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ERP on Operational Performance
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Transcript of ERP on Operational Performance
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“Do not be embarrassed by your failures, learn from them and start again”Richard Branson
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ENTREPRENEURSHIP AND MANAGEMENTFACULTY OF MANAGEMENTUVA WELLASSA UNIVERSITY
Final Research
PresentationBy
K.G.G.S.LakmalUWU/ENM/09/0027
Outline Research topic Introduction Literature review Research problem Research objectives Conceptual framework Hypothesis Research methodology Data analysis and interpretation Conclusion Suggestions References
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Research Topic
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The Impact of Enterprise Resource Planning
System on Operational Performance in
Listed Companies in Sri Lanka(With special reference to manufacturing
sector)
Introduction An Enterprise Resource Planning
(ERP) system is software that helps organizations to integrate their business functions through a common database and enable planning and utilization of organizational wide resources ( Silva.P.B.M.G, et al,2011).
Effectiveness is at peak in each successful organization.
In the new era of management, managers are more sensitive with operational performance to achieve organizational effectiveness.
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Literature ReviewAuthors Research Titles FindingsP.B.M.G. De Silva, K. Gunawardana and S.K.P.N. Silva
The Impact of Enterprise Resource Planning Systems on Management Accounting in Private Companies in Sri Lanka
ERP system has improved the quality of management accounting process, and the training as well as vendor support has an impact on the usage of ERP system but there is low impact on decision making process.
A. Chamaru De Alwis and D.M.R.Dissanayake
Middle managers attitudes on business performance generated through Enterprise Resource Planning
There is a positive weakrelationship between ERP features and its impact on business performance.
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Literature ReviewAuthors Research Titles FindingsK.A.J.M. Karunasekara
Impact of ERP usage on work and work life in Sri Lankan manufacturing organizations
There is a high level of ERP usage in manufacturing organizations.
A.T.Fonseka Uncompetitive Trends in Sri Lankan and the Mind Set of Industrialsts
The absence of an information-seeking culture, lack of planning and competitive strategy, lack of innovation and poor work ethic reason to
Amin Amid, Mehdi Bagheri and Saeed Ghasrodashti
Analysis the Impact of Enterprise Resource Planning Systems onOrganizational Effectiveness
If the managers wantto improve their performance in long term,consider the casual and intervening factors inselecting ERP application and vendors.
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Research problem Both ERP system and operational management are emerging areas in Sri Lanka.
Rare in Sri Lankan context.
Operational performance in the Sri Lankan business sector is at a very low level.
ERP system implementation is a huge investment, this affects not only for organizations but also for the country in long run and in indirect manner.
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Research objectives
Determine the relationship between user training on IT and three operational factors which are gaining operational performance.
Determine the relationship between vendor support and three operational factors which are gaining operational performance.
Find out the impact of ERP system on operational and organizational performance.
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Conceptual Framework
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ERP Usage Operational Performance
User training on IT and process
Vendor support
Time savingImproved decision making
Independent Variable Dependent Variable
Hypothesis
The hypotheses are developed to test the relationship between user training and vendor support on the ERP usage in operational performance.
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Research methodologyPopulationCompanies which are using ERP system in manufacturing sector in Colombo Stock Exchange.SampleOut of 25companies 21 companies are taken as sample.Data collection method Interview QuestionnaireData analysis Descriptive statistic, Correlation coefficients and Regression analysis
SPSS version 16 and Minitab 15
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Data analysis and interpretation
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Descriptive statistics
Independent variable
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Descriptive statistics - Dim ensions of ERP usage
M ean Std. Deviation
User training on IT and process 4.1878 0.0523
Vendor support 3.7937 0.0444
Source: Based on primary data
Descriptive statistics
Dependent variable
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Descriptive statistics - Dim ensions of Operational perform ance
M ean Std. Deviation
Tim e saving 4.1005 0.0659
Im proved decision m aking 4.1701 0.0445
Im proved resource utility 3.5111 0.0696
Source: Based on primary data
Correlation Analysis
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Correlation between User training and Vendor support
Dependent Variable Correlation–User training Correlation-vendor support
Tim e saving 0.145 0.585
Im proved decision m aking
0.603 0.546
Im proved resource utility 0.575 0.308
Source: Based on primary data
Regression Analysis
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Regression
M odel β Stand Error T- Value P- Value
Constant 0.5042 0.2993 1.68 0.097
ERP Usage 0.87775 0.07571 11.59 0.000
Source: Based on primary data
Regression Analysis
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Operational performance = 0.504 + 0.878 ERP usage + ε
Based on this equation when ERP usage increases by one unit, operational performance will
increase by 0.878.
Conclusion ERP systems have been influenced to the performances of their business to large degree
The relationship of user training and three dimensions is positive
The relationship of vendor support and three dimensions is positive
ERP usage significantly impact to enhance the operational performance.
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Conclusion Better and higher training and vendor involvement can increase the better utilization of the potentials of ERP system
The implementation stage of ERP system, employees are highly reluctant to transfer ERP the system from the existing system
Through the good interrelation between vendor and organization’s IT manager can increase the better utilization of the potentials of ERP system.
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Suggestions Keeping policies with documentation assist to improve the firm operational performance
Develop an evaluation criterion and reward system for employees based on their performance with the ERP system
Move from traditional training mechanisms to end-user training tools.
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Suggestions Whenever business process is changed or any customizations are done to the system, the employees should be given adequate training on the change.
Flexible working schedule and management development can be used to improve firm operational performance.
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ReferencesAlwis.A.C.,Disnayaka.,D.M.R., “Middle managers attitudes on business performance generated through Enterprise Resource Planning (ERP)”,2009
Amid.A.,Bagheri.M.,Ghasrodashti.S., “Analysis the Impact of Enterprise Resource Planning Systems on Organizational Effectiveness ”international journal of systems applications, engineering & development issue 3, Volume 4, 2010
Bhatti .T.R., “Critical success factors for the implementation of Enterprise resource planning (ERP): empirical validation”, pp.1-10,2008
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ReferencesKarunasekara K.A.J.M.,” impact of ERP usage on work and work life in Sri Lankan manufacturing organizations”,2007
Silva.P.B.M.G.,Gunawardana.K,Silva.S.K.P.N., ‘The Impact of Enterprise Resource Planning Systems on Management Accounting in Private Companies in Sri Lanka’,2008
Fonseka.A.T.,”Uncompetitive trends in Sri Lankan industries and the mind set of industrialists”,Sri Lankan journal of management,vol.6,2001
Shawl.R.S.,”Key performance indicators for information technology (IT) operational management of financial industry in Taiwan” African Journal of Business Management ,Vol. 6(3), 2012,pp. 1041-1055
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THANK YOU
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Research questions How organizations exercise ERP systems in operational performance?
What is the impact of ERP system implementation in operational performance?
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Hypothesis1. H1 There is a relationship between ERP user training and Time saving 2. H2 There is a relationship between ERP user training and Improved decision making 3. H3 There is a relationship between ERP user training and Improved resource utility 4. H4 There is a relationship between ERP vendor support Time saving 5. H5 There is a relationship between ERP vendor support and improved decision making 6. H6 There is a relationship between ERP vendor support and Improved resource utility
Data interpretation and analysis
Instrument ValidationCronbach’s alpha is 0.8336 which reflects 83% of reliability
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Descriptive analysis
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1 ≤ X ≤ 2.5 All most disagree
2.5 ≤ X ≤ 3.5 M oderately agree
3.5 ≤ X ≤ 5 All most agree
Correlation Analysis
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Perfect positive relationship r∈ [1]
Strong Positive relationship r∈ [0.5 to 1]
M oderate positive relationship r∈ [0 to 0.5]
M oderate negative relationship r∈ [-o.5 to 0]
Strong negative relationship r∈ [-1 to -0.5]
Perfect negative relationship r∈ [-1]
Regression Analysis
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M odel Sum m ary
Labels Value
R square S 68.8%
Adjusted R Square 68.3%
Std. Error of the Estim ate 0.180039
Source: Based on primary data
Regression Analysis
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Analysis of variance
M odel DF Sum of Squares
M ean Square
F- value P- value
Regression 1 4.3571 4.3571 134.42 0.000
Residual 61 1.9773 0.0324
Total 62 6.3343
Source: Based on primary data
