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Darshana Sedera IT Professional Services Queensland University of Technology Brisbane, Australia Does Size Matter? Enterprise System Performance in Small,

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Presentation on theme: "Darshana Sedera IT Professional Services Queensland University of Technology Brisbane, Australia Does Size Matter? Enterprise System Performance in Small,"— Presentation transcript:

1 Darshana Sedera IT Professional Services Queensland University of Technology Brisbane, Australia Does Size Matter? Enterprise System Performance in Small, Medium and Large Organizations

2 InformationTechnologyP rofessional S ervices Presentation outline Study Background Focus of this paper Literature Review –Organizational Context –Size as a determinant –Information System Success Data collection Results and analysis Discussion Research outlook with 3gERP

3 InformationTechnologyP rofessional S ervices Study Background Substantial resource requirements in Enterprise System implementation and maintenance have traditionally restricted such product suits to large organizations, prompting some researchers and practitioners to claim that ES are only suitable for large corporations (Hillegersberg and Kumar 2000). The aforementioned and the recent changes in ES market, wherein the demand for Enterprise Systems from large organizations has plateau, has prompted ES vendors to focus on Small and Medium Enterprises (SMEs) with scaled-down ES (Piturro 1999; Everdingen, Hillegersberg et al. 2000). Such changes have renewed discussion on the suitability of conventionally large packaged Enterprise System for Small and Medium Enterprises.

4 InformationTechnologyP rofessional S ervices From Yesterday… Focus is on SMEs – Kirill et al. Small – does not mean a scaled-down large company – Sarker Cost of implementation and maintenance – Nolan Knowledge Management and ERP – Nolan Competitive advantage and IS investment – Newman Implementation methodologies – Johansson Etc, Etc.

5 InformationTechnologyP rofessional S ervices We are interested in…relationships between Enterprise Systems (Client, Consultant and Vendor) The size of the organization and ES-performance (given that it is the same ES)… The antecedents of ES-success (e.g. Knowledge Management) and organization size… Change Management procedures and size… Requirements analysis procedures / requirements and size… Implementation issues size… Training needs of small, medium and large organizations… Industry sectors differentiations and size… Organizational cultural differences and size… This paper is a high level overview of the 1 st preposition. A full discussion paper will appear soon.

6 InformationTechnologyP rofessional S ervices Focus of this PAPER…. The main Objectives Using the four dimensions of the IS-Impacts model (Gable, Sedera 2008), this study seeks to determine the purported differences in performance across the small, medium and large organizations. To determine a repeatable classification to categorize organizations according to the ”organizational size”. It is noted that many researchers have employed IT budget, # of employees and similar indicators to classify organizations.

7 The Research Context and the Survey Instrument

8 InformationTechnologyP rofessional S ervices The Organizations 27 SAP using public sector organizations QLD, Australia –Before SAP, –Implemented in late 1990, several millions per application, –World’s first public sector SAP implementation, –Similar versions of SAP, –Same consultants, –Many success stories, –Dissatisfaction from Small organizations (CAA ~ 240 users), Management and maintenance structure –QLD Treasury to fund each installation. –Citec to provide support and maintenance. –Shared Services with MyERP with 5 large clusters.

9 InformationTechnologyP rofessional S ervices The Survey The data was collected using the 48 survey items –Evaluation of success, –Knowledge Management, –Training, –User expertise, Demographic details were gathered from each respondent (e.g. duration at the public sector, department, education, training received, etc). More objective data were collected from organizational reports (e.g. SAP version details, architecture, user licenses of each agency). 319 responses, leading to 310 valid responses. Strategic, Management, Operational, Technical respondents.

10 InformationTechnologyP rofessional S ervices The instrument for measuring success Overall, the impact of SAP on me has been positive. Overall, the impact of SAP on the agency has been positive. Overall, SAP is satisfactory The items are “Formative” in nature… (Gable, Sedera 2008)

11 The Analyses

12 InformationTechnologyP rofessional S ervices Organizational Classification To determine a benchmark / cut-off that can be employed in measuring ES performance, –There is some confusion in the literature on SIZE –E.g. Laukkanen, Sarpola et al. (2007), ‘medium’ is defined as enterprises with less than 250 employees, wherein the organizations with less than 50 employees are classified as small. Traditionally, organizations with more than 250 employees are classified as ‘large’ (Chau 1994; Chau 1995). –Do we use the NUMBER OF EMPLOYEES?, IF SO, WHAT HAPPENS IN HEALTH / EDUCATION SECTORS? Using the aforementioned, to assess whether the different organizational sizes have different views on success dimensions, and To assess whether certain organizational sizes place a greater emphasis on particular success dimensions when evaluating ES performance.

13 InformationTechnologyP rofessional S ervices Cluster Analysis Using the criterion item on “Organizational Impact” a cluster analysis was conducted… This was purely exploratory… The analysis yielded three classes… Compared these classes with the demographic details gathered through the survey and from the objective sources… We found the relationship between classes that CITEC and the consultants use for their different charging structures and our three classes (~100% match). –200 or less SAP user licenses –200- 999 SAP user licenses –1000 or more SAP user licenses

14 InformationTechnologyP rofessional S ervices Cluster Analysis The three classes and the three cluster variables were compared and revealed ~100%* match, yielding the following classification: Large (4), Medium (17), Small (6) * 98% for less that 200 cluster ABC DE ClusterN% of Total Mean Values for Criterion Items # of User Licenses C1C2C3 1 – Large6621.29 than 1000 2 – Medium19663.23 4.364.464.26200 - 999 3 – Small4815.48 4.674.734.48Less than 199 Combined310100

15 The Descriptive Statistics

16 InformationTechnologyP rofessional S ervices Organizational Impact Overall Productivity Cost Reductions Staff Reductions Organizational Costs

17 InformationTechnologyP rofessional S ervices Individual Impact Individual Productivity Awareness and Learning Decision Effectiveness Individual Productivity

18 InformationTechnologyP rofessional S ervices System Quality

19 InformationTechnologyP rofessional S ervices Information Quality

20 InformationTechnologyP rofessional S ervices Relative Emphasis on Success Dimensions All three classes of organizations demonstrate a reasonably strong correlation between the success dimensions and overall success. The magnitude of the correlation within a dimension decreases with the increasing organizational sizes. In other words, the smaller organizations place a relatively greater emphasis on all of the four dimensions compared to its counterparts, when providing an assessment of ES-success. SmallMediumLarge System Quality0.8320.8060.784 Information Quality0.7950.6960.686 Individual Impact0.8390.7680.560 Organizational Impact0.8230.8060.636

21 InformationTechnologyP rofessional S ervices Implications and limitations Repeatable classification method for system evaluation purposes… CA Triangulation The three clusters / t-tests demonstrate significant differences between pairs… Practitioners should promote intangible benefits to SMEs, as the net benefits may take a longer time to eventuate. Knowledge Management… Better / different charging and maintenance structure for SMEs. Limited to perceptual views, Could be influenced by party-line responses,

22 InformationTechnologyP rofessional S ervices Research Outlook with EgERP Topic AreaMethod/s#Country/iesSector/sProduct/sTheory IS-ImpactsMulti-Survey China 2 Oil and GasSAP Malaysia 1 TertiaryLocal Gulf 1 Oil and GasSAP Australia 1 PublicOracle, SAP, Local Appropriate UseCase study, Expe:, Survey1India, China, AustraliaPharma, IT Consulting, EducationSAP, LocalAST CRM, SCM BenefitsCase study, Survey1AustraliaManufacturingSAPTBA Expert Performance in ISCase study, Survey1India, China, AustraliaTelco, Pharma, PublicSAP, Local, OracleStake:, AST Health ISCase study1AustraliaMedical IS??AST Knowledge MgmtCase study, Survey2Australia, MalaysiaPublicSAPAST Shared ServicesCase study2AustraliaPublicSAPTBA Service QualityCase study2AustraliaBanking TBA SatisfactionCase study, survey1AustraliaPublicSAPTBA Rapid ImplementationCase study1South AsiaBanking and InsSAPTBA TOTAL NUMBER OF STUDENTS 17 SME performance evaluation / Comparative study (SAP, Microsoft) SME requirements template for Public Sector SMEs Shared Services Potential

23 Darshana Sedera IT Professional Services Research Group Queensland University of Technology Brisbane, Australia Does Size Matter? Enterprise System Performance in Small, Medium and Large Organizations

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