ERP IMPLEMENTATION BARRIERS FACED BY SMES IN THE

CONSTRUCTION INDUSTRY IN DUBAI

A study submitted in partial fulfilment

of the requirements for the degree of

Master of Science in Information Management

at

THE UNIVERSITY OF SHEFFIELD

by

PRASHANTH JAYAPRAKASH

(Reg. No. 100140992)

September 2011

Acknowledgement

I owe my deepest gratitude to my supervisor, Dr. Alex Peng, whose supervision,

encouragement and support throughout the study enabled me to develop an

understanding of the subject. It would have been next to impossible to write this

dissertation without his help and guidance.

I am grateful to my friend, Gheevarghese, for making the arrangements at National

Group, Dubai for conducting this study and for his moral support.

Lastly, I offer my sincere regards to all those who supported me in any respect during

the completion of this work.

Prashanth Jayaprakash

Abstract

Background. Literature reveals that there adoption of ERP systems in the

construction sector is relatively low. There is a serious lack of research about ERP

implementation barriers faced by SMEs in the construction sector in Dubai.

Aims. The study aimed to identify and explore the causes and consequences of the

critical barriers in implementing ERP systems in SMEs in the construction industry

in Dubai using a case study.

Methods. With the help of a critical literature review, a barrier ontology was built

consisting of twenty one critical barriers under the categories namely organisational

barriers, system barriers and cultural barriers. Based on the barrier ontology, a

questionnaire was sent to all the forty prospective users of ERP systems in the case

company. The top seven barriers were identified based on response to the

questionnaires. Semi-structured interviews were conducted with three managers to

explore the causes and consequences of the identified top seven barriers.

Results. Organisational and System barriers were identified as the major barriers in

implementing ERP systems in SMEs in the construction system in Dubai. The

inability of the ERP systems to suit the requirements of the construction industry

remains a major problem in adopting ERP systems. Moreover, the lack of clear

strategic goals and readiness by the adopting organisation has a negative impact on

the implementation of ERP systems in SMEs in the construction sector.

Conclusion. It is concluded that organisations need to have a clear vision and plan

about the ERP implementation before adopting ERP systems. Further extensive

research is needed in order to generalise the results more correctly.

Word Count: 14275

1

Table of Contents List of figures .......................................................................................................................... 5

List of tables ........................................................................................................................... 6

1. Introduction .................................................................................................................... 7

1.1. Research context ..................................................................................................... 7

1.2. Research Question ................................................................................................... 9

1.3. Research Objectives ................................................................................................ 9

1.4. Methodology............................................................................................................ 9

1.5. About the case company ....................................................................................... 10

1.6. Structure of the dissertation .................................................................................. 11

2. Literature review on ERP Systems ............................................................................. 13

2.1. Introduction ........................................................................................................... 13

2.2. Benefits of ERP systems ....................................................................................... 13

2.3. ERP Implementation – Challenges and Critical Factors .................................... 14

2.4. ERP systems and SMEs ........................................................................................ 17

2.5. ERP systems in construction industry ................................................................. 18

2.6. Conclusion ............................................................................................................. 20

3. Barriers in implementing ERP systems ...................................................................... 21

3.1. Introduction ........................................................................................................... 21

3.2. Organisational Barriers ......................................................................................... 22

3.2.1. Lack of clear strategic goals ......................................................................... 22

3.2.2. Lack of commitment by top management ................................................... 22

3.2.3. Inadequate change management effort......................................................... 23

3.2.4. Conflict of interest among different departments or functional units ........ 23

2

3.2.5. Lack of IT expertise ...................................................................................... 23

3.2.6. Unavailability of funds .................................................................................. 24

3.2.7. Lack of user involvement .............................................................................. 24

3.2.8. Inadequate user training ................................................................................ 24

3.2.9. Fear of loss of power and loss of job ........................................................... 25

3.2.10. Low skilled staff ........................................................................................ 25

3.2.11. Reluctance to adopt technology ................................................................ 26

3.3. System Barriers ..................................................................................................... 26

3.3.1. Non-conformance of the system to organisational needs ........................... 26

3.3.2. Insufficient support from the consultant ...................................................... 26

3.3.3. Insufficient support and services from system vendor ................................ 27

3.3.4. Need for extensive customisation of the system to suit business needs .... 27

3.3.5. Long implementation time ............................................................................ 27

3.3.6. Need for expensive hardware/networking equipment ................................. 28

3.4. Cultural Barriers .................................................................................................... 28

3.4.1. Power centralisation and centralised decision making due to high power distance 28

3.4.2. Not reporting problems/faults because of high power distance ................. 28

3.4.3. Effect of personal relationships to ensure success in business ................... 29

3.4.4. User resistance in using ERP because of cultural misfit between Western and Arabic world .......................................................................................................... 29

3.5. Conclusion ............................................................................................................. 29

4. Research Methodology ................................................................................................ 32

4.1. Introduction ........................................................................................................... 32

4.2. Research Strategy .................................................................................................. 32

3

4.3. Research Procedure ............................................................................................... 33

4.3.1. Quantitative Research ................................................................................... 33

4.3.2. Qualitative Research ..................................................................................... 33

4.4. Data Collection ...................................................................................................... 34

4.4.1. Questionnaire ................................................................................................. 34

4.4.2. Semi-structured Interview ............................................................................. 35

4.5. Data Analysis ........................................................................................................ 36

4.5.1. Quantitative data analysis ............................................................................. 36

4.5.2. Qualitative data analysis ............................................................................... 36

4.6. Conclusion ............................................................................................................. 37

5. Questionnaire Findings ................................................................................................ 38

5.1. Questionnaire Design ............................................................................................ 38

5.2. Questionnaire Administration .............................................................................. 38

5.3. Findings ................................................................................................................. 39

5.3.1. Gender ............................................................................................................ 39

5.3.2. Age group ....................................................................................................... 40

5.3.3. Education level .............................................................................................. 41

5.3.4. Computer skill ............................................................................................... 42

5.3.5. Benefits of ERP Systems .............................................................................. 43

5.3.6. Major barriers in implementing ERP systems ............................................. 44

5.4. Top seven major barriers ...................................................................................... 46

5.5. Conclusion ............................................................................................................. 48

6. Interview Findings ....................................................................................................... 49

6.1. Interview Design ................................................................................................... 49

4

6.2. Interview Administration ...................................................................................... 49

6.3. Analysis ................................................................................................................. 49

6.4. Findings ................................................................................................................. 50

6.4.1. Benefits of ERP systems ............................................................................... 50

6.4.2. Top seven barriers in implementing ERP systems ...................................... 51

6.5. Discussion and Conclusion ................................................................................... 57

7. Conclusion and Recommendations ............................................................................. 60

7.1. Conclusion ............................................................................................................. 60

7.2. Recommendations ................................................................................................. 61

7.3. Research Limitations ............................................................................................ 62

7.4. Further Research ................................................................................................... 62

References ............................................................................................................................. 63

Appendix 1 - Questionnaire ................................................................................................. 66

Appendix II – Interview Questions ..................................................................................... 68

IT Manager ................................................................................................................... 68

HR Manager ................................................................................................................. 69

Sales Manager .............................................................................................................. 70

5

List of figures

1. Structure of dissertation 12

2. Barrier ontology 31

3. Gender chart 39

4. Age group 40

5. Education level 41

6. Computer skills 42

7. Conceptual map of interview data 59

6

List of tables

1. Benefits of ERP 43

2. Organisational barriers 44

3. System barriers 45

4. Cultural barriers 46

5. Top seven barriers 47

7

1. Introduction

1.1. Research context Enterprise Resource Planning (ERP) system is a business management system that

integrates a set of modular software applications which can be used to manage and

integrate all business functions within an organisation (Shehab et al., 2004). It

includes tools for financial and cost accounting, sales and distribution, materials

management, human resource, production planning and computer integrated

manufacturing, supply chain and customer information. ERP systems provide

information to those who need it when they need it. The benefits of a properly

selected and implemented ERP system can be considerable, e.g. reduction in

production time and cost, generation of more accurate demand forecasts and

enhanced customer service (Ragowsky and Somers, 2002).

ERP systems have traditionally been applied in capital intensive manufacturing

companies. However, ERP systems expanded beyond the manufacturing sector and

have been largely adopted by companies in service industry (Shehab et al., 2004). It

is generally considered that ERPs are for large firms and smaller firms have to adjust

according to the practices and software adopted by the large firms (Rao, 2000).

Small to Medium sized Enterprises (SMEs) have found difficulties in surviving with

the opening up of the economy. They have to leverage IT to stay competitive and

customer oriented. ERP is often considered the answer for the survival of SMEs

(Shehab et al., 2004).

It is pointed out that the success rate of ERP implementation in SMEs is very low.

This is mainly due to inefficiency and barriers that exist in these firms such as

shortage of resources, insufficient IS expertise, poor understanding about ERP,

irregular business processes and conflicting roles (Deep et al., 2008). It is, therefore,

crucial for SMEs to standardise existing business processes and organisational

8

structure in order to align with the new ERP environment (Newman and Zhao,

2008). It is argued that the improvements in business process should actually be

performed well before the start of ERP implementation (Lee et al., 2003). Deep et al.

(2008) highlight that inefficiencies inherent in SMEs will not only affect the

efficiency of ERP systems but may also result in the failure of ERP implementations

in SMEs. Christofi et al. (2009) emphasise that it is vital for SMEs to identify and

improve any inherent deficiencies existing in their business during ERP preparation

or pre-implementation in order to successfully complete the implementation on time

and budget.

Construction companies face enormous challenges of managing project schedules,

budgets, safety and quality to meet the requirements (Chung et al., 2008). The

construction industry is considered to be traditional and is hesitant in adopting new

technologies (Bjork, cited in Kang et al., 2008: 852). Construction companies have

been implementing ERP systems over the last few years to integrate their business

processes and resources, particularly those related to project accounting procedures

and practices (Chung et al., 2008). It can be observed that the benefits of technology

are experienced more by smaller companies rather than larger firms. Even though

many construction firms have identified the benefits of ERP systems, they hesitate to

implement these systems due to high costs, uncertainty and risks associated with it

(Kang et al., 2008).

In the recent years, Dubai has emerged as a global city and a business hub. Even

though Dubai’s economy was built on oil industry, real estate has become one of the

main sources of revenue for Dubai. A large number of construction works is going

on in and around Dubai. It has recently attracted much attention through many

pioneering large construction projects. The construction boom in Dubai created a

plethora of SMEs in the construction industry.

9

There is a serious lack of research in the construction industry regarding ERP

implementation barriers in SMEs. SMEs in the construction industry have limited

guidance to adopt and successfully implement ERP systems. Moreover, less study

has been reported in the context of Dubai. This study will help in identifying the

major obstacles faced during the implementation of ERPs in SMEs in the

construction industry in the context of Dubai.

1.2. Research Question A. What are the barriers faced by SMEs in the construction industry in Dubai in

implementing ERP systems?

B. What are the causes of these ERP implementation barriers and its consequences?

1.3. Research Objectives (i) To do a literature review on ERP systems in general

(ii) To do a literature review on ERP implementation barriers in SMEs in the

construction industry

(iii)To identify the benefits of using ERP systems by SMEs in the construction

industry

(iv) To investigate the barriers faced by SMEs in the construction industry in Dubai

in implementing ERP systems using a case study approach.

(v) To explore the causes of the ERP implementation barriers and its consequences

1.4. Methodology

This research will be carried out using a predominantly deductive theory. A case

study design will be used as the framework for collecting and analysing data. Firstly,

a barrier ontology will be built after reviewing the existing literature. Based on this

ontology, a questionnaire will be developed. The questionnaire will then be sent to

all the prospective users of the ERP software (approximately forty users) to identify

the main barriers in implementing the ERP system. A frequency table of the

responses will be formed and the mean of all the critical barriers will be calculated,

10

to identify the top seven critical barriers. Subsequently, based on the top seven

critical barriers, a semi-structured interview will be conducted with some expert

users of the system (around five users), to explore the causes and consequences of

each of the top seven barriers. Thematic analysis will be used to analyse the

interview data. Multiple methods of data collection provide different perspectives

about the same topic. It allows the findings from one method to be checked against

the findings from another and enhances the validity of data (Denscombe. 1998). The

case will then be discussed on the basis of the findings from both the questionnaire

and interviews. Finally, recommendations will be made based on these findings and

also the areas for further research will be identified.

1.5. About the case company National Group of Companies is one of the leading and respected group of

companies in the United Arab Emirates based in Dubai. The group consists of the

following five companies namely:

i. National Dewatering & Land Draining Co. (LLC)

ii. National Piling

iii. National Pump Industry Co. (LLC)

iv. National Engineering Contracting

v. First National Heavy Equipments Rental (LLC)

National Group caters the diverse needs of the construction industry in and around

Dubai by providing innovative solutions and excellent services. It plays a major role

in the development of infrastructure products. National Group of Companies has a

very good reputation in the construction industry and has successfully executed over

a thousand projects.

National Group of Companies was selected as the case company to conduct this

study because of the ongoing ERP implementation project at three of its member

companies viz National Dewatering & Land Draining Co. (LLC), National Piling

11

and National Engineering Contracting. The implementation is being managed by one

of the leading software vendors in the Middle East with its base in India. A total of

seven modules – Sales, Procurement, Inventory, Finance, HRMS, Workshop and

Maintenance and Job contracting - are being implemented as part of the ERP

implementation project. Out of the seven modules, Job contracting module is

different for all the three companies where the ERP is being implemented.

National Dewatering and Land Draining Co. provides dewatering equipment and

services for land drainage to its wide clientele across diverse construction segments.

The company’s innovative solution plays a vital role in the construction sector thus

plays a major role in the development of infrastructure project.

National Piling is one of the key players in the field of geotechnical and foundation

engineering. It operates in association with National Dewatering and Land Draining

Co. With its expertise, National Piling carries out small to large projects to the

satisfaction of its clients.

National Engineering Contracting is one of the multi faceted engineering,

contracting and construction companies based in Dubai. The company has expertise

in project management, engineering, procurement and construction and its

operations spread across all the corners of United Arab Emirates. It provides a

complete solution to all types of construction requirements.

1.6. Structure of the dissertation This dissertation is structured as follows. The next two chapters cover literature

review about ERP systems in general and ERP implementation barriers in SMEs in

the construction industry respectively. The fourth chapter is research methodology

which discusses about research design and methods to collect and analyse data. The

next chapter discusses the findings of the questionnaire in detail. The sixth chapter

discusses the findings of the interview. Finally, the seventh chapter contains

12

conclusion and recommendations. The structure is diagrammatically shown in

Figure 1.

Figure 1: Structure of dissertation

1. Introduction

2. Literature review – ERP systems in general

3. Literature review – ERP implementation barriers

4. Research Methodology

5. Questionnaire findings

6. Interview findings

7. Conclusion and Recommendations

13

2. Literature review on ERP Systems

2.1. Introduction ERP systems are software systems which include numerous products to support

every day business operations and decision making. It serves many industries and

various functional areas in an integrated way and attempts to automate any data

oriented management processes (Hitt et al., 2002). Mabert et el. (2003:302) define

ERP systems as “enterprise-wide online interactive systems that support cross-

functional processes using a common database.”. ERP attempts to assimilate

suppliers and customers with the manufacturing environment of the organisation.

The multitude of interconnections makes sure that information in one part of the

business is available to any other parts. It is thus possible to view the business as a

whole and helps people analyse data, avoid redundant actions and make better

decisions (Gupta, 2000). ERP systems are process oriented IT tools for improving

business performance (Al-Mashari et al., 2003). It is believed that “ERP is the finest

expression of the inseparability of business and information technology.” (Gupta,

2000:114).

2.2. Benefits of ERP systems ERP adopters differentiate themselves from competitors because of both the

productivity benefits accruing from ERP usage and the hidden barrier to entry

produced by the successful ERP implementation. The financial markets constantly

reward ERP adopters with higher market valuation both during and after

implementation (Hitt et al., 2002). Umble et al. (2003) state that a successful ERP

implementation can considerably cut the operating costs, predict demand forecasts

more accurately, speed production cycles and significantly improve customer

service. The two major benefits ERP provides are (i) an integrated enterprise view of

the business that incorporates all departments and functions, (ii) an enterprise-wide

database to enter, record, process, monitor and report all business transactions

14

(Umble et al., 2003). Shang and Seddon (cited in Al-Mashari et al., 2003) classify

ERP benefits into five categories as below:

(i) Operational – relates to reduction in cost, reduction in cycle time, improvement

in productivity, improvement in quality and improvement in customer services.

(ii) Managerial – relates to better management of resources, better decision making

and planning and improvement in performance.

(iii)Strategic – supports business growth, supports business alliance, builds business

innovations, builds cost leadership, generates product differentiation and builds

external linkages

(iv) IT infrastructure – builds business flexibility, reduces IT cost and increased IT

infrastructure capability

(v) Organisational – supports organisational changes, facilitates business learning,

empower and build common values

2.3. ERP Implementation – Challenges and Critical Factors ERP implementation is usually a formidable challenge and a typical implementation

may last from one to five years (Mabert et al., 2003) and it is often loaded with

business and technical risks (Hitt et al., 2002). Despite the benefits provided by

ERP systems in managing and integrating all business processes of an organisation,

it often costs a huge amount to purchase, consumes significant time to install and

more importantly can result in disturbing organisational changes (Volkoff, cited in

Al-Mashari et al., 2003). It also creates extensive requirements for training, dips in

productivity levels and mishandled customer orders that can damage the bottom line

at least in the short term (Stein, cited in Umble et al., 2003). ERP systems often

require changes to processes throughout the organisation for their successful

implementation (Mabert et al., 2003). The difficulty in implementing an ERP system

is mainly due to the pervasiveness of changes associated with ERP (Hitt et al.,

2002). Even though some companies have benefited significantly from ERP

implementation, others have to scale back their projects and accept nominal gains or

even abandon the implementation (Soh et al., 2000). Since ERP projects involve

15

investment in terms of both resources and resulting organisational changes,

companies are very keen about the implementation times and budgets. They often go

to great lengths to set sensible timelines and budgets (Mabert et al., 2003).

Even though most of the ERP implementation projects are unique in many ways,

some of the fundamental strategies, activities and issues are common to all of them,

irrespective of the package implemented. The strategy used for implementation is a

prime factor in determining the outcome of the ERP project regardless of the type of

the system implemented. Organisations that are on time and on or under budget do a

better job in planning their ERP project (Mabert et al., 2003). ERP systems impose

its own logic on a company’s strategy, organisation and culture and therefore its

selection should be conducted with utmost care. The company which implements

ERP should mostly accept the supplier’s assumption about the company and change

existing processes to conform to them. The company should recognise its crucial

business needs and the required features and characteristics of the system (Umble et

al., 2003).

Umble et al. (2003) have identified the following factors as critical to the successful

implementation of ERP:

(i) Clear understanding of strategic goals – It is important that the organisation

should clearly define why the ERP system is being implemented and what crucial

business requirements the system will address.

(ii) Commitment by top management – Strong leadership, commitment and

participation by top management are crucial for the successful implementation of

ERP systems.

(iii)Excellent project management – Excellent project management is essential for a

successful ERP implementation. This includes a clear definition of objectives,

development of both a work plan and a resource plan and careful tracking of project

progress.

16

(iv) Organisational change management – ERP, by its very nature, imposes major

changes on the structure and processes of most companies. The resulting changes

significantly affect organisational structure, policies, processes and employees.

Therefore, it is essential to utilise proper change management techniques to deal

with the changes created by the implementation.

(v) A good implementation team – The implementation team is vital since it is

responsible for creating the overall schedule of the entire project, assigning

responsibilities for various activities and determining the due dates. The team should

comprise of excellent resources who are chosen for their skills, past

accomplishments, reputation and flexibility.

(vi) Extensive education and training – The end users should be trained properly to

earn the full benefits of ERP systems. For the training to be successful, it should

start early, preferably well before the implementation begins.

Based on the set of characteristics relative to their nature and timing during the

implementation process, Mabert et al. (2003:304) categorised them into three

namely “planning effort”, “implementation decisions” and “implementation

management”. Planning efforts relate to all factors that need to be dealt with before

the start of the project. These include top management support and involvement in

the planning of the project, formation of the implementation team and addressing

main technology issues. Implementation decisions relate to strategic options on how

to carry on the implementation process. These include whether to implement the

whole system in one stretch or in a phased manner and the degree of customisation

and reengineering. Implementation management relates to all actions during the

implementation process.

Gupta (2000) states that the main obstacle faced by all companies in implementing

ERP systems are the resistance to change. It is either because the employees are

unwilling to learn new techniques or the IT department is reluctant to change

because of its attachment to the product. With top management support, appropriate

17

implementation team and involvement of users in the implementation process can

alleviate resistance. Cost and time overruns is another persistent problem with ERP

implementation (Gupta, 2000). The amount of modifications to the system badly

affects both implementation times and cost (Mabert et al., 2003). Another problem

which is common in all implementation is poor end user training. The user training

should not only aim at educating the users as to how to use the system but also to

help them understand the business processes behind the ERP applications (Gupta,

2000). Another key issue that arises during ERP implementation is performance.

2.4. ERP systems and SMEs Most of the big firms confine their business with only those companies that have

implemented the same ERP software as the big firms. It is generally considered that

ERPs are for large firms and smaller firms have to adjust according to the practices

and software adopted by the large firms. ERP systems are expensive which makes it

unaffordable for SMEs. This does not imply that SMEs do not require an ERP

system. SMEs lack money power and business resilience of large firms and thus

requires greater need for information integration (Rao, 2000). SMEs select ERP

systems which closely matches the specific functions and processes of their business

in order to easily manage the business, increase operational efficiency and to reduce

cost (Umble et al., 2003). Rao (2000) points out that SMEs should adopt an ERP

system which meets the criteria detailed below:

(i) Affordable – attractive prices including implementation support

(ii) Domain knowledge of suppliers – the supplier should have sufficient knowledge

about the industry

(iii)Local support – support from suppliers in terms of both IT expertise and domain

knowledge is required for effective implementation

(iv) Technically upgradable – supplier should upgrade the product when new

technologies become available in the future

(v) Uses latest technology

18

It is pointed out that the success rate of ERP implementation in SMEs is very low.

This is mainly due to inefficiency and barriers that exist in these firms such as

shortage of resources, insufficient IS expertise, poor understanding about ERP,

irregular business processes and conflicting roles (Deep et al., 2008). It is, therefore,

crucial for SMEs to standardise existing business processes and organisational

structure in order to align with the new ERP environment (Newman and Zhao,

2008). It is argued that the improvements in business process should actually be

performed well before the start of ERP implementation (Lee et al., 2003). Deep et al.

(2008) highlight that inefficiencies inherent in SMEs will not only affect the

efficiency of ERP systems but may also result in the failure of ERP implementations

in SMEs. Christofi et al. (2009) emphasise that it is vital for SMEs to identify and

improve any inherent deficiencies existing in their business during ERP preparation

or pre-implementation in order to successfully complete the implementation on time

and budget. The study conducted by Christofi et al. (2009) reveal that changes are

required not only in business processes but more importantly in people, technology

and organisational policies so as to improve the inefficient business processes. The

study also reveals that SMEs often consider ERPs as an omnipotent solution to all

their problems which may divert the attention from the impacts of existing

organisational issues resulting in the potential failure of ERP.

2.5. ERP systems in construction industry Construction companies face enormous challenges of managing project schedules,

budgets, safety and quality to meet the requirements (Chung et al., 2008). The

construction industry is considered to be traditional and is hesitant in adopting new

technologies (Bjork, cited in Kang et al., 2008: 852). It is widely recognised in

construction industry that human intelligence and experience are the most important

assets for successful business (Shi and Halpin, 2003). The investment in IT in the

construction industry is comparatively lower than other industries and this is

believed to be the reason for poor productivity in the construction industry (Ekstrom

and Bjornsson, cited in cited in Kang et al., 2008: 852). Shi and Halpin (2003) point

19

out that over 90% of construction companies are SMEs and they cannot afford to

spend a fortune to implement ERP systems. Since ERP systems give emphasis to

standardisation and automation, they suit best for standard and repetitive operations

and management processes (Jacobs and Whybark, cited in Shi and Halpin,

2003:219) and do not quite support the needs of construction firms. Construction

companies have been implementing ERP systems over the last few years to integrate

their business processes and resources, particularly those related to project

accounting procedures and practices (Chung et al., 2008). It can be observed that the

benefits of technology are experienced more by smaller companies rather than larger

firms. Even though many construction firms have identified the benefits of ERP

systems, they hesitate to implement these systems due to high costs, uncertainty and

risks associated with it (Kang et al., 2008).

One of the main reasons for construction companies to utilise ERP is to improve its

efficiency and eliminate waste. It is, however, observed that construction companies

have little to direct them in identifying the key success factors (Chung et al., 2008).

From the business point of view, a construction company operates in a different way

from a manufacturing company. The construction business is project oriented.

Moreover, many management processes in the construction industry cannot be

standardised (Shi and Halpin, 2003). The existing ERP systems can hardly meet the

requirement of construction industry as they are developed mainly for manufacturing

companies. Chung et al. (2009:207) highlight that “each construction project is

characterized by a unique set of site conditions, project team, and the temporary

nature of relationships between project stakeholders”. These unique characteristics

of construction firms result in the extensive customisation of ERP software which in

turn increases the challenge in implementing the software (Chung et al., 2009).

It can be observed that many construction firms adopt a “best-of-breed approach” to

implement ERP systems where separate software packages are selected for each

process rather than implementing a full package provided by major ERP vendors

20

(Tatari, cited in Chung et al., 2008:373). Chung et al. (2008:373) point out that the

reason behind adopting this approach is that “construction processes are less

standardized than manufacturing”. Barreiros et al. (2010) reinforce that a good

selection of ERP systems can increase the chances of success in implementing ERP

systems in construction industry. It can be argued that a poor selection of selection

of software will require major changes resulting in resource consumption and makes

it a high risk effort (Barreiros et al., 2010). Moreover, Shi and Halpin (2003) point

out that in order to address the requirements of construction industry, more research

is needed to develop an ERP knowledge base especially for construction industry.

2.6. Conclusion Projects in the past have failed mainly because of lack of focus, lack of proper

funding and minimal business participation (Gupta, 2000). A survey conducted by

Information Week reveals that the failure for IT related projects can be attributed to

poor planning or poor management, change in business goals during the project and

lack of business management support (Umble et al., 2003). An ERP project requires

extensive planning in advance of the implementation, an accelerated implementation

strategy, strong top management support during implementation and keeping the

customers and suppliers informed about the project (Mabert et al., 2003). The

benefits of ERP systems cannot be leveraged without strong coordination of efforts

and goals across business and IT personnel (Willcocks and Sykes, 2000). The

implementation of ERPs in SMEs is problematic because of the inefficient business

processes and internal problems in SMEs. Ignoring these organisational issues

during the ERP preparation stage will not only affect the success of ERP

implementation but also affect the use of the system after it goes live (Christofi et al,

2009). Implementation of ERP systems in constructions firms are challenging as the

ERP systems available on market are intended mainly for manufacturing firms.

Construction industry is project oriented and characterised by non-standard

procedures. This makes it difficult for ERP systems to suit the needs of construction

industry. A detailed literature review of the barriers to ERP implementation in SMEs

is discussed in the next chapter.

21

3. Barriers in implementing ERP systems

3.1. Introduction Implementing an ERP system in an organisation is a huge challenge and a time

consuming process. A study conducted by Mabert et al. (2003) revealed that even

though most of the ERP implementation projects are unique, they still have many

common strategies, activities and underlying issues, regardless of the package being

implemented. Stein (cited in Umble et al., 2003:244) highlights that implementing

an ERP system not only takes a lot of time and money but also brings about

disruptive changes in company’s culture, give rise to extensive training requirements

and even lead to dip in productivity of short term. Moreover, ERP systems require

considerable changes to processes throughout the organisation to ensure its

successful implementation (Mabert et. al, 2003). It is, therefore, obvious that there

are potential barriers in implementing an ERP system in an organisation.

The main objective of this chapter is to identify the potential barriers in

implementing ERP systems in SMEs in the construction industry in Dubai. The

barriers can be classified under the headings namely organisational barriers, system

barriers and cultural barriers. As pointed out by Polikoff et al. (cited in Peng and

Nunes, 2010a:603), “barriers to organisational activities may often exist within the

organisational context”. In view of this, a set of organisational barriers in the context

of SMEs have been looked into. Moreover, a set of barriers may arise because of the

technical limitations and drawback with the ERP system itself. These barriers are

organised under system barriers. Finally, since ERP packages reflect the business

models in western countries, it may give rise to cultural misfits in Asian countries

(Soh et al., 2000). The cultural misfits may give rise to potential barriers and are

discussed under the heading cultural barriers.

22

3.2. Organisational Barriers

3.2.1. Lack of clear strategic goals To implement an ERP system, it is necessary for the key people throughout the

organisation to create a clear and compelling vision about how the organisation

should work so as to “satisfy customers, empower employees, and facilitate

suppliers for the next three to five years.” (Umble et al., 2003:245). The goals,

expectations and deliverables should be clearly defined. Moreover, the organisation

should also carefully define the need for implementing the ERP system and the

crucial business requirements addressed by the system (Umble et al., 2003). A study

conducted by Mabert et al. (2003) revealed that a clear objective has a positive

impact in completing the ERP implementation on time. It is to be noted that an

organisation’s attempt to install a system without setting up clear vision and

understanding of the business needs can end up in a disaster (Davenport, cited in Al-

Mashari et al., 2003:358). Al-Mashari el al. (2003) reinforce that lack of clear

direction and strategic planning makes an ERP implementation suffer a huge failure.

3.2.2. Lack of commitment by top management A successful ERP implementation requires strong leadership, commitment and

involvement by the top management. Inputs from executive level play a crucial role

in analysing and rethinking existing business processes (Umble et al., 2003). Mabert

et al. (2003) points out that the involvement of senior management is required

throughout the project, from the start to completion, to ensure the successful

implementation of ERP systems. Moreover, top management support helps to reduce

resistance by users (Gupta, 2000). Al-Mashari et al. (2003) highlight that leadership

and commitment is the key element of success and is a must for successful and

effective ERP implementation.

23

3.2.3. Inadequate change management effort ERP systems may bring about drastic changes in the way organisations operate. The

structure and processes that exists in most companies do not comply with the

structure, tools and types of information provided by ERP systems (Umble et al.,

2003). Holland and Light (cited in Al-Mahsari et al., 2003:359) point out that

business process redesign is a pre-condition to take full advantage of an ERP system.

Moreover, Mabert et al. (2003) highlights that organisational change should be

developed in advance and continually updated during implementation process for the

successful implementation of ERP systems. It is to be noted that the changes brought

about by the implementation will result in resistance and chaos, if the employees are

not properly prepared for the impending changes. However, organisations can utilise

the opportunities provided by the ERP systems if they employ proper change

management techniques (Umble et al., 2003).

3.2.4. Conflict of interest among different departments or functional units One of the major barriers in introducing Information Systems (in this case ERP) in

an organisation is the lack of collaboration and communication between different

functional units within the organisation (Fletcher and Wright, cited in Peng and

Nunes, 2010a:606). Shanks et al. (cited in Aboelmaged, 2009:324) highlight that the

problem of coordination among different functional areas may lead to the failure of

ERP implementation. Markus (cited in Aboelmaged, 2009:324) points out that the

resistance in cross-functional IS implementation is an outcome of misfit in power

distribution.

3.2.5. Lack of IT expertise One of the main barriers to implement ERP systems in SMEs is insufficient IS/IT

expertise (Deep et al, 2008). It is to be noted that the success of ERP implementation

depends on the collaboration and co-operation between various experts in different

functional units within the company (Peng and Nunes, 2010a). It can, therefore, be

24

considered that lack of IT expertise can be a potential barrier in implementing ERP

systems in SMEs in construction industry in Dubai.

3.2.6. Unavailability of funds Although a range of ERP packages are available in the market especially for SMEs,

they are still expensive. Moreover, over 90% of construction firms are small to

medium sized firms (Shi and Halpin, 2003). It is obvious that the financial resources

of SMEs are limited and that most of the SMEs may find it difficult to afford ERP

systems (Shehab et al., 2004). It can, therefore, be assumed that lack of funds is a

potential barrier in implementing ERP systems.

3.2.7. Lack of user involvement The success of ERP implementation depends on effective teamwork (Rao, 2000). It

requires full support from the users to capture the requirements and map the work

flow correctly. Moreover, inputs from the users help to identify the problems with

the system. It also promotes exchange of information acquired through experience

and gain familiarity with the system (Umble et al., 2003). Gupta (2000) points out

that user involvement helps to reduce the resistance in using the system.

3.2.8. Inadequate user training Education about ERP systems is one of the widely identified success factor as the

understanding and acceptance of users is paramount in implementing ERP (Umble et

al., 2003). Rao (2000:84) underlines that “if people have to have the right attitude,

they must understand what ERP is and also what it is not”. With an ERP

implementation, users need to acquire considerable knowledge to solve the problems

with the structure of the system (Umble et al., 2003). Moreover, if the users do not

receive sufficient training, they may not use it properly and may not help in

improving the system (Wright and Donaldson, cited in Peng and Nunes, 2010a:608).

25

Lack of motivation among employees because of poor performance appraisal

A study conducted by Aboelmaged (2009) has revealed that lack of commitment,

interest and coordination among the employees is one of the major barriers in

implementing ERP systems. Behery and Paton (2008) reinforce that employees have

greater commitment to the organisation when the appraisal process is effective. If

there are no means to motivate the employees to perform well, they would rather

lose interest in their work. Successful ERP implementation requires complete

cooperation from users (Rao, 2000) and lack of motivation among employees can be

considered as a potential barrier to implement it.

3.2.9. Fear of loss of power and loss of job It can be perceived that staff consider information as one of the main signs of power

within the organisation (Damodaran and Olphert, 2000). Since the use of ERP

results in collaboration and information sharing across various functional units, staff

may fear that they may lose their power (Martinsons and Westwood, cited in Peng

and Nunes, 2010a:606). Moreover, ERP systems emphasise automation and it can

eliminate a lot of manual processes resulting in job redundancies (Shehab et al.,

2003). This can give rise to psychological problems in employees and can result in

resistance to use the system (Peng and Nunes, 2010a).

3.2.10. Low skilled staff Low skilled or employees with lower levels of education may find it difficult to use

technologically advanced systems like ERP. Moreover, they may not be willing to

make changes in the way they perform their job (Peng and Nunes, 2010a). Wright

and Donaldson (cited in Peng and Nunes, 2010a:608) highlight that low skilled or ill

trained staff can be a potential barrier to the use of ERP systems.

26

3.2.11. Reluctance to adopt technology The construction industry is considered to be conservative and hesitant in adopting

technology (Bjork, cited in Kang et al., 2008: 852). Moreover, in the construction

industry, it is widely recognised that human intelligence and experience are the key

to business success (Shi and Halpin, 2003). Therefore, it can be considered that

reluctance in adopting technology is a major barrier in implementing ERP systems.

3.3. System Barriers

3.3.1. Non-conformance of the system to organisational needs The ERP systems available in market are mainly developed for manufacturing

industry and it is difficult to meet the requirements of construction industry with

these softwares (Shi and Halpin, 2003). Moreover, construction business is project

oriented (Shi and Halpin, 2003) and each construction project is unique in many

ways (Chung et al., 2009). This results in extensive customisation of the ERP

software which makes the implementation challenging and a high risk effort (Chung

et al., 2009). It can, therefore, be considered that non-conformance of the system to

organisational needs is a potential barrier in implementing ERP systems. However,

Barreiros et al. (2010) point out that a good selection of ERP system increases the

success factor of its implementation in construction firms.

3.3.2. Insufficient support from the consultant Consultants play an important role in the successful implementation of ERP

systems. The support from the consultant has considerable effects on the quality and

progress of the implementation process (Chung et al., 2008). It is observed that

consultants play a key role in implementing and maintaining information systems

(Tsai et al, cited in Peng and Nunes, 2010a:608). Consultants usually address the

technical and knowledge gaps in the user companies (Peng and Nunes, 2010a).

Inexperienced consultants can thus hamper the successful implementation of ERP

systems.

27

3.3.3. Insufficient support and services from system vendor Lack of support and services from system vendors is considered a common hurdle in

introducing and using information systems (Wright and Donaldson, cited in cited in

Peng and Nunes, 2010a:608). A study conducted by Adam and O’doherty (cited in

Shehab et al., 2004:377) has revealed that the vendors not only play a crucial role in

technical terms but also helps their clients in “correcting their expectations and

perceptions of ERP systems and implementations”. Since the adoption of ERP

systems in the construction industry is relatively lower (Chung et al., 2008; Chung et

al., 2009), it can be inferred that the vendors lack the domain knowledge and skills

required to implement ERP systems in construction firms.

3.3.4. Need for extensive customisation of the system to suit business needs It can be observed that construction industry lacks standardisation and that many

management processes are difficult to standardise (Shi and Halpin, 2003). ERP

systems are built upon best industry practices. Moreover, the ERP systems available

in market are developed mainly for manufacturing companies (Shi and Halpin,

2003). As a result, construction firms need to do extensive customisation of the ERP

software which makes the implementation challenging and a high risk operation

(Chung et al., 2009). Mabert et al. (2003) underline that the implementation time and

cost increase considerable with the amount of customisation.

3.3.5. Long implementation time ERP implementation is an intensive process and it takes considerable time to

complete the implementation process (Al-Mashari et al., 2003; Mabert et al., 2003;

Umble et al., 2003). Since SMEs lack the business resilience of larger firms (Rao,

2000), they may not be able to dedicate the man hours required for such an extensive

process as it may affect the productivity of the firm. Considering this, it can be

expected that long implementation time is a potential barrier to implement ERP.

28

3.3.6. Need for expensive hardware/networking equipment The requirement of huge storage devices and networking equipment is generally

considered as one of the main problems associated with the adoption of ERP

systems (Shehab et al., 2004). It can be assumed that most of the SMEs lack the

basic infrastructure needed to implement an ERP system. Moreover, SMEs lack the

money power unlike larger firms (Rao, 2000) and the requirements of expensive

equipment will definitely be a burden on such firms. It can, therefore, be considered

that need for expensive equipment is a potential barrier to implement ERP systems.

3.4. Cultural Barriers

3.4.1. Power centralisation and centralised decision making due to high power distance

A study conducted by Hofstede (1985) revealed that the culture of UAE is

characterised by high power distance. It can, therefore, be assumed that leaders have

almost absolute powers in their companies. Martinsons and Hempel (cited in Peng

and Nunes, 2010a:604) point out that this characteristic of leaders will result in

centralised decisions. It can, however, be argued that top managers are neither

experts of information systems nor regular users of ERP and that their knowledge

and experience is inadequate to make a suitable decision on their own (Peng and

Nunes, cited in Peng and Nunes, 2010b:2-3). This can be considered a potential

barrier because it can result in improper decisions related to the functionality and

capability of the system to be implemented (Peng and Nunes, 2010a).

3.4.2. Not reporting problems/faults because of high power distance ERP implementation requires involvement from the users for it to be successful.

Users should understand the system being implemented and report any problems or

faults associated with the system. UAE being a high power distance society

29

(Hofstede, 1985), staff may be reluctant to report such problems. This can be

considered a barrier as the problems or faults need to be rectified for the successful

implementation of the software. This problem has been discussed by Peng and

Nunes (2010a) in their study about barriers to ERP exploitation in China.

3.4.3. Effect of personal relationships to ensure success in business It is common in the Arab world to give importance to personal relationships while

making important business decisions; referred as Wasta in Arabic (Hutchings and

Weir, cited in Rabaai, 2009:5-6). It is likely that leaders may use personal

relationship to initiate and maintain business relationships. However, it can become

a problem since such business relationships tend to be informal and insecure. If the

ERP vendors are selected using personal relationships, a change in the leadership

may change the relationship with the business partners as well and this may give rise

to a plethora of issues posing a major barrier to the implementation. Peng and Nunes

(2010a) point out a similar problem in Chinese society in their study about barriers

to ERP exploitation in China.

3.4.4. User resistance in using ERP because of cultural misfit between Western and Arabic world

ERP systems are developed mainly based on Western culture which is characterised

by individualism. However, UAE being a collectivist society, people give more

importance to a group rather than an individual (Hofstede, 1985). It is, therefore,

likely that the ERP software will bring about a change in the way people work. As a

result, users may resist to implementation and use of ERP.

3.5. Conclusion ERP implementation is an intensive and time consuming process. There are a

considerable number of factors which affect the successful implementation of ERP

system in an organisation. Since ERP systems are primarily developed for large

30

scale manufacturing firms, its implementation is more challenging for small and

medium sized firms. The barriers in implementing ERP systems can be grouped into

three categories namely organisational barriers, system barriers and cultural barriers.

It is pointed out that often barriers to organisational activities may often exist within

the context of the organisation. Barriers may also arise as a result of technical

limitations or drawbacks of the ERP software. Finally, a set of barriers may arise due

to cultural misfits. A set of twenty one major barriers – 11 organisational barriers, 6

system barriers, 4 cultural barriers – have been identified and discussed. The barrier

ontology is depicted in Figure 2.

31

Organisational Barriers (OB)

ERP implementation barriers

System Barriers (SB)

Cultural Barriers (CB)

OB2: Lack of commitment by top management

OB3: Inadequate change management efforts

OB4: Conflict of interest among different functional units

OB5: Lack of IT expertise

OB6: Unavailability of funds

OB7: Lack of user involvement

OB8: Inadequate user training

OB9: Lack of motivation among employees because of poor PA

OB10: Fear of power/job loss

OB11: Lack of clear strategic goals

OB1: Lack of clear strategic goals

SB1: Non-conformance of the system to organisational needs

SB2: Insufficient support from the consultant

SB3: Insufficient support and services from the system vendor

SB4: Need for extensive customisation of the system to suit business needs

SB5: Long implementation time

SB6: Need for extensive hardware/networking equipment

CB1: Power centralisation and centralised decision making due to high power distance

CB2: Not reporting problems/fault because of high power distance

CB3: User resistance in using ERP because of cultural misfit

CB4: Reluctance in adopting technology

Figure 2: Barrier ontology

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4. Research Methodology

4.1. Introduction

Research methodology forms the framework for conducting a research. Saunders et

al. (2003:2) refer to the term methodology as “the theory of how research should be

undertaken.” It includes the philosophical and theoretical assumptions upon which

the research is based. A research has many stages which include formulating and

clarifying a topic, critically reviewing the literature, choosing an appropriate

strategy, collecting data using suitable tools, analysing data using proper techniques

and writing up (Saunders et al., 2003).

So as to answer the research questions and accomplish research objectives, the

research philosophy has taken up the principles of positivism with a predominantly

deductive approach. The research strategy is a mixed method approach through the

use of a case study and using a combination of questionnaires and semi-structured

interviews.

4.2. Research Strategy A mixed method approach is used through the use of a case study and using a

combination of questionnaire to collect quantitative data and semi-structured

interview to collect qualitative data. A sequential explanatory strategy is followed in

this study which is characterised by the collection and analysis of quantitative data

followed by the collection and analysis of qualitative data (Creswell, 2003). The idea

of sequential explanatory strategy is to use qualitative data to aid in describing and

interpreting the findings of a primarily quantitative research. One of the main

strengths of this design is its straightforward nature. Moreover, sequential

explanatory strategy is “easy to implement because the steps fall into clear, separate

stages.” (Crewell, 2003:215). In this research, the critical barriers in implementing

ERP systems are identified with the help of a questionnaire. Subsequently, semi-

33

structured interviews are used to explore the causes and consequences of the

identified critical barriers.

A case study is a preferred strategy for doing research which involves a practical

study of a specific current phenomenon within its real life situation using multiple

sources of data. The key benefit of case study approach is that the focus is one or a

few instance which gives in-depth details about the case under consideration. It

supports various research methods and well suits for small scale research projects

(Denscombe, 1998).

4.3. Research Procedure

4.3.1. Quantitative Research In quantitative research, the emphasis is on quantifying the collection and analysis of

data. Numerical data or data that can be converted into numbers are generated as a

result of quantitative research. It demands a deductive approach in relating the

theory and research and the emphasis is on the testing of theories. The main aim of

quantitative research is to establish a relationship between one independent variable

and a dependent variable in a population (Bryman, 2001). Quantitative research is

either descriptive or experimental in nature. Quantitative data can consist of simple

counts such as the frequency of occurrences to more complex data such as test

scores (Saunders et al., 2003). Quantitative analysis techniques are used to analyse

and interpret these data.

4.3.2. Qualitative Research Qualitative research is discovery based, building theory from data rather than

making assumptions about truth and then trying to prove it. Quantitative research is

investigative in nature. It produces in depth and comprehensive information. The

data obtained from qualitative research are the perceptions of the people in the

context (Bryman, 2001). Qualitative researchers use a variety of approaches to

34

collect data (e.g. ethnography, grounded theory, storytelling, shadowing,

phenomenology). Saunders et al. (2003) underline three different aspects of

qualitative research: uses meanings expressed through words, data is non-

standardised and requires classification into categories, analysis done through the

use of conceptualisation. The aim of qualitative research is to seek out understanding

in the same way the participants in the study understand their world.

4.4. Data Collection A combination of questionnaires and semi-structured interviews is used to collect

data. Initially, quantitative data is collected using questionnaires to identify and

establish the main barriers in implementing ERP systems. Subsequently, semi-

structured interviews are used to collect qualitative data to explore the causes and

consequences of the identified barriers.

4.4.1. Questionnaire Questionnaire is the primary data collection method. It is designed to identify and

establish the critical barriers in implementing ERP systems in SMEs in the

construction industry in Dubai. The questionnaire will be based on the barrier

ontology to be built after a critical literature review. The questionnaire will be

designed diligently in order to capture the data required to answer the research

question. The effective creation of a questionnaire needs vigilant planning and

thought and is a much harder task than is generally thought (Bryman, 2001).

4.4.1.1. Questionnaire Design The questionnaire (Appendix I) is designed based on the barriers identified with the

help of a critical literature review. There are three sections in the questionnaire – the

first section is about the benefits of ERP systems, secondly the barriers in ERP

implementation and thirdly information about the respondents. There are a total of

21 barriers namely 11 organisational barriers, 6 system barriers and 4 cultural

barriers. A five point Likert scale is used as the survey scale to analyse and compare

35

the results wherein Strongly Agree being 5 and Strongly Disagree being 1. The

respondents can select any one of the five options namely Strongly Agree, Agree,

Neutral/Don’t know, Disagree and Strongly Disagree. The questionnaire is piloted in

order to ensure its reliability and validity as pointed out by Saunders et al. (2003).

Piloting ensures that the respondents have no issues in answering the questions and

no issues in recording the data. The questionnaire is refined a number of times to

make it simple and easy to read.

4.4.1.2. Questionnaire Administration The questionnaire is sent to the IT Manager of the company by means of email. The

IT Manager will then distribute a hard copy of the questionnaire to all the 40

prospective users of ERP system, including the CEO and MD. Scanned copies of all

the responses will be sent across to the researcher initially and the hard copy will be

sent through via post subsequently.

4.4.2. Semi-structured Interview A semi-structured interview is flexible and allows new questions to be introduced as

the interview progresses (Denscombe, 1998). In a semi-structured interview, the

interviewer generally has a set of themes to be explored and understand what the

interviewees say.

4.4.2.1. Interview Design Semi-structured interviews are conducted to explore the causes and consequences of

the top seven barriers identified with data collected using questionnaire. An

interview instrument consists of a set of themes and questions to be covered in the

interview (Saunders et al., 2003). The questions (Appendix II) are designed in such a

way that the focus of the interview will concentrate only on the top seven barriers

and to bring the interview back on track if the interviewees tend to divert from the

main topic. The first few questions are general in nature in order to get familiarised

with the interviewee and put the interviewee at ease. The questions are designed to

be more specific as the interview progresses. A combination of initiating questions,

follow up questions, trigger questions and closed questions are used in order to

36

explore the causes and consequences of the established barriers. The interviewees

are selected based on their involvement and familiarity with the system under

implementation. All the interviewees are managers as the users are not very familiar

with the system.

4.4.2.2. Interview Administration The interviews are conducted over telephone. Five interviews are planned with the

following personnel of the case company – Senior Manager (Operations), IT

Manager, HR Manager, Finance Manager and Sales Manager. All the three

interviews are recorded with the help of voice recorders for the purpose of

transcribing.

4.5. Data Analysis The quantitative and qualitative data collected as part of the questionnaire and semi-

structured interviews are analysed using corresponding analysis techniques as

detailed below.

4.5.1. Quantitative data analysis A five point Likert scale is used as the survey scale to analyse and compare the

results wherein Strongly Agree being assigned a value of 5 to Strongly Disagree

being 1. A frequency table is created based on the responses and the result is

calculated accordingly. Finally, the mean of each of the barriers is calculated by

dividing the result by the total number of responses.

4.5.2. Qualitative data analysis The data collected through interviews is analysed using a thematic analysis with a

deductive priori coding. Thematic analysis is “a method for identifying, analysing,

and reporting patterns (themes) within data.” (Braun and Clarke, 2006:81).

However, this data driven inductive approach can also be used along with a

deductive priori coding as put forward by Fereday and Muir-Cochrane (2006).

Fereday and Muir-Cochrane (2006:4) point out that this approach “complemented

37

the research questions by allowing the tenets of social phenomenology to be integral

to the process of deductive thematic analysis while allowing for themes to emerge

direct from the data using inductive coding”. The thematic analysis conducted in the

study is based on the principles given by Braun and Clark (2006) and the stages are

given below:

i. Familiarising the data: The interview data is familiarised through the process of

transcription, reading and re-reading it.

ii. Assigning codes to the data: Codes are assigned to the interview data using the

codes already identified with the help of the literature review.

iii. Collating codes into relevant themes: After assigning codes to data, the codes are

organised into the themes which have been identified.

iv. Developing conceptual maps: Based on the themes and codes, a conceptual map

is created to discuss and represent the interview data.

v. Reporting findings: The quotes are further analysed and the analysis is related to

the literature, questionnaire findings and the research questions.

4.6. Conclusion This study uses the principles of positivism with a predominantly deductive

apporach to answer the research questions and accomplish the research objectives.

The research strategy is a mixed method approach through the use of a case study

and using a combination of questionnaires and semi-structured interviews. The

critical barriers is identified and established with the help of questionnaire and the

causes and consequences of the barriers is explored with the help of semi-structured

interviews. The questionnaire response is analysed by creating a frequency table and

mean. The interview data is analysed with the help of thematic analysis with a

deductive priori coding.

38

5. Questionnaire Findings

5.1. Questionnaire Design The questionnaire was designed based on the barriers identified and established with

the help of a critical literature review. There were three sections in the questionnaire

– the first section was about the benefits of ERP systems, secondly the barriers in

ERP implementation and thirdly information about the respondents. There were a

total of 21 barriers namely 11 organisational barriers, 6 system barriers and 4

cultural barriers. A five point Likert scale was used as the survey scale to analyse

and compare the results. The respondents could select any one of the five options

namely Strongly Agree, Agree, Neutral/Don’t know, Disagree and Strongly

Disagree.

5.2. Questionnaire Administration The questionnaire was sent to the IT Manager of the company by means of email.

The IT Manager then distributed a hard copy of the questionnaire to all the 40

prospective users of ERP system, including the CEO and MD. A total of 26

responses were obtained. Scanned copies of all the responses were sent across to the

researcher initially and the hard copy was sent through via post subsequently.

39

5.3. Findings

5.3.1. Gender Out of the 26 respondents, 22 are male and 4 were female employees. The

percentage is as shown in Figure 3. It can be observed that male employees

outnumber female employees.

Figure 3: Gender Chart

40

5.3.2. Age group The age group of the respondents are as shown in Figure 4. It can be noted that a

half of the respondents are of the age group 30-40. There is only one respondent in

the age group Above 50 and there are no respondents in the age group Under 20.

Figure 4: Age group

41

5.3.3. Education level The education levels of the respondents are as shown in Figure 5. It can be observed

that majority of the respondents (42%) possess a bachelor degree. 31% of the

employees have a post secondary qualification. It can be inferred that most of the

respondents have a more than a minimum level of education to perform well and

independently.

Figure 5: Education level

42

5.3.4. Computer skill The computer skills of the respondents are as shown in Figure 6. Almost 77% of the

respondents have intermediate computer skills. It can be assumed that most of the

employees do not find difficulty in using computers.

Figure 6: Computer skill

43

5.3.5. Benefits of ERP Systems The main benefits of ERP systems were investigated by asking the respondents to

rate the benefits on a five point Likert scale ranging from Strongly Agree (5) to

Strongly Disagree (1). A frequency table was created based on the responses and the

mean of the benefits calculated accordingly. The results are as shown in Table 1.

Benefits of ERP Strongly Agree Agree

Neutral/Don't know Disagree

Strongly Disagree Mean

Increases productivity 11 13 2 0 0 4.346 Better management of resources 8 16 2 0 0 4.231 Improves customer service 6 18 2 0 0 4.154 Better decision making and planning 6 18 2 0 0 4.154 Reduces operating cost 5 19 2 0 0 4.115 Improves performance 4 20 2 0 0 4.077 Supports business growth 4 19 3 0 0 4.038 Facilitates management and organisation in the company 4 18 3 0 0 3.885 Reduces IT cost 1 16 5 3 0 3.462

Table 1: Benefits of ERP

It can be observed that more than 80% of the respondents agree with all the above

mentioned benefits of ERP systems. The top five results reflect that users consider the

operational (i.e. increases productivity, improves customer service, reduces operation

cost) and managerial (i.e. better management of resources and better decision making

and planning) benefits of ERP systems rather than strategic benefits of ERP (supports

business growth and improves performance) that may occur in the long run. However,

around 11% of the respondents disagree that ERP systems reduces IT cost. This may be

due to the lack of awareness about ERP systems.

44

5.3.6. Major barriers in implementing ERP systems The major barriers in implementing ERP systems were investigated by asking the

respondents to rate each of the 21 potential barriers, under the categories namely

organisational barriers, system barriers and cultural barriers. The barriers were

measured on a Likert five point scale ranging from Strongly Agree (5) to Strongly

Disagree (1).

5.3.6.1. Organisational barriers Table 2 shows the results for organisational barriers.

Organisational Barriers Strongly Agree Agree

Neutral/Don't know Disagree

Strongly Disagree Mean

Inadequate change management efforts 3 19 4 0 0 3.962 Lack of clear strategic goals 2 20 4 0 0 3.923 Lack of commitment by top management 2 20 4 0 0 3.923 Lack of motivation among employees because of poor performance appraisal 2 20 4 0 0 3.923 Conflict of interest among different departments/functional units 4 16 5 1 0 3.885 Low skilled staff 1 21 4 0 0 3.885 Unavailability of funds 2 18 6 0 0 3.846 Lack of user involvement 1 19 5 1 0 3.769 Fear of loss of power and/or loss of job 1 19 5 1 0 3.769 Reluctance to adopt technology 1 19 5 1 0 3.769 Inadequate user training 1 18 4 3 0 3.654 Lack of IT expertise 0 14 9 3 0 3.423

Table 2: Organisational barriers

The results show ‘Inadequate change management efforts’ as the most agreed

organisational barrier by the respondents. It reflects the lack of effort from the

management to adopt proper change management techniques. The reason for this

may be the lack of awareness about proper change management among the top

management. It can be inferred from the results that the respondents find it difficult

45

to cope up with the changes to be introduced by the ERP system and consider it as a

major barrier. As pointed out by Umble et al. (2003), inadequate change

management efforts make the employees unprepared for the changes to be brought

about by the ERP system. More than 70% of the respondents agree with all the

above mentioned organisational barriers except for ‘Lack of IT expertise’. Moreover,

some of the respondents disagree with the fact that ERP systems reduces IT cost

5.3.6.2. System barriers The results of system barriers are as shown in Table 3.

System Barriers Strongly Agree Agree

Neutral/Don't know Disagree

Strongly Disagree Mean

Non-conformance of the system to organisational needs 4 18 4 0 0 4.000 Long implementation time 6 14 6 0 0 4.000 Insufficient support from the Consultant 5 16 4 1 0 3.962 Insufficient support and services from system vendor 4 16 5 1 0 3.885 Need for extensive customisation of the system to suit business needs 4 16 5 1 0 3.885 Need for expensive hardware/networking equipment 2 16 7 1 0 3.731

Table 3: System barriers

The respondents rated ‘Non-conformance of the system to organisational needs’ and

‘Long implementation time’ as the major system barriers. It is noted that the ERP system

available in the market do not suit the requirements of construction firms (Shi and

Halpin, 2009). ERP implementation is an intensive and time consuming process (Al-

Mashari et al., 2003; Mabert et al., 2003; Umble et al., 2003). As user involvement is

required during the implementation of ERP, employees may find it difficult to dedicate

to time for it if the implementation continues for a longer period of time. However,

around 70% of all the respondents agree with all the above mentioned system barriers.

46

5.3.6.3. Cultural barriers Table 4 shows the results for cultural barriers.

Cultural Barriers Strongly Agree Agree

Neutral/Don't know Disagree

Strongly Disagree Mean

Power centralisation and centralised decision making due to high power distance 2 15 8 1 0 3.692 Not reporting problems/faults because of high power distance 2 15 8 0 0 3.615 Effect of personal relationships to ensure success in business (known as Wasta in Arabic) 0 1 23 2 0 2.962 User resistance in using ERP because of cultural misfit between Western and Arabic world 0 0 24 2 0 2.923

Table 4: Cultural barriers

The results show ‘Power centralisation and centralised decision making due to high

power distance’ as the main cultural barrier. It can be observed that the ratings for

cultural barriers are comparatively low. It may be either due to the lack of awareness

of cultural impacts on ERP implementation or they do not believe it to be a potential

barrier in implementing ERP systems. However, majority of the respondents believe

that centralised decision making of leaders can be a potential barrier to ERP

implementation. The result is relevant as Peng and Nunes (cited in Peng and Nunes,

2010b:2-3) point out that top management may lack the knowledge about

information systems to make a suitable decision on their own.

5.4. Top seven major barriers Based on the responses received, a frequency table was created and the mean of the

barriers calculated accordingly. Out of the twenty one barriers, the top seven barriers

were identified based on the mean value is shown in Table 5.

47

ERP implementation barriers Mean Non-conformance of the system to organisational needs 4.000 Long implementation time 4.000 Inadequate change management efforts 3.962 Insufficient support from the Consultant 3.962 Lack of clear strategic goals 3.923 Lack of commitment by top management 3.923 Lack of motivation among employees because of poor performance appraisal 3.923

Table 5: Top seven barriers

The results show that most of the users perceive ‘Non-conformance of the system

to organisational needs’ as the major barrier to implement ERP systems. The

result is consistent with the study of other researchers (e.g. Shi and Halpin, 2003;

Chung et. al, 2009) who highlight that the project specific nature and non-

standard work processes in the construction industry make it difficult for the

ERP systems available to suit the needs of construction firms.

Out of the top seven barriers, four are organisational barriers (Inadequate change

management efforts, Lack of clear strategic goals, Lack of commitment by top

management, Lack of motivation among employees because of poor

performance appraisal) and three are system barriers (Non-conformance of the

system to organisational needs, Long implementation time, Insufficient support

from consultant). It is evident from the results that organisational barriers are

more critical than system barriers. The system barriers are in one way connected

to the organisational barriers as the organisation is responsible for selecting the

system.

The barriers expressed by the results were mainly functional in nature. The top

seven barriers consist of three system barriers (Non-conformance of the system

to organisational needs, Long implementation time, Insufficient support from the

48

Consultant) and four organisational barriers (Inadequate change management

efforts, Lack of clear strategic goals, Lack of commitment by top management,

Lack of motivation among employees because of poor performance appraisal).

Organisational barriers, as mentioned above, reflect the short term strategy of the

top management. Moreover, it reflects the lack of awareness among the top

management about ERP implementation.

5.5. Conclusion A questionnaire was designed based on the twenty one potential ERP

implementation barriers identified and established through a critical literature

review. The questionnaire was sent to forty prospective users of the system and

twenty six responses were received. The questionnaire was analysed by creating a

frequency table and the mean of all the barriers were calculated. The results for each

of the three categories of barriers namely organisational barrier, system barrier and

cultural barrier are discussed further. Based on the mean value of each of the

barriers, the top seven critical barriers are chosen in order to explore the causes and

consequences of each of them. The barriers will be explored with the help of semi-

structured interviews and the findings of the interviews are discussed in the next

chapter.

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6. Interview Findings

6.1. Interview Design Semi-structured interviews were conducted to explore the causes and consequences

of the top seven barriers identified with data collected using questionnaire. A set of

open ended and closed ended questions were designed to collect detailed data about

all the seven critical barriers. The questions were designed in such a way that the

focus of the interview would concentrate only on the top seven barriers and to bring

the interview back on track if the interviewees tend to divert from the main topic.

The first few questions were general in nature in order to get familiarised with the

interviewee and put the interviewee at ease. The questions were designed to be more

specific as the interview progresses. The interviewees were selected based on their

involvement and familiarity with the system under implementation. All the

interviewees were managers as the users were not very familiar with the system.

6.2. Interview Administration The interviews were conducted over telephone. Initially, five interviews were

planned with the following personnel of the case company – Senior Manager

(Operations), IT Manager, HR Manager, Finance Manager and Sales Manager.

However, Senior Manager (Operations) and Finance Manager were not available

during the period of interview. All the three interviews were recorded with the help

of voice recorders for the purpose of transcribing.

6.3. Analysis The interviews conducted were first transcribed with the help of the audio recording

of the conversation. The data was then analysed using a thematic analysis with

deductive priori coding.

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6.4. Findings

6.4.1. Benefits of ERP systems The interviewees emphasised on the following benefits of ERP systems

• Facilitates management and organisation in the company

• Better decision making and planning

• Improves performance

• Supports business growth

According to the Sales Manager, “ERP could improve the efficiency in day-to-day

operations as well as it would help us to do better planning and take better

management decisions”. The HR Manger opined that

“the system would help us bringing in a control mechanism and bring about a logical

process workflow…any firms looking for advancement of result has to have IT

imbibed within it and this is a means of, you know, our first step towards the future

and it is a long term strategy.”

From the above quotations, it is clear that the management focus not only on the

managerial and operational benefits of ERP but also on the organisational (facilitates

management and organisation in the company) and strategic benefits (supports

business growth) of ERP. Moreover, the management consider ERP implementation

as a long term strategy.

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6.4.2. Top seven barriers in implementing ERP systems The top seven barriers in implementing ERP systems was identified and established

after analysing the responses to the questionnaire. The mean of all the twenty one

major barriers were calculated based on the questionnaire response. The top seven

barriers were identified based on the value of mean. The top seven barriers are as

below:

Non-conformance of the system to organisational needs

Long implementation time

Inadequate change management efforts

Insufficient support from the Consultant

Lack of clear strategic goals

Lack of commitment by top management

Lack of motivation among employees because of poor performance appraisal

6.4.2.1. Non-conformance of the system to organisational needs

As discussed in section, non-conformance of ERP systems to organisational needs is

a common problem in the construction industry (Shi and Halpin, 2003; Chung et al.,

2009).

All the three interviewees agreed that this is a major barrier in implementing the

ERP system. The IT Manager of the company commented:

“We are implementing several modules like Sales, Procurement, Finance,

HRMS, Workshop and Maintenance, Inventory and Job contracting. This is a

main problem for job contracting module. Our work is project-specific and it

depends on the site. The ERP system cannot match all aspects of our work. And

this resulted in extensive customisation of the system for this particular module.”

This fact was confirmed by the Sales Manager who mentioned:

52

“Yes, it happens. If you have a module which isn’t implemented or which isn’t a

feature of the ERP system, it could be a major barrier. In the system we’re

implementing, the piling process was never integrated. So it is a kind of obstacle

in implementing the system.”

Moreover, the quotations clearly show that the main cause for this is the project-

specific nature of work as pointed out by Shi and Halpin (2003) and Chung et al.

(2009).

It emerged from the interview that this barrier caused considerable delay to the

project. According to the IT Manager:

“There was a huge difference between the requirements we conveyed to the

consultant during the mapping time and what he conceived. The consultant is not

able to understand what type of business we do. So he mapped something and it

doesn’t match with our business and again he remapped the whole thing and it

took a lot of time.”

The Sales Manager agreed with this and commented:

“It is one of the reasons that is delaying the implementation of ERP because the

consultant take a large amount of time to understand the process; to implement it

and to test it and it has been going on for a while.”

From the results, it is clear that non-standard work processes and project-specific

nature or work are two major issues which makes ERP implementation in

construction firms a more challenging task.

53

6.4.2.2. Long implementation time It is well known that ERP implementation is an intensive and time consuming

process (Al-Mashari et al., 2003; Mabert et al., 2003; Umble et al., 2003). The

interviewees confirmed that this is a major issue for the company. The HR Manager

commented:

“See, time is money. The time that we have to keep aside, bringing in our users

to understand the system and testing it, training, everything takes a lot of time.

And this is the time we have to be productively putting into work.”

The Sales Manager added:

“This is a major drawback. As it spans across time, it consumes more of the

employee time because the consultant need constant feedback and updates from

the employees. So the longer it goes, the longer it consumes our man hours.”

It is obvious from the above statements that productivity loss is a major concern

during the ERP implementation process. The project may get ramped up before

completion if the implementation takes much longer time as it considerably affects

the productivity of the company. Moreover, the IT manager mentioned “most of the

management team is well aware of the long implementation time of ERP but some

staff are getting frustrated because of this.” This may in turn result in loss of co-

operation from the employees. Altogether, it emerged from the interview that long

implementation time is a major issue in implementing the ERP system.

6.4.2.3. Inadequate change management efforts As discussed in section, a good change management effort is required in order to

harness the opportunities provided by ERP systems (Umble et al., 2003). From the

interview, it emerged that lack of proper change management techniques can give

rise to some critical issues. The Sales Manager mentioned that “we have been given

54

some information about the system but I don’t think we had a better change

management process”. According to the HR Manager:

“See, we are not a firm that has really grown and if you ask about change

management, it is a huge term for us to handle at this point of time. Little by

little we are trying to adjust and trying to accommodate the system. People at our

firm, when they first heard about ERP system, they were really scared. They

thought it is an employee reduction programme. We had to make them

understand that they are not being made redundant and that it is just going to

help them and that takes more time and effort and patience on the part of the

management. So that is a change management effort because we have to

convince our employees. If you look at it in that perspective, yes, change

management is being done. But on a very strictly HR perspective of change

management, I would say no.”

It is clear from the above quotations that very little efforts have been made in terms

of change management. It can be inferred that there is lack of awareness about the

importance of proper change management techniques. Moreover, it can be assumed

that the employees are not prepared for the changes that the ERP implementation

would brought about which can result in resistance in using the system by the

employees (as discussed in section). Therefore, this can be a major barrier in the

successful implementation of the system.

6.4.2.4. Insufficient support from consultant Consultants play a crucial role in the quality and progress of the system

implementation (Chung et al., 2008) and to educate the user company about ERP

implementation (Peng and Nunes, 2010a). The IT Manager mentioned:

“During the time of implementation, the consultant has changed four times. We had

to explain the whole thing to each consultant and we lost a lot of time in doing this

and the project got delayed. The support from the vendor itself was less”

The HR Manager also commented similarly:

55

“See, when you are actually getting a vendor coming to your place and get

something installed or implemented, you expect the complete support of the firm

with one consultant. But here we have seen multiple changes, four or five

consultants coming in. So the flow gets lost. At least when I look at it from my

perspective the project got delayed considerably due to lack of support from the

vendor themselves.”

It is evident from the above statements that lack of support from the consultant

delayed the project. Moreover, it is clear that lack of support from the consultant is

due to the lack of support from the vendor.

6.4.2.5. Lack of clear strategic goals It is imperative that firms should have clearly defined their strategic goals before the

implementing ERP systems. Al-Mashari et al. (2003) highlight that lack of clear

direction and planning makes an ERP implementation suffer a huge failure. From

the interviews, it is evident that the goals were not clearly defined. The IT Manager

commented:

“No, it was not clear. Actually when we started, the business flow was not

thorough for our users. When we explained it to the vendor it was incomplete.

As a result, there was much gap when the vendor presented the initial product

with our business flow. During the requirements gathering process, no one from

the senior management participated, only the basic users gave the inputs. So

there was lack of clarity on both company and vendor sides.”

The HR Manager added: “The users first of all did not understand what was

happening. If we had taken it a little slowly or I would say if we had planned it

better, it would have helped us more”. From the above statements, it is clear that

there is a lack of clear vision and business needs. As a consequence, there is a lack

of focus and also it delayed the implementation. It can be inferred that lack of clear

56

strategic goals can eventually lead to the failure of the project, therefore, can be

considered a crucial barrier.

6.4.2.6. Lack of commitment by top management Senior management involvement is required throughout the ERP implementation

process in order for it to be successful (Mabert et al., 2003). Moreover, Gupta (2000)

points out that top management involvement helps to reduce resistance from the

users. According to the Sales Manager,

“The top management actually made the decision to go for the ERP

implementation but later it was handed over to our in-house ERP consultant. I

think after that point the involvement by the top management is minimal and it

had been taken forward by the ERP consultant. We had an information session,

by the consultant, about ERP but not directly by the top management.”

The IT Manager commented: “The CEO does not involve in the implementation

process. He just conveys messages either through me or another manager.” The

statements clearly suggest that there is a lack of support from the top management. It

may be because of the lack of awareness among the top management about ERP

implementation.

6.4.2.7. Lack of motivation among employees because of poor performance appraisal

A successful ERP implementation requires full support from the users (Rao, 2000).

In order for the employees to have greater commitment to the organisation, there

needs to be an effective appraisal process (Behery and Paton, 2008). Employees

would rather lose their interest in work if there is no proper system for appraisal.

It emerged from the interview that there is no proper appraisal system and that the

users do not provide their support. The IT mentioned that

57

“Actually there is no system as such for appraisal. It depends upon the seniority

and not on the performance. One important thing is users are not dedicating that

much time for looking into the product and understanding it. Moreover, they are

not giving much input.”

It can be inferred from the above statement that there is a lack of motivation among

the employees and that appraisal system has an important role in motivating the

employees. The lack of support from the users is a crucial problem for ERP

implementation and as such ‘Lack of motivation among the employees because of

poor performance appraisal’ can be considered a major barrier in implementing ERP

systems.

6.5. Discussion and Conclusion It can be observed that the questionnaire and interview data emphasise different

benefits of ERP systems. The respondents to the questionnaire agree more with the

operational and managerial benefits of ERP systems whereas the interview data

reflects the strategic, managerial and organisational benefits of ERP. It can,

therefore, be assumed that the benefits of ERP systems are not conveyed to the

employees properly by the top management. Moreover, it reflects a lack of

commitment from the top management towards the implementation of ERP system.

All the top seven barriers identified with the help of questionnaire data was agreed

by the interviewees. The interviews shed light on the causes and consequences of

each of the seven barriers. Apart from the top seven barriers identified with the help

of questionnaire, one of the major barriers that came up during the interview was

‘Fear of loss of power and/or loss of job’. The IT Manager commented that “Most of

our employees didn’t know what the use of ERP is and they felt that it is an

(E)mployee (R)eduction (P)rogramme and there was resistance from users because

of this.” It is evident from the above quotation that users resist the implementation of

ERP. The resistance from users can be linked to lack of awareness about ERP. It

58

also suggests the lack of commitment from the top management to assure the

employees about the benefits of ERP. The concept map depicting the top seven

barriers, its causes and consequences are shown below (Figure 7).

The questionnaire results show that respondents are either neutral or unaware about

the cultural misfits to be brought about by the ERP system. The Sales Manager

commented:

“I don’t think there is a big cultural shift in terms of technology. Most of our

workforce is from Asian countries like India and they are pretty happy to use

technology. Moreover, the Arabs are so happy to accept new technologies. In

this country they have all the advanced technology implemented right now. So

there won’t be any cultural barriers in terms of technology.”

Even though it is evident from the above statement that cultural misfit has not much

an impact on the implementation process, there is a chance that users start realising

about the situation once they start using the system fully. It may eventually affect the

successful implementation of the system.

It emerged from the interviews that most the top seven barriers directly or indirectly

delayed the implementation process. Delay in implementation can have adverse

impact on the organisation (e.g. decrease in productivity) and frustration and non-

cooperation from users. Moreover, it is evident that there is a lack of awareness

about ERP implementation not only among users but also among senior

management. It can, therefore, be established that the identified top seven barriers

can have adverse effect on the implementation of ERP systems.

59

Organisational Barriers

Non-conformance of the system to organisational needs

Non-standard work processes

Software cannot match the needs of organisation

System Barriers

Project specific nature of work

Need for extensive customisation

Delay in implementation

Long implementation time

Frustration among users

Need for more man hours

Reduction in productivity

Inadequate change management

Lack of awareness about change management Staff not prepared

for the impending changes

Insufficient support from the consultant

Incomplete business flow

Lack of clear strategic goals

Lack of clear vision and business needs

Lack of focus

Lack of commitment from top management

Poor performance appraisal system

Lack of motivation among employees

Lack of support from users

Fear of job/power loss

Delay in implementation

Insufficient support and services from the vendor

Delay in implementation

Lack of awareness about ERP

Resistance from users

Lack of awareness about ERP

Top 7 barriers

Figure 7: Conceptual map of interview data

60

7. Conclusion and Recommendations

7.1. Conclusion This study identified and explored the causes and consequences of the critical barriers in

implementing ERP systems in SMEs in the construction industry in Dubai by means of a

case study conducted at National Group in Dubai.

Research Question A:

What are the barriers faced by SMEs in the construction industry in Dubai in

implementing ERP systems?

With the help of the questionnaire, the critical barriers in implementing ERP systems in

SMEs in the construction industry in Dubai have been identified. The results show

organisational barriers and system barriers as more critical in successfully implementing

ERP systems. The results reflect the importance of organisational readiness before and

during the implementation of the ERP system. Organisations adopting ERP systems

should have clear strategic goals and business needs. Moreover, the top management

support is required from the beginning till the end of the entire project. The main system

barrier is the inability of the ERP systems to meet the requirements of the construction

industry as discussed in the literature. Therefore, utmost importance is needed while

selecting a system.

Research Question B:

What are the causes of these ERP implementation barriers and its consequences?

The causes and consequences of the implementation barriers were explored with the help

of semi-structured interviews. Interview findings confirm that non-conformance of ERP

system to organisational needs as a critical barrier in implementing ERP systems.

Moreover, interview data emphasises the importance of organisational readiness. It is

observed that lack of focus due to lack of clear strategic goals as the reason for most of

the implementation barriers. Due to the lack of clear strategic goals, the project can go out

of track right from the selection of the vendor. Moreover, there is a lack of awareness

about ERP implementation among the top management and lack of top management

61

support affects the progress of the implementation project. It is important while selecting

the system that it meets the requirements of the organisation and also the system vendor

needs to have sufficient domain knowledge. It is observed that SMEs lack the awareness

about the importance of change management while implementing an intensive project like

ERP implementation. It can be concluded that that all the identified barriers is one way or

other way related to the lack of planning and clear vision about ERP implementation and

the perceived business needs. All the barriers can eventually delay the progress of the

implementation process which in turn can affect the successful completion of the ERP

implementation.

7.2. Recommendations From the conclusions made above, the researcher has arrived at the following set of

recommendations for SMEs in the construction sector embarking for ERP

implementation.

ERP implementation is an intensive process which takes considerable time and resources

for its successful completion. The top management of firms adopting ERP systems should

have clear vision and well defined business needs before embarking to this endeavour.

The top management should also acquire sufficient knowledge about ERP

implementation and need to extend their support throughout the project. Moreover, the

top management should also assure the benefits of ERP systems to the employees so as to

reduce the resistance from them.

Since the ERP systems available in the market are primarily developed for manufacturing

firms, it may be difficult for the construction firms to meet their requirements with those

systems. In order to reduce further complexities, care should be taken while selecting an

ERP system. Moreover, it is important for the selected ERP system vendor to have

sufficient domain knowledge. Proper change management techniques should be used to

ensure that the employees are properly educated about the ERP system being

implemented and also to prepare them for the impending changes to be brought about by

the system

62

ERP implementation requires full cooperation and inputs from users. If the employees do

not have commitment towards the organisation, it will affect the quality of their work.

The top management should employ proper appraisal techniques in order for the

employees to be motivated and perform well.

7.3. Research Limitations One of the main drawbacks of this research is that it employed a single case study

method. Therefore, the generalisation of the results of this study is less authoritative.

Even though the case company is a Small and Medium sized enterprise in the

construction sector, it may present the whole construction industry in Dubai.

The other drawback of this study is the relatively small sample size. Since the case

company is a SME, the number of ERP users are less.

7.4. Further Research Since the study was based on a single case study method, further empirical research of the

same type is indeed required. The further research can be carried out in a much wider

scope so as to generalise the result more correctly. Moreover, currently there is a lack of

literature about ERP implementation in SMEs in the construction industry and further

research is certainly needed to gain more insights.

63

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Appendix 1 - Questionnaire

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Appendix II – Interview Questions

IT Manager Could you briefly explain your role in the ERP implementation project?

In your opinion, what benefits ERP systems can bring to your company?

What are the reasons behind the decision to implement an ERP system?

Does some of your staff fear that adoption of ERP would result in job or power loss?

It is generally believed that ERP systems are for larger firms. What is your view on this?

The adoption of ERP systems in the construction industry is relatively low. Do you agree with this?

What were the criteria for selecting the system vendor?

What was the major hurdle in selecting the vendor?

Do you think the non-conformance of the system to the organisational needs is the main barrier in implementing ERP?

Could you explain how this affected the implementation process?

It is generally believed that ERP implementation is a time consuming process. What impact it has on the implementation process in your company?

What are the change management efforts done during the pre-implementation stage?

In what ways would better change management improve the implementation process?

Have you got proper support from the consultant?

Do you think the strategic goal behind implementing the ERP system was clear enough to support the project?

Could you explain the involvement of top management in the implementation process?

Have the top management made available enough fund for this project?

Are the employees satisfied with the performance appraisal system in the company?

Is there any other measure to motivate the employees to perform well?

In what ways do you think this lack of motivation among employees affect the implementation process?

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Do the users resist in using the ERP system because of the cultural misfit between Western and Arabic culture?

Is there any other major barriers, other than what we discussed, which you think would affect the implementation process?

HR Manager Could your briefly explain your role in the company?

In your opinion, what benefits can ERP system bring to your company?

It is generally believed that ERP systems are for larger firms. What is your view on this?

Do you think the non-conformance of the system to the organisational needs is the major barrier in implementing the ERP system?

Do you mean that the project specific nature of the construction field is making it difficult to select a suitable ERP solution?

ERP implementation is a time consuming process. Do you think this will have any impact on the implementation process?

Do you mean to say that this affects the productivity of the company?

What are the change management efforts done during the pre-implementation stage?

Do you think a better change management process would have smoothened the implementation process?

Have you got proper support from the consultant?

What do you think are the effects of this non-support on the implementation process?

What were the strategic goals in implementing ERP system in your organisation?

Do you think the goal was clear enough to support the project?

How this affected the implementation process? E.g. did this give rise to any confusion among the users or Consultant?

Could you explain the involvement of top management in the implementation process?

Was there any effort from the management to assure the employees about the benefits of ERP?

Have the management made available enough funds for the completion of the project?

Are the employees satisfied with the current appraisal system in the company?

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Is there any measure to motivate the employees to perform well? E.g. increment or other benefits

In what ways do you think lack of motivation among the employees affect the implementation process?

Do users resist in using the ERP because of the cultural misfit between Western and Arabic culture?

Is there any other major barrier you think, other than what we discussed, would affect the implementation process?

Sales Manager Could you briefly explain your role in the company?

In your opinion what benefits can ERP system bring to your company?

It is generally believed that ERP systems are for larger firms. What is your view on this?

Do you think the non-conformance of the system to organisational needs is the main barrier in implementing an ERP system?

Do you think this is a common problem in the construction industry?

In your company, how this affected the implementation process?

Does this result in more customisation of the software?

It is generally believed that ERP implementation is time consuming. What is the effect of long implementation time at your company?

Is it affecting the productivity of the company?

Are the users frustrated with the long implementation time?

What are the change management efforts done during the pre-implementation stage?

Do you think a better change management process would have a good effect on the implementation process?

Have you got proper support from the consultant?

How did it affect the implementation process?

Do you think the strategic goal behind implementing the ERP system in your company was clear enough to support the whole project?

In what way does this affect the implementation process?

Could you explain the involvement of top management in the implementation process?

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Did the top management assure the benefits of ERP to the employees before the implementation?

Are the employees satisfied with the current performance appraisal system in your company?

Is there any measure to motivate the employees to perform well? E.g. increment in salary

In what ways do you think this lack of motivation among the employees affect the implementation process?

Do users resist in using ERP systems because of the cultural misfit between the western and Arabic culture?

Is there any other major issue, other than what we discussed, would affect the implementation process?