A development of enterprise resource planning success model for accounting profesionals

I also would like to thank Dr.Nguyen BichLien for her comments on system-use concept of the ERP success model foraccountingprofessionals, which is a motivation for discovering a more app

MINISTRY OF EDUCATION AND

TRAININGUNIVERSITYOFECONOMICSHOCHIMINHC ITY

Phan,ThiBao Quyen

AD E V EL O P M E NT O F E N T E R P R I

S E RESOURCEPLANNINGSUCCESSMOD ELFORACCOUNTINGPROFESSIONAL

S

ADOCTORALTHESIS

HoChiMinh City,2020

MINISTRY OF EDUCATION AND

TRAININGUNIVERSITYOFECONOMICSHOCHIMINHC ITY

Phan,ThiBao Quyen

AD E V EL O P M E NT O F E N T E R P R I

S E RESOURCEPLANNINGSUCCESSMOD ELFORACCOUNTINGPROFESSIONAL

S

Major:AccountingCode:9340301

The effort to complete this thesis would not have been possible without the contribution ofanumber of persons and organizations First and foremost, I would like to express mydeepestgratitude to my two supervisors, Associate Professor, Dr Vo Van Nhi and Dr.Nguyen ThiKim Cuc for their support and guidance Especially Associate Professor, Dr VoVan Nhi, myprincipal supervisor, hisencouragementkeepsme going even through the mostdifficultmomentsof this study

Iwouldliketooffermy gratitudetoUniversity ofEconomicsHoChiMinhCity,andacknowledgethe supports I have received from the School of Accounting at University ofEconomics HoChi Minh City I would like to thank Associate Professor, Dr Nguyen XuanHungandDaoTatThangfor facilitating me completing the PhDthesis ontime

I would like to thank my colleagues in Accounting Information System Division fortheirencouragement during my PhD journey I would like to give a special thank to Dr.NguyenPhuoc Bao An for providing me constructive feedback and making me trust myselfthat I amcapable to finish this stressful research project I also would like to thank Dr.Nguyen BichLien for her comments on system-use concept of the ERP success model foraccountingprofessionals, which is a motivation for discovering a more appropriate system-use concept inthe ERP ongoing context In my daily work, I would like to thank Dr Luong Duc Thuan, Dr.Pham Tra Lam,Nguyen Quoc Trung and Nguyen Huu Binh for supporting me to performlecturing-tasksinorder to facilitate myresearching

I am so grateful to Dr Nguyen Thi Thu for her enthusiasm for my queries I would like to acknowledge the advices and the comments on how toeffectivelyadopttheSmart-

research-method-related-PLSsoftwaretoanalyzethecollecteddatafromDr.NguyenPhongNguyen.I really appreciate his experience

of such a useful tool I would like to thank the help ofDr.TrinhHiepThienforhisassistanceindistinguishingbetweenreflectiveandformativeconstructs.IalsowouldliketothankNguyenThaoNguyenforhercounselingonconfirmationfactor analysis

My thanks also go to academics from UEH and informants from participant organizationsthathave assisted me to complete the pre-testing, pilot testing and main survey, whose namescannotbe disclosedowning toconfidentialityagreements.

I would like to thank my brothers and sisters, as well as my friends, in particular, PhanQuocHieu, Dr Pham Thanh Ha, Phan Quoc Lan, and Nguyen Thi Thu Nguyet Their help,support,and friendship keep me balance every up and down moment and make the completion of thisthesismoreinterestingandenjoyable insteadofpressureonlyor sometimesboringness

I give special thanks to my parents, especially my wonderful mom, who have always stayedby

me, encouraged me to pursue my academic career, as well as assisting me to take caremychildren Without their support and sacrifice, this work would have been stalled Forthisreason,this thesis isdedicated to bothofyou

Last but not least, I would like to thank my husband and my little daughters Yourlove,support and continual understanding have made this adventure possible Therefore, thisthesisisalso dedicated toallofyou

2.3.2 Asummaryof ERP SuccessModelsfrom 1990uptopresent 27

2.3.4 Differencesbetween thecurrent studyandtheelevenprevious ESMs 46

2.4 Reviewof‘richconstruct(s)’enablingtoovercomeunansweredvalidity-setting-relatedissues 45

CHAPTER3CONCEPTUALFRAMEWORK,CONSTRUCTCONCEPTUALIZATIONANDHYPOTHESES 49

3.2 TheoriesusedintheESMAP 49 3.2.1 D&MISsuccessmodel(DeLone&McLean,1992) 49

Appendix2.1ElevenpreviousERPsuccessmodels 183 Appendix4.1A d v a n t a g e s ofusingsurveymethodinthecurrentstudy 190 Appendix4.2Identifying formativeandreflectiveconstructs 191 Appendix4.3Evidenceinrelationtotheexpertpanel’sfeedbackonthepreliminaryquestionnaire

193 Appendix4.4T h e originalPartAofthepreliminaryquestionnaire 195 Appendix 4.5A summary of changes in Part B of the preliminary questionnaire after

Appendix4.7Questionnairetranslationprocessinthecurrentstudy 200 Appendix4.8Listofintervieweesanddemographicinformation 201 Appendix4.9Pilotstudyresponsesfromthreetargetinformants 202 Appendix4.10TheVietnamesequestionnaireafterpilottesting 203 Appendix4.11B i a s issuesconsiderationandhowtominimizethem 207 Appendix4.12S a m p l e sizeCalculatorv2.0forCronbach’sAlphaTest 210 Appendix4.13TheresultofcalculatingtheminimizesamplesizebyG*Powersoftware 211 Appendix 4.14 Sample size recommendation in PLS-SEM for a Statistical Power 80% (Hair Jr et al.,2014) 211

Appendix5.3IndependentSampleT-testforNon-responseBias 219 Appendix5.4TotalVarianceExplainedforCommonMethodBiasTest 224

UEH UniversityOf Economics Ho Chi Minh City

VIF VarianceInflationFactor

Table1.1:RankingsofthemostmentionedERP-relatedtopics(Huang&Yasuda,2016) 3

Table2.1:Evolution of ERP 22

Table2.2:AdvantagesofERP (MohammadA.Rashidetal., 2002) 24

Table2.3:DisadvantagesofERP (Mohammad A.Rashidetal., 2002) 24

Table2.4:ERPlifecyclemodels 25

Table2.5:SummaryofERPsuccessmodelsfrom1990topresent 31

Table2.6:AsummaryofstudiesinvolvingmeasuringERPsuccessinVietnam 43

Table2.7:SummaryofdefinitionsandhowtodeveloptheconceptualizationofPABinERPcontext 46

Table2.8:AdvantagesoftheESMAP 48

Table3.1:Differencesamong thetraining,adoptionandongoing usecontexts(adaptedfrom Dengetal.(2004)) .56

Table4.1:Conceptualizationoftheconstructs 67

Table4.2:IndicatorsofSystem Quality 68

Table4.3:IndicatorsofInformation Quality 68

Table4.4:IndicatorsofPerceived AccountingBenefit 69

Table4.5:Indicatorsof Use 69

Table4.6:IndicatorsofSatisfaction 70

Table4.7:IndicatorsofAccountantPerformance 71

Table4.8:IndicatorsofOrganizationalPerformance 71

Table4.9:The minimizesamplesizeofthe currentstudy 79

Table5.1:SummaryofTheFactorAnalysisAppropriatenessCriteria 91

Table5.2:EFATestResults-Refinedscales 92

Table5.3:NewconceptualizationandoperationalizationofnewfactorsextractedfromEFA 94

Table 5.6: Internal consistency, indicator reliability and convergent validity analyses of the first-ordermeasurement model 100

Table5.7:Discriminantvalidity(FornellandLackercriterion) 102

Table5.8:Discriminant validity(HTMT) 102

Table5.9:Internalconsistency,andconvergentvalidityofthe second-ordermeasurementmodel 103

Table5.10:Validityofformativesecond-order constructs 104

Table5.11:CollinearityassessmentoftheESMAP 105

Table5.12:Directrelationshipsforhypothesistesting 108

Table5.13:Summaryofresultsintermsofpathcoefficients,f 2 andq 2 value 110

Table5.14:Resultsoftotalandspecificindirect effects 111

Table5.15:Directeffectsincludingmediatorsinthe ESMAP 112

Table5.16:VAFvaluesofeach mediatormodel 113

Table5.17:Resultsof specificindirecteffects 114

Table5.18:ResultsofPLS-MGAforERPimplementationandpost-implementationorganizations 115

Table5.19:ResultsofPLS-MGAforlarge-sizedandsmall-and-medium-sizedorganizations 116

Table5.20:ResultsofPLS-MGAforpopularandnon-popular-ERP-packages-adoptedorganizations 116

Table5.21:Resultscomparisonamongmodels 117

Table5.22:Resultsoftheadjusted R 2 valuebetweentheESMAPandtheparsimoniousmodel 119

Table5.23:Impactsof omittinginformationqualitytouse 120

Table5.24:Impactsofomittinginformationqualitytosatisfaction 121

Table 5.25: Asummary ofsignificanttotal effectsamongconstructsand significantdifferenceofseveralpathsin theESMAP 122

Table6.1:ComparisonofVariance Explainedamongthreemodels 132

Table6.2:SummaryofPAB'soperationalization 142

Table 6.3: Summary of the current PAB construct's advantages (in comparison with the original PAB of KanellouandSpathis(2013)) 143

Figure1.1:DifferentmanagementsoftwaretypesadoptedinorganizationsinVietnam 2

Figure1.2:Thenumberof publicationson"ERP"inGoogle Scholarbyyear 3

Figure1.3:Accountingvaluechain(Hunton,2002) 7

Figure1.4: Researchquestionhierarchy 13

Figure1.5: AsystematicprocedurefordesigningtheESMAP 18

Figure2.1:Aliteraturemapidentifyinguniquenessandworthoftheresearchtopic 20

Figure2.2:Stand-aloneapplications'architecture(Loh&Koh,2004) 21

Figure2.3:ERP-integratedarchitecture(Loh&Koh,2004) 21

Figure2.4:ERPapplicationsmarketsharessplitbytop10ERPvendorsandothersin2016 23

Figure2.5:CategoriesofISsuccess(DeLone &McLean,1992) 45

Figure3.1:D&MISSuccessModel(DeLoneandMcLean,1992) 50

Figure3.2:IS-continuancetheory(Bhattacherjee,2001) 51

Figure3.3:Theresearchmodel(theESMAP) 54

Figure4.1:AresearchframeworkofJohnW.Creswell(2013) 63

Figure4.2:LocationofVN(green)inASEAN(darkgrey)(Referencedfromwikiwebsite) 76

Figure4.3:DifferentmanagementsoftwaretypesadoptedinorganizationsinVietnam 80

Figure5.1:Dataanalysisprocessofthestudy 84

Figure5.2:Datapreparationprocessofthestudy 85

Figure5.3:InstrumentPreparationProcessofthestudy 96

Figure5.4:Processoftestingthe ESMAP 98

Figure5.5:HypothesesTesting_BootstrappingDirectEffectResults 107

Figure6.1:EffectsofthelengthofERPadoption 126

Figure6.2:Effectsoftheorganizationalsize 127

Figure6.3:Organizations'perceptionsoftheESMAP'sconstructsbytheadoptedERPpackage 128

Figure6.4:Descriptivefindingsoforganizationalperformance 129

Figure6.5: ImpactsofERPlifecycle phaseson firms'organizationperformance(Ross&Vitale,2000) 129

Figure6.6:Descriptivefindingsofaccountantperformance 130

Figure6.7:Descriptivefindingsofuse 131

Figure6.8:Descriptivefindingsofsatisfaction 134

Figure6.9:Descriptivefindingsofsystemquality 136

Figure6.10:Descriptivefindingsofinformationsystem 138

Figure6.11:Descriptivefindingsofperceivedaccountingbenefit 141

EnterpriseResourcePlanning(ERP)systemiscommercialsoftwarethatautomatesandintegratesmany or most of a firm’s business processes It allows to access to integrated datacross theentire enterprise according to real-time (Davenport, 1998) Therefore, ERP system isexpected toincrease productivity via processes standardization, to improve decision-makingability via information integration throughoutthe whole enterprise, to enhance cooperationbetween organizational entities by connectingthem smoothly, and the most important, tomaintain competitive advantage once thesebenefits are satisfied (Davenport, 1998) Thesepromises are possibly a close explanation ofits increasing popularity Namely, Fortune 500companies are trusting ERP system1and it isalso a solution that large-sized organizations inVietnamselect and adopt more growingly2.Nevertheless, instead of achieving impressive benefits from their ERP systems, somefirmshave faced difficulties in gaining the benefits they expected Therefore, as suggestedbyMarkus and Tanis (2000), for both researcher and executives, one of the initial interested-questionsiswhetherinvestmentsinERPwillpayoff.Severalorganizational-leveleconometricstudies conducted (M C Anderson, Banker, & Ravindran, 2003; Hitt, Wu, &Zhou, 2002)give an answer that it is likely yes – on average However, the impacts vary fromenterprise toenterprise, even from module to module (Nicolaou, 2004a) in which accounting-related modules are in charge of changed-

therelevantliteratureandconcludethatERPimplementationhasaconsiderableimpactonaccountingde

p ar tm en to f t h e b usi ne ss o r g a n i z a t i o n s H e n c e , t h e ex ec ut iv es ’ n e x t questions are

probably to be,how can I maximize the positive impacts on accounting department? IstheresomewaytopredictwhattheultimateimpactsofERPsystemsonaccountingprofessionalswil lbeinorder to achieve agoal ofenhancing organizationalperformance?

These questions are worth addressing In attempting to do so, the author draws on D&MISsuccess model (DeLone & McLean, 1992), IS-continuance theory (Bhattacherjee, 2001)andthe principle “fitness for use” (J M Juran, 1988) to develop the ERP success modelforaccounting professionals in order to make them more productive, which in turnimprovesperformance of implemented organizations The theoretical and empirical resultsindicate thatorganizational performance is, indeed, influenced by the extent to whichaccounting expertseffectivelyutilizeERP systemsin the adoption andongoingcontext

1 Thisinformationisquotedfromwebsite http://fortune.com/2017/09/13/amazon-microsoft-google-sap-cloud/

2 Thisinformationis quotedfromVietnameseE-commerceIndicatorReportin2018.

This study makes an original contribution to both of theory and practice through formingandvalidating the ERP success model for accounting professionals only In a little moredetail, itprovides empirical evidence regarding Hunton’s accounting value chain (2002) Inaddition, itdiscoversandproveseffectiveuseasthemostappropriatesystem-useconceptsofar.Moreover, it makes an effort to investigate outcomes of accounting benefitsperceived fromERP system, which related-studies are much further under-researched Last

theresearchprovidesvaluableimplicationsfororganizationmanagementonhowtheycansuccessfully manage accounting department as well as accounting professionals in an attempttomaximize ERP’s impacts on organizational performance, which executives have paidmuchattentionto forrecentyears buthave notyetfound out theanswer so far

Keywords:ERPsuccessmodel,accountingprofessionals,

perceivedaccountingbenefits,systemuse,the principle"fitness for use"

CHAPTER 1INTRODUCTIO

N

1.1 Chapterintroduction

The purposes of this chapter are to describe a broad overview of the research,generallypresent methodology, and introduce forthcoming chapters This chapter begins withresearchbackground, and moves on a discussion on two main motivations for research, whichfocus onexplanation what research topic is and why to choose it Identifying research topic is veryimportant as it allows limitingthe scope of reviewing a literature The research objective andresearch questions are thenaddressed in the third and forth part of this chapter Next, sectionfive of this chapterrepresents research justification to make clarify the significance of thestudy Subsequently,research methodology is outlined to enable to image how to conductthewholedissertation,andfollowedbyresearchscope.Finally,thethesisstructurewillbeproposed,providingdescriptionofthesixforthcoming chaptersof thisthesis

1.2 Backgroundofresearch

Enterprise Resource Planning (ERP) system is one of the most popular forms ofITforbusinesses at present Deriving from efforts to rationalize lead times and possessionstockcosts, the 80’s manufacturing resource planning (MRP II) is developed into ERPsystemconsidered as the standard that integrates business processes throughout theorganization,whichinturnenhancesoperationalefficiency(Akkermans,Bogerd,Yücesan,&VanWassenhove,2003;Davenport,1998).Callaway(1999)statesthattheERPsystempromisesto achieve benefits in both tangible (e.g., reduced personnel, inventory, IT and procurement,transportation, and logistic costs;improved cash flow management, revenue and profits) andintangible (e.g., increasedvisibility of corporate data, speed of decision making, and controlover global businessoperations; improved customer responsiveness and business processes)manner

SuchthosebenefitspushbusinessorganizationstowardsadoptingtheERPsystems(Davenport,1998;Ifinedo,Udo,&Ifinedo,2010;VincentA.Mabert,Soni,&Venkataramanan, 2003) This hasbeen proved by tremendous expansion of the worldwideERP applications market for the last

(Ifinedo,Rapp,I f i n e d o , & S u n d b e r g , 2 0 1 0 ) , h a s g r o w n m o r e t h a n t w i c e t o a p p

r o a c h n e a r l y $ 8 2 2

$84.7 billion by20213

Being consistent with the trend, in Vietnam, E-Commerce Indicator Report in 2017alsoindicates that the number of organizations adopting ERP system has been more increasedin2016

Humanr esource management

Accounting/

Financial software

Figure 1.1: Different management software types adopted in organizations in

Vietnam(Source:VietnameseE-commerce IndicatorReport in2017)

As such, this study is conducted in the context, which the ERP system has already been oneofthe most popular business-management-applications in organizations all over the world andbeginsto beincreasinglyadoptedinVietnam

1.3 Motivationsforresearch

1.3.1 Motivation1-ERPresearch

With respect to a boom in ERP-adopted business organizations, research in the ERP hasalsoincreased over the past years To acquire how the growth of publications about ERP is,theGoogle Scholar database is scanned for the term “Enterprise Resource Planning” in theperiod1990-2016 The results of this searching are summarized in following bibliometric4graph(seeFigure1.2).ThisgraphrevealsthegrowinginterestinERPoverthepast26years.Accordingly,ERP(althoughalittledecrease)isstillaprominentfieldintheresearchcommunity, with about 6000search results on average in the 2009-2016 period (Google2017)

G.Wang, Shih, Jiang, & Klein, 2008).Critical successfactors(CSF)havethusc o n s t i t u t e d fewthingsthat must gowelltoensuresuccessofanorganization(Boynton &Zmud,1984).

CSFis investigated to identify essential areasof concern and providesmeasurest h a t

w o u l d aid in managing those areas (Boynton & Zmud, 1984) The CSF researches havetypicallyaddressedseveraldifferentissues.Inmostcases,typicalCSFstudieshaveconsistentlyidentified a set of core factors critical to the success of ERP implementations includingtopmanagementsupport, theimplementationteam,organization-wide commitmenttothe system,

and fit between the ERP systems and the firm (Finney & Corbett, 2007; Hong & Kim,2002;Murray & Coffin, 2001; Ross & Vitale, 2000; J E Scott & Vessey, 2000; Somers &Nelson,2001; Somers & Nelson, 2003; Stefanou, 2000) In other cases, some papers havefound thatfirm size is also an important factor related to ERP implementation success(Bernroider &Koch, 2001; Buonanno et al., 2005; Vincent A Mabert et al., 2003;Muscatello, 2003; Snider,daSilveira, &Balakrishnan, 2009).

Alternatively,ratherthanfocusingonidentifyingthefactorscriticalforsuccessinimplementingERP system, the few researchers are interested in building ERP success modelsas untypical CSFstudies For instance, H.-Y Lin, Hsu, and Ting (2006) develop an ERPsuccess model upon the DeLone and McLean’s(1992, 2003) information system successmodel Lin et al.’s (2006) model relates the

measures(i.e.,financialeffectiveness,customereffectiveness,internalbusinesseffectiveness,andinnovation and learning effectiveness) They demonstrate that the success of any ERPsystemmaybepredictedbyintegrationoftheinformationsystemsuccessmodelandbalancescorecar

d constructs Specifically, they suggest that the adoption of balance scorecard criteriawillallow firms to more easily assess impacts of the ERP system is either positive ornegativeaswellas to moreeffectivelymanagetheERP systemimplementation

ERP CSFs research is crucial; however, quite mature for a certain period of time; therefore,aquestioniswhether therestillhavetheinterestingresearch opportunitiesforERPresearchers.Drawing on recent relevant literature, Mukti and Rawani (2016) as well asGrabski et al.(2011) assert that there exists a paucity of ERP success model research Thus, this studyisexpected to increase insight regarding such an area Another reason of choosing ERPsuccessmodeltostudyinplaceofinvestigatingsinglecriticalsuccessfactorsisduetoi t s advantages

5 First, the ERP system causes complex and challenging tasks, and there aremanyintegratedfactorsinfluencingthelevelofsuccess,thereforeidentifyingprimaryfactorsrunnin

g organizational performance under a whole model is more appropriate Second, themodelforces researchers to be explicit about the way the problem is perceived Thus, thereislessroomforsloppyorconfusedthinkingwhenmodeling.Theactofsystematicallyconsideringthe impact of one variable on another forces researchers to make their logic moreconsistentwhen thinking about a problem Third, model is effective and efficient way oforganizingresearchers’ knowledge about a problem of interest Hypotheses investigatedinmodelwillexpandtheirknowledgeaboutthephenomena.Finally,modelprovidesasafeand

5 Thelast three reasons arequotedbyJ W.Jones,Steffy,andBray(1991).

economical way of testing relationships as it allows simulating the effect of making achangeinone variableonother variables without actuallymaking thechange.

Finney and Corbett (2007) lament the fact that most of recent ERP CSF research (bothtypicaland untypical CSF type) has generally taken from a macro perspective or a view of multipletop mangers, the perspectives ofkey or single stakeholders are often missing This proves thatCSF research potentially still lies in either micro-level ortarget-level approaches Likewise,Grabski et al (2011) suggest that ERP research has yet to sufficiently

issuessuchashowERPinfluencesstakeholdersinaccordancewithstakeholders’insights;orwhethe

r stakeholders’ performance can be effectively improved in organizations adoptingERP; oreven whether the perceptions of stakeholders on the ERP system can enhancetheorganizational performance of adopting enterprises To put it in other way, tocomprehendpositive impacts of the ERP system on stakeholders, a question is whether there

is a modelguiding stakeholders how to adopt ERP successfully in order to contribute toincreasingorganizationalperformancefromstakeholders’ perspectivesthemselves

For these reasons, it could be concluded that in terms of ERP research, a call for developingamodel measuring ERP success from stakeholders’ perspective has been established forrecentyears

1.3.2 Motivation2 –BehavioralAccounting Research (BAR)

Behavioral accounting research (BAR) or behavioral research in accounting is defined asthestudyofaccountingprofessionals’behaviorornon-

accountants’behaviorinfluencedbyaccounting functions, and/or report system, and/or creatingaccounting information (Hofstedt&Kinard,1970)

Sincethelatetwentiethcentury,BARhavedrawnincreasingattentionfromaccountingresearchers,academics and international community (Nowak, 2016 ) In the early stageofBAR,B i r n b e r g a n d S h i e l d s ( 1 9 8 9 , p p 4 1 - 6 1 ) e x t r a c t f i v e

Out of these five schools of accounting behavioral research, Birnberg and Shields (1989)alsomention a few behavioral researches related to accountants, which are called the studiesofaccountants Because of their shortage, they have not yet constituted the sixth schoolofbehavioral research in accounting Likewise, Sorensen (1990) determines that the a schoolof‘studyof accountants’, indeed,existshoweveritsstatusis alarming.

Recently, Tin, Agustina, and Meyliana (2017) conduct a comprehensive review to obtainaclearer picture and more extensive knowledge about direction and development inbehavioralaspects of accounting Accordingly, behavioral accounting research scopes from

2005 to 2014areclassified into seven schools as follows:

(1)Topicsdiscusstheeffectofhumanbehavioronthedesign,construction,anduseoftheaccountingsystem(10.74%)

(2) Topicsdiscusstheeffectof accountingsystemonhumanbehavior(13.22%)

(3) Topicsdiscussthe method/strategytoalterhumanbehavior(29.75%)

(4) Topicsdiscussthehandlingofhuman thatcan affectsubject’sbehavior(27.28%)

(5)Topicsdiscusstheresearchmethodologyassociatedwithabehavioralaspectofaccounting,such as examining measures, developing measures, and variableconstructdimensiontowards human behaviorexamination(9.09%)

(6) Topicsdiscussbuildinga modelinaccountingprofessions(3.3%)

(7) Topicsdiscusstheuseof theorytoanalyzehuman behaviorinaccounting(7.43%)

Given these related literature reviews of behavioral research in accounting, it is obviousthatresearch directions of behavioral accounting are broader developing although the prioritytoeach school at each moment is dramatically different Notably, among such schools, studyofaccountantsi s , i n d e e d , m o r e g r o w i n g l y c o n c e r n e d T h i s s c h o o l , f r o m b e i n g c h a

r g e d o f t h e fewstudiesin1989(Birnberg&Shields,1989),hasbeenconsideredasapartofa n individual, independent group (10.74%) in recent years (Tin et al., 2017) The evidence pointstothefactthat a call forthe‘studyof accountants’ isrealand vital

Not only choosing study of accountants as a response to its call, this study intends to focusonit because of the increasingly dramatic change of accountants’ roles and functions inERPenvironment For example, Sayed (2006) emphasizes that the traditional accounting roleinIS-

is confirmed via the findings of their survey in which about 83% of those who havesomeexperience of the ERP system choose the statement ‘the ERP system have positiveeffects onmanagement accountants’ in comparison with a total of 55% interviewees agreewith thestatement ‘the ERP system have positive effect on organizational performance’ whenbeingrequired to give opinions about perceived effects of the ERP systems on organizationsand onmanagement accountants According to these statistics, there is no denial that userswhoexperience the ERP system easily recognize the impacts of ERP system onmanagementaccountants, rather than on organizational performance Moreover, theirrespondents (senioraccountants) concede that the ERP system is as a positive developmentenabling them to bemore focused on financial management and less on bookkeeping aspects.Furthermore, ratherthan being changed their role by the ERP system only, accountants, incontrast, also influencethe design of ERP systems For example, in ERP pre-implementationstage, when questioningvendors about features that are supported by their packages, the focus of questions is often onwhether certaintechniques such ABC and the balanced score card could be supported by theirproduct(Newman

& Westrup, 2005)

Another reason explaining why a school of ‘study of accountant’ is chosen in this thesis isdueto accountants’ contributions to organization value in business organizations adopting IS,especially ERP system DrawingonPorter’s value chainand Elliott’si n f o r m a t i o n v a l u e chain, J E Hunton (2002)proposes the accounting value chain (shown in Figure 1.3)whichilluminateshowaccountantscanaddvaluetobusinessorganizationsintoday’sglobalinformationand communication technologyenvironment

Figure1.3:Accountingvaluechain(Hunton,2002)

Figure 1.3 reflects that the accounting value chain includes three-value levels rangingfromlowtohighlevelintheIScontext.Onitslow-

valueside,accountantshavenolongeropportunitiestoaddincrementalvaluetothetraditionalfunctionsrelatingtoi d e n t i f y , measure, and record accounting transactions owing to IS’spredictability, and automatic-ability The following phase of such a chain focuses ontranslating data into information thatmakes sense In a little more detail, in routine work,recording and processing accountingtransactions as well as creating previous formatted-information are conducted automatically.Reliable IS controls relating to accounting are a

Assuch,accountants’contributionsinthisphasearealsonothigh.Itcanbeeasilyrealizedthat,inthe IS context, the more increasingly the accounting functions and tasks can be performedby IS, the lower the accountants can

thesignificantcontributionsofaccountantsfocusonthesidethatITjustassistsinsteadofperformingaccountants’ tasks Here are some of outstanding values that accountants cancreate inIS adoptingorganizations:

(1) Disseminating business knowledge: Information system provides functions andfeatureswhichallowaccountantstogenerate,manage,integratebusinessknowledgeanddisseminate such knowledge to inside and outside users of the organizations Undertheviewpoint of Elliott (2001), a capability of knowledge leveraging makesaccountingprofessionalsdistinguish rather than differenttypes of staffs

(2) Developingexternalities:Merginge-commerceandsupply chainsintoorganizationoperationslikely leads to appearance of externalities, which in turn creates new worksfor accountants For example, they need tomonitor, controlt h e f l o w s o f i n f o r m a t i o n and protect the privacy,confidentiality and security rights of related parties Theserequirements undoubtedlyput pressure on accounting experts, but, on the other hand,proposeopportunities forthemto addmorevalue totheircompanies

(3)

Providingassurance:Notonlyaddingvalueimpossibly-replacedtoorganizations,accounting professionals also provide assurance for managers,investors, and societiesviaauditor’s opinion regarding thefairnesson andofffinancialreporting

(4) Internal value of accounting systems: Drawing on data integration feature of someIS(especiallyERPsystem),accountantsconducttoprocessdata,andcreateusefuldecision-makinginformationmorequickly,reliablyand relevantly

To sum up, this thesis focuses on “study of accountants” due to its increasing concern inBARliterature; the more growingly intertwined relationship between accountants and ERP system;andtheir valuable contributionsinIS-adopting business organizations

1.3.3 Combinationof ERP researchand BehavioralAccountingresearch (BAR)

CombinationofERPresearchandBARisessentialandtimelybecauseERPisatransformative force

on the accounting In reality, because of its accounting benefits,ERPrequiresaccounting expertises tochangetheirrole inordertomakebroadercontributionto the company, such as reporting on non-financial measures, auditing information systems,implementing managementcontrols within information systems, and providing managementconsulting services (Grabski

et al., 2011) Therefore, the thesis will combine ERP CSFsresearchwith the studyofaccountants

Given research gaps related ERP research and BAR, a research topic is formulated That istodiscoverh o w t o a s s e s s E R P s u c c e s s f o r a c c o u n t i n g p r o f e s s i o n a l s f r o

m a c c o u n t i n g professionals’ perspective themselves, in simple terms, developing an ERP success modelforaccountingprofessionals (ESMAP)

It is worth noting that there are virtually no researches of the ESMAP, thus, it is consideredasthe first and unique study up to now in an effort to better understand ERP system-relateddrivers leading improvement inorganizational performance toward a point of accountingexperts’view

Drucker (2018) once said:“What you measure is what you get.” “Ensure that every measureof performanceis pertinentto beachievement ofa goalorvalue of your organization.Otherwise, you risk misdirecting your organization.”Accordingly, give the

relatively fewstudies on the development of ERP success model (ESM) (G Gable, Sedera, &Chan, 2003;Ifinedo, 2006; H.-Y Lin et al., 2006; Smyth, 2001), two broad problems areidentified: first,the validity of ESM design and second, target setting in ESM design Theseare also primaryconcernsindeveloping the ESMAP

ValidityissueoftheESMAPdesign

The first problem in this line of research relates to the validity of the ESMAP Being

adaptedfrom Ittner and Larcker (2001),validity in this study is defined as‘ t h e e x t e n t

t o w h i c h a model succeeds in capturing what it is supposed to capture’ Accordingly,

twoquestionsthatneedtobeconsideredwhendesigningamodel:whatissupposedtobecaptured?andhow canaframework be designedto successfullycapturethis?

In the context of this study, the success of adopting the ERP system of accounting expertsiswhat supposed to be captured Therefore, the remaining question is how a framework canbedesignedto successfullycapture the ERP success foraccounting professionals

Recall that, ESMAP is the first study conducted Hence, the gap in the knowledgeaboutvalidity of the ESMAP is due to two main reasons First, there is still little work ontheintegration of ESM and accounting (Grabski et al., 2011) This means that it is difficultfor usto have a comprehensive understanding of accounting professions behind thephenomenon

westudy.Toovercomethislimitation,wewillreviewextensiveliteraturerelatedtoESM,information systemsuccess model to choose a proper ESM as well as scanningpreviousstudiesinrelationtoimpactsofERPsystemsonaccountinginordertodiscover,thenincorporateappropriateaccounting-relatedconstruct(s)intotheselectedmodelofERPsuccess

The second reason in relation to the validity of constructs used in the ESMAP is that mostofESMre se ar ch er s t y p i c a l l y focuspr im ar il y att h e or ga ni za t io na l level r at he r tha

nl oo ki ng at the detail in the operational level6of organizations when studying ESM design (Chien &Tsaur,2007; Markus & Tanis, 2000; Rosemann & Wiese, 1999; Smyth, 2001; Stefanou,2001).Hence, referring such a approach, the ESMAP studies at the higher organizationallevelsprovide aggregate information about organizational performance; the aggregate, high-levelinformation may capture the underlying phenomenon being examined, that allow ustobetterunderstand theactualdrivers of organizationalperformance

In summary, in order to deal with the validity issue of the ESMAP design, it is importantforresearchers to integrate an accounting-related construct(s) into the suitable ESMframeworks,and examine accounting issues at the organizational level This will enable AISresearchers togain more insights into what is supposed to be captured and which constructs can successfullycapturethis in relation toimproving organizationalperformance

TargetsettingissueoftheESMAPdesign

The second problem in this line of research relates to target setting of the ESMAPdesign.Target of the ESMAP is to guide accounting professionals how to successfully adoptthe ERPsystems, in other words, to make them increasingly productive in the ERP context, inorder toachieve improvement in organizational performance Obviously, this motivation runshow

whichhands-efficient, accountant performance should be also another dependent variable Indeed,eventhoughthemainobjectiveofany businessesistomaximizeorganizationalprofits,itisessential torecognize that profits, in nature, are generated from productive employees, and asa result, it is vital for any enterprise to findout how to improve IS’s positive impacts onindividuals As IS’s these impacts on anindividual are high, it seems likely that the effect fororganization that the individualparticipates in will also be high (Princely Ifinedo et al., 2010).Consequently, target-setting issueoftheESMAPdesign allowsindicating organizationalperformance andaccountantperformanceastwo dependentvariables intheESMAP.

In conclusion, a call for combination of ERP research and BAR leads to forming researchideaof developing the ESMAP in order to improve organizational performance In doing so, asdiscussed above, validity andtarget setting when designing the ESMAP must be made clarify.To put it differently, the development of theESMAP must be considered at organizationallevel and the components of the ESMAP need to includeorganizational performance andaccountant performance as dependent variables More

anaccounting-relatedconstruct(s)appropriatetoembedintheproperERPsuccessmodel.Research streams inrelation to ERP success models and an accounting-related construct(s)willbe reviewedsystematicallyand criticallyin Chapter2

1.4 Researchobjective

Both of two motivations for the research mentioned above suggest a demand for developingamodelmeasuringERPsuccessfromaccountants’perspectivewithagoalofmakingorganizationincreasingly efficient Therefore, the objective of this research is to examine howan ERP successmodel for accounting professionals (ESMAP) can be designed in an effortinordertoimprovetheirorganizationalperformance.Morespecific,whileissuesofE R P (Aloini,Dulmin, & Mininno, 2007, 2012; Bernroider & Koch, 2001; Cegielski, Jones-Farmer,Wu, &Hazen, 2012; Dey, Clegg, & Cheffi, 2013; Grabski et al., 2011; Haddara, 2014;Hakim&Hakim,2010;Hedman&Borell,2004;Kanellou&Spathis,2011),itsi m p a c t s a t individual level (Amoako-Gyampah & Salam, 2004; Bueno & Salmeron, 2008; Buonanno etal.,2005; Chou, Chang, Lin, & Chou, 2014; Costa, Ferreira, Bento, & Aparicio, 2016; Hsu,Yen,

& Chung, 2015; Kositanurit, Ngwenyama, & Osei-Bryson, 2006), accounting practicesandfunctions in ERP environment (Aryani, 2014; Daoud & Triki, 2013; G Sutton, 2006;Kihn &Lepistö, 2011)h a v e r e c e i v e d g r o w i n g a t t e n t i o n f r o m

k n o w n abouthowERPsuccessmodelforaccountingprofessionalscanbedesignedtosupportmanagers to better manage as well as helping accountants to better conduct their work intheERPc o n t e x t i n o r d e r t o a c h i e v e t h e g o a l o f i m p r o v e m e n t o n o r g a n i z a t i o n a

l p e r f o r m a n c e ,

which is the focus of this thesis In short, the primary objective of this research is todevelopandtestERP successmodelforaccounting professionalsat organizationallevel.

1.5 Researchquestions

Cooper and Emory (1995) propose a framework of ‘top-down’ research questionhierarchyincludingfour distinctlevels as follows:

 Level one, theManagerial levelquestion, captures the management perspective.

Thisquestion is defined as a statement or recognition of an interested problem, inotherwords,a coreresearch question

 Level two, theResearch levelquestions capture the ‘general purpose’ of the

research.They are specific research problems extracted from themanagerial questionintheanswerable manner

 Level three, theInvestigation level, are systematic questions of how research

questionsareaddressed

 Level four (if necessary), theMeasurement level question,consists of the actual

datacollectionqueries (e.g surveyandinterview questions)

Thisr e s e a r c h a d o p t s t h e “ t o p

-d o w n ” r e s e a r c h a p p r o a c h o f C o o p e r a n -d E m o r y ( 1 9 9 5 ) t o extract the researchquestions from above-stated research objective This hierarchy is chosenas it allows entirely visualizing what need to beexplored and how a research process can beconductedto successfullyexplorethese

Accordingly, the managerial question of this thesis is that “How can the ESMAP be designedin an attempt to improve accountant performance, which in turn enhances organizationalperformance?”

Two research questions extracted from the managerial question aresequent that:“ How canthe ESMAP be formed in an attempt to improve accountant performance, which in turnenhancesorganizationalperformance?” and “How can theESMAPbevalidated?”

To answer the first research question “How can the ESMAP be formed in an attempt toimprove accountant performance, which in turn enhances organizational performance?”,thestudyneeds to investigate some queries asfollows:

 WhataretheexistingERPsuccessmodels?

 Whichc o n s t r u c t ( s ) m a k e s t h e E S M A P d i s t i n g u i s h f r o m t h e e x i s t i

n g E R P s u c c e s s models?

Figure1.4representsahierarchyofmanagerial-research-andinvestigative-level-relatedresearchquestions in the current study It is worth noting that the measurement questions haveyet to befinalized in Figure 1.4 They are the subject of ongoing research effort and presentedspecificallyin sectionsrelatingtoresearchmethodologyinChapter 4.

evidence on the accounting value chain of J E Hunton (2002).Second,

itshouldbenotedthatalmostpreviousstudiespayattentiononperspectivesofmultiplestakeholdersonERPsuccesswhilethisstudyfocusesonperceptionsofaccountingprofessionals only It isregarded as ‘pioneer’, and therefore, expands new research directionfocusing on developingERP success models for each particular user in order to maximize thepositive impacts ofERP on performances of each employee type Once ERP’s these impactson all employees arehigh, it seems likely that the effect for organization that the wholeindividuals participate in

will likely be high (Princely Ifinedo et al., 2010).Third, perceivedaccounting benefit concept

is firstly validated in the complex model as the ESMAP related findings such as its significant role in the ESMAP aswell as its outcomes so far

Theperceived-accounting-benefit-constitute to bring unique, priceless contributions to both ERP andBAR literature.Finally, the

ESMAP focusing on the post-implementation stage adds moreinsights into the paucity ofresearch on ERP system after implementation (Grabski et al.,2011)

Thisstudyisalsoan essentialfromapracticalstandpoint Org an iz at i on a l profits,innature,aregeneratedfromproductiveemployees.Thus,theESMAPispreciousasitguidesaccountin

g professionals how to become productive under ERP settings More specific, theESMAPsupports them to adjust their ERP adopting behavior in order to improve theirworkperformance.Furthermore,alsothemostimportant,theESMAPguidesorganizationmanagement how to predict, access and improve organization’s accountant performance toachievethe advanced organizational performance for their organizations As a result,theESMAPallowsmanagementtobettermanager,controlaccountingexpertsandtheirworkin

ERP post-implementation context Finally, organization will obtain beneficial outcomewhenindividual benefits are positive influenced (Princely Ifinedo et al., 2010) To put itdifferently,accountingprofessionalsandorganizationmanagementobtaindirectbenefitsfromtheESMAPwhile their organization receives indirectbenefitsfromtheESMAP.

1.7 Methodology

This study makes use of positivism paradigm7and quantitative research method, as itisappropriate for validating a new theories-based-formed ESMAP against empirical data.Thisstudy is divided into two phases: (1) forming the ESMAP, and (2) validating theESMAP Tostart with, it reviews related literature and finds suitable foundational theories to

theESMAPwithits9hypothesesanditsconstructs-conceptualization.Then,thee m p i r i c a l survey data is obtained from an expected sample of

300 organizations8in Vietnam adoptingthe ERP system for at least one year The ESMAP’sconstructs operationalization and theirvalidation are subsequently conducted via SPSS 24.0and AMOS 20.0 software packages.Finally, the theoretical model and hypotheses of theESMAP are tested using PLS-SEManalysistechnique with the support of SmartPLS 3.2.7software

1.8 Researchscope

Followingboundariesandconsiderationscontributetoformingthescopeofthisdissertation:

First, this study selects Vietnam, an Asian developing country, as the research context

forobservationand empiricaltesting(see adetailexplanationinSection 4.5.2.1)

Second, it is necessary to clarify what ERP success is in this study The ‘success’ term in

ISliterature is often used as effectiveness (DeLone & McLean, 1992; Markus & Tanis, 2000;B.Myers, Kappelman, & Prybutok, 1996; B L Myers, Kappelman, & Prybutok, 1997; J.Y.Thong, Yap, & Raman, 1996) that constitutes the “extent to which an informationsystemactually contributes to achieving organizational goals” Thong et al (1996, p 252).Therefore,in the same way G Gable et al (2003) define, ERP success in the current study isreferred tohow to adopt ERP system to improve effectiveness in implemented enterprises.Notably,

theERPs u c c e s s i n t h i s c a s e e x c l u d e s b o t h E R P ’ s t e c h n i c a l i n s t a l l a t i o

n a n d i m p l e m e n t a t i o n

7 Positivism prefer ‘working with an observable social reality and that the end product of such research can belaw-like generalizations similar to those produced by the physical and natural scientists’ (Remenyi & Williams,1998)

Thissizeislargeenoughtoobtainparameter estimateswith“standard errorsmallenoughtobeof practicaluse”(J C Anderson &Gerbing, 1988)

success, which are measured by cost overruns, project management metrics, time estimatessoforth(Hong &Kim,2002; Markus & Tanis, 2000).

Third, the study unlimited considers various ERP packages including foreign and local

brandsbecause benefits of those still are possibly comparable (Vincent A Mabert et al.,2003).Furthermore,varyinginsystem’stypes,tosomeextent,mayincreasesoftware-

relatedgeneralizabilityofthis study

Finally,thethesis’sunitofanalysisisatorganizationallevel.Thus,respondentsareorganizationsimp

lementingtheERPsystemforatleastoneyearwhileinformantsareaccountingprofessionals,specifically,chieffinancialofficer,chiefaccountants,chiefcontrollers,chiefinternalauditorsandsenioraccountantswhohaveatleasttwoERP-experience years As a result, the perspective beingpresented in this study excludes end-users,othersemployers,orother managers andmid-levelexecutives

1.9 Thesisstructure

Thethesisstructurecommencesfromchapter2–literaturereview.Thesectionbelowintroducesbriefsummaryof thecontent of each chapter

 Chapter 2 - Literature Review: Chapter 2 reviews areas of relevant prior research

fromthe literature, providing a summary of the current state of understanding ofEnterpriseResourcePlanningSystem.Thetopicareasdiscussedintheliteraturereviewconsistof:

(1)EnterpriseResourcePlanning:definingERP,evolutionofERP,advantagesanddisadvantages ofERP and the ERP lifecycle; (2) Review of ERP success models: identifychallenge of measuring ERP success, listing the existing ERP successmodels,

discussiononp r o b l e m s w i t h t h e e x i s t i n g E R P s u c c e s s s t u d i e s , d i f f e r e n c e s

b e t w e e n t h e r e s e a r c h topic and the previous ERP success models, and review of research-topic-related studiesinVietnam; and (3) Review of ‘rich construct(s)’ enabling to overcomeunansweredvalidity-setting-relatedissues

 Chapter 3 – Conceptual framework, construct conceptualization and hypotheses:Chapter3developsatheoreticalmodelofmeasuringERPsuccessforaccountingp

rofessionalsinanattempttoachieveimprovingorganizationalperformance.T h e chapterbegins with three theories used as explanation foundation of the ESMAP Basedon them,this chapter forms the conceptual ESMAP, then presents and explains reasons ofselectingconstructs’ conceptualization, and ends with the arguments leading to 9 testablehypotheses

 Chapter4–Methodologies:Chapter4 represents the development of the

researchmethodology in the step-by-step manner The chapter begins with considerationon

thenatureofthephenomenonbeingstudied.Thefollowingisdecisionaboutselectingwhetherqualitativeor/andquantitativeapproachesareappropriatefortheresearchquestions Then, the

withresearchapproachandresearchobjective.Subsequently,researchmethodwillbepreciselydiscussed.Finally, thethesis proposes ethical considerations

 Chapter 5 – Data analysis:Chapter 5 describes the last steps of how to validate

theESMAP once the data set is collected It starts with data preparation with a goalofdeveloping the final sample Then all constructs of the ESMAP are re-validated toensuretheirstructuresappropriateinERPadoptionandongoingcontextinVietnam.T h i s chapte

r ends with testing the ESMAP using PLS-SEM analysis technique and conductingseveral advanced analysis to obtain more understanding of theESMAP’s explanatorypower

 Chapter 6 – Discussion of findings:Chapter 6 indicates and explains the

predictionpower of the ESMAP It provides meanings of statistical descriptive findings,comparesresults with the previous literature, and interpret findings of each hypothesesproposed inthe ESMAP Furthermore, it provides more comprehensive insights of theESMAP basedonadvanced-analyses-results

 Chapter7–Conclusion:Thischapteroutlinesasummaryofthefindingsandconclusions It

begins with a re-visitation from research questions that illustratesthewholeworkconductedinthisthesis.Then,basedonthefindingssynthesizedandanalyzed,thetheoreticalcontributionsandpracticalimplicationsofthisstudyarediscussed,followedbyaconsiderationfortheresearchlimitations,delineationsandsuggesteddirections for furtherresearch

Allchapters mentionedabovefollowa multistageprocedureillustratedinFigure1.5

1.10 Chaptersummary

This introductory chapter to the thesis begins with the background of the study, andthenprovides a description of research motivations Next, the research objective and theresearchquestions based on these motivations are represented in sequence Following theresearchquestions, justification is proposed Subsequently, the research methodology ispresented,followed by research scope An outline of the forthcoming thesis chapters isidentified at theendof the chapter

CHAPTER 2LITERATUREREVIEW

2.1 Chapterintroduction

Chapter 2 introduces the basic literature of Enterprise Resource Planning, a review oftheexistingERPSuccessModels,areviewof‘richconstruct(s)’enablingtoovercomeunansweredvalidity- and target-setting-related issues as discussed in Section 1.3.3 Moredetail,theliterature review has twomainobjectives:

(1) to support to determine whether the research topic is worth studying bysystematicallyandcriticallyreviewingpreviousstudiesthatarecloselyrelatedtotheonebeingundertaken, then comparing the research topic with these findings.T h e w h o l e

p r o c e s s of identifying whether the topic of interest is researchable is summarized in

(1) ERPand ERPsuccessmodels (ESMs):

Section 2.2 generally reviews Enterprise Resource Planning in terms of highlights suchasdefinition of ERP, evolution of ERP, advantages and disadvantages of ERP, the ERPlifecyclein sequence These are followed by a discussion of some of the key issues related to ERPSuccess Models in Section 2.3.Namely, this section makes clarify which challenge businessorganizations has been facingwhen measuring ERP success Then, a summary ranging from1990 to up to now of ERPsuccess models that have dealt with the challenge hasaddressed.Subsequently,anumberofissueswiththeseexisting-ERP-success-

modelstudiesarespecifically analyzed to provide a comprehensive picture of the aliveresearch gaps that needto be paid attention to when developing ERP success model Based onthem, the differencebetween the current study and the previous ERP success studies ispointed out Finally,Section 2.3 closes with a review of the ERP success studies in Vietnamwith expectation ofcheckingwhetherthisresearch ideais a duplicateof anypreviousVietnamesestudy

(2)

Areviewofaccounting-relatedconstruct(s)toidentify‘richandmeaningful’variableadditional into the chosen ESMAP

Section 2.4 presents an extensive review to discover perceived accounting benefitinstrumentof Kanellou and Spathis (2013), which is considered as ‘richandmeaningful’constructconnectingtheERPsystemand accounting profession.

Figure2.1:Aliteraturemapidentifyinguniquenessandworthoftheresearchtopic(Source:by

author) 2.2 EnterpriseResourcePlanning

2.2.1 DefiningERP

There is not an official definition of ERP system in IS literature Most researchersoftenillustrate its functionality to clarify what it is For example, ERP system allowsinformationflows to go throughout business functions as well as business units, thoseconnections

arepreciselys i m i l a r t o w h a t t h e I n t e r n e t c o m m u n i c a t e s a m o n g c o m p a n i e s ( D a

v e n p o r t , 2 0 0 0 )

Another explanation is that this packaged-business-management-software type enablesanorganizationtooptimallyutilizeitsresourceviaintegratedapproachtoitsinformation-

processingaswell asoperatinguponaprocess-orientedperspectiveinsteadoffunction-oriented view (Nah, Lau,

& Kuang, 2001) In a little more detail, Soh, Kien, and Tay-Yap(2000) summarizes that ERP system is capable ofautomating, integrating business processes,sharingdataacrossthewholeenterprise,andaccessing,producinginformationinrealtime

To image more clearly what ERP system is, Loh and Koh* (2004) graphically compare integratedarchitecturewithstand-aloneapplications’architecture.Intermoftraditionalapproachpreviously happening within organizations, each individual department has its owncomputersystem in order to run its work (see Figure 2.2) More often than not, these systemsaredeveloped in isolation, and each function will fail to consider how it fits in withotherdepartments This can lead to duplication of data across the organization, which createsitsown problems The systems become like silos within the organization operating on theirownwithlittleinteraction

ERP-Figure2.2:Stand-aloneapplications'architecture(Loh&Koh,2004)

When appearing, ERP system combines them all into a single, integrated software inwhichconsists of a series of modulesrelated to an organization’s the different functionsareasthemselves.Thesemodulesrunuponasingleshareddatabasecentralsothattheyareintegratedand able to operate efficiently.In other words,unlike in the information siloapproach, in anERP system, departments can share information and communicate witheachotherinaneasyandquickmannerandaddition,theproblemsofdataduplicationandredundancyareresolved (seeFigure 2.3)

Figure2.3:ERP-integratedarchitecture(Loh&Koh,2004)

Based on the preceding descriptions mentioned above, we may conduct that an ERP isapackaged complex business software designed to integrate business processes andfunctionsthrough using single database in order to be able to permit the sharing of commondata andinformationin realtime.

2.2.2 EvolutionofERP

ERP has it roots in Materials Requirement Planning (MRP) of the 1970’s ((Davenport, 1998);(Wortmann, Hegge, & Rolefes, 2000); (Hwa Chung & Snyder, 2000)) From abusinessperspective,ERPhasexpandedfromcoordinationofmanufacturingprocessestotheintegratio

n of enterprise-wide backend processes Meanwhile, from technological aspect, ERPhas evolvedfrom legacy implementation to more flexible architecture for clients Based onstudies of Mohammad A Rashid, LiaquatHossain, and Patrick (2002) and Utzig, Holland,Horvath,andManohar(2013),thehistoricaleventsrelated withERParesummarizedin Table

2.1inorder toillustrate thekeycharacteristics oftheERPevolutionfrom1960suptodate

internal-

process,utilizeasingledatabase,therefore,promisingimproved-business-activities-performance The initial ERP is considered as an premises model

on-2000s ExtendedEnterpri

seResourcePlanni

ng(ERPII)

ERPIInotonlyfocusesonclientswithadditionaldevelopmentofsuppliermanagementmoduleandcustomermanagementmoduletooptimize the entirebusiness processes, but also focuses on e-commercewith growth of htmlinterfaces ERP II is a hosted-solution modelsinceitsp l a t fo rm is r u n o ff-

s i t e w h i l e i t s s o ft w a re mu s t b e i n s t a l l e d o ne n d users’computers

-2010+ ERPinthecloud ThisisathirdmodelofERP,inwhichtheERPisdistributedfromthe

cloudand accessedbyend-usersviaWebbrowsers

The following statistics prove that the market for ERP has been dramatically growing sinceitsintroductionsin1988(Muscatello,2003).In1998,therevenuestoERPvendorswereapproximately

$16.6 billion (Carlino & Kelly, 1999); this figure shot speedily up to $47.8billion in 2004(Fitzgerald, 2005) After more than twenty years since its appearance, theglobal ERPapplication market has grown to approach nearly $82.2 billion in 2016 The topsof ERPvendors includes SAP, FIS Global and Oracle achieving nearly 7%, 4% and3%marketshare,respectively(AppsRunTheWorld,December2017)9(seeFigure2.4).Obviously,the rapidly upward trend in the revenues of ERP providers has been a clear proofconfirmingthe popularityof thistype of softwarefortheenterprise in theworld

Figure 2.4: ERP applications market shares split by top 10 ERP vendors and others in

2016(Source:Apps RunThe World,December2017)

2.2.3 AdvantagesanddisadvantagesofERP

Organizations’expectationsforERPhasgenerallycreatedamisleadingperceptionthatimplementin

g ERP system will immediately improve their functionalities This is obviouslyimpossible

To have an accurate understanding of characteristics of ERP, it is necessary tocomprehend itsadvantages and disadvantages Mohammad A Rashid et al (2002) showthebenefitsthatastandardERPsystemmaybringtoorganizations(seeTable2.2)andsimultaneouslylist certain disadvantages thattheyneed to overcome (seeTable 2.3)

9 These figures are quoted from the Allert Pang’s report (December 1st2017)that is posed on website Apps RunThe World, and retrieved in September 19th, 2018 from https:// www.appsruntheworld.com/top-10-erp- software- vendors-and-market-forecast/