Impact of ERP implementation success on organisational structure in the manufacturing sector

Abstract

In the modern competitive manufacturing context, many organisations are willing to eliminate non-value adding tasks, reduce the cost of production and hence to improve the overall value of the supply chain, for better prospects to accomplish higher profit margins. When operations gets complex and the industry gets broader, conventional ways do not help organisations to manage their information flow efficiently, so to fulfil this requirement, most of the organisations implement ERP tools. As far as management processes are concerned, “Organising” is the most important element. As the most valuable asset of any organisation is the human resource, it is obvious that the organisational structure is most important when organizing resources. Therefore it is important to study the impact of the implementation success of the ERP systems on the organisational structure as in modern context, many of the top managers are always willing to cut down human resources by alternative means such as automation. Through the Literature survey it was found that, effort in studying the impact on the organisational structures by ERPs was week especially in the Sri Lankan context. Therefore the study focused on exploring the impact of the ERP implementation success on the organisational structures in Sri Lankan manufacturing organisations. During the study, five organisations were selected in similar scale, where ERPs in similar scope, have been implemented. It was carried out as a quantitative study and the implementation success and the perceived level of impact on the organisational structure were measured based on data gathered through questionnaires distributed among end users of ERP (n=89). Data was analysed using SPSS V16.0. The results depicted that the level of success of ERP implementations were high, but the level of impact on the organisational structure by ERPs was not significant and hardly visible. The most impacted element of the structure was “Departmentalisation” but with low significance.