ERP systems adoption: An exploratory study of the
organizational factors and impacts of ERP success
Chuck C.H. Law
*
, Eric W.T. Ngai
Department of Management and Marketing, The Hong Kong Polytechnic University, Hong Kong, PR China
Received 21 September 2004; received in revised form 7 February 2007; accepted 11 March 2007
Available online 29 May 2007
Abstract
We examined the relationships between the success of ERP system adoption, extent of business process improvement (BPI), and
organizational performance and investigated the associations between the outcomes of these initiatives and such organizational
factors as strategic intent, senior management support, and the status of the IT function within a company. A correlation analysis of
96 firms was made to test our hypothesis that the strategic intent to use ERP was closely related to the success of BPI, ERP, and
organizational performance. The results also demonstrated that CEO-IT distance may have little direct bearing on the outcomes of
ERP and BPI initiatives. A closer CEO-IT reporting relationship, however, was found to be associated with higher levels of senior
management support for both types of enterprise projects. This empirical evidence reinforced the long-held assumption that
organization-level benefits, BPI, and ERP success were closely related; and that these relationships were subject to the influence of
the organizational variables.
# 2007 Elsevier B.V. All rights reserved.
Keywords: ERP adoption; Business process improvement; Organizational benefits; Senior management support; CEO-IT distance; Strategic intent
1. Introduction
Enterprise resources planning (ERP) systems allow
seamless integration of information flows [6] and
business processes [30] across functional areas within a
company. They support information sharing along a
company value chain and help to achieve operating
efficiency. ERP packages offer a workflow engine to
generate automated workflows according to business
rules and approval matrices so that information and
documents can be routed to operational users for
transaction handling, and to managers and directors for
review and approval [23].
Although ERP systems have been recognized as
useful to many businesses while touted by vendors and
consultants as systems that incorporate good business
practice, ERP systems have often been found to fail to
be effective [45]. One of the widely discussed issues is
the need for an ERP-process fit involving some need for
business and process changes. The relationship between
business process change and successful ERP adoption is
symbiotic: the benefit of ERP adoption often results in
business change [31]. However, its outcomes are likely
to be influenced by the organizational and cultural
antecedents that facilitate or inhibit effective manage-
ment of organizational changes [2,25,40]. The literature
insists that it is necessary for the CEO and senior leaders
to encourage the adoption of the technology and change
[44]. Consequently, we decided to concentrate in this
study on factors at the strategic management level:
strategic intent to adopt ERP, the status of the IT leader,
www.elsevier.com/locate/im
Information & Management 44 (2007) 418–432
* Corresponding author. Tel.: +852 2766 7296;
fax: +852 2774 0611.
E-mail address: lawftmac@yahoo.com.hk (C.C.H. Law).
0378-7206/$ – see front matter # 2007 Elsevier B.V. All rights reserved.
doi:10.1016/j.im.2007.03.004