The current issue and full text archive of this journal is available at www.emeraldinsight.com/0263-5577.htm
IMDS 110,1
ERP implementation in Omantel: a case study Stuart Maguire
78
The Management School, University of Sheffield, Sheffield, UK
Udechukwu Ojiako Received 12 July 2009 Revised 17 August 2009 Accepted 22 August 2009
School of Management, University of Southampton, Southampton, UK, and
Al Said The Management School, University of Sheffield, Sheffield, UK
Abstract Purpose – Enterprise resource planning (ERP) systems if successfully implemented bring about competitiv comp etitivee adv advantag antages. es. On the other hand, project failure could, in an extreme case, cause an organisation to go out of business. Mapped against existing literature on ERP critical success factors, this paper examines environmental factors that impacted on the adoption of ERP by The Oman Telecommunication Company (Omantel). Design/methodology/approach – A case study methodology is used to study perceptions of the ERP system implementation project in Omantel. This pa paper per hig highli hligh ghts ts the pa parti rticul cular ar pro proble blems ms of lar large ge org organ anisa isatio tions ns tha thatt op opera erate te Findings – This disparate legacy systems. sing ngle le ca case se st stud udy y is co cond nduc ucte ted. d. Th This is pr prov ovid ides es Research Researc h limit limitations ations/impl /implicatio ications ns – A si opportunities for further research in a number of varied settings. It is ver very y imp import ortan antt tha thatt ex exper perien iences ces of ER ERP P pro projec jects ts are sha shared red acr across oss Originality/value – It countries and sectors. This is because many ERP implementations are rolled out by multi-national corporations in several countries, often simultaneously. This is one of the few ERP studies that have been conducted by an internal member of staff. In these situations, it is not just a case of access, but that the respondents feel able to give practical answers. Keywords Manufacturing resource planning, Project management, Competitive advantage Paper type Case study
Industrial Management & Data Systems Vol. 110 No. 1, 2010 pp. 78-92 q Emerald Group Publishing Limited 0263-5577 DOI 10.1108/02635571011008416
1. Introduction There are a wide variety of tools and systems that have been developed to enable organisations to become more competitive, one of these tools is enterprise resource planning (ERP). ERP systems are all about ensuring that operational systems being used by an orga or gani nisa satio tion n ar aree ful fully ly in inte tegra grated ted.. Th Thee pur purpos posee of usi using ng ER ERP P is to im impr prov ovee an and d si simpl mplif ify y the internall business processes, which typica interna typically lly requir requires es re-engin re-engineering eering of current business processes (Huang et al., 2004). The idea is to combine various systems into a single data da taba base se (P (Payn ayne, e, 20 2000 00). ). Thi Thiss ap appr proa oach ch wi will ll ena enabl blee theorga theorgani nisa sati tion on to ha have ve a si singl nglee vi view ew of its business by ensuring that systems that support different functionalities within the organisation are combined (Kumar and van Hillegersberg, 2000). There are quite a few advantages of adopting ERP as part of as an organisational strategy. strateg y. For one, ERP systems support an organisation’s organisation’s desire for systems integration integration which whic h mean meanss tha thatt orga organis nisati ations ons will willnot not have to man manage age sepa separat ratee syst systems ems ind indepen ependent dently. ly.
In this case, the organisation optimises its processes which then improves the entire supply chain process, and integrates functionalities leading to increased transparency across the organisation. In most cases to continue to support this optimisation, the organisation also develops sets of expert common capabilities. The result is that the organisation is most likely to save on operational costs due to rationalisation and systems integration. It is expected that such savings on operational costs will be transferred to lower costs for the customer. At the same time, the integration of systems should lead to the provision of a more memorable experience for the customer as service provision becomes more seamless. ERP systems can also empower employees by providing them with real-time data (Davenport, 1998). It is also connected with greater job flexibility by providing a platform that enables the expansion of individual awareness, creativity, and innovation. Overall, existing statistics suggest that 63 per cent of large ERP customers are of the opinion that they do realise some major business benefits from their ERP implementations (Gould, 2004). ERP systems are however key strategic resources for the majority of organisations. Their importanceis demonstratedby statistics which showthat theyusuallycomprise the largestsegmentof an organisation’s applicationsbudget (Aloini et al., 2007). 2. ERP implementation Although this is the case, it is imperative to highlight that many ERP implementations have been considered as significant failures (Markus et al., 2000). Examples include Avis Europe Ltd’s abandonment of its ERP implementation project in 2004 (at a cost of $54.5 million) and Ford Motors’ ERP purchasing system which was also abandoned in 2004, after the company had spent close to $200 million. Perhaps, the most famous case of ERP system implementation failure relates to the collapse of the US$5 billion (GBP£2.5 billion) pharmaceutical giant FoxMeyer Drugs partially driven by a failed ERP implementation in 1995. Work examining ERP implementation in the Middle East is not particularly extensive, although some work has been conducted. For example, Kholeif et al. (2007) discussed ERP customisation failures in the Middle East. On the other hand, Aladwani (2001) examined user resistance to ERP implementation from a Kuwaiti perspective while Ziaee et al. (2006), studying ERP software selection, proposed a two-phase procedure of selecting ERP vendors in small manufacturing enterprises in Iran. A review of available research shows that there is a general lack of literature on ERP systems implementation in Oman. With developments which have led to the new ERP II, it is now possible for service providers and their customers to share information by integrating their systems into one single database (Moller, 2005), leading to more organisations recognisng the huge benefits from successful implementation of ERP systems. Starting in the late 1990s there has been growing use of ERPs in many of the larger businesses and organisations. The extensive use of ERP reflects the need of businesses and organisations to replace older software systems and achieve integration of different organisational functions and processes. 3. Considerations Information technology and information systems (IT/IS) serve as a major support platform for many organisations to build the competitive success of their enterprise. They serve numerous roles including being a key component of knowledge management and
ERP implementation in Omantel 79
IMDS 110,1
80
customer intelligence, as well as enablers and agents of business change and transformation making them a core aspect for the twenty-first century organisation. The provision of IT/IS in organisations is always demanding and the case of ERP implementation in The Oman Telecommunication Company (Omantel) is no different apart from specific characteristics such as the emphasis on active localisation and Arabisation of digital content (ESCWA, 2003). In addition, the company is one of the few telecommunications still operating in a monopoly market. Previous studies on implementation strategies adopted in ERP implementation specific to telecommunications have been conducted, for example, by Berchet and Habchi (2005). According to Beheshti (2006), the implementation stage is usually a very critical step during the introduction of ERP systems. As ERP implementation is usually complex (as in the case of most corporate level IT/IS projects), it is not uncommon that many organisations do allocate significant resources to this phase of the project. Unfortunately, current ERP implementation statistics do not look promising with an estimated 70 per cent of all ERP implementations likely to fail (Sivunen, 2005). Overall, it is important for organisations implementing ERP systems to recognise that the introduction of ERP will most likely result in key organisational changes which, if not managed carefully, can actually result in conflict within the organisation especially in relation to the question of how to integrate the ERP system, the legacy system, and the business processes of the organisation. 4. The case study The success or failure of a research exercise has been demonstrated to be directly related to the research methodology adopted (Easterby-Smith et al., 1993; Yin, 1989). This particular study focused on how an organisation behaved during a major exercise of systems interactions. For this reason, it became imperative that this study was conducted using a research approach that emphasised both subjective and contextual interpretation of events (van Strien, 1997). For this reason, we adopted a single case study approach as the primary mode of research. It is imperative to highlight that the use of single source-case studies is well represented in research (Eisenhardt, 1989). In this particular case, based on earlier work by Yin (1989), the use of Omantel as a single case study is valid as it can be argued that within the Omani context, due to the size of its operations, it is representative of the telecommunication industry. Our main reason for choosing this approach was because our investigation was primarily directed at studying current phenomena in a real world context (Yin, 1989). This approach has been used even though it is not generally popular in project management. In particular, we mention the work of Jaafari (2003), who suggests that creative-reflective models are most appropriate when studying complex projects. Of particular relevance is the fact that this approach is heavily reliant on the competencies of project management professionals. Omantel is the sole licensed operator in the Sultanate of Oman for fixed line telephony. The company presently operates as a monopoly in the Public Switched Telephone Network and Internet Service Provider markets. The company has a mobile subsidiary (Omanmobile) which offers mobile services and operates as a duopoly with Nawras which is owned by Qatar Telecommunication Company. The government of Oman is the major shareholder of the parent company Omantel. Omantel has been providing communication services for nearly four decades and currently, the number
of people who are employed in Omantel and its subsidiary Oman Mobile is about 2,600. The group achieved a profit of 80 Omani Rial (£108 million) by the end of 2006 (Omantel Financial Statements, 2006). 5. Strategic drivers Omantel commissioned the ERP project for two major reasons. In the first place, the company sought to ensure that it was strategically placed and ready for the anticipated liberalisation of the Omani telecommunications industry. To achieve this, it has sought to upgrade its capabilities in terms of network technologies that will support best practice controllable work flows (Al Wohaibi, 2006). The second driver was a need by the organisation to position itself to be able to meet national development requirements as identified by the United Nations (ESCWA, 2003). In February 2005, an agreement between Omantel and Oracle, one of the leading global ERP providers (Huang et al., 2004) with about 14.5 per cent of market share (Jakovljevic, 2001) was signed, with the project being initiated immediately. The project was planned to be completed in exactly 12 months after initiation. However, the implementation process overran by about six months, with completion of all ERP package transfers from the test environment completed in June 2006. The overrun was primarily driven by a limited number of IT/IS staff within Omantel possessing necessary Oracle integration expertise. This caused major communication problems between Omantel staff and the technical team from Oracle (for example in explaining systems architecture of existing legacy systems). There was also limited in-house expertise within Omantel on Oracle products. This meant that Oracle’s initial contract to focus solely on implementation was soon expanded into a consultancy role. 6. Findings from the case study The findings obtained from the case study are discussed and analysed in this section, and combined into themes. These findings (not determined directly from this case study) are mapped against earlier discussed critical success factors that impact on ERP systems implementations (Finney and Corbett, 2007; Nah et al., 2003): .
.
.
.
.
.
.
stakeholder consultation; vendor selection; project management; stakeholder management and communication; training; risk management; and system re-engineering and software customisation.
6.1 Stakeholder consultation Omantel understood that each of its customers were not only a stakeholder, but also an important collaborators in the ERP implementation. For this reason, the company was committed to full consultation and transparency with not only its customers, but also with its competitors (predominantly Nawras), and the regulator (Telecommunications Regulatory Authority (TRA) of Oman). Omantel’s principle ERP consultation philosophy was not necessarily to seek unconditional consent from either Nawras or
ERP implementation in Omantel 81
IMDS 110,1
82
the TRA, but rather based on the recognition that such consultation will ease competitive concerns (especially in relation to Nawras). Success of the project was based on bilateral discussions that would hopefully lead to consent. Consultation covered four specific areas of the implementation (Table I). Each consultation process was managed independently as part of a specific working group. Lessons. Omantel’s decision to implement a consultation programme was in recognition that it shared where possible commercially sensitive information on the scope of the ERP implementation. By sharing such information, Omantel anticipated that stakeholder needs were to be fully understood and reflected in the implementation plan. Thorugh this consultation process, the company was able to address the various concerns raised by stakeholders which included creating a greater focus on collaborative testing. In effect, the consultation programme represented an approach for Omantel to create a more detailed understanding with its suppliers, customers, its mobile subsidiary (Omanmobile), competitors (predominantly Nawras), and the regulator (TRA of Oman) of the project. The consultation was limited to the operational and technical impacts arising from the sequencing and timing associated with Omantel’s implementation plan (thus falling within the remit of the Implementation and Migration Working Group). Three major issues emerged from the consultation process, clarity on: (1) operational impact of the timing of the implementation, especially in relation to specific customers; (2) a specific request for implementation freeze periods from customers due to a specific event (e.g. billing runs); and (3) whether the implementation plan will negatively impact or impede Omantel’s ability to meet regulatory and contractual obligations, and possible cost implications if the implementation fails. Omantel’s objectives were to ensure that these three issues were resolved prior to completion of the issuing of test cases and schedules. This was regarded as feasible as it was not expected that the implementation plan would remain unchanged and fixed throughout the duration of the project. Omantel sought to reach solutions acceptable to all parties through its change control process. 6.2 Vendor selection The decision to select Oracle as the ERP vendor was based on recommendations by Omantel’s in-house software evaluation team. Selection of Oracle was conducted through Board External industry focus
Table I. Omantel consultation activity
Details
Focus on external operations of Omantel and how the ERP implementation will impact on corporate, government and other high-value customers Product management working group Focus on product management and expected new product introduction resultant from the ERP implementation Conformance testing Focus workshops on test execution plans, especially on operational readiness Implementation and migration How Omantel will approach implementation (and subsequent migration to new platforms)?
an evaluation workshop organised by the vendor evaluation team during which all interested stakeholders (including representatives from its mobile subsidiary (Omanmobile) and other lines-of-businesses such as its Al-Ufuq Prepaid Card Unit, were invited to review various bids and proposals from potential vendors. One major parameter which was considered was how such an initiative could impact on existing integration with legacy systems (especially some stand-alone systems used for billing mobile customers). From interviews with the Omantel ERP Implementation Manager, it emerged that Omantel’s decision to award the project to Oracle was based on Omantel’s perception of Oracle’s ability to demonstrate an understanding of its business. Lessons. Previous research by Ponis et al. (2007) and Swan et al. (1999) lists vendor selection as one of the critical management issues in ERP implementation. Oracle was able, according to the Omantel ERP Implementation Manager, to demonstrate that its solution was the “most practical, suited application, able to address Omantel’s business objectives”. In addition, “Oracle was able to demonstrate that it had the infrastructure, experience and reputation to support Omantel’s vision ” (Al Wohaibi, 2006). These are two key parameters discussed by Ponis et al. (2007) and Ziaee et al. (2006), which also influence ERP vendor selection. Overall, again on this point, we note that the role of reputation (Keil and Tiwana, 2006) and trust (Benders et al., 2006) has been discussed within the context of ERP vendor selection criteria. 6.3 Project management The major concern about the overall project management approach related to knowledge sharing and transfer. The Omantel staff expressed concerns that the Oracle consultants seemed to have no time, or were unwilling, to share knowledge with the Omantel technical project staff. This perception was especially prevalent during the first stages of project implementation. Overall, the scope of work of the project involved: validation of scope and quality of service; .
.
.
.
.
definition of service architecture and interfaces; development of a test mechanism; development of procedures to ensure that no loss of service would occur during systems implementation; and establishment of success criteria.
A phased implementation approach was adopted, with key milestones (Table II) and distinct objectives being identified for each project phase (Table III). Monitoring and control of the overall project plan was through a formal change control process which sought to: Track and manage requests for changes to sequencing and timing of any aspect of the plan (through stakeholder consultation). Modify the plan over the course of project duration (initially 12 months). The plan was updated and published monthly under change control and made available to all stakeholders. .
.
If possible, reduce this very large gap (obviously check that it does not as a result split tables up too much).
ERP implementation in Omantel 83
IMDS 110,1
Milestone
Definition
Definition of project dashboard
Success criteria are defined to facilitate implementation performance to be assessed Focuses on the establishment of baseline processes for various aspects of the project including communications and back-out. These procedures will also need to be tested successfully Assist stakeholders in designing test plans for customer premises equipment in order to establish compatibility with new implemented platforms Commencement of programme of general awareness of migration to all stakeholders Undertaking to verify that (where necessary) all migration cases (especially in relation to legacy platforms) have been issued, reviewed and agreed by all stakeholders Undertaking to verify that all test cases have been issued, reviewed and agreed by all stakeholders Undertaking to verify completion of compatibility testing of all products on the network All lessons from completed phases of the project successfully collated All customers migrated Systems go live
Baseline procedural establishment
84 Customer premises equipment compatibility Stakeholder awareness Migration cases and schedule issued
Test cases and schedule issued Network and product compatibility testing complete Post-implementation review Table II. Omantel ERP milestones
All customers migrated Live
Lessons. The implementation was managed by utilising a strong matrix project structure. Omantel assigned project management responsibility to its in-house project management office, leaving Omantel team leaders in each domain with full responsibility while overall management responsibility resided with the Omantel project manager. Support was provided by Oracle which provided an independent integration team (in order to facilitate development, support and knowledge transfer). However, in reality this approach did not work as what appeared to be a parallel implementation team emerged. To resolve the developing conflict, the project team was reorganised into one team. Overall, responsibility was assigned to an Omantel project manager, while technical leadership and consultancy was provided by Oracle. Other subtle efforts were made to support integration. For example, to break down the possibility of poor project level focus (Kuprenas, 2003), improve communication (Zomorrodian, 1986) and facilitate a greater sense of a shared project agenda (Lamproulis, 2007), the project team was moved from individual offices into a single open plan office. 6.4 Stakeholder management and communication The implementation of new IT/IS systems is usually accompanied by changes in operations and ways of working. If not adequately addressed, new systems introduction can be met by resistance from stakeholders (Brown et al., 2002). Often this resistance can manifest in different forms such as system non-use (Maguire and Ojiako, 2007), or withdrawal (Allen and Wilson, 2005). One of the approaches adopted by Omantel to overcome stakeholder resistance was to choose a robust approach to stakeholder anaylsis. Table IV provides details on the stakeholders, dividing them into key groups. Details on a desired response in each case are also provided.
Work stream Details Customer experience
The customer experience work stream focused on identification, contact and management of each line of business impacted by user acceptance testing. In general this work stream was responsible for putting together a test strategy plan, developing test scenarios and managing the interface with other lines of business impacted by the implementation Technology The technology work stream was responsible for ensuring that required technology was in place to support ERP implementation. Key activities in this work stream include setting up of required user acceptance test environments, development of required design and test documents, and resourcing of testing and technical support to the project team and customers, when required Systems It was expected that in most cases, the implementation will impact on a majority of development existing customer interfacing systems. A full compatibility audit of all systems was conducted prior to systems development Networks The network and systems readiness work stream was responsible for ensuring that all and existing (and legacy) networks and systems were migrated (as required). This team was systems also responsible for ensuring that new designs and necessary changes required for the successful implementation were successfully completed. The team was specifically responsible for activities such as production of solution designs, end to end testing of solution design, and the implementation of the network and systems changes Customer Omantel’s priority was to ensure that the transfer of customers onto the new platform migration was conducted with minimal impact on customers. One crucial aspect of this migration and was to utilise robust and detailed advance notifications (covering service disruptions assurance and data freezes). At the same time, it is crucial to recognise that customer migration plans also included a back-out plan which articulated a clear process (if required), whereby customers could be migrated back to legacy systems (without substantial loss of service)
The stakeholder management and communication approach facilitated the development of a framework for stakeholder segmentation that identified not only important stakeholder groups, but also identified desired responses from them based around: What Omantel wants stakeholders to know about the implementation? How Omantel want stakeholders to feel about the implementation? What Omantel want the stakeholders to do about the implementation? .
.
.
Lessons. Stakeholder management and communications is a key success factor for ERP projects and its role has been discussed by various researchers such as Al-Mashari and Zairi (2000). For example, it is known that communication influences the acceptance of technology (Amoako-Gyampah and Salam, 2004), and enhances the two-way flow of information between the vendor and customers, thus enabling feedback. Omantel sought to communicate and engage with all stakeholders and to provide advice on the likely impact of the proposed implementation. By engaging in this process, Omantel sought to reassure stakeholders on service continuity. Omante’s consultation philosophy was based on an acceptance that the level of engagement was not to be based on a “one size fits all” approach, but that instead, stakeholder management was to be tailored to the individual needs of each stakeholder. Even though processes were put in place to support effective stakeholder communication (for example, a special implementation webpage was created and
ERP implementation in Omantel 85
Table III. Omantel ERP project work streams
IMDS 110,1
Group
Categorisation
Desired response
Major customers
Know
The project objectives, detailed information on emerging solutions and capabilities Enthusiastic and confident that Omantel is their best partner and will continue to deliver desired value Identify needs and work with Omantel to exploit the implemented platform and purchase solutions That they are not affected by the ERP implementation That they are reassured about the future and the service they receive and expect to receive in the future Continue to remain with Omantel The company’s vision, overall strategy, constituent projects and potential impacts on company’s competitive position if failure occurs. At base level, understand broad impacts of the project Confident, trusted, valued and part of the company’s vision and future Possess a shared vision and outlook. Are willing to create lasting customer relationships, while at the same time seek opportunities to enhance the customers’ experience The broad outline plan. Understand value associated with current project Confident that the new implementation will enhance Omantel’s competitiveness Continue to maintain (and in some cases increase) their investment in Omantel, while at the same time encouraging others to do so The outline plan and its compliance with regulatory and contractual agreements and requirements Confident that the plans adhere to regulatory requirements n/a The detailed plan and how they fit in Involved in the implementation Proactively get involved in all aspects of the project
Feel
86
Do Low-value customers
Know Feel
Employees
Do Know
Feel Do
Investors
Know Feel Do
Regulatory (TRA)
Know Feel
Table IV. Omantel ERP management analysis
Oracle and other suppliers
Do Know Feel Do
heavily promoted), there were general concerns with stakeholder information especially in relation to how quickly responses were provided to stakeholder information requests (especially those requests put forward formally). To address this problem (and improve information flow), an information database was developed and delivered. Perhaps, most worrying is that only a handfulof employees (mainly senior managers) was aware of the project before its inception. Most surprising is that even after implementation, a small number (admittedly only a handful) was not even aware that any new systems had been deployed! Studies on systems introduction (Maguire and Ojiako, 2007; Ojiako and Greenwood, 2007) have highlighted that poor employee engagement will often lead to a lack of understanding of the system.
6.5 Training The general perception of the employees was that training was not adequate. It appeared that the majority of staff involved in the project were first trained on the new system well after the “go-live” date. This obviously meant that at the time of commissioning, close to one in three employees was not trained on the use of the system. Perhaps, more worrying is that overall, about 15 per cent of staff involved in the project did not receive any training at all, while those who did, such as on database languages such as structured query language, only ended up using their newly acquired skills nearly seven months after training, meaning that knowledge gained from the original training was forgotten due to lack of practice. This meant that refresher courses had to be arranged at additional cost to the company. Lessons. Even though recognised as a crucial means of addressing possible resistance to organisational change (Maguire and Redman, 2007), and of crucial importance in ERP implementation (Yu, 2006), the study appears to indicate that inadequate staff training was a major concern within the project team. It is important to highlight that an issue with the employee’s perception of training was fully acknowledged by the project manager. Various reasons have been attributed to this situation. For example, he pointed out that there was a general problem working with a limited number of expert users and trainers. In addition, the talent pool available to Omantel was generally restricted. 6.6 Risk management Despite numerous consultations, the potential impact of the implementation on services provided by some stakeholders remained unclear primarily because Omantel did not have the appropriate knowledge to carry out these tests, leading to an over-reliance on Oracle to resolve technical queries. At the same time, precise details of the improved “experience” new systems that users were to be exposed to at the completion of the project were not clearly articulated. In certain instances, Omantel was unable to provide exact details on time lags associated with anticipated “breaks-in-service” which were expected to impact on customers’ systems. This had an adverse effect on the detailed dialogue conducted with some customers. In terms of risk associated with the test programme, it was felt that the time allocated for customer managed inter-operability and equipment testing (one month) was considerably limited as no time appeared to have been allowed for any contingencies, late deliveries or significant failures in testing. Overall, the information provided to support testing was also initially regarded as extremely high level. Lessons. Successful ERP implementation is dependent on numerous factors and parameters. One of these parameters is poor information management (Biehl, 2007). 6.7 System testing and software customisation Failure to test in a robust way can often lead to significant problems when a system goes live (Maguire, 2004; Ojiako and Greenwood, 2007). Omantel had quite a few products that had to be reconfigured as part of the introduction of the new ERP systems. Under the joint system testing and software customisation process run by Omantel and Oracle, most products were reviewed by specialists to determine what impact the newly introduced system would have on Omantel’s products and services. In the majority of cases, confirmation was received that there was unlikely to be any
ERP implementation in Omantel 87
IMDS 110,1
88
impact (subject to more aggressive testing). It was, however, noted that due to the short contingency period between testing and “go live” date, if the tests failed, product and service customisation would need to be managed expertly in order to ensure that the limited resources of the organisation were used effectively and also to ensure that disruption was minimised. Details of test scenarios were produced, and scripts for the testing of products and services that had to be completed prior to migration were also prepared. However, citing the general lack of technical knowledge within the organisations, a review of these test scenarios appeared to be insufficient, as each generally lacked the necessary depth to give assurance of its robustness. The result (which was one of the major contributors to the project being delivered late) was that product and service offerings required changes either because the requirement for change had been identified before testing began and had not been sufficiently addressed, or where changes had to take place following a problem identified during testing. Lessons. As the literature suggests that ERP clients should avoid system modification (Markus et al., 2000), an agreement was reached between Omantel and Oracle that no part of the ERP system would be customised to meet the system compatibility requirements for any of Omantel’s products and services. Any system customisation implemented by Omantel without full sign-off by Oracle would invalidate the system warranty and support. 7. Discussions The introduction of the new ERP system is the most significant change within Omantel since the drive to liberalise the Omani telecommunications industry commenced. These new systems have the potential to deliver significant benefits to the organisation. They are also expected to fundamentally transform the way Omantel delivers services to all of its customers. Ultimately, it is the first major step the organisation has taken in readiness for the full liberalisation of the telecommunications industry in Oman. Unlike the more chaotic strategic alignment approach adopted by NITEL (Ojiako and Maguire, 2006) which led to poor customer perception (Onwumechili and Okereke-Arungwa, 2003), the findings indicate that the impact of the ERP system on Omantel is considered in a more positive light. For example, a majority of the company’s employees were of the opinion that the newly introduced systems had made a considerable difference to their jobs. It is however important to highlight that overall evaluation of the performance of the system still raises concern. We show that just over half of employees sampled felt that the new system was easy to use. This point reinforces the need to address employee training as a matter of urgency. At the same time, it reiterates that the effects of earlier failure of management to engage with employees during system design is still lingering. 8. Conclusions ERP is no longer a western European or North American issue. By its very nature its implementation is complex and far-reaching. There are plenty of opportunities for things to go wrong. Its multinational nature means that further research should be undertaken in a range of countries to identify the political, cultural, and behavioural repercussions of implementation. The scope and complexity of ERP means that any
opportunity to gain insights from this system development process should be grasped with both hands. We do not have all the answers with regard to this process and so any way the process can be facilitated should be made available to a wider audience. This research has examined the key environmental factors that have impacted on the adoption of ERP by a large organisation in Oman. It highlighted the implementation of strategic systems that would transform the capabilities of the company at a time of major change within the sector. There has been a dearth of research with regard to ERP implementation with Oman. There has been some research in the Middle East in the area of ERP but the fact that an internal member of staff undertook the interviews meant that fur [. . .] study? Their insight into internal strategies and documentation was made available and this added to the richness of the research. This research has also shown how important it is to view ERP implementation as a strategic operation for the organisation at every stage. Adopting a stakeholder involvement philosophy at an early stage of development paid dividends for Omantel. This openness seems to have facilitated an effective system development process that, in turn, led to a successful implementation. This particular investigation has highlighted the benefits that can accrue from a commitment to full consultation and transparency throughout the various stages of ERP implementation. During any large system development there is a temptation for the various stakeholder groups to be secretive about the scope of the project and their roles within it. However, this can often have serious consequences in relation to areas such as system testing. This crucial area can only be wholly addressed if rigorous testing takes place – and this will only occur if there is a united effort to provide the requisite test data for the various processes and elements of the system. Many organisations underestimate the organisational impact of ERP implementations. Even the timing of the implementation can have adverse effects on various parts of the organisation or strategic partners, i.e. customers and clients. Viewing the consultation process as important also allowed Omantel to collect strategic intelligence that would help with the risk management that should always underpin any ERP implementation. The critical aspect of vendor selection was based on Oracle’s commitment to make great efforts to understand Omantel’s core business. However, probably more important in the longer term was Oracle’s ability to demonstrate that it had the infrastructure, experience and reputation to align with Omantel’s vision and business objectives. What Omantel has gone some way to achieving is to view an organisational ERP implementation as external and strategic rather than internal and operational. This very important distinction increased the chances of the ERP implementation being a success. This does not mean that there were no glitches in the overall process, i.e. some Omantel staff expressed concerns that Oracle’s consultants were unwilling to share information and knowledge with them. This is of particular concern as knowledge transfer should be a key part of any ERP implementation, especially where it is normally taken as a given that the vendor’s consultants will disappear soon after implementation. It would be especially constructive if the stakeholder management and communication approach could be tested in other countries and sectors, and with different sizes of organisations. Even though single case study research, especially if undertaken by internal managers, can provide researchers with a significant amount of rich data, it is often
ERP implementation in Omantel 89
IMDS 110,1
very difficult to determine firm conclusions. This is why further research in a number of varied settings and environments is needed to consolidate any of the conclusions revealed by this particular research. References
90
Aladwani, A.M. (2001), “Change management strategies for successful ERP implementation”, Business Process Management Journal , Vol. 7 No. 3, pp. 266-75. Allen, D. and Wilson, T. (2005), “Action, interaction and the role of ambiguity in the introduction of mobile information systems in a UK police force”, IFIP International Federation for Information Processing , Vol. 158, pp. 15-36. Al-Mashari, M. and Zairi, M. (2000), “Information and business process equality: the case of SAP R/3 implementation”, Electronic Journal on Information Systems in Developing Countries , Vol. 2, available at: www.unimas.my/fit/roger/EJISDC/EJISDC.htm (accessed 3 April 2001). Aloini, D., Dulmin, R. and Mininnoa, V. (2007), “Risk management in ERP project introduction: review of the literature”, Information & Management , Vol. 44 No. 6, pp. 547-67. Al Wohaibi, M. (2006), Omantel – Management Discussion & Analysis Report – Year Ended 31/12/06 , available at: http://mrmewr.gov.om/Financials%20for%20website/2006/Year% 20End%20English/Management%20Discussion%20And%20Analysis_2006_Final.pdf (accessed 17 January 2008). Amoako-Gyampah, K. and Salam, A. (2004), “An extension of the technology acceptance model in an ERP implementation environment”, Information & Management , Vol. 41 No. 6, pp. 731-45. Beheshti, H. (2006), “What managers should know about ERP/ERP II”, Management Research News, Vol. 29 No. 4, pp. 184-93. Benders, J., Batenburg, R. and van der Blonk, H. (2006), “Sticking to standards; technical and other isomorphic pressures in deploying ERP-systems”, Information & Management , Vol. 43 No. 2, pp. 194-203. Berchet, C. and Habchi, G. (2005), “The implementation and deployment of an ERP system: an industrial case study”, Computers in Industry , Vol. 56 No. 6, pp. 588-605. Biehl, M. (2007), “Success factors for implementing global information systems”, Communications of the ACM , Vol. 50 No. 1, pp. 53-8. Brown, S.A., Massey, A.P., Montoya-Weiss, M.M. and Burkman, J.R. (2002), “Do I really have to? User acceptance of mandated technology”, European Journal of Information Systems, Vol. 11 No. 4, pp. 283-95. Davenport, T.H. (1998), “Putting the enterprise into the enterprise system”, Harvard Business Review, Vol. 76 No. 4, pp. 121-31. Easterby-Smith, M., Thorpe, R. and Lowe, A. (1993), Management Research: An Introduction, Sage, London. Eisenhardt, K. (1989), “Building theories from case study research”, The Academy of Management Review, Vol. 14 No. 4, pp. 532-50. ESCWA (2003), “The United Nations economic and social commission for Western Asia. Profile of the information society in the sultanate of Oman”, E/ESCWA/ICTD/2003/11/Add No. 13, available at: www.escwa.un.org/wsis/reports/docs/Oman-E.pdf (accessed 11 January 2008). Finney, S. and Corbett, M. (2007), “ERP implementation: a compilation and analysis of critical success factors”, Business Process Management Journal , Vol. 13 No. 3, pp. 329-47.
Gould, J. (2004), ERP ROI Myth & Reality: A Peerstone Research Report , available at: http://216. 197.101.108/pdfs/ERP_ROI_Table_of_Contents_and_Summary.pdf (accessed 14 January 2008). Huang, S., Chang, I., Li, S. and Lin, M. (2004), “Assessing risk in ERP projects: identify and prioritize the factors”, Industrial Management & Data Systems , Vol. 104 No. 8, pp. 681-8. Jaafari, A. (2003), “Project management in the age of complexity and change”, Project Management Journal , Vol. 34 No. 4, pp. 47-57. Jakovljevic, P. (2001), “The ERP market 2001 and beyond”, available at: www.technology evaluation.com Keil, M. and Tiwana, A. (2006), “Relative importance of evaluation criteria for enterprise systems: a conjoint study”, Information Systems Journal , Vol. 16 No. 3, pp. 237-62. Kholeif, A., Abdel-Kader, M. and Sherer, M. (2007), “ERP customization failure institutionalized accounting practices, power relations and market forces”, Journal of Accounting & Organizational Change, Vol. 3 No. 3, pp. 250-69. Kumar, K. and van Hillegersberg, J. (2000), “ERP experiences and evolution”, Communications of the ACM , Vol. 43 No. 4, pp. 23-6. Kuprenas, J. (2003), “Implementation and performance of a matrix organization structure”, International Journal of Project Management , Vol. 21 No. 1, pp. 51-62. Lamproulis, D. (2007), “Cultural space and technology enhance the knowledge process”, Journal of Knowledge Management , Vol. 11 No. 4, pp. 30-44. Maguire, S. (2004), “Reconciling the system requirements process in changing business environments”, Information Management & Computer Security , Vol. 12 No. 4, pp. 362-72. Maguire, S. and Ojiako, G.U. (2007), “Interventions for information systems introduction in the NHS”, Health Informatics Journal , Vol. 13 No. 4, pp. 283-302. Maguire, S. and Redman, T. (2007), “The role of human resource management in information systems development”, Management Decision, Vol. 45 No. 2, pp. 252-64. Markus, M.L., Tanis, C. and van Fenema, P.C. (2000), “Multisite ERP implementations”, Communications of the ACM , Vol. 43 No. 4, pp. 42-6. Moller, C. (2005), “ERP II: a conceptual framework for next-generation enterprise systems”, Journal of Enterprise Information Management , Vol. 18 No. 4, pp. 483-97. Nah, F., Zuckweiler, K. and Lau, J. (2003), “ERP implementation: chief information officers’ perceptions of critical success factors”, International Journal of Human-Computer Interaction, Vol. 16 No. 1, pp. 5-22. Ojiako, G.U. and Greenwood, D. (2007), “Information systems and technology service introduction success criteria”, paper presented at PICMET 2007 Conference, Portland International Centre for Management of Engineering and Technology, Management of Converging Technologies, Portland State University, August 5-9. Ojiako, G.U. and Maguire, S. (2006), “Divestiture as a strategic option for change in NITEL: lessons from the BT and AT&T experience”, INFO: The Journal of Policy, Regulation and Strategy, Vol. 8 No. 6, pp. 79-94. Omantel Financial Statements (2006), Report on the Management and Organization of Oman Telecommunications Company , available at: www.omantel.net.om/Financials%20for% 20website/2006/. . ./Corp%20Governance_Final2006.pdf (accessed 12 April 2007). Onwumechili, C. and Okereke-Arungwa, J. (2003), “The morning of competition: Nigeria’s NITEL drags its feet with poor customer service”, INFO: The Journal of Policy, Regulation and Strategy, Vol. 5 No. 3, pp. 65-71.
ERP implementation in Omantel 91
IMDS 110,1
92
Payne, W. (2000), “The time for ERP”, Work Study at MCP UP Limited , Vol. 51 No. 2, pp. 91-3. Ponis, S., Tatsiopoulos, I., Tsitsiriggos, K. and Christou, I. (2007), “Integrating enterprise resource planning vendor evaluation into a proposed ERP selection methodology”, International Journal of Integrated Supply Management , Vol. 3 No. 4, pp. 364-84. Sivunen, P. (2005), Organizational Cultural Impact in ERP Implementation in China , Swedish School of Business, Hanken. Swan, J., Newell, S. and Robertson, M. (1999), “The illusion of ‘best practice’ in information systems for operations management”, European Journal of Information Systems , Vol. 8, pp. 284-93. van Strien, P. (1997), “Towards a methodology of psychological practice, the regulative cycle”, Theory & Psychology , Vol. 7 No. 5, pp. 683-700. Yin, R. (1989), Case Study Research: Design and Methods, Sage, Beverly Hills, CA. Yu, C. (2006), “Causes influencing the effectiveness of the post-implementation ERP system”, Industrial Management & Data Systems, Vol. 105 No. 1, pp. 115-32. Ziaee, M., Fathian, M. and Sadjadi, S. (2006), “A modular approach to ERP system selection: a case study”, Information Management & Computer Security , Vol. 14 No. 5, pp. 485-95. Zomorrodian, A. (1986), “Experience with matrix management in a developing country”, International Journal of Project Management , Vol. 4 No. 3, pp. 168-76. Corresponding author Udechukwu Ojiako can be contacted at:
[email protected]
To purchase reprints of this article please e-mail:
[email protected] Or visit our web site for further details: www.emeraldinsight.com/reprints
