Adaptation of Diffusion of Innovations Theory for Successful ERP Implementation

Information and Communications Technology (ICT) plays a critical role in today’s organization environment and Information Systems (ISs) hold an enormous control in organizational operations with data entering is governed by it. Enterprise Systems (ESs) such as Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Supply Chain Management (SCM), Advance Planning and Scheduling (APS) systems are the most cutting-edge IS in present corporate world covering all the business sectors. ERP system connects the organization’s different operations organized into a single large integrated system with proper controls so that interconnectivity creates an extra opportunity for growth and increased productivity of the depending divisions. Organizations invest millions of dollars to implement a suitable ERP system with enormous effort consuming hundreds man months of an implantation team to harvest these benefits. Successful implementation of ERP heavily depends on human-factors presented that organization’s implementation team is highly critical to success of ERP implementation. According to the Diffusion of Innovation theory, most individuals evaluate new technology through subjective evaluations of near-peers who have adopted the technology. Early adopters decrease the uncertainty about a novel idea by adopting it and then conveying near-peers through interpersonal networks. The present research attempts to identify any relationship between ‘Diffusion of Innovations Theory’ and core implementation team of successful ERP project. This research is based on a mixed methodology of qualitative and quantitative methods in two stages. In the stage one, 24 participants were researched implementing qualitative methodology. In the stage two, 104 participants were researched by means of quantitative methods. Initially, qualitative methods of interviews were conducted to categorize the ERP project as successful or unsuccessful, impact of implementation team in success or failure. In the stage two, short questionnaires were implemented to quantitatively categorize implementation team members based on Diffusion of Innovations Theory. Collected data were analysed compared with project success and impact of implementation team. Furthermore, secondary data such as literature was also contributory to the main outcome and results.The research shows that most of the ERP implementation team consist of Early Adopters and Early Majority. Early Majority have above average social status, contact with Early Adopters and hold lower level of opinion leadership compared with Early Adopters in a system. Early Adopters decrease the uncertainty about a novel idea and technology by adopting it and then transmitting to near-peers through interpersonal networks. The impact of human characteristics on ERP project implementation has similar impact as innovation establishing in the society, which is demonstrated by ‘Diffusion of Innovations Theory’. The research shows, if the majority of implementation team consists of Early Adopters, they will mitigate the uncertainty about a new Enterprise Software Solution by adopting it very quickly and then transmitting to other employees through interpersonal and organizational networks. The study also reveals ways in which sensible selection of implementation team could be conducted to assist the successful implementation of ERP.