ERP Application Empirical Study Based On Diffusion Of Innovation Theory

As an integrated management information system for the organizations, Enterprise resource planning (ERP) applies advanced information technology and reflects the success model of business management. It is an advanced mode for business management, by utilizing information technology and internet technology in objectives constructing, action handling and so on. ERP integrates the business processes, improves the visibility of information, produces and accesses information in a real-time environment, and makes common data and information shared in the entire enterprise, provides accurate and overall information to the decision makers on time, thus the inventory is reduced, the cost is reduced, productivity and customers' satisfaction are improved, and the revenue is increased, etc. Despite these benefits, many companies have had serious problems during implementation of ERP systems. These problems have caused many companies to abandon their ERP implementation under their limited capacity.In order to go deep into this phenomenon, find out the procedure of ERP application in Chinese enterprises, the diffusion of innovation (DOI) theory is used in this thesis to study the factors affecting the diffusion of ERP within organizations, and then empirical study is used to test certain key factors of ERP implementation in China. First, the model is developed in this thesis based on DOI theory, including nine factors such as ERP compatibility, ERP complexity,ERP relative advantage, firm's management mechanism, firm's complexity, competitive pressure, top management support, business process reengineering and implementation consultants to determine the ERP diffusion, and hypothesized the relationships between nine factors and the ERP diffusion. Two dimensions to assess the ERP diffusion are the satisfaction of key users in ERP system and the extent of ERP diffusion (including the breadth of diffusion and the depth of diffusion).Analysis material was obtained from the investigation into the firms that haveimplemented ERP systems. Finally, some statistical methods in SPSS software such as bivariate correlations analysis, partial correlations analysis,single regression analysis, multiple regression analysis and so on are used to analyze the data in order to test the hypotheses. Through above modeling and analysis, conclusions as follows are reached:(a) ERP relative advantage, ERP complexity, top management support, implementation consultants and competitive pressure are tested to be the key factors for the satisfaction of key users in ERP system. ERP complexity and competitive pressure are negatively associated with the satisfaction of key users in ERP system. The rests are positively associated with the satisfaction of key users in ERP system. ERP relative advantage has the most significant effect on the satisfaction of key users in ERP system.(b) ERP relative advantage, firm's complexity and management mechanism are tested to be the key factors for the depth of ERP diffusion. ERP relative advantage and firm's complexity are positively associated with the depth of ERP diffusion. Firm's management mechanism is negatively associated with the depth of ERP diffusion. Firm's complexity has the most significant effect on the depth of ERP diffusion.(c) ERP complexity and top management support are tested to be the key factors for the breadth of ERP diffusion. ERP complexity is negatively associated with the breadth of ERP diffusion. Top management support is positively associated with the breadth of ERP diffusion. ERP complexity has the most significant effect on the breadth of ERP diffusion.In addition, some recommendations are put forward in this thesis to provide guidance (such as enhancing top management support and improving ERP relative advantage, etc) for enterprises, ERP software suppliers and implementation consultants.