Enterprise Resource Planning (ERP) Implementation in a Sub-Saharan African Nation (SSA): An Empirical Test of Competing Models & Theories
In this study, the researcher developed a modified research model to examine the antecedents and impact of extent of Enterprise Resource Planning (ERP) systems implementation on Process Management Capability, and its subsequent impact on firm performance. The existing model was extended by the addition of the following constructs: Ethical Factors, Data Culture, Organizational Integration, and Organizational Performance. In exploring ERP implementation in Ghana, a Sub-Saharan African (SSA) nation, two competing theories, the Institutional theory and the Panoptic theory, were tested using empirical data collected from a survey involving 115 respondents from organizations in Ghana that had implemented ERP systems. The data was analyzed using structural equation modeling-partial least squares.
The findings indicate that the Panoptic theory explains the relationships between the constructs better and confirms the positive impact of higher extent of ERP implementation on process management capabilities. Theoretical implications of the study include (1) the emergence of the Panoptic theory as a strong predictor of ERP implementation in SSA (2) the mediating effect of the Ethical factors and Organizational Integration (3) the panoptic theory has more predictability and can be more easily generalized than institutional theory, allowing the research to have a more global impact beyond SSA and (4) Contextual factors such as industry type, employee size, and ERP type influence ERP implementations in SSA. Practical Implications are: (1) ERP systems create information visibility which checks the ethical behaviour of employees and causes them to behave in a socially responsible manner (2) Organizations can achieve greater organizational integration by increasing their extent of ERP implementation and (3) Governments and regulatory bodies must institute policies and protocols that encourage ERP adoption.