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ABSTRACT
Evaluating the success of enterprise resource planning (ERP) systems for relevant organizations is an emerging area of study. Many organizations both large and small have been victims of unsuccessful ERP implementations. This study attempts to complement ongoing research dedicated to understanding ERP systems more clearly and how knowledge creation drives success. Knowledge is recognized as a strategic tool within an organization necessary for sustaining a competitive advantage. Numerous studies have focused on knowledge management and its relationship to overall organizational performance, with a lack of observation, however, on individual systems. This study aims to investigate how knowledge management enablers and knowledge creation relate to ERP success. This research targets footwear and apparel manufacturers, as these industries are unique due to product demand challenges and supply chain inefficiencies. The involved survey contains 187 respondents, with the result of this empirical study indicating that knowledge creation has an impact on ERP success. Specifically, in knowledge management enablers, organizational culture and decentralized organization demonstrates a strong relationship to the knowledge creation that further influences the success of ERP systems.
Keywords: IT strategy, ERP success, knowledge management, knowledge creation, enterprise systems.
1. INTRODUCTION
Enterprise resource planning (ERP) systems are commercial software packages that integrate transaction-oriented data and business processes throughout an organization [30]. ERP systems are promising to businesses wanting to consolidate and integrate the many elements that compromise business practice [41]. Capitalizing on competitive advantage underlies the motivation of firms for adopting ERP systems.
Although ERP facilitates competitive advantage to an organization, there is a high rate of failure in implementing ERP systems. Statistics indicate that 74% of manufacturing organizations and 59% of service-based organizations either use or implement ERP [29]. Panorama Consulting Group [49] reported that 93% of ERP implementations take longer than expected and 59% cost more than expected. Furthermore, only 13% characterize themselves as "very satisfied" with their company software implementation. Even though reports indicate high failure rates, primary research recently forecasted sustained demand for ERP systems throughout 2008 and beyond [49].
Knowledge management (KM) emphasizes enhancing competitive advantage in firms through more effectively utilizing their knowledge assets to subsequently ensure ERP success through the free flow of knowledge as information across organizations. Improved knowledge sharing and creation should enhance flexibility and...