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Journal of Manufacturing Technology Management A novel model to implement ERP based on dynamic capabilities: A case study of an IC design company Tsung-Sheng Chang, Hsin-Pin Fu, Cheng-Yuan Ku,

Article information: To cite this document: Tsung-Sheng Chang, Hsin-Pin Fu, Cheng-Yuan Ku, (2015) "A novel model to implement ERP based on dynamic capabilities: A case study of an IC design company", Journal of Manufacturing Technology Management, Vol. 26 Issue: 7, pp.1053-1068, https://doi.org/10.1108/ JMTM-12-2013-0185 Permanent link to this document: https://doi.org/10.1108/JMTM-12-2013-0185

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A novel model to implement ERP based on dynamic capabilities A case study of an IC design company

Tsung-Sheng Chang Department of Information Management, Da-Yeh University,

Changhua, Taiwan Hsin-Pin Fu

Department of Marketing and Distribution Management, National Kaohsiung First University of Science and Technology,

Kaohsiung, Taiwan, and Cheng-Yuan Ku

Department of Information Management and Finance, National Chiao Tung University, HsinChu, Taiwan

Abstract Purpose – The purpose of this paper is to propose an implementation model for enterprise resource planning (ERP) based on resource-based view, and using the dynamic capability theory as its theoretical foundation. This model includes: the establishment of the objectives of the implementation, an assessment of the available resources and the scope of the implementation, the redesign/integration and organizational learning during the process, the implementation of the system, and the measurement and evaluation of its performance. Design/methodology/approach – An integrated circuits design company in Taiwan was used in a case study to examine the validity of the proposed model. Findings – When the proposed ERP implementation model was applied in this study, the results show that organizational coordination, system-process redesign and integration, and organizational learning are the critical strategies for enterprises, in order to reduce the risks during the implementation of ERP projects. Practical implications – This model can help enterprises recognize the resources needed when implementing an ERP. In addition, they need to consider the reliability of these resources, as this will increase the efficiency of the implementation, and thus the probability of success. Originality/value – Studies of past models in the implementation of ERP have been conducted in various industries. There is a need for further studies that evaluate the different concepts in terms of the effectiveness of specific methods, in order to enhance the probability of successfully implementing a dynamic system. This paper is one of the first to explain how an enterprise can implement an ERP that is based on the theory of dynamic capabilities. The case study illustrates the important, critical success factors. Keywords Dynamic capabilities, Enterprise resource planning Paper type Research paper

1. Introduction Enterprise resource planning (ERP) can be used to share accurate information, improve the efficiency of internal operations, provide better quality of service for customers and suppliers, and enhance the competitiveness of enterprises, enabling them respond

Journal of Manufacturing Technology Management

Vol. 26 No. 7, 2015 pp. 1053-1068

© Emerald Group Publishing Limited 1741-038X

DOI 10.1108/JMTM-12-2013-0185

Received 23 December 2013 Revised 14 May 2014

Accepted 13 October 2014

The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/1741-038X.htm

The authors gratefully acknowledge the information provided and contributions of Ko-Chin Tung, who is the manager of the information department at Modiotek, the company used in the case study.

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quickly to the rapidly changing business market. Although many research issues related to ERP have been discussed in the literature, such as business-process re-engineering (Davenport, 1998; Millet, 2013), senior managers’ support (Kale et al., 2010; Boonstra, 2013), and key success factors (Motwani et al., 2005; Chou and Chang, 2008; Li, 2011), many implementations of ERP projects still fail. Thus, it is important to develop better implementation models for ERP, as these can provide important guidelines for organizations seeking to adopt such projects.

Previous studies have developed ERP implementation models from different perspectives, such as the six-phase model based on innovation diffusion theory (Rajagopal, 2002), and the five-stage Accelerated SAP (ASAP) method using rapid implementation and a business-process orientation (Fleisch et al., 2004; Portougal and Sundaram, 2006). More recently, von der Weth and Starker (2010) proposed the Motivation-Emotion-Support-Strategy approach, which is based on employee knowledge. However, to the best of our knowledge, these earlier models do not consider ERP implementations from the perspective of dynamic capability. In recent years, many scholars have confirmed that ERP implementations usually consume a significant amount of resources, the availability and quality of which can have significant effects on the outcome of the projects (Xue et al., 2005; Plaza and Rohlf, 2008). For instance, if the financial resources needed are more than the allocated budget, then this project is likely to fail. The inappropriate use of human resources also influences the operational efficiency of such efforts. Öztemel and Polat (2007) noted that effective management of resources enables business managers to accomplish their goals. Thus, when implementing ERP, project managers should focus on resource management and control, not only to avoid failure, but also to reduce costs. Karimi et al. (2007) noted that successful implementation of ERP relies on the correct and effective application of resources.

Dynamic capabilities theory focuses on integrating business resources, and leveraging and reconfiguring them to achieve operational goals and to maintain business competitiveness (Teece et al., 1997). The theory is based on a resource-based view (RBV), which can be used to analyse the current resources of enterprises by constructing thresholds and evaluating the implementation strategies of their projects (Lee et al., 2007). Thus, dynamic capabilities theory can explain how an enterprise can best implement ERP. In addition, both Jarvenpaa and Leidner (1998) and Wade and Hulland (2004) note that current studies on ERP rarely adopt the perspective of dynamic capabilities and there are many areas that have not been studied in any significant depth. Therefore, this study proposes an ERP implementation model based on RBV, using dynamic capabilities as its theoretical foundation. An integrated circuit (IC) design company that has already completed an ERP implementation was used in a case study to examine the validity of this model. It is anticipated that the results of this case study will serve as the practical example for enterprises considering the implementation of an ERP project.

2. Dynamic capabilities theory The dynamic capabilities theory originated from the concept of RBV (Teece et al., 1997; Eisenhardt and Martin, 2000). Barney (1991) defined RBV as representative of the valuable resources of an enterprise that cannot be imitated, and that can be used to create profits and to initiate competitive advantage. Since different firms have different resources, their competitive advantage also differs. However, in the current, highly globalized market, business environments change very rapidly, and RBV alone cannot explain why enterprises with similar resources do not necessarily achieve the same

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operational performance. One reason for this is that their resources are not always effectively integrated and allocated (Teece et al., 1997). Therefore, in order to obtain and maintain a sustainable competitive advantage, an enterprise should strive to use its available resources in ways that are best suited to its current environment.

Since Teece et al. (1997) proposed the concept of dynamic capabilities, it has been adopted in many studies to examine various managerial fields. Recently, Teece (2007) proposed that dynamic capabilities are related to top management’s ability to sense and seize opportunities, and on their ability to reconfigure intangible and tangible assets. Daniel and Wilson (2003) defined eight different dynamic capabilities, and examined e-business transformations using five case studies drawn from different industries. The concept of dynamic capabilities also emphasizes how to accomplish goals; thus, it is suitable for application to qualitative studies, as it can serve as a theoretical foundation for the analysis. Augier and Teece (2009) and Teece (1996) defined that the “enterprise” is the firm taking a global approach to meet the business objectives. The organization has the fundamental characteristic of an enterprise. An enterprise can include more than one organization. Organizations can be transformed and reconfigured to enhance business opportunities and competitiveness. This study used the concept of dynamic capabilities to assess the strategies that e-businesses use to carry out organizational transformation, and then developed a model for the implementation of ERP.

There are three main constructs of dynamic capabilities: process, position, and path (Teece et al., 1997). Process examines an enterprise’s resource integration, reconfiguration, and its capability for organizational learning. Position describes the critical assets that can enhance a firm’s competitive advantages, such as its technical, reputational, structural, systemic, and market assets. Finally, path is used to uncover the directions of future business operations by examining path dependencies or technical opportunities. Of the three, process has been studied the most often, is also the best defined. Most scholars have adopted the concept of process proposed by Teece et al. (1997) to interpret or measure dynamic capabilities (Pentroni, 1998; King and Tucci, 2002; Wu, 2006). In this study, we also adopted a similar view of dynamic capabilities. However, according to Daniel and Wilson (2003), the implementation of an information system can also be referred to as the reconfiguration of the resources of a business. Therefore, this study did not include a firm’s capability for reconfiguration of their resources in the proposed model, since the ERP implementation, itself, is actually a reconfiguration of the business’ resources.

3. The proposed model Our model proposes five stages based on previous literatures, as shown in Figure 1.

3.1 Stage 1: establishment of the objectives of the implementation In most studies of ERP implementations, the first stage is to set the objectives of the implementation (Rajagopal, 2002; Verville and Halingten, 2003; Yahaya et al., 2004). For example, Holland and Light (2001) suggested that the implementation an ERP system requires specific strategies and goals, while Soja (2010) investigated many of the success factors, and stated that the key point is the existence of a good implementation plan.

According to Berchet and Habchi (2005), ERP planning should start with the business planning of the enterprise, to which more detailed plans are then added. Therefore, in Stage 1, it is necessary for a firm to first examine its operational goals,

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their consistency, and the objectives of the information system. If there is a high level of consistency, the value of the information system can be demonstrated. In order to avoid impractical planning, managers can find the high-priority ERP modules, invest resources, and accomplish company goals on time. Al-Turki (2011) concluded that most small and medium enterprises regard the financial modules as the first matters that need attention, and this is reasonable, as this helps to both recognize the effectiveness of the ERP implementation and enhances its operational performance. When considering the objectives of the information system, members of the project team should be allowed to participate in discussions, so that the team can work towards a consensus and reduce conflicts.

3.2 Stage 2: assessment of the available resources and the scope of the implementation Stage 2 is carried out to assess the available resources and the scope of implementation, and this can help to achieve a more effective allocation of resources, as well as to determine the members of the project team.

Stage 1

Stage 2

Stage 3

Stage 4

Stage 5

Establishment of implementation objectives

Assessment of the available resources and scope of implementation

Process redesign/integration and organizational learning

System implementation

Performance measurement and evaluation

• Link between ERP objectives and operational goals

• Technology resources • Human resources • Business resources

• Coordination and integration • Organizational learning

• Programme design • System testing

• Tangible performance • Intangible performanceFigure 1.

ERP implementation model based on the concept of dynamic capabilities

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This stage of the theoretical study discusses RBV, in order to understand the corporate resources and enable the construction of their dynamic capabilities. Thus, the study categorizes the necessary resources, such as technology resources, human resources, and business resources, as proposed by Powell and Dent-Micallef (1997). Technology resources include the architecture of the information systems and the technology in use, such as the flexible integration of customer relationship management (CRM) and supply chain management (SCM) for improving the management process, as proposed by Smith (2011). A stable and reliable infrastructure will affect the quality of corporate activity (Xu, 2011). Human resources include the available manpower for the project, while business resources are more broadly defined. Tsai et al. (2012) argues that financial management is an important issue, as it will affect the performance of the ERP implementation. In fact, the financial factor has always been a critical factor in business activities, so this study has assumed financial resources are business resources. Several prior papers, which have examined this categorization, clearly explain the resources needed for information system-related activities (Zhuang and Lederer, 2006; Tan and Manica, 2007), and some operational definitions contained in these works are shown in Table I. The three categories represent the resources needed in an ERP implementation.

3.3 Stage 3: process redesign/integration and organizational learning This is the most important stage in an implementation of ERP, and includes organizational coordination and integration, as well as the capability for organizational learning, proposed by Teece et al. (1997) as the two main concepts of dynamic capabilities.

3.3.1 Coordination and integration. Coordination and integration refers to how the organization reaches consensus through frequent communication. Since the implementation of an ERP is carried out by different departments, the members of the project team should communicate well with each other in order to design the new business processes carefully and define the demands of the users accurately. If this is not achieved, the direct decisions made by managers or consultants could result in serious resistance from the users of the system. Project meetings do not only rely on positive communication and coordination, but also on clear documentation. When disagreements arise, these records can help resolve conflicts. Berchet and Habchi (2005) and Delen et al. (2005) suggested that, within an ERP implementation, top management must strongly and actively support communication if the implementation is to be successful.

3.3.2 Organizational learning. Employee training and education is important, and a critical factor in both avoiding and overcoming the resistance from the members of the organization (Somers and Nelson, 2003). Organizational learning can change a firm’s

Resources Description

Technology resources ERP modules, system framework (Powell and Dent-Micallef, 1997; Karimi et al., 2007)

Human resources IT personnel’s skills, senior managers’ support, communication environment (Powell and Dent-Micallef, 1997; Worley et al., 2005)

Business resources Financial support (Andersen and Segars, 2001; Plaza and Rohlf, 2008)

Table I. Operational definition of

resources

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internal culture, and enable employees to immediately recognize their critical tasks (Robbins, 1990). Therefore, during the implementation of ERP, it is important to reinforce organizational learning as soon and as much as possible.

According to innovation diffusion theory (Roger, 1995), if there are some members of the organization who enjoy learning, it is easier to create a “learning atmosphere”. Rajagopal (2002), Palanisamy (2006), and McGinnis and Huang (2007) suggested that the process of organizational learning should start from the beginning of an ERP implementation, and not after the system is online. Therefore, before this point, some “seed” (influential) employees from the various departments should be pre-trained, in order to help other members use the ERP system and thus, avoid resistance to it. In addition, these employees may be able to provide practical suggestions for designing the new business processes (Srivardhana and Pawlowski, 2007).

3.4 Stage 4: system implementation This stage includes the development and implementation of the actual information systems of the enterprise. It focuses on the development of the programme, the designs of the required reports, and the tests that will need to be carried out on the system. The importance of this stage should not be neglected, because errors in the assessment of the staff that is needed to carry out the project would delay the implementation (Yahaya et al., 2004; Shaul and Tauber, 2012). The critical tasks in this stage are: examining the views of users; making sure the ERP implementation is carried out on time; and ensuring that the results match the project goals.

3.5 Stage 5: measurement and evaluation of performance After the system is online, there are tangible and intangible elements of performance, all of which must be monitored and measured. In general, tangible performance includes the operational time, costs, and benefits (Nawanir et al., 2013), while the intangible performance refers to the level of integration of the system and the satisfaction of its users (Hwang and Grant, 2011). Some studies adopted return on investment (ROI) as tangible performance but it is only consider the financial index (Hunton et al., 2003; Tsai et al., 2012), and true ROI is so difficult to obtain (Menachemi et al., 2007; Thouin et al., 2009). Thus, we observed operational time and cost as tangible performance. However, although tangible performance is specific, research indicates that the intangible elements of performance are more beneficial to the business than the tangible elements (Kans, 2013).

Another specific characteristic of this stage is that there should be some consideration of the company’s development after the ERP implementation (Nicolaou and Bhattacharya, 2008). A lack of effort in this regard can cause problems related to future maintenance and costs. Businesses should work to make best use of the ERP systems they have established in order to develop their competitiveness, and as part of that goal, the information department has to consider the burden of maintaining its existing information system when planning a new one.

4. Validation of the model 4.1 Procedure This work used a case study to validate the proposed model. First, we conducted in-depth interviews with the information supervisors of the company used in the case study to understand their ERP implementation. After reviewing the interview

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information, we developed a preliminarily set of critical barriers and success factors for an ERP implementation, and then developed the first part of a structured questionnaire. In the second step, based on the five stages of our model, we designed the second part of the questionnaire to validate the feasibility of each stage. The questionnaires were distributed to the information supervisors, the stakeholders in the ERP project, and the users in all departments of this company, with a total of 11 questionnaires being sent out and returned.

4.2 Background of the company in the case study Because the external environment of high-tech firms, such as those working in the IC design or semiconductor industries, is very competitive, their dynamic capabilities can easily be examined (Eisenhardt and Martin, 2000). This study uses an IC design company in Taiwan, called Modiotek, as the targeted firm. The IC design industry is based on the upstream-value chain of semiconductor manufacturers, and the market is extremely volatile. Therefore, institutional changes need to be more rapid and efficient than in industries that are more traditional. This company was founded in August 2006, has about 90 employees. It focuses on the development and design of audio chips, which are used in various consumer electronic products, such as mobile phones and digital audio products. Modiotek has recently adopted the use of SAP R3 on a Windows operating system.

4.3 Description of implemented ERP At first, this company planned to implement several information systems at the same time. However, after detailed discussions, the top management decided to adopt the ERP system first, due to their limited resources. The new information systems were needed because if business data cannot be handled properly, the process of transactions will slow down and operational efficiency will be reduced. On the other hand, the information department lacked both the manpower and the necessary experience in planning an information system. Since the top management hoped that the company would be able to complete the ERP implementation in a short period of time, they decided to bring in outside consultants to help achieve this.

After discussing the details of the ERP implementation with the consultants, two main objectives were set: greater data consistency, and the construction of new and standardized procedures. Among the various ERP system modules, the company decided to focus first on materials, finance, and marketing. The firm’s internal processes were modified based on these priorities, and its external processes were also integrated with the warehousing systems of the cooperating IC manufacturers. For educational training, the human resources department selected “seed” employees before the implementation, and these then assisted other users in their departments, thus promoting Modiotek’s organizational-learning capability, a key part of our model. With the senior managers’ supervision and support, the ERP project was completed on time, and the company was, thus, better able to develop its ISO-based business processes and refocus on R&D and marketing management.

4.4 Description of the stages We assessed the barriers and success factors of ERP implementation for Modiotek. The statistical measurements were based on a seven-point Likert scale, ranking from 1 – “strongly disagree” to 7 – “strongly agree”. In total, 11 important members of implementation team from different departments were queried, and the data

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were analysed to validate the reliability of the barriers and success factors, as listed in Table II. In addition, these members were also interviewed to validate the feasibility and legitimacy of the proposed model, as shown in Table III.

4.4.1 Stage 1: establishment of the objectives of the implementation. The statistical results show that the employees agreed that it is necessary to identify operational goals and the overall objectives of the information system (Items A and B), and these clear objectives constitute one of the ERP success factors (Factor 1). However, based on Barrier 1, the discussion and identification of the objectives requires a long time, and all divisions were required to get involved and work to achieve a consensus about the objectives (Barrier 3). In addition, the workload of the information personnel is extraordinarily heavy, and in many cases companies lacks the medium- and long-term planning needed for their information systems (Barrier 2). Therefore, it is recommended that information managers should make efforts to plan future system development as early as possible.

4.4.2 Stage 2: assessment of the available resources and scope of the implementation. The success factors for ERP implementations are to identify the required resources and to modify the objectives so as to implement the ERP on time (Factors 2-4). Accordingly, Stage 2 is quite important (Items C-E). Evaluating the technological, human, and business resources enables the staff to analyse the possible problems that may arise during the ERP implementation, and clarify the related responsibilities. The respondents from the case study agreed with this point (Items F and G). This suggests that supervisors should strive to understand the resources that are available and needed, and help to decide the goals and the assignment of duties related to the implementation of ERP:

• Technological resources: the case company defined the scope of these as the three modules of material, finance, and marketing of the SAP R3.

• Human resources: the information personnel were overworked at the company, and thus, the firm hired external consultants. In order to enhance the self- management capabilities of the internal information personnel, the consultants were asked to train them, and thus, leave behind important expertise in the company for future ERP-related work.

Description Mean value

Barriers Barrier 1 During the ERP implementation, a long time is needed for the discussion of

the objectives and coordination 6.27 Barrier 2 At the early stage, the company lacks medium- and long-term planning for

its information system 4.50 Barrier 3 During the ERP implementation, the employees feel stress at work 5.73 Barrier 4 After the ERP implementation, the users find that the system operation

does not match their routine processes 5.36

Success factors Factor 1 During the ERP implementation, the objectives of the ERP system are

identified 5.55 Factor 2 During the ERP implementation, technology resources are identified 5.18 Factor 3 During the ERP implementation, the human resources are identified 5.09 Factor 4 During the ERP implementation, the business resources (financial support)

of the project are identified 4.91 Factor 5 After the ERP implementation, staff quickly learn how to use the system 5.27

Table II. Implement barriers and success factors

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• Business resources: the required expenditure on ERP modules is significant, but the financial support available for implementation of the project was very limited, and thus, only three modules were adopted and eventually completed after implementation.

4.4.3 Stage 3: process redesign/integration and organizational learning. • Coordination and integration

One critical task for an ERP project is to improve the communication and coordination between departments. This view was supported by the employees of the firm (Item H), who stated that thorough and in-depth discussions were required, because conflicts may arise during the implementation (Barrier 1). Therefore, the employees agreed that

Item Description Mean value

Stage 1 A During the ERP implementation, it is necessary to construct operational

objectives 6.36 B During the ERP implementation, it is necessary to construct the overall

objectives of the information system 6.36

Stage 2 C During the ERP implementation, it is necessary to identify the technology

resources 6.09 D During ERP implementation, it is necessary to identify the human resources 5.36 E During the ERP implementation, it is necessary to identify the business

resources (financial support) 5.27 F The technology, human, and business resources help clarify the issues that

arise during the ERP implementation 5.64 G The technology, human, and business resources help find solutions to

problems 5.55

Stage 3 H During the ERP implementation, the integration of communication and

coordination is important 6.55 I Senior managers should actively support the coordination efforts 6.88 J During the ERP implementation, it is important to practice organizational

learning 5.55 K Staff who are familiar with the business process serve as seed employees,

and these can be more effective than the use of a learning system 6.00 L Staff who are familiar with the information system serve as seed employees,

and these can be more effective than the use of a learning system 5.64

Stage 4 M Generally speaking, the ERP implementation of the company is successful 5.91

Stage 5 N The evaluation of the ERP’s intangible performance is more important than

that of its tangible performance 4.82 O The ERP’s system, integration is the most significant part of intangible

performance 5.91 P The ERP saves operational time and cost, which is the most significant part

of tangible performance 6.18 Q In future planning, the ERP system should be regarded as one of the firm’s

important information technology resources 6.36

Table III. Statistical results of

different stages

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senior managers should actively support the project during the related meetings (Item I), as this can help to resolve conflicts quickly:

• Organizational learning

According to the information from the returned questionnaires, organizational learning is another critical factor for successful implementation of ERP (Item J). When this company implemented the ERP, they also included an organizational-learning programme, and every department selected seed employees to learn how to use the system, following the method suggested in this study. The results indicate that those staff members who are most familiar with the enterprise’s processes should be chosen first as the “seed” employees (Mean: Item KWItem L). As the seed employees have personally participated in the project, they usually feel more responsible and are willing to teach and share their knowledge with others (Factor 5), which can reduce the workload of the information personnel with regard to training.

4.4.4 Stage 4: system implementation. The ERP project includes programme design and system testing, and in this firm, these were implemented and monitored by professional information personnel from both inside and outside the company. Thus, the results of the technical evaluation were clear, and the development of the system was less difficult. Based on the results of the survey, members from the different departments all agreed that the implementation of ERP was successful (Item M).

4.4.5 Stage 5: performance measurement and evaluation. Regarding tangible benefits, the case company was now able to save considerable time and money, which significantly improved the performance of the firm (Item P). However, the employees also agreed that the intangible benefits are more important than the tangible ones (Item N). Before the use of ERP, the exchange of information with business partners was inconsistent and required a lot of time. With successful ERP, data were transferred more quickly and accurately, and this was the most significant intangible benefit of the project (Item O). Based on the interviews about coordination integration and organizational learning, the specific, intangible results are presented in Table IV.

Regarding the intangible benefits of organizational learning, most employees considered that they could easily learn to use the information system (Factor 5). However, regarding the material modules, they still had some difficulties with their routine operations (Barrier 4). Based on these results, it is clear that the requirements for the material modules are more complicated than first thought, and thus they still need further modification.

Status

Coordination and integration Operational information is now based on the ERP system, and errors are reduced Information about the material modules and warehousing is exchanged among partners The communication among partners is precise and consistent, so the company can respond to demands immediately

Organizational learning The seed employees create a positive organizational atmosphere and resistance is rare Employees who are not familiar with the ERP modules learn to use them quickly

Table IV. Intangible results of integration and learning after ERP implementation

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Finally, all the respondents agreed that the ERP system is a very important information technology (IT) resource (Item Q). In addition, the information supervisors are now planning for future information systems, and have three main targets: improvement of the original ERP system, an R&D system, and a workflow system. Efforts in these areas can help to improve the current situation and avoid overloading the staff. After evaluating the outcome of the implementation of ERP, the company decided to invest more resources in the maintenance of the system in order to enhance the firm’s self-management capabilities.

5. Critical issues of an ERP implementation After the implementation of ERP, the performance of the company improved significantly. Some insights from the in-depth interviews with staff are presented, as follows.

First of all, the reliability of resources is an important issue. The purpose of confirming the scope of resources is to identify, adopt, and allocate resources in the most appropriate fashion. However, for most decision-making cases, only the resources with the required capabilities are selected, and thus the implementation may not be carried out as expected. For example, projects are usually executed by managers who have the required capabilities, but this does not mean that they know how to use financial resources. Therefore, even though a project may be finished on time, significant amounts of money may be wasted. Thus, it is thus important to carefully select the team members for an ERP project, as this can reduce conflicts and complaints. The reliability of resources should be valued more highly than their capabilities; reliability refers to the ability of a resource to achieve predictable results in every task, and to work well with other key factors. However, current definitions of dynamic capabilities do not include reliability (Teece et al., 1997), and thus, efforts should be made to integrate this concept into dynamic capabilities theory.

Second, the employees who participate in the ERP project should not be given too many additional duties. This is because the workload associated with the implementation of ERP is rather heavy, particularly for the information system personnel, who need to focus clearly on the task at hand. Therefore, before implementing a large-scale ERP project, it is first necessary to evaluate the employees’ workloads. Enough employees should be hired before the project starts in order to avoid increasing work-related stress, as this will enable staff to concentrate on their work and produce results that are more reliable.

For the company in the case study, most of the employees involved in the project were professional R&D personnel, with duties that require the capabilities of self- learning and cooperation within the organization, and thus, these staff are used to learning new things. In addition to the seed members, others employees were also very interested in understanding and using the ERP system. The organizational atmosphere at the company is very positive, and this is an important competitive advantage for an IC design company.

Fourth, although internal information personnel and external software companies cooperate to build enterprise information systems, the main professional work is still provided by software companies. In this company, IT employees work very hard, but building a complex information system and business process for an enterprise remains a daunting challenge and employees need to understand all of the concepts in a short period of time. This can cause considerable stress, which will affect other departments.

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Thus, to ensure that employees are able to learn and understand the necessary ERP skills, time for training must be planned and allocated. There are many customized commercial software enterprise information systems, but the expected results have not been achieved in many implementations. Some companies do not want to increase the cost of implementation of information systems and so they give the IT staff the responsibility; this carries a high risk, and has led to failure in the implementation of information systems. While employees may have the necessary IT skills, they still require time to learn new concepts that will provide effective maintenance of the new systems operations and improve their quality. A concern with rapid implementation of information systems is the lack of improvement in system quality in the post- implementation period. Ram et al. (2013) points out that enterprises should input resources continually and robustly in the post-implementation period in order to reduce the risk of failure. In summary, regardless of which enterprise information system is implemented, attention must be paid to maintaining adequate IT staff, understanding the abilities of personnel, adjusting company attitude, setting reasonable workload for personnel, maintaining high-personnel loyalty, and so on, in order to ensure the organization’s stability and to maintain normal operation of the company’s information systems.

To date, the company in the case study has not encountered any significant barriers regarding its implementation and use of the ERP system, and thus, the system has improved its performance. Specifically, the relationships it has with its partners are closer, and the information personnel have a higher level of expertise. In addition, the initial ROI is difficult to estimate. The reason that this company implemented ERP is to improve the operating performance. Therefore, this company did not pay more attention on ROI. But there are many improvements in operating efficiency and satisfactions were being transferred into tangible benefits. The maximum performance is to save one-fourth operation time. Comparing to the previous work, employees spend less time in operation management and reduction of operating costs, information data are accurate and consistent as well. However, many enterprises have found that their ERP systems do not function as well as expected, and this is often because they did not identify their objectives at the beginning of the process effectively, or did not assess the required resources carefully. Information supervisors and stakeholders should evaluate the resources that are available and needed in order to avoid inappropriate project proposals. As an information system supervisor of the company noted, “If we had implemented the ERP system and other systems at the same time, we would not have had the system online on time”.

6. Conclusions, limitations, and future work This study developed an implementation model for ERP based on dynamic capabilities theory. Of the five stages in this model, Stage 3, which describes the capabilities of coordination, integration, and organizational learning are the most critical during an implementation of ERP. This model can serve as a guideline for enterprises interested in implementing ERP. The academic contributions of this work are summarized as follows. First, this study is based on dynamic capabilities theory, and therefore, expands the breadth of the research of IS implementations. Second, we have illustrated that when integrating and allocating resources, the perspective of dynamic capabilities should be expanded to consider the characteristic of reliability, instead of focusing only on the firm’s capabilities and functions. The findings of this work offer a new direction for future studies that aim to develop dynamic capabilities theory.

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In view of the limited resources available, this study is subject to certain restrictions. First, the study only observes a single company as a sample case. In this study, the sample case is an IC design company, a fairly typical example of companies that rely on IT services and would benefit from a dynamic ERP system. However, due to industries, firm size and culture differences, it is difficult to make generalized outcome. Second, previous studies provide a variety of implementation models for ERP, actions adopted during the implementation process, and in-depth interviews. The use of in-depth interviews may result in bias on the part of the interviewer, and may not always be reliable. In this study, in addition to interviews, we used a structured questionnaire to investigate the users’ subjective and perceived experiences during a project; thus, this survey method avoids bias that may be introduced by our interviewer’ past experiences and backgrounds. Finally, the study recommends that future research be carried out on dynamic capabilities. The dynamic capabilities theory is a useful method of analysis in strategic management and can be applied to different information systems for enterprises, such as e-SCM and e-CRM. In addition, the reliability of various resources (e.g. personnel, financial) is of critical importance, and in the future, academic work should explore an effective way to measure reliability, based on the type of resource under consideration.

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About the authors Dr Tsung-Sheng Chang is an Adjunct Researcher of Department of Marketing and Distribution Management at the National Kaohsiung First University of Science and Technology. He holds a PhD of the Department of Information Management, National Chung Cheng University, Taiwan, ROC. His current research interests are in the areas of e-business, infotainment system and behaviour, information management issue, and IT applicability. His articles appeared in International Journal of Electronic Business Management, Production Planning & Control, and other journals.

Hsin-Pin Fu currently serves as a Distinguished Professor of Department of Marketing and Distribution Management at the National Kaohsiung First University of Science and Technology. He holds a PhD from the Institute of Industrial Engineering, National Chiao Tung University, Taiwan. His research interests are in electronic business and operation management in industrial applications. Fu has published over 50 articles in international journals. Professor Hsin-Pin Fu is the corresponding author and can be contacted at: [email protected]

Cheng-Yuan Ku serves as a Professor of Department of Information Management and Finance at the National Chiao Tung University, Hsin-Chu City, Taiwan, ROC. He holds a PhD from the Institute of Electric Engineering & Information Science, Northwestern University, USA. His research interests are in information network, dynamic programming, stochastic process, information security. Ku has published over 50 articles in international journals.

For instructions on how to order reprints of this article, please visit our website: www.emeraldgrouppublishing.com/licensing/reprints.htm Or contact us for further details: [email protected]

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1. Rodney McAdam, Umit Bititci, Brendan Galbraith. 2017. Technology alignment and business strategy: a performance measurement and Dynamic Capability perspective. International Journal of Production Research 55:23, 7168-7186. [Crossref]

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