ERP adoption in Chinese
small enterprise: an exploratory
case study
Yulong Li
Gabelli School of Business,
Roger Williams University, Bristol, Rhode Island, USA
Abstract
Purpose – The purpose of this paper is to examine a Chinese small enterprise’s failed attempt to
adopt enterprise resource planning (ERP) and to identify the critical success factors for these type of
projects.
Design/methodology/approach – Information was collected through multiple site visits and
semi-structured interviews with key staff of the ERP project, as well as examination of relevant
company documentations.
Findings – The study identified nine critical success factors and discussed how these factors affected
ERP adoption in a small farming feed manufacturing company.
Originality/value – Considering very few ERP project failures are recorded in the literature and the
majority of existing ERP research in China was in the context of large state-owned or foreign-invested
companies, this paper represents an early effort to explore the reasons why ERP adoption failed in the
case study company. It provides valuable lessons to Chinese small enterprises on some of the common
pitfalls they may encounter when pursuing ERP.
Keywords Manufacturing resource planning, Small enterprises, Critical success factors, China
Paper type Case study
1. Introduction
Enterprise resource planning (ERP) is a multi-module application software system that
helps organizations to streamline their business processes. It revolutionizes
organizational transaction structure by replacing a firm’s many stand-alone
applications with a united system that facilitates enterprise-wide integration.
Numerous studies have consistently credited ERP for its ability to improve business
decision-making capabilities and organizational performance. The most prominent
benefits of ERP include better cost structure, faster customer response rate, higher
information visibility, and improved process flow (Nikookar et al., 2010; Romero et al.,
2010; Gattiker and Goodhue, 2005; Nicolaou, 2004). ERP has been regarded as a key part
of organizational information infrastructure for modern businesses. In recent years, it
becomes a world-wide sensation for companies to invest in ERP projects. Gattiker and
Goodhue (2005) and Wang et al. (2006) believed that the trend to adopt ERP was expected
to continue for years to come.
The past three decades have witnessed China’s stunning metamorphosis from a
primitive agriculture-dominated society into an industrialized economy (Gao and Yu,
2010). To meet the increasingly turbulent and diverse market expectations and to
continuously improve productivity, many Chinese firms have been moving quickly to
reengineer business processes by utilizing modern information technology (Ma and
Dissel, 2008). A report by the consulting firm Analysys International (2007) indicated
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ERP in Chinese
small enterprise
489
Received February 2010
Revised September 2010
Accepted October 2010
Journal of Manufacturing Technology
Management
Vol. 22 No. 4, 2011
pp. 489-505
q Emerald Group Publishing Limited
1741-038X
DOI 10.1108/17410381111143130