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Stakeholder perspective on internal marketing communication An ERP implementation case study

Internal marketing communication 311

Sherry Finney Department of Organizational Management, Shannon School of Business, Cape Breton University, Sydney, Canada Abstract Purpose – Communication strategy during the management of change has been one success factor widely cited in the literature. However, despite its recognition within the enterprise resource planning (ERP) domain, there has been little regard for stakeholder perspective and even less for practical suggestions regarding communication planning. Design/methodology/approach – This mixed-method research investigated the ERP implementation process from the perspective of four key stakeholder groups and generated greater understanding of their differing views on communication effectiveness and preferred communications strategies during the management of change process. Findings – The findings of this study revealed that stakeholders differ, significantly in some respects, in how each group believes certain aspects of the project should be handled, from a tactical communication standpoint. Research limitations/implications – The research is based on a single case study, which adds caution to the generalizability of the results. Further, the survey sample was self-selected and not random. Practical implications – This paper has made a significant contribution in terms of understanding differing perspectives regarding communication strategies during change. Particularly, we have learned how each group believes certain aspects of the project should be handled, from a tactical standpoint. Originality/value – The lack of case studies addressing practical challenges has already been identified as a gap in the literature. Further, with a stakeholder perspective combined, this research has revealed another element, which is that the management of ERP projects is not as simple as a “one size fits all” strategy. Keywords Educational institutions, Internal marketing, Resource management, Stakeholder analysis, Critical success factors, Communication management Paper type Research paper

1. Introduction Research on enterprise resource planning (ERP) implementation and critical success factors (CSFs) has been a relatively popular topic in the IS realm for the past decade. What is driving this agenda is the belief that greater understanding of the various success factors will enhance overall chances of implementation success. Given that the ERP market is so lucrative and the proposed benefits to the organization are so significant, if success is achieved, it is easy to understand this rationale. Most would agree that the range of CSFs cited in the literature is vast, varying from such factors as the need to consider team composition to the need for visioning and planning.

Business Process Management Journal Vol. 17 No. 2, 2011 pp. 311-331 q Emerald Group Publishing Limited 1463-7154 DOI 10.1108/14637151111122365

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However, while there has been no lack of research that has identified the diversity of success factors, there is less that provides greater understanding of how specific CSFs need to be managed. Particularly, it has been revealed that while change management is the most widely cited success factor, the activities that are encompassed by “change management” vary considerably (Finney and Corbett, 2007). The most common emerging themes include: the need to build acceptance and commitment to the change (Parr and Shanks, 2000; Motwani et al., 2002; Bajwa et al., 2004; Holland and Light, 1999; Abdinnour-Helm et al., 2003; Kumar et al., 2002) and address resistance (Ross and Vitale, 2000; Hong and Kim, 2002; Skok and Legge, 2002), the need to communicate (Ribbers and Schoo, 2002), the need to understand benefits and drawbacks (Bingi et al., 1999; Aladwani, 2001), the need to educate (Siriginidi, 2000a, b), and the need to consider and address organizational culture issues (Davison, 2002; Aladwani, 2001; Al-Mashari et al., 2003; Nah et al., 2001; Scott and Vessey, 2000; Tarafdar and Roy, 2003; Skok and Legge, 2002). However, upon closer examination, the change management activities noted above reveal a common thread of communication planning, and while researchers frequently make reference to these terms or “like terms”, they rarely seem to explain in detail exactly what should be done or what tactics should be implemented to manage the change (Finney and Corbett, 2007). Piercy suggests that internal marketing (IM) communication is one possible strategy to facilitate acceptance of change. Another gap in the ERP success factor literature centers on the lack of stakeholder perspective (Finney and Corbett, 2007). New technologies, such as ERPs, are typically adopted by a wide range of users; therefore, in order to facilitate acceptance of the change, usually brought with such an initiative, wider stakeholder consultation is advisable. This article reports on a case study of an educational institution implementing a suite of ERP modules. Exploratory research conducted through qualitative interviews indicated dissension across stakeholder groups with regard to attitudes surrounding communication planning. The lack of stakeholder perspective in ERP studies reported in the literature, coupled with this initial finding, supported the need for a more detailed examination of the effectiveness and preferred approaches of communication strategies and tactics used during change management projects. As a result, a quantitative research design using survey methodology compared and contrasted four stakeholder groups with regard to attitudes and preferences surrounding IM communication. Findings and conclusions present specific, tactical suggestions. The paper is organized as follows. The following two sections cover relevant literature in the wider domain of communication, and more specifically, IM communication, and stakeholder theory as it applies to ERP. Communication planning is considered a necessary aspect of marketing planning; in this instance, however, the marketing is focused internally and is meant to facilitate the change and/or the acceptance of the new technology. Literature surrounding stakeholder theory focuses particularly on ERP studies and there appears to be support for additional research in this domain. Next, the research methodology is outlined; justification is provided for a quantitative approach and the sample selection, sampling procedures and instrumentation are described. Key findings are presented, followed by conclusions and directions for future research. 2. Communication and change management Communication has often been referenced as a necessary component of ERP implementation. Further, when one considers the activities of change management,

another popular success factor, it is clear that communication is an inherent aspect. According to this researcher’s earlier work (Finney and Corbett, 2007) in the area of CSF identification, there have been very few studies that have examined communication within an ERP context. One report states that communication should occur among various functions/levels (Mandal and Gunasekaran, 2003) and specifically between business and IT personnel (Grant, 2003). Another study cites the need for a communication plan (Kumar et al., 2002) to ensure that open communication occurs within the entire organization. Finally, several researchers report that communication should encompass the entire organization, including the shop-floor employees (Yusuf et al., 2004), as well as suppliers and customers (Mabert et al., 2003). As previously noted, preliminary research for the current study revealed differences in opinion regarding appropriate communication strategies and tactics to gain acceptance of a new system, as well as the degree of communication required. Introduction of an ERP is a very significant change initiative and in an effort to find an appropriate measurement scale for effective communication during change, the field of literature relating to communication for change management was reviewed. According to research by Goodman and Truss (2004, p. 220), research in this field is “complicated by the fact that [. . .] we lack appropriate and rigorous tools to measure the effectiveness of communication during change programmes”. Goodman and Truss, however, have presented a model that addresses several key communication decisions surrounding message process and content that need to be addressed when implementing a major change initiative. Similarly, Harkness (2000, p. 67) has observed that “there are no straightforward tools that can be used uniformly to measure the impact of internal communication” He further posits that this is partly due to the fact that communication is a hugely dynamic human process. Another article outlines seven empirically founded principles of effective communication (Klein, 1996). IM literature was also consulted to determine if there might be an appropriate measurement tool for assessing internal communication when implementing change. Several researchers (Varey, 1995; Piercy, 1995, 1990, 2002; Piercy and Morgan, 1991; Causon, 2004) have supported the view that IM is an appropriate technique for effective implementation of corporate change strategies. The conclusion, however, is that the IM literature also does not present any specific measurement tools for assessing the effectiveness of internal communications during a change management initiative. Based on the communication/change management literature, two theoretically important constructs were identified (Table I) in addition to a set of measurement items for each. These items are further described in the research methodology.


3. IM for change management According to Moran and Brightman (2001, p. 111), change management is the “process of continually renewing an organisation’s direction, structure, and capabilities to serve Communication constructs

Construct items

Communication methods Communication content

Timing, media choices and delivery agent, and feedback mechanisms Information relevance, information sought, information conveyed

Note: Construct items were determined based on the following articles: Klein (1996), Harkness (2000), Armenakis and Harris (2002) and Goodman and Truss (2004)

Table I. IM communication construct items

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the ever-changing needs of external and internal customers”. Employees are often resistant to change, whatever the nature or cause. Work by Armenakis and Harris (2002) purports that stakeholders play a significant role in changing organizations and in order to motivate employees, the employees must believe that something is wrong and something needs to change. It is in the creation or realization of this belief that IM can play a role. Recent work by Causon (2004) concludes that people resist change because the old way of doing things is always easier; she believes that IM is necessary for employees to understand the reason behind the change. Similarly, Rafiq and Ahmed (1993) support this notion as they see IM as a planned effort to overcome organizational resistance to change and to align, motivate and integrate employees towards the effective implementation of corporate and functional strategies. Finally, work by Piercy (1990) reveals that effective change requires a resourced and realistic implementation process that confronts the structural and process issues that have been aligned with new strategies. One mechanism that has been proven effective for addressing this issue is IM (Piercy, 1990; Piercy and Morgan, 1991; Varey, 1995; Causon, 2004). According to Piercy (2002, p. 401), “Internal marketing provides the skills and tools to make implementation effective”. In fact, Piercy and Morgan (1991) go as far as stating that IM is unavoidable because marketing plans and strategies imply organizational change; they further profess that it is not enough to analyze external markets in order to carry out the organizational change, and acknowledge that it is naı¨ve to think that marketing plans and strategies will sell themselves to those whose support is needed. While the research is limited, there is clear support of IM as a mechanism to facilitate change. Notwithstanding, it is also important to consider the impact of stakeholder perspective with regard to organizational change. 4. Stakeholder theory and ERP A stakeholder is defined as, “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Freeman, 1984, p. 25). The application of stakeholder theory provides methods for identifying and managing stakeholder goals and objectives, which is done from two perspectives: inside-in and inside-out (Freeman, 1984). The inside-in perspective considers actors internal to the company (i.e. employees, managers), while the inside-out view looks at groups connected to the organization, but to a lesser degree and in a different capacity (i.e. shareholders). As a method to facilitate organizational change, stakeholder perspective is well-supported. As noted by Haberberg and Rieple (as cited in Lovegrove, 2005), stakeholder approach is based on three basic declarations: organizations possess a number of constituencies that affect and are affected by others; the interactions and the outcomes of processes undertaken by these groups affects the organization as well as other stakeholder groups; stakeholder perceptions affect the viability of strategic action. The introduction of an ERP is one such example of a strategic action that is also a change initiative. It is a commonly held belief that without engagement and acceptance by stakeholders, it is unlikely that any change will deliver the potential benefits promised. Therefore, it can be clearly justified that stakeholder consultation is a necessary element of any change management program. A look more specifically, at the stakeholder literature in the IS field reveals that identified stakeholder groups have included managers, IT professionals, end-users, and internal auditors (Infinedo and Nahar, 2007). Lyytinen, Mathiassen and Ropponen (as cited in Infinedo and Nahar, 2007), however, believe that stakeholders can be

identified based on research purpose, or more particularly as actors that can set forth claims or benefit from IT systems development issues. Therefore, depending on the situation, identified stakeholders may extend to broader groups. More particularly in the ERP field, Legris and Collerette (2006) have introduced a table summarizing the ERP implementation process and have identified stakeholders as project managers, vendors, users and system owners. Similarly, Akkermans and van Helden (2002) also include project managers and vendors, but they add project champion and top management to that group. External to the company, however, there are other groups to consider, such as customers, suppliers and business partners (Bajwa et al., 2004). These differences demonstrate how, as noted above, the nature or purpose of the research will determine the stakeholder groups considered. A review of the literature has also provided insight into documented differences in stakeholder perspective. For instance, it has been suggested by Grindley (as cited in Infinedo and Nahar, 2007) that due to cultural differences, some of the identified groups will hold conflicting views on IT related issues. Several studies have explored this dimension. Particularly, Schein (1992) concluded that top management and IT personnel belonged to distinct subcultures. Similar research by Ward and Peppard (1999) revealed cultural gaps between IT and business departments. One of the reasons cited for the divergence between these two groups extends to different goals regarding IT issues. In the domain of ERP, research by Singletary et al. (as cited in Infinedo and Nahar, 2007) has revealed differences between managers, IT professionals and end-users on benefits and drawbacks of ERP implementation. Finally, work by Bradley and Lee (2004) has revealed discrepancy between technical and management personnel regarding understanding of necessary levels of training. This kind of research is limited, however, as the majority of study has been managerially focused and the stakeholder perspective has not been often considered (Amoako-Gyampah, 2004). Kossek’s (1989) work brings attention to the need to consider the perceptions of other important groups and Amoako-Gyampah (2004, p. 171) more specifically states that knowledge of any differences can “help implementers develop appropriate intervention mechanism such as training and communication that can lead to successful ERP implementation”. 5. Research methodology This research utilized a case study informed primarily by quantitative research design. The selected organization was a public-sector educational institution that had undergone an implementation of three modules of the PeopleSoft ERP suite. Users of the suite were faculty and staff only. Exploratory qualitative interviews with a representative sample of four stakeholder groups were succeeded by a quantitative survey. A content analysis of the interviews indicated dissension with regard to communication planning during change, which was in this case an ERP implementation. The focus of the research moved toward gaining a broader understanding of the views of the client organization, in general, through survey research. Survey methodology allows researchers to focus on a sample to learn something about the larger population of interest, which is in this instance the case study organization. It is an efficient and economical means of gathering data about people’s knowledge, attitudes, beliefs, expectations, and behavior. Data collection occurred through development of an online questionnaire and invitation online sampling by e-mail (Burns and Bush, 2006). A subscription to a commercially available online survey provider was secured and the instrument was


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built online. An online survey administration was deemed to be acceptable as the population of interest was obviously computer literature and had access to the internet. Discussions with the pre-test sample and members of the case study organization also revealed that this was the preferred method and the one that they believed would elicit the greatest response rate, depending on the timing of the delivery. There were three e-mail campaigns, occurring at approximate two-week intervals. A total of 85 usable questionnaires resulted. The statistical methods used in analysis included descriptive and inferential statistics (ANOVA and Kruskal-Wallis). 5.1 Sample description For the quantitative survey, the target population was defined as all current users of the case study unit’s PeopleSoft system and all former members of the PeopleSoft Implementation team. The current users of the system were further divided into three groups: staff users, management, and IT staff. The four primary stakeholder groups that were examined in the data analysis were Users (current staff who are day-to-day users of the system); Managers (current management who are users of the system and those managers with access to the system); IT staff (all IT staff seconded to the implementation team and current IT/computer services staff); and Consultants (all outside consultants contracted to work with the implementation team). 5.2 Sampling procedures Sampling methodology was not applied in this instance as the survey instrument was administered to all members of the population, which totaled 325 individuals. This procedure was possible given there was ample time, the population size was not too large or difficult to access, there was an expectation of variance, and the expense was not an inhibiting factor. 5.3 Instrumentation The qualitative interviews revealed differences in opinion regarding appropriate communication strategies and tactics to gain acceptance of the new system, as well as the degree of communication required. Because the literature review revealed no suitable scale to measure IM communication during ERP, attention was placed on compiling a list of constructs that were hypothesized to be important determinants of communication effectiveness. Based on the communication/change management literature, two theoretically important constructs were identified (Table I) in addition to a set of measurement items for each. It should be noted that this measurement scale had not been tested for reliability. However, this was not a concern since the main objective of the research was not to assess the effectiveness of the communication strategies as such, but to determine if there are stakeholder differences regarding communication strategy. The following sections outline the process for question development for the various construct items addressing communication methods and communication content. Communication methods. The questions relating to timing are based on the communication needs model according to stages of organizational change, as proposed by Klein (1996). See the relevant part of the model in Table II. His work, in turn, is based on the Kurt Lewinian model (Lewin, 1951) that incorporates three stages of change;

Unfreezing

Changing

Communication needs Explaining issues, needs, rationale Informing employees of progress Identifying and explaining directives Identifying and explaining first few steps Reassuring people Informing management cadre

Getting input as to effect of the process Developing sophisticated

Refreezing Publicizing the success of the change Spreading the word to employees

knowledge among all supervisory management personnel Challenging misconceptions Continual reassurance of employees Delineating and clarifying role relationships and expectations

Source: Klein (1996)

unfreeze, change, refreeze. Questions were presented on a five-point Likert scale and respondents were asked to indicate their degree of agreement with the statements. Media choices need to change with the stages of the implementation process (Klein, 1996). Further, a communication strategy needs to consider all available choices including verbal, written and electronic media (Klein, 1996; Pitt et al., 2001). Parr and Shanks (2000) present a model of ERP implementation that synthesizes the work of other researchers, notably Bancroft et al. (1998), Ross (1998) and Markus and Tanis (2000). Parr and Shanks’ model presents three major phases of ERP implementation: planning, project and enhancement. In order to develop questions for this construct, the first two phases have been used as a guide. Specifically, for each task identified in the planning and project phases, respondents were asked to identify their most preferred method of communication. Based on the literature and the preliminary interviews, possible communication media included: face to face with immediate supervisor, face to face with project team member, face to face with senior administration, face to face with project champion, project web page, e-mail, electronic newsletters, informational memos, web-cast, teleconference, other print media. Finally, effective communication can only occur if there is a mechanism for feedback so that the sender can check to make sure his/her message is understood (Klein, 1996). Communication content. The second communication construct addresses the content of the message itself. According to Pearson and Thomas (1997), there are three kinds of information that can make up communication content: information that employees must know because it affects his/her job; information that they should know because it affects some aspect of the organization and finally, information they could know, which might include unimportant office gossip. Question addressing this construct sought to determine if the organization stakeholders felt that they received the information they must and should have. 6. Data analysis and results 6.1 Descriptive analysis For almost every construct item, the consultants expressed the highest levels of agreement while the users reported the lowest. These results may be viewed in Table III.


Table II. Klein’s communication needs for organizational change

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Table III. Mean (SD) communication method scale scores by stakeholder

Scale Item The rationale for the new ERP was clearly explained to employees The initial communication about the new system should come from senior management Managers and supervisors were informed and able to answer most employee questions about the new system Employees were periodically informed of the progress of the PeopleSoft project The implementation team sought employee input regarding the new system and its effect on my job Employees who were not part of the project team were made aware of how they would be affected by the new system Any misconceptions about the impact of the new system were quickly addressed by the project team After the system was implemented, employees were informed of how the new system met the organization’s objectives There were effective feedback mechanisms in place for employees to ask questions about the new ERP system? Employees were provided with information about how the ERP would affect their job Employees were provided with information about how the ERP was affecting other parts of the organization

Managers

Users

IT staff

Consultants

2.07 (0.59) 2.65 (1.02) 2.25 (1.16)

1.94 (0.68)

1.80 (0.41) 2.17 (0.88) 1.63 (0.74)

1.31 (0.48)

2.87 (1.25) 3.50 (0.98) 2.75 (1.28)

2.44 (0.81)

1.87 (0.52) 1.98 (0.65) 2.00 (1.07)

1.81 (0.83)

2.87 (1.25) 2.76 (1.04) 2.38 (1.06)

2.00 (0.82)

2.73 (1.03) 3.07 (1.04) 2.50 (1.31)

2.31 (0.70)

2.60 (0.91) 2.76 (0.99) 2.13 (1.13)

2.38 (0.62)

2.73 (1.28) 2.72 (0.96) 2.38 (1.19)

2.56 (0.63)

2.53 (0.99) 2.48 (1.00) 2.25 (1.16)

2.25 (0.68)

2.93 (1.16) 3.07 (0.98) 2.63 (1.30)

2.38 (0.62)

3.07 (1.28) 3.35 (0.92) 2.88 (1.25)

2.50 (0.63)

Notes: Scale: 1 – strongly agree; 2 – agree; 3 – neither agree or disagree; 4 – disagree; 5 – strongly disagree

Descriptive statistics were also calculated to determine the preferred media choice for specific ERP tasks, according to the various stakeholder groups. For some tasks, all stakeholder groups were very close in agreement on the preferred method of communication. For instance, when it comes to the task of backfilling/planning for staff to be placed on the project, everyone was in agreement that communication face to face with a supervisor was the best method. For the selection of the ERP package itself, the majority of stakeholders considered e-mail an appropriate medium. As well, everyone agreed very strongly that when it comes to user training, communication face to face with members of the project team is decidedly one of the very few accepted modes of contact. There were also some distinct differences in opinion as well, and in many cases, the differences were expressed by the users. For instance, when considering the ERP task of analysis and redesign of business processes, managers, IT staff and consultants felt very strongly that this kind of communication should occur face to face with the project team members. Surprisingly, the majority of users felt that e-mail would the best method, followed by face to face with supervisor. Managers, IT staff and consultants also felt that the training of the project team needed to occur face to face with the project team, and yet again, the users differed and wanted to receive this communication either by e-mail or from the project champion. Another ERP task involves planning

of resources, both human and financial. For this task, the users were almost equally split between preference for various forms of personal and non-personal communication and the other groups preferred some form of face to face contact. With respect to team member selection, managers and users preferred e-mail, while IT staff and consultants preferred some form of face-to-face contact. Finally, for the clarification of the rationale for ERP, the IT staff and were largely in favor of electronic methods of communique´, consultants were split on their preferences, while the management and users preferred face to face communication. These results may be viewed in Table IV. 6.2 Tests of difference – IM communication strategy In order to determine if there were any statistically significant differences among the stakeholder groups for the IM communication scale, further tests were required. The scale for the above measure was interval, which indicated parametric tests; however, it was also necessary to examine the normality of the distribution through calculation of Z-scores. Results revealed that all but two of the 11 communication construct items satisfied the normality criterion. For these two items, the non-parametric Kruskal-Wallis test was performed. For the remaining nine items, one-way between-subjects ANOVA determined if any differences existed, while post hoc tests determined how precise the differences were and exactly which mean scores were different (Burns and Bush, 2006). Two types of analysis were performed. One considered significant differences among groups on the total score for the scale. The second considered differences among groups on individual scale items. An analysis of variance showed that there was a significant difference among groups with regard to the overall mean scores of the communication methods and content scale; F(3, 81) ¼ 3.22, p ¼ 0.027 (Table V). Post hoc analyses using the Tukey post hoc criterion for significance indicated that the total scale mean score for the consultants (M ¼ 23.88, SD ¼ 4.47) was significantly less than that for the users (M ¼ 30.50, SD ¼ 7.61), F(3, 27) ¼ 3.218, p ¼ 0.027. The total score for the communication methods and content scale provides an indication of agreement on the various construct items collectively. It should also be noted that lower scores are also indicative of more positive or preferred behavior when considering the role of communicating during an ERP implementation. Therefore, because the average total mean score on this scale for the consultant group is 23.88 as compared to a total average mean score of 30.50 for the user group, it can be concluded that the assessments of the communication methods and content are different between the two groups, with the user indicating an overall less positive assessment (Table VI). In addition to a comparison of means for the total score of the scale, a test of differences in means was also conducted for the individual construct items that comprised the scale. For all 11 items, ANOVA or Kruskal-Wallis tests were performed and it was revealed that significant differences existed for the following: . the rationale for the new ERP was clearly explained to employees ( p ¼ 0.026); . the initial communication about the new system should come from senior management ( p ¼ 0.001); . managers and supervisors were informed and able to answer most employee questions about the new system ( p ¼ 0.003); and . employees were provided with information about how the ERP was affecting other parts of the organization ( p ¼ 0.031). (Tables VII and VIII).


Table IV. Percentage of preferred media choice for various ERP tasks by stakeholder group

Users IT staff Consultants ERP task – selection of ERP Managers Users IT Staff Consultants ERP Task – planning of resources (human and financial) Managers Users IT staff Consultants ERP Task – project team member selection Managers Users IT staff Consultants ERP task – Back-filling/planning for staff to be placed on project team Managers Users IT staff Consultants

ERP task – clarification of rationale for ERPManagers 21.4 22.0 0.0 14.3 21.4 12.2 16.7 14.3 23.1 17.1 16.7 21.4 15.4 7.3 0.0 7.1 16.7 4.5 16.7 7.1

7.1 24.4 14.3 14.3 0.0 12.2 0.0 0.0 15.4 19.5 16.7 14.3 15.4 17.1 20.0 35.7 33.3 43.2 33.3 78.6

8.3 6.8 33.3 14.3

15.4 9.8 40.0 28.6

15.4 7.3 16.7 7.1

7.1 12.2 0.0 14.3

14.3 7.3 14.3 21.4

8.3 4.5 0.0 0.0

7.7 9.8 40.0 21.4

15.4 7.3 33.3 28.6

14.3 14.6 0.0 14.3

35.7 7.3 0.0 0.0

0.0 0.0 16.7 0.0

15.4 2.4 0.0 0.0

7.7 4.9 0.0 7.1

14.3 2.4 16.7 21.4

0.0 7.3 0.0 21.4

25.0 34.1 0.0 0.0

30.8 46.3 0.0 7.1

15.4 36.6 16.7 14.3

35.7 34.1 66.7 21.4

14.3 24.4 71.4 21.4

Face to Face to face face with Project with web project senior admin champion page E-mail

0.0 2.3 0.0 0.0

0.0 2.4 0.0 0.0

7.7 2.4 0.0 7.1

0.0 7.3 0.0 7.1

7.1 2.4 0.0 0.0

E-newsletter

320

ERP task

Face to face with project Face to team face with supervisor member

0.0 4.5 0.0 0.0

0.0 4.9 0.0 0.0

0.0 4.9 0.0 0.0

7.1 0.0 0.0 7.1

0.0 4.9 0.0 7.1

8.3 0.0 0.0 0.0 (continued)

0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0

0.0 4.9 0.0 0.0

0.0 0.0 0.0 0.0

Memo Web cast

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7.7 11.6 16.7 7.1 14.3 0.0 0.0 0.0 7.1 2.4 0.0 0.0 14.3 21.4 0.0 14.3

38.5 11.6 50.0 42.9 35.7 19.0 66.7 78.6 21.4 21.4 100.0 64.3 50.0 47.6 66.7 78.6

0.0 0.0 0.0 0.0

28.6 33.3 0.0 21.4

28.6 35.7 16.7 21.4

15.4 16.3 0.0 14.3

7.1 2.4 0.0 0.0

7.1 2.4 0.0 7.1

0.0 2.4 0.0 0.0

7.7 4.7 0.0 14.3

21.4 23.8 16.7 7.1

21.4 33.3 0.0 7.1

21.4 31.0 0.0 0.0

15.4 34.9 16.7 0.0

Face to Face to face face with Project with web project senior admin champion page E-mail

Note: The values represent percentages of the preferred media choices as selected according to stakeholder group

ERP task – analysis and redesign of current business processes Managers 15.4 Users 20.9 IT staff 16.7 Consultants 21.4 ERP Task – training of project team Managers 0.0 Users 9.5 IT staff 0.0 Consultants 0.0 ERP task – new system design and configuration Managers 0.0 Users 4.8 IT staff 0.0 Consultants 0.0 ERP task – user training Managers 7.1 Users 4.8 IT staff 0.0 Consultants 0.0

ERP task

Face to face with project Face to team face with supervisor member

0.0 0.0 16.7 0.0

7.1 0.0 0.0 0.0

0.0 0.0 16.7 0.0

0.0 0.0 0.0 0.0

E-newsletter

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 7.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 2.4 0.0 0.0 0.0 2.4 0.0 0.0 0.0 0.0 0.0 0.0

Memo Web cast


Table IV.

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Table V. ANOVA output: comparison of total scale scores across stakeholder groups

Follow-up post hoc tests were then necessary to determine which groups, in fact, differed from one another. For equal variances, Tukey’s HSD is recommended when wanting to complete all pairwise comparisons of the means. For unequal variances, Dunnett’s T3 is recommended for pairwise comparisons as well as when sample sizes are small. For the non-parametric variables, multiple comparisons were conducted using the Mann-Whitney U-statistic. Results of post hoc tests revealed that for the above four items, the significant differences were between the views of the consultants and users. The consultants held significantly stronger levels of agreement on each of the items indicating that from their perspective, the project team or implementation team performed much more effectively on these communication aspects than perceived by the users. Therefore, users did not feel as strongly as the consultants did that they, the users, understood the rationale, were provided with sufficient information and were being managed by people with the appropriate level of information on the new system. In addition, for the construct item, initial communication should come from senior management, significant differences were also found to exist between managers and consultants. Particularly, the managers were less in agreement on this item, indicating they did not believe as strongly as the consultants did that senior managers should be providing much of the initial communication to the organization. These results suggest potential links between phenomena. Foremostly, internal communication during change should consider a stakeholder perspective that reflects appropriate methods as well as content. Second, a stakeholder perspective in communication planning can be a potentially effective mechanism to promote acceptance and understanding of need for change. Total scale score Communication methods

Between groups Within groups Total

Sum of squares

df

Mean square

F

Sig.

588.270 4,935.683 5,523.953

3 81 84

196.090 60.934

3.218

0.027

95% of confidence interval Mean (I) Stakeholder group ( J) Stakeholder group difference (I-J) SE Managers Users IT staff

Table VI. Multiple comparisons: Tukey HSD output total score communication methods scale

Consultants

Staff IT staff Consultants Managers IT staff Consultants Managers Users Consultants Managers Users IT staff

22.433 2.317 4.192 2.433 4.750 6.625 * 22.317 24.750 1.8750 24.192 26.625 * 21.875

Note: Significant at: *0.05 level of mean difference

2.321 3.418 2.805 2.321 2.990 2.266 3.417 2.990 3.380 2.805 2.266 3.380

Sig. 0.722 0.905 0.446 0.722 0.391 0.023 0.905 0.391 0.945 0.446 0.023 0.945

Lower bound Upper bound 2 8.522 2 6.648 2 3.168 2 3.655 2 3.094 0.6819 211.281 212.594 2 6.992 211.551 212.568 210.742

3.655 11.281 11.551 8.522 12.594 12.568 6.648 3.094 10.742 3.168 2 .682 6.992

Employees were provided with information about how the ERP was affecting other parts of the organization

Employees were provided with information about how the ERP would affect their job

There were effective feedback mechanisms in place for employees to ask questions about the new ERP system?

After the system was implemented, employees were informed of how the new system met the organization’s objectives

Any misconceptions about the impact of the new system were quickly addressed by the project team

Employees who were not part of the project team were made aware of how they would be affected by the new system

The implementation team sought employee input regarding the new system and its effect on my job

Managers and supervisors were informed and able to answer most employee questions about the new system

The rationale for the new ERP was clearly explained to employees

Scale item Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within groups Total Between groups Within Groups Total Between groups Within groups Total

8.147 67.806 75.953 16.153 86.671 102.824 8.422 87.978 96.400 7.813 83.175 90.988 3.805 70.595 74.400 1.034 80.072 81.106 1.041 75.712 76.753 6.214 79.363 85.576 9.004 78.243 87.247

3 81 84 3 81 84 3 81 84 3 81 84 3 81 84 3 81 84 3 81 84 3 81 84 3 81 84

5.032 0.003 2.585 0.059 2.536 0.062 1.455 0.233 0.349 0.790 0.371 0.774 2.114 0.105 3.107 0.031

5.384 1.070 2.807 1.086 2.604 1.027 1.268 0.872 0.345 0.989 0.347 0.935 2.071 0.980 3.001 0.966

Sig.

3.244 0.026

F

2.716 0.837

Sum of squares df Mean square


Table VII. ANOVA output communication methods scale items

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7. Findings and discussion Findings of this study supported the primary proposition that: P1.

324

Table VIII. Kruskal-Wallis output communication methods scale items

Stakeholders hold differing views regarding preferred communication methods and content during an ERP project.

Particularly, preliminary interviews indicated that users and IT staff wanted more communication through different media. In the wider quantitative survey, the overall mean score of the users on the communication scale further supported the same sentiments. Users expressed the highest levels of disagreement for almost every measure item. managers were the next group most likely to be in disagreement and, therefore, dissatisfied with how communication occurred. Consultants reported the highest levels of agreement. As well, there were significant differences between users and consultants and users and managers on the four communication items noted above. One noted difference was that managers were in significantly less agreement on the point of whether initial communication should come from senior management. This is an interesting observation. Perhaps, the managers did not believe the initial communication should come from them because they were suspect of the opinions of end-users. One Manager, during the exploratory interview, inferred that employees would probably not trust communication from senior managers. It is impossible to be certain of the reasoning behind this view; however, it certainly presents a problem. In the exploratory interviews, the consultants mentioned implementation of a very detailed communication plan that outlined when communication should occur, with whom and by whom. If the managers did not feel that communication was their responsibility or that they were not the best person to do it, as the survey results indicate, they may have not carried through with their assigned communication roles, as instructed by the consultants. These are just inferences, however, and all significant differences noted above would need to be further examined through follow-up inquiry. While this difference highlighted varying views in preferred delivery agent, other aspects of communication considered the media choice. The quantitative survey also explored communication methods by gathering data on the preferred media choice for various types of communication during the ERP implementation process. Looking at this information from a tactical standpoint, it can be determined that face to face communication is the preferred method of communication for all stakeholder groups, in the majority of circumstances. For some ERP tasks, stakeholder groups agreed on which communication medium was most preferred. For instance, communication relating to User training was considered best expressed by face to face contact with the project team. Similarly, the selection of the package could be communicated effectively through e-mail methods. Conversely, there were situations where stakeholder groups differed. Table IX summarizes the results according to whether the stakeholder group most preferred personal or non-personal methods,

x2 df Asymptotic significance

The initial communication about the new system should come from senior management

Employees were periodically informed of the progress of the PeopleSoft project

16.352 3 0.001

1.477 3 0.688

ERP task Clarification of rationale for ERP Selection of ERP

Personal media choices Non-personal media choices (%) (%) Managers (78.5) Users (61) Consultants (50) Users (51.2)

Managers (69.3) Users (51.2) IT staff (83.4) Consultants (71.4) Project team member selection Managers (53.9) IT staff (100) Consultants (92.8) Back-filling/planning for staff to be placed on Managers (66.6) project team Users (59) IT staff (83.3) Consultants (100) Analysis and redesign of current business Managers (77) processes Users (60.4) IT staff (83.4) Consultants (85.7) Training of project team Managers (78.6) Users (64.2) IT staff (83.4) Consultants (100) New system design and configuration Managers (57.1) Users (61.9) IT staff (100) Consultants (85.7) User training Managers (71.4) Users (73.8) IT staff (66.7) Consultants (92.9)

IT staff (71.4) Consultants (50) Managers (57.1) IT Staff (83.4) Consultants (57)


Planning of resources (human and financial)

Users (56)

as indicated by percentage values. For three items, clarification of rationale, selection of ERP and project team selection, there is certainly more divisive opinions on how the communication should occur. What this information reveals, however, is that stakeholders do prefer to receive certain communication by certain methods. As a result, project teams need to incorporate this information into communication plans by identifying proper tactical approaches. These results support the view that it is important to select appropriate media and match communication strategies to employee profiles. A closer examination of the literature reveals limited, but similar findings. For example, Goodman and Truss (2004) have made the same observation regarding the need to match media with receiver. Their research presents a model of effective internal communication during management of change. The current findings are somewhat similar except they focus particularly on an ERP implementation as one kind of change management project and they more extensively consider varying stakeholder groups. This same discrepancy in stakeholder attitudes regarding effective communication

Table IX. Media choice preference by stakeholder group

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mechanisms was also supported by Amoako-Gyampah (2004). He found differing views between managers and end-users on the effectiveness of communication focused on explaining the technological benefits, and the use of roadshows and newsletters. While these channels may not be comparable to those assessed in the current research project, the conclusions are the same: stakeholder groups have differing views on message content, media and sender, and there needs to be a match between sender, receiver and medium. The second proposition presented by this research supports the notion that: P2.

A stakeholder perspective in communication planning can be a potentially effective mechanism to promote acceptance and understanding of need for change.

Users represent the largest segment affected by an ERP, and in this case study, they expressed the highest levels of disagreement. In addition to the high levels of disagreement on the measure items, users differed significantly on the following: the rationale for the new ERP was clearly explained to employees (M ¼ 2.65), managers and supervisors were informed and able to answer employee questions (M ¼ 3.50), employees were provided with information about how the ERP would affect their job (M ¼ 3.07) and employees were provided with information about how the ERP was affecting other parts of the organization (M ¼ 3.35). These mean scores are worrisome because they indicate that Users lacked information. Particularly, they paint a picture of users who do not feel they can get questions answered and have some uncertainty about the effects of the new system. Uncertainty ultimately creates resistance to change. Wagner and Newell (2006, p. 54) note that in order to address any potential controversy, effort should be placed on recognizing the needs of other stakeholders. Further, they propose that handling of such controversies can be critical to the system’s success: they are not to be “dismissed or ignored”. Finally, it is important to draw attention to the work by Armenakis and Harris (2002), which sheds light on the importance of stakeholders in the face of change and the need to ensure that employees understand and believe the need for change. Knowledge of the rationale behind the system is critically importance to facilitate acceptance of change and that was not achieved in this case study because of inadequate communication. This knowledge of differing views, and in some instances, starkly different agreement levels of issues surrounding communication cannot be ignored. In this case study, communication has failed to meet the needs of some stakeholders. Particularly, lack of information has negatively affected agreement levels for some very important issues, all of which impact acceptance levels for change and possible project failure. In other research, Al-Mashari and Al-Mudimigh (2003) contrasted a failed ERP project with several best practices companies and an inadequate communication plan was determined to be a contributing factor to the failed project. Likewise, Martin and Huq (2007, p. 138) conclude from their case study research that “effective communication can dispel confusion and employee resistance as employees become more educated about the ERP project”. Based on our initial proposition, we have discovered that communication must take a more market-oriented approach (i.e. different message, different media, for different groups) This means being more aware of individual stakeholder groups’ needs surrounding method and content in order to facilitate acceptance of change. One possible tactic might be the careful choice of delivery agent for a message. The suggestion to use

internal supporters as tools for internal marketing, was similarly noted by Martin and Huq (2007, p. 136) in their statement, “successful ERP implementation depended on top management effectively orchestrating and coordinating the efforts of multiple change leaders throughout the organization”. Suggestions to use communication and participation to build user buy-in were also echoed by Grant et al. (2006). In many instances, communication has been already been recognized as a necessary component of any change management plan, but the current research goes one step further by providing support for the need to also incorporate a stakeholder perspective. 8. Conclusion The findings of this study have provided a significant contribution to the body of knowledge surrounding the ERP phenomenon and stakeholder preferred communication strategies. What has been uncovered for the first time is that stakeholders differ, significantly in some respects, in how each group believes certain aspects of the project should be handled, from a tactical communication standpoint. This research has revealed that the management of ERP projects is not as simple as a “one-size-fits-all” plan. Communication strategy, particularly, is one area that requires a tailored approach to meet stakeholder needs. In fact, aside from only a couple of studies (Bradley and Lee, 2004, Infinedo and Nahar, 2007) that considered differences between IT managers and business managers regarding differing views on benefits and drawbacks of ERP projects and levels of training, there has been nothing that specifically considered wider stakeholder views regarding understanding of change management and communication. The need for research with this focus particularly has been supported in the literature (Amoako-Gyampah, 2004, Kossek, 1989) because it is recognized that better understanding of stakeholder perspective will assist implementers in developing appropriate intervention methods and techniques. The most significant methodological value came from the emphasis on the ERP project from an organizational, human-centered point of view. For years, researchers in the IS field (Orlikowski and Barley, 2001; Benbasat et al., 1987; Orlikowski and Baroudi, 1991; Gable, 1994; Kaplan and Duchon, 1988) have argued for research that is techno-social in nature (Skok and Legge, 2002; Walsham, 1995; Willcocks and Lester, 1999). The rationale: it better captures the complexity of the situation, and in the case of ERP, the situation is complex. It is further argued that particularly in the ERP realm, organization focused studies are underrepresented as are case studies addressing practical challenges (Dery et al., 2006). This research fills that gap quite nicely. 9. Limitations and directions for future research One interesting finding of this research was the discrepancy regarding the most appropriate sender of initial communication regarding the rationale for the ERP. Follow-up research should explore why Managers believed they were not the most appropriate medium when consultants did. Like the managers, the users were also of the opinion that initial communication should not come from managers. To date, there has been nothing mentioned in the literature that has addressed stakeholder differences regarding such communication aspects. If it were known why the various stakeholder groups hold these perceptions, it may be possible to determine if they are, in fact, properly informed. Any differences in opinion between consultants and other stakeholder groups deserve further attention given that it is the consultants who are, in most instances,


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primarily in charge of the implementation process, including communication planning. This kind of research could potentially uncover some of the possible weaknesses and/or conflicts in communication, which occur during the initial stages of the project. As the data have revealed, communication at this stage needs to be handled delicately as people are learning about the ERP and its proposed process changes for the first time. If the right person, does not deliver the message in the proper manner, it could induce unnecessary resistance. Another more general line of questioning of this research uncovered data concerning the most appropriate communication media: personal or non-personal. There were many differences across stakeholder groups. If stakeholders differ with respect to “whom” or “how” the message is delivered, presumably, they may possibly differ as well on other issues of context or content. As an example, a possibility for future research would focus on the timing of communication, as well as the level of communication detail. This kind of information combined with the knowledge of stakeholder preferred medium would add much to the communication planning element of ERP projects. References Abdinnour-Helm, S., Lengnick-Hall, M.L. and Lengnick-Hall, C.A. (2003), “Pre-implementation attitudes and organizational readiness for implementing an enterprise resource planning system”, European Journal of Operational Research, Vol. 146, pp. 258-73. Akkermans, H. and van Helden, K. (2002), “Vicious and virtuous cycles in ERP implementation: a case study of interrelations between critical success factors”, European Journal of Information Systems, Vol. 11, p. 35. Aladwani, A.M. (2001), “Change management strategies for successful ERP implementation”, Business Process Management Journal, Vol. 7, p. 266. Al-Mashari, M. and Al-Mudimigh, A. (2003), “ERP implementation: lessons from a case study”, Information Technology & People, Vol. 16, p. 21. Al-Mashari, M., Al-Mudimigh, A. and Zairi, M. (2003), “Enterprise resource planning: a taxonomy of critical factors”, European Journal of Operational Research, Vol. 146, pp. 352-64. Amoako-Gyampah, K. (2004), “ERP implementation factors a comparison of managerial and end-user perspectives”, Business Process Management Journal, Vol. 10, p. 171. Armenakis, A.A. and Harris, S.G. (2002), “Crafting a change message to create transformational readiness”, Journal of Organizational Change Management, Vol. 15, pp. 169-83. Bajwa, D.S., Garcia, J.E. and Mooney, T. (2004), “An integrative framework for the assimilation of enterprise resource planning systems: phases, antecedents, and outcomes”, Journal of Computer Information Systems, Vol. 44, pp. 81-90. Bancroft, N., Seip, H. and Sprengel, A. (1998), Implementing SAP R/3, Manning Publications, Greenwich, CT. Benbasat, I., Goldstein, D.K. and Mead, M. (1987), “The case research strategy in studies of information systems”, MIS Quarterly, Vol. 11, p. 369. Bingi, P., Sharma, M.K. and Godla, J. (1999), “Critical issues affecting an ERP implementation”, Information Systems Management, Vol. 16, p. 7. Bradley, J. and Lee, C.C. (2004), “ERP training and user satisfaction”, paper presented at the 10th Americas Conference on Information Systems, New York, NY. Burns, A.C. and Bush, R.F. (2006), Marketing Research, Pearson Education, Upper Saddle River, NJ.

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Siriginidi, S.R. (2000b), “Enterprise resource planning in reengineering business”, Business Process Management Journal, Vol. 6, p. 376. Skok, W. and Legge, M. (2002), “Evaluating enterprise resource planning (ERP) systems using an interpretive approach”, Knowledge and Process Management, Vol. 9, p. 72. Tarafdar, M. and Roy, R.K. (2003), “Analyzing the adoption of enterprise resource planning systems in Indian organizations: a process framework”, Journal of Global Information Technology Management, Vol. 6, p. 31. Varey, R.J. (1995), “Internal marketing: a review and some interdisciplinary research challenges”, International Journal of Service Industry Management, Vol. 6, p. 40. Wagner, E.L. and Newell, S. (2006), “Repairing ERP: producing social order to create a working information system”, Journal of Applied Behavioral Science, Vol. 42 No. 1, pp. 40-57. Walsham, G. (1995), “The emergence of intrepretism in IS research”, Information Systems Research, Vol. 6, p. 376. Ward, J. and Peppard, J. (1999), “Mind the gap: diagnosing the relationship between the IT organization and the rest of business”, Journal of Strategic Information Systems, Vol. 8, pp. 29-60. Willcocks, L. and Lester, S. (1999), Beyond the IT Productivity Paradox, Wiley, Chichester. Yusuf, Y., Gunasekaran, A. and Abthorpe, M.S. (2004), “Enterprise information systems project implementation: a case study of ERP in Rolls-Royce”, International Journal of Production Economics, Vol. 87, pp. 251-66. Further reading Finney, S. (2008), “Stakeholder perspective of ERP critical success factors”, PhD thesis, University of Warwick, Coventry. E-Merge (2003), FAQs, available at: www.gov.ns.ca/econ/emerge/faqs.asp (accessed April, 2003). About the author Sherry Finney is an Associate Professor in the Department of Organizational Management at Cape Breton University (CBU), Canada. She received a Bachelor of Business Administration from CBU, a Master of Business Administration from Saint Mary’s University, Canada and a PhD from the University of Warwick, UK. Her research interests include IM for change management, new technology implementation, social/sustainable marketing and case teaching pedagogy. Her research has been published in Business Process Management Journal, Journal of Marketing Communications and Journal of Education for Business. Sherry Finney can be contacted at: [email protected]

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