Can Organizational Structure Influence ERP Success?

Abstract

Implementing enterprise resource planning systems is a sophisticated, lengthy and costly process which tends to face serious failure. Though many contributing factors have been cited in the literature, the authors argue that the integrated nature of ERP systems, which generally requires an organization to adopt standardized business processes reflected in the software, is one of the key factors contributing to these failures. The integration and standardization imposed by most ERP systems may not be suitable for all types of organizational structures and it seems that some characteristics in organizational structures affect the likelihood of implementation success or failure. Based on the theory of organizational structure, this paper analyzes how the traditional variables which define a firm's organizational structure such as formalization, complexity, and centralization along with two variables of size and CIO position in an organization influence ERP projects success. The paper tests five hypotheses using a sample of 203 Iranian cases. The results show that all of the research variables on organizational structure exert a positive influence on ERP success which confirms all the research hypotheses.