procedures. Since July 2013 Deloitte Consulting offshored their CFM activities to Deloitte India. Deloitte India serves as the support arm of the organization.
4 Findings
This section describes the findings which were derived from the interviews. The findings are divided into two section, one section is about the findings regarding the two CSF, User training and education and User acceptance. The second section will be about the findings regarding the two CSF, Change management and Interdepartmental communication. These findings will be analyzed by using the theory as described in the Literature (chapter one).
4.1 User training and education & User acceptance
Training, education and acceptance are a very important factor in having a successful ERP implementation. The reason is that if you don not train and educate your employees, they will not be able to use the system appropriately or not even use it at all. According to the literature this is one of the causes for implementation failure. The acceptance of a system comes with motivating the end users and involving them in the process.
During the interviews the interviewees were asked what they thought in generally of SAP as an ERP system. There were a lot of negative thoughts about Deloitte ERP system. Most interviewees shared the same opinion about the system. As one senior manager outlined:
‘It’s a robust system which does not do what it needs to do, it’s outdated and information which I need is not real time available’.
Another interviewee (Director) was asked the same question and he said:
‘It’s a system developed by engineers and not developed by people from the business. So engineers developed it, financials will use it and for the people in the business it’s Abracadabra, well that’s special / extraordinary’.
SAP trainings are given to newly managers (Senior Consultant which had a promotion to become a manager) or to new managers, directors and partners which came from outside Deloitte and started at this level. Managers are responsible for their assignments, for example keeping their budget in track. The assignments are the projects conducted where Deloitte advises their customers, in different services areas. For the consulting practice these are projects on three business areas, namely: Technology, Strategy and Operations (S&O) and Human Capital.
The SAP trainings as mentioned above, are only given at this particularly situation when employees are being promoted to their managerial role. This training is a single classrooms training which takes about 3 to 5 hours.
After asking the interviewees generally about SAP, the interviewer asked them what they thought about the SAP trainings. One senior manager said:
‘This training was a basic training, it was not more not less than learning a trick. It explained on which buttons you have to push to get the results you need in your daily work’.
One director said:
‘In all those years that I worked and started as a manager, only one training I followed, that’s bizarre. I learned everything from a colleague or from the support team, but not from a special training’.
Most of the interviewees have mentioned that they know what the importance of training and education is, but find it unfortunate that these are not offered properly by Deloitte. They think that every employee especially manager and up, needs to be trained in particular sap usages and also agreed on the fact that a manager is an integral manager and should be responsible for the administrative part of his work. They would like to have additional training offered which gives them more in-depth information on how to get the proper information from SAP. They also would like to have a kind of refreshing training, since the single training is too much information and all that knowledge has become diluted.
Most of the interviewees also think that this will increase the user’s acceptance. As mentioned in the literature, acceptance comes with the extent that the person has behavioral control. If the person has behavioral control, the performance should increase to the extent that the person is motivated to try. In this case the managers do not have behavioral control because they found the system to complex. They are not trained and educated to try to work with SAP, the consequence of this is that they avoid the use of SAP. One interviewee said that he could understand that it is not possible to simply abandon an ERP system like that, but he said the only way to increase the SAP usage is for people to accept the system. A system can be as expensive as is it but if people do not experience it as a user-friendly system and don not see the added value of such a system, than the usage will never be at his full extent.
What clearly emerged from the interviews, is that due to the fact that almost every manager (and up) uses SAP to the lowest possible extent, the information in the system is not up to date. The consequence of that is that for example looking at the sales funnel, the information is outdated, like one manager said:
‘Garbage in is garbage out’.
Due to the fact that managers find SAP to complex, information is not updated in the system. So looking for new information in SAP will not allow the manager to have the real-time information. The consequence of that is that the information will not be updated in the system but managers will find their own way to get real-time information, this will lead to different processes, routines and habits.
What also came out of every interview is the responsibility of the management, specific mentioned is the tone at the top. This also is in line with the Theory of Planned Behaviour which explains the norm. This norm is the social pressure an individual feels to perform a particular behaviour. As one manager pointed out that if the responsible partner does not take responsibility he would care less to perform. Another variable of the Theory of Planned behaviour mentioned in the literature, is control. This variable outlines the capability a person’s feelings to perform the behaviour. The interviewees mentioned that they do not feel capable to use SAP as they should do or would like to use it. The argument is that they do not find the system intuitive enough. Most of the interviewees said they think SAP is to complex and outdated.
4.2 Change management and interdepartmental communication
As mentioned in the literature change management is an essential factor of having a successful ERP implementation. Half of the ERP failures are due to the fact that organizations underestimate the efforts involved in change management. Change management is about a structured process which manages individuals who are affected by the change. It recommends tactics to get the employees ready for the change, like training programs.
One of the conclusion that can be made from the interviews is the fact that Deloitte failed in some tactics involved in change management. One is the training programs. As mentioned earlier one director said in the nine years that he is a managers, he had one training (see quote before). In the literature is mentioned that to overcome resistance from end users there needs to
be looked at the functional barrier of use. Most interviewees said they find the ERP system to complex.
During the interviews the interviewees were asked why they think that the SAP usage within consulting is low. Most interviewees agreed that they found the system to complex and that is why most people avoid SAP. What also emerged from some interviewees is that they think that also the background and education of someone is very important in the intension to use an ERP system. Most managers of consultant do not have a financial background. They also think that the extent in which they will use SAP will determine the dexterity of their SAP use.
One interviewee said that he thinks that most people fear to use SAP, because of lacking specific knowledge. Further he described that the tone at the top is also a leading factor of someone’s SAP use. What he meant is that if the top stated that a manager is not able to invoice or extract information from SAP by himself but needs to do this through the CFM support department, you give a signal as top management. Those are choices that are made by the top and these are the consequences of those choices, he said. One of the consequences is that due to the fact that those supportive departments (CFM) are within Deloitte, the attitude of those people changes. They no longer feel responsible for those tasks, although all interviewees agreed to the fact that a manager should be an integral manager and is responsible for everything. This includes the administrative part of his function.
To elaborate the change management factor, the interviewees were asked what they think the management should do to increase the SAP usages within the managers of consulting. There were mixed answers that emerged from this question. One interviewee said that the management should first update the SAP version. He thinks the SAP version is outdated and needs to be simplified. Increasing usage comes with training people and teach them what is expected from them and how they should do this. Another interviewee said that the partners/top management should take the responsibility in this. What he meant is that for example the monthly target of the partners should be explained, why that target is important and what the target means.
Another important argument mentioned during the interviews is that the management should not offer the additional tooling to people, for example CFM and forms that can be filled in to adjust figures in SAP. Because most managers do not extract the needed information by themselves from the system, additional processes are created. These processes include additional work for support departments, which will let other employees extract the needed information for the manager. This is cumbersome and inefficient. Due to this an interviewee thinks that the people of consulting are spoiled. This also leads to low attendance at trainings which are offered for
employees who become manager (and up). This low attendance is because they know that the CFM support department will do everything for them. This also is in line with the theory of planned behaviour which is about the attitude towards performing a particular behaviour. According to the institutional theory these are habits that will become institutionalized and overtime will cause difficulties to change.
As mentioned in the literature, communication is the oil that keeps everything work properly. During the interviews the interviewees were relatively positive about the communication regarding SAP. They said that the news regarding SAP is clear and available on the intern website of Deloitte. Also when they open the SAP site, the latest updates are stated on the openings page. They think the information is enough and said that other important news is from time to time communicated by email.
4.3 Summary of the findings based on the theory
This section will provide a summary of the findings by using the Theory of Planned Behaviour and the Institutional Theory.
4.3.1 Summary of the findings
The findings as described above are in line with the theoretical arguments as described in the first chapter. The findings prove that ERP implementations are indeed complex and are time consuming. Looking at this case, where Deloitte implemented SAP in 2004, the system is still updating and is still not used as intended to be used. SAP within consulting is mostly used just for registering the worked hours. The reason for this is that most consulting managers find the system to complex in its use. The findings show that most consulting managers do not have a financial background and that could be the reason that they found SAP to complex and struggle with the system. Fear and interest were also mentioned. The findings also conclude that Deloitte failed in training and educating their people correctly. There are no training programs and that is why people don not know how to use SAP, so they avoid it. Because they avoid to use SAP, the information in the system is not op to date. So extracting information from the system will not enable them to have up to date information. Most managers would be willing to try and show interest in working with SAP, but first want to have good training and education programs in order for them to understand the system and get motivated.
Tone at the top was also found very important by the managers. The findings show that if management (in this case the partners) does not show responsibility, the managers will make no
their monthly measure points and these are targets that needs to be achieved. They want the partner to explain why this measure point is so important and what thus it means. Another comment mentioned was that if the partner was not taking responsibility he would care less to perform and not willing to achieve the monthly measure point. These kind of behaviours should be avoided and can be avoided by having a strong tone at the top attitude. Offering additional tooling is not helping people of consulting to work with SAP. This because people will ask the CFM support department to get their needed information. This is inefficient and could easily be solved. This also influences the behaviour of people and the longer it takes the more difficult it would be to change this behaviour.
4.3.2 Findings explained by theory
The use of SAP can be influenced by different factors. According to Ajzen (2006) the Theory of Planned Behaviour explains upon three variables which addresses how people can be motivated to behave in a particular way. Ajzen explains this by the attitude, norm and control that people have in a certain situation. These variables are all recognized during the interviews. The attitude variable is about the attitude towards performing the behaviour. This can be explained by the fact that the managers of consulting know that there are support departments that will help them in anything they need, so why would they make any effort to do it by themselves. This a good example of the attitude variable which is explained by Ajzen. During the interviews the interviewees mentioned that they found the tone at the top very important. The amount of social pressure they feel to perform the behaviour is the norm variable explained by Ajzen. As the findings conclude, most managers will only perform if they will feel a pressure from the partners. The following quote confirms the above:
‘If the responsible partner doesn’t show any responsibility I would care less to perform’.
This is a typical example of performing a particular behaviour only when you feel pressure. The control variable of Ajzen is the extent to which people feel capable to performing the behaviour. In this case it can be concluded that the managers do not feel capable to perform the preferred behaviour regarding SAP. This because they found the system to complex. If the system was more intuitive and had the needed training and education they would be more willing and have more interest in using the system.
Most managers of consulting do not think that using SAP will enhance their job performance, they only see it as a burden. This is exactly the meaning of the perceived ease of use belief, which is the degree which individuals believe that using a particular system will be effortless. The ideal believe is that managers think that using a particular system will enhance their job performance that is the perceived usefulness belief as describe in the theory. The perceived usefulness belief strongly effects someone’s behavioral intention and can directly affect the actual usage. This can be an outcome if the managers will be educated and trained in using SAP, which results in motivation and interest in using the system. This then can result in thinking that SAP can help them in enhancing their performance.
According to the institutional theory (Burns and Scapens, 2000) a group of members will behave in the same way of the defined patterns and just assume that this is the way things are. This behaviour can be concluded as the behaviour which the people of consulting show. They see and know that the CFM support department will do anything for them, so they think that this is the way things are. This results in avoiding the SAP system and work inefficiently, despite the fact that the information is in their reach and the willingness they have to learn to work with SAP and get their own information from the system. Burns and Scapens (2000) mentioned that due to this, the habits and routines they have tend to remain stuck and causes resistance against new ways of thinking and doing.
If actors have the power to collectively question existing rules and routines, conscious change may occur. If the rules and routines are misunderstood or not accepted by the actors, unconscious change may occur.
Because of the strong criticism on SAP by the people of consulting, they show a strong resistance attitude. The resistance can be described as the resistance due to lack of capability (knowledge and experience) and not by resistance due to competing interest, as described in chapter one. The resistance showed by managers of consulting can also be due to metal allegiance. Because the process became institutionalized and the way of thinking and doing is embodied in the routines of managers and embodied in the institution. The most likely form of resistance is the lack of knowledge and experience. The managers are willing to change their habits but can only do that if they get trained and educated in using SAP. If training and education will not be offered in such a way that the managers can use the system by themselves and will not avoid it, the managers will be stuck
in their habits and routines. This will maintain resistance against new ways of thinking and doing.
