Influence of an ERP system on the value chain process of multinational enterprises (mnes)

CHAPTER 6: RESEARCH FINDINGS AND INTERPRETATION OF
DATA ANALYSIS

6.1 Introduction

While the previous chapter described the methodology and research design utilised in this study, this chapter outlines the finding of the qualitative study relating to the primary and some of the secondary objectives as indicated in the previsious chapter. The findings are related to the literature review (linking strategy with IT through a value chain approach, and the ERP system), with Axapta Microsoft software attributes given in the case study. The findings of the empirical study conducted through self-administered questionnaires are also represented in a similar order as given in the measuring instrument.

6.2 Qualitative findings

The findings of the qualitative study indicate that Axapta software is a value chain system that meets the requirements of a global ERP system due to its configuration and architecture under MNE strategy. It was found that its integrated status, which encompasses ERP system attributes and characteristics, its functionalities, modules and open system function with e-business mechanisms help to integrate, co-ordinate and leverage the MNEs' value chain. Cost leadership and differentiation strategy elements within Axapta software also position it as a strategic IT tool, which therefore supports the MNEs in crafting their business strategy to gain competitive advantage.

6.2.1 Axapta software integrates MNEs' value chain and supports MNEs' strategy

The Axapta Microsoft software is consistent with the concept of competitive business strategy as discussed by Turban et al., (2004a: 6) in section 2.2. These authors stipulate that IT can help any business to pursue competitive strategies by developing new market niches, locking in customers and suppliers by raising the cost of switching, providing unique products and services and helping organisations to provide products and services at a lower cost by reducing and distributing costs.

According to Ward and Griffiths (in Corboy, 2002:7) and Siriginidi (2000:376), IT can be used to gain competitive advantage because of its capabilities and status of linking the organisation to the customers and suppliers through EDI, VANs and extranets, creating effective integration of the use of information in a value-adding process, enabling the organisation to develop, produce, market and

93

distribute new products or services and provide senior management with information to assist them to develop and implement strategies through knowledge management. See section 2.3.

Axapta software can be used as a strategic IT tool within MNE management because it improves co-ordination, collaboration and information sharing, both within and across the various organisation's sites, and integrates the management information processes and applications within the MNE's operations. (See sections 4.4, 4.5 and 4.6.)

· Axapta's various functionalities and the Internet allow MNEs to collaborate and connect with their customers, vendors, partners, or employees via the Web, Windows, WAP, wireless, VAN, LAN, XML and Microsoft BizTalk. It allows MNEs to exchange information with others through ERP software in their IT infrastructure, such as a parent company, subsidiary or supplier.

· The selected key features are speed, customisation options, multiple databases, worldwide features, all-in-one products, foreign language and foreign currency, built-in remote access and questionnaires.

· The generic modules of Axapta consist of Financial management, Business analysis, Object server, Tools, Commerce gateway, Enterprise portal framework, HR business process management, Human resource management I, II and III, Logistics, Master planning, Product builder, Production, Shop floor control, Trade, Warehouse and sales management, Project, Marketing automation, Questionnaires, Sales force automation, Telemarketing and Sales and marketing. The modules could be customised to suit the MNE structure and objectives.

Axapta attributes include programming language (Java-derivative with embedded SQL support), database (either Microsoft SQL server or Oracle database), source code (MorphX), Web applications and the commerce gateway that provides an XML interface to the Microsoft BizTalk server as discussed in section 4.3. These attributes classify Axapta software's generic capabilities as a transactional and geographical automation and an analytical, informational and sequential system for MNEs. Therefore Axapta software is truly an ERP system, which provides a platform for integrating MNE applications such as SCM, CRM, executive information system data mining and e-commerce systems. Axapta thus conforms to the view of Aladwani (2001:266) that an ERP system is an integrated set of programmes that provides support for core organisational activities. Blasis

94

and Gunson (2002:16-7) state that an ERP system is a tool that grafts a solution for human resources, finance, logistics etc., and eventually to SCM and CRM, as discussed in section 3.3. Ming et al. (2004:690) and Davenport (in Adam & Carton, 2003:24) are of the opinion that an ERP system influences the cross-organisation application integration, where organisations can link their ERP systems directly to the disparate applications of their suppliers and customers. Such integration benefits the organisation due to its current associated trends. Axapta fulfils these requirements as well. (see section 3.5.)

Axapta software could support MNEs' value chain internationally since it has centralised, distributed and hybrid architecture as mentioned by Clemons and Simons, and Zrimsek and Prior (in Madapusi & D'souza, 2005:10). Axapta software can be configured and customised according to the MNE strategy at organisation, system and business process level (see sections 3.7.1 and 3.7.3). Thus, through the MNE's strategy, Axapta architecture is multifunctional and can be customised and parameterised to suit the MNE with distributed information architecture, a stand-alone local database and application as options.

6.2.2 Strategic factors of an ERP system evaluation

To meet the requirements of the MNE's value chain system, ERP software needs to be evaluated in terms of its modules and functionality. It must also be possible to configure the different ERP software systems with different modules, thereby making it look different from others (Sarkis & Sundarraj, 2000:205). A typical set of business functions supported by an ERP system as the supply chain factors for ERP software evaluation was summarised in section 3.8. Sarkis and Sundarraj (2000:205) have integrated those evaluation factors into one conceptual model, shown in figure 3.3, to explain the linkage and the relationship of all processes and functions within the supply chain through an ERP system, allowing communication between the different activities to take place. A comparison was made between Axapta software attributes and functional modules (section 4.6) and general ERP system modules and business functionality (section 3.8). Table 6.1 below indicates that Microsoft has made Axapta software with various functional modules in its package to meet the general conceptual model of an ERP system, which can be depicted in different activities and processes, standardised and customised to suit the MNE. An ERP system has a large central relational database, which allows the sharing of all the information within the MNE's departments through the execution, integrated functionality and global nature of the system. Other characteristics

95

are the multiplatform, multimode manufacturing, electronic data interchange, work automation, database creation, imaging, multilingual and modules as noted by McAdam and McCormack (2001:116), Siriginidi, (2000:379-80), Bhatt (2000:1331), Stirling, Petty and Travis (2002:430) and Clemons and Simon (2001:207) in section 3.4. Thus, Axapta as an ERP system matches the view of Siriginidi (2000:379-80), who stipulate that the general model of an ERP system must be a system's total solution to support multiple divisions or organisations under a corporate banner and seamlessly integrate operating platforms as the corporate database that results in integrated management information. In addition, Axapta also corresponds with the views of Shehab et al., (2004:361) in section 3.6.2, who state that ERP systems are all based on a central, relational database, built on a client/server architecture and consist of various functional modules.

Table 6.1: General ERP system modules compared to Axapta software package modules

ERP system modules	Axapta software modules
1. Business planning	1. Axapta business planning
2. Enterprise performance measurement	2. HR balanced scorecard and Business analysis		3. Decision support
3. Tools, Project I and HR business process management
4. Marketing and sales	4. Marketing automation, Sales and marketing, Sales force automation and Sales management
5. Manufacturing	5. Master planning, Production I and Shop floor control
6. Finance and accounting	6. Financial management and Project II
7. Engineering	7. Product builder
8. Human resources	8. Human resource management I, II and III
9. Purchasing	9. Trade
10. Logistics	10. Logistics and Warehouse management
11. After-sales services	11. Object server, Telemarketing and Questionnaires
12. Information technology	12. Enterprise portal framework, Integrated and Web- enabled business logic, Internet, Commerce gateway and object server

Source: Dykstra and Cornelison, and Olinger (in Sarkis & Sundarraj, 2000:206).

96

6.2.3 Summary (sections 6.2.1 and 6.2.2) for hypothesis1 (H1)

With regard to hypothesis 1 (H1), and the questions asked in section 2.5 were whether Axapta software supports strategic management within the MNE and whether Microsoft has positioned Axapta competitively. These issues will assist MNE management in crafting a strategy aimed at establishing a sustained competitive strategy. The following can be stated:

Hypothesis 1 (H1) is not rejected and it can therefore be concluded that Axapta software is an ERP system with an integrated value chain system due to the elements discussed above (in section 6.2.1) and in sections 6.2.5.1-2, 6.2.5.3-4; 6.2.5.5 and 6.2.5.6 below. Axapta modules also suit the strategic factors of an ERP software evaluation as discussed in section 6.2.2. Furthermore, Axapta has various advantageous elements incorporated, as discussed in section 3.5.1, such as Y2K compliance, ease of use, integration of all functions, online communication with suppliers and customers, customisation, improvement of decision-making due to the availability of timely and appropriate information, improved process time and feasibility of administering pro facto control on the operations and Internet interface (Gupta, 2000:115-16). Axapta characteristics (in section 3.5.2) are that it is flexible, comprehensive, with modular and open systems, operating beyond the organisation, capable of simulating the reality and with a multiple environment.

The integrated configuration and the e-commerce functionality as core competence within Axapta software could support the MNE's strategy management due to its cost leadership and differentiation strategy, local hardware requirements, the involvement of maximum use of LANs and minimal use of WANs, the autonomy of each local unit, and headquarter linkage, which occurs primarily through financial reporting structures (section 3.7.3). Axapta software could influence the MNE to integrate the business process activities across its value chain functions, enabling the implementation of all variations of best business practices with a view towards enhancing productivity, operation efficiency, sharing common data and practices across the entire organisation to reduce errors, produce and access information in a real-time environment to facilitate rapid and better decisions and cost reduction (see section 3.6.2).

As mentioned in section 2.5, Turban et al., (2004a: 16) discuss the cost leadership and
differentiation strategies. A cost leadership strategy focuses the organisation's attention on
manufacturing scale and efficiency that exhibit the capital investment, process engineering skills,

97

intense supervision, design for manufacturing, low-cost distribution systems, tight cost controls, frequent and detailed cost reports, high specialisation and incentives based on quotas for organisation management. Differentiation strategies focus on select product or service attributes that customers deem important and create value by supplying products and/or services with the desired attributes. To achieve success with a differentiation strategy, an organisation must differentiate between product or a service attribute different from those chosen by industry rivals (Porter, 1998:10). Therefore, a differentiation strategy is most likely to produce an alternative and lasting competitive edge when it is based on technical superiority, quality, giving customers more support services and the appeal of more value for money (Thompson & Strickland, 1987:110).

In answer to the question asked at the start of this summary section, Microsoft has indeed positioned Axapta software with cost leadership and differentiation strategies due to the attributes incorporated in the Axapta package (sections 4.2, 4.3, 4.4, 4.5 and 4.6). Axapta is a low-cost leader software among the different ERP system software in the market. It has also differentiated itself from other software in its value proposition (the quality, competitive price and the product and service attributes) and key success factors such as customer value distributors as shown in Walters and Lancaster's value chain below (section 6.2.5.2). These strategic elements constitute the forces that contribute to the MNE's competitive position and that persuade the MNE management to perform the activities differently than the competitors and link those activities in the value chain to craft its strategies for competitive advantage.

However, behind the cost leadership and differentiation strategies, other strategic elements are associated with Axapta software (section 2.5); elements which could support the MNE's strategy to gain competitive advantage. These are:

· The niche strategy: Axapta has a niche market with a quality product, low-cost price, fast, multiple databases and other selected key features.

· The alliance strategy: alliance is achieved through Microsoft SQL server or the Oracle database.

· The innovation strategy: Axapta has key features to meet the current global ERP system requirements and MNE growth.

· The locked-in customer or suppliers strategy: Axapta software links customers and suppliers through integrative modules in its module package.

98

· The entry-barriers strategy: Axapta has created barriers to prohibit entry to other MNEs.

In practical terms, Microsoft has increased the switching cost for Axapta software and thus created a barrier prohibiting entry to any competitor. This offers the MNEs the opportunity to expand their business and decrease supply costs, increase cost efficiency, build relationships with suppliers and customers within the MNEs and replace and add applications to meet the organisation's growth and changing partners. In this way Axapta attributes could assist MNE management in crafting strategy accordingly.

6.2.4 Axapta's software evaluation

A strategic IT plan is a decision-making process that should be undertaken with care, systematically and within an organisation's understanding of the business context (see section 2.4). Therefore, by applying Axapta software attributes as discussed in chapter 4 through strategic IT plan evaluation, the MNE management could achieve efficiency in the overall management operation in the same context as noted by Peppard (in Corboy, 2002:6), namely by establishing entry barriers which affect the cost of switching operations, differentiating products/services, limiting access to distribution channels, ensuring competitive pricing, decreasing supply cost, increasing cost efficiency, using information as a product and building closer relationships with suppliers and customers.

6.2.5 Axapta's value chain system

In chapter 1 (section 1.1.3) it was pointed out that the value chain model can be used to evaluate relative position, identifying an organisation's distinctive competence(s) and directions for developing competitive advantage. In addition, IS has an impact on an organisation's individual value chain and on how the integration between the value systems of the various contributors or activities could be strengthened, as well as on the cost/value of the product (Axapta), users (MNEs), manufacturer (Microsoft) and customers. The value chain can be used to evaluate a company's process and competencies, and investigate whether IT supports add value, while simultaneously enabling managers to assess the information intensity and role of IT. Thus, the value chain approach was positioned as an evaluative tool to assess Axapta's attributes (as the product) and MNEs (as the user), and Microsoft (as the manufacturer) in order to answer the hypothesis formulated in the introduction and scope of this study.

99

In chapter 2, the theory behind the value chain system was analysed relating to the different models. This led the researcher to suggest that most ERP systems, including Axapta software, were built on the value chain concept. A value chain assists management in crafting a strategy (section 2.6). It was concluded that the value chain is based on the linkage, co-ordination and interrelationships among the activities within the system. Thus, Axapta could be assessed by means of the value chain approach to test if its attributes and architecture suit the different value chains in the MNE strategy context. The customised value chain (section 2.9) led to the following findings:

6.2.5.1 Porter's value chain and Axapta's value chain architecture

The primary activities of Porter's value chain are inbound logistics, operations, outbound logistics, marketing, sales and service. The support elements are procurement, technology development, human resource management and infrastructure (see figure 2.1 in section 2.7.1). The key features of Axapta, namely manufacturing, distribution, SCM, project management, financial management, CRM, human resource management, business analysis, global solution and technology, can be compared with the activities of the Porter value chain (section 4.5), as well as Axapta's generic module activities.

Figure 6.1: The module activities of Axapta depicted in the Porter value chain

Secondary activities

Firm infrastructure

(Accounting, Finance, General management, Business analysis and tools)

Technology development

(Product builder, Web-enabled application, ERP, Internet, Commerce gateway, etc.)

Human resources management
(Employee information and registration, recruitment processes, etc.)

Procurement
(Supply chain, Electronic information exchange)

Value

Inbound
logistics

Operations

Outbound
logistics

(Warehouse management, Logistics, Distribution)

Services

Marketing and
sales

(Master planning,
Shop floor control,
Project I)

(Productions, Manufacturing)

(Global solution, Service management, Object serve, Distribution)

(CRM, Sales force marketing, Automation, Customer self-service, websites Sales management)

Primary activities Primary activities

Upstream value activities Downstream value activities

100

Source: Adapted from Porter ' value chain in Turban et al., (2004a: 11).

The depiction of Axapta activities shown in brackets in figure 6.1 above proves indeed that Microsoft has incorporated Axapta's value chain system with its different activity processes and modules in Porter's value chain in order to strengthen, support and position the MNE's value chain activities to operate efficiently (see section 4.6).

6.2.5.2 Walters and Lancaster's value chain and Axapta's attributes

The reason for assessing the Axapta software value/cost drivers using Walters and Lancaster's value chain model and components (see figure 2.5 in section 2.7.4) was to analyse Axapta's capability, attributes, key features and functionality modules (see sections 4.2, 4.3, 4.4, 4.5 and 4.6). Microsoft as the manufacturer associated Axapta with the key success factors supporting the MNE supply chain integration and co-ordination in an MNE's operation activities. This maximises the customer and distributor values criteria and minimises customer acquisition costs.

As shown in figure 6.2 below, Axapta software has the value/cost drivers that enhance MNE business processes and integrate the different applications within the supply chain. It co-ordinates and strengthens the different activities in relationships to improve productivity and enable the MNE to operate globally and communicate efficiently. The elements associated with Axapta software are value/cost driver, logistics management, strong integrated company/dealer and supply network, cost management, service (distributors), service (customers), marketing automation, telemarketing, self-service website, Internet, customer and supplier involvement, management knowledge and CRM. Other elements that Axapta software has are global reach and online service, worldwide coverage, technologies applications, time responses and accuracy. Axapta relationship management elements are software support, management and staff development, open communication with providers, suppliers, dealers/company and co-ordination. Thus, Axapta information and relationship management creates the value strategy and positioning, which is linked with the value production and criteria that encompass both Axapta operations and organisation structure management.

In organisation structure management, the Axapta elements that assist MNEs in operating
efficiently and effectively are the control of manufacturing and service, the supply chain, staff
training, the partnerships with customers, suppliers and dealers, the integration of supply, selective

101

outsourcing and ongoing customer surveys. In the operations structure and management, both production and logistics play an important role. The Axapta production drives include elements such as maintenance and repair, material requirement planning, the bill of material, capacity planning, job scheduling and sequencing, and IT-driven design and manufacturing. In Axapta logistics drives, the elements are global communication, IRIS information system, and supply chain integration, remote serviceability monitoring and quick response.

Figure 6.2: Axapta cost/value drivers depicted in Walters and Lancaster's value chain

Organisation
structure
management

Customer value criteria

· Brand name

· Competitive prices

· Flexible response (languages, time, culture)

· Reliable, easy to use

· Module selection,
customisation

Customer acquisition costs

· Easy installation

· Switching cost

· Worldwide distribution

· Servicing, consultant
possibility

· Product reliability

Customer
value
(Distributor)

· Global reach

· "Online" service

· Worldwide coverage

· Technologies applications

· Time response

· Accuracy

· Software support

· Management and staff development

· Open communication with providers, suppliers, dealers, company

· Provider = company, i.e. long-term continuity

· Co-ordination

Information management

Value
strategy

and
positioning

Relationship
management

Value
production and
criteria

· Control of manufacturing, service, and the supply chain

· Staff training

· Partnerships with customers, suppliers and dealers

· Integrated
supply

· Selective outsourcing

· Integrated
supply

· Ongoing customer surveys

· Maintenance and
repair

· MRPII, BOM

· Capacity planning

· Job scheduling and
sequencing

· IT-driven design and manufacturing

· Global communication

· IRIS information
system

· Supply chain integration

· Remote serviceability monitoring

· Quick response

Operations structure
and management

Production

Logistics

Value/
cost
drivers

Customer
value

Distributor/customer cost
criteria

· Customer field

support

· Company/distributor/ customer liaison: product and service

Value proposition
(product/service attributes)

· Module differentiation

· Software customisation

· Flexibility

· Product substitution

· Service/advice

· Transaction convenience

· User capacity maximisation

· Quality, consistent costs and service

· Speed

· Integrated CRM

· Cost leadership

Distributor/customer value
criteria

· Internationally recognised brand

· Company support: service and sales

· Worldwide response network

· Product market development

Key success factors

· Vertically integrated
supply chain

· Innovation

· Economies of scale

· Strong marketing component modules

· Responsiveness,
speed

· Integrated CRM, customer and supplier application strategy

· Cost-effectiveness

· Technical expertise

· Flexibility in manufacturing

· E-business components

· Supply chain and logistics management

· Strong integrated company/dealer and supply network

· Cost management: IT-controlled manufacturing activities and service

· Service (distributors): database and business analyses

· Service (customers): customised software, and low-cost

service

· Marketing automation and telemarketing

· Self-service website, Internet

· Customer and supplier involvement

· Management Knowledge, CRM

"Corporate value"

· Productivity

· Profitability

· Knowledge

· Cash flow

Source: Adapted from Walters and Lancaster (2000:163).

102

The value proposition of Axapta (product and service attributes) consists of modules of differentiation, which are incorporated in its package, software customisation capability, flexibility, product substitution, service/advice, transaction convenience, user capacity maximisation, quality, consistent costs and service, speed, integrative and the cost leadership. The Axapta corporate value consists of productivity, profitability, knowledge and cash flow. The key success factors (the vertically integrated supply chain, innovation, economies of scale, strong marketing component modules, responsiveness, speed, integrated CRM, customer and supply application strategy, cost-effectiveness, technical expertise, flexibility in manufacturing, e-business components) are the strategic elements enhancing the MNE's strategy. In the Axapta distributor customer cost criteria, Microsoft as the manufacturer and provider could assist the user (MNE) in customer field support and company/distributor/customer liaison. In addition to the Axapta distributor/customer value criteria, Microsoft is one of the top companies worldwide due to its internationally recognised brand, company support in service and sales, worldwide response network and product market development.

Customer value contributes to the key success factors of Axapta software. Axapta positions itself as one of the top ERP software systems in the market due to both customer value criteria and customer acquisition costs. The customer value criteria element of Axapta include reliance on the brand name, competitive prices, flexible responses (in languages, time and culture), reliability, easy to use, module selection with a customisation option, customer acquisition costs, installation, switching cost and worldwide distribution, servicing, consultant possibility and product reliability.

6.2.5.3 The customer-centric value chain and Axapta software

According to Slywotzky and Morrison (1997:17) (see section 2.7.2), customer-centric thinking is based on the identification of customer priorities and therefore constructs business designs to match them. Axapta software incorporates this customer-centric value chain approach. Microsoft has incorporated into Axapta software architecture features such as CRM, SCM, collaboration functionality and the distribution channel capabilities, shown in table 4.1. The Commerce gateway module promotes supply chain solutions and the Enterprise portal framework module allows customers to interact with some of the functions in the organisation's value chain via other modules (see section 4.6). Thus, Axapta software can allow any MNE to apply a customer-centric approach

103

due to the Product builder-Web-based product configuration, which allows configuring complex products to meet the customers' wants and needs.

6.2.5.4 Scott's value chain and Axapta software

The core elements of Scott's value chain as discussed in section 2.7.3 comprise seven areas: operation strategy, marketing sales and service strategy, innovation strategy, financial strategy, human resource strategy, information technology strategy and lobbying position with government. In the Scott value chain, co-ordination across the value chain is essential. To strategise its plans well, an MNE needs compatible ERP software with the various modules to support its objectives. Axapta software has different modules, as discussed in section 4.6, which can strategically enhance the MNE's business management. These modules are Operation strategy, Production, Logistics, Master planning, Shop floor control and HR balanced scorecard. For the marketing sales and service strategy, Axapta has the Trade and Commerce gateway, Marketing automation and Sales management, sales force automation, Sales marketing and Questionnaire modules.

To enhance innovation strategy, Axapta software includes Product builder and the financial management module to enhance the financial strategy. To enhance the human resource strategy within the MNE, Axapta has the modules of Human resource management I, II and III, which can help to gather and structure employee information, automate recruitment processes and employee absence analysis and develop resources to meet strategic goals. To enhance the IT strategy within the organisation, Axapta has incorporated HR business process management, which develops and manages business processes by identifying and monitoring actions, as well as the Tools and Enterprise portal framework modules. The modules are co-ordinated through Web applications, Commerce gateway provides an XML interface to the Microsoft BizTalk server, and the integrated e-commerce applications facilitate the relationships between the MNE's value chain activities across its SBUs. Axapta software configuration indeed meets the requirements of Scott's value chain.

6.2.5.5 Value nets and Axapta software value chain architecture

According to Bovet and Martha (2000:2-6), a value net forms itself around its customers, who are at the centre. It captures their real choices in real time and transmits them digitally to other net participants. It views every customer as unique and allows customers to choose the product/service attributes they value most (see section 2.7.5). With regard to Axapta software, Microsoft has built

104

Axapta software architecture and configuration in such a way that an MNE using it can customise the software in any way it wants, and co-ordinate its departments to work in relationships through digital collaborative system mechanisms due to Axapta key features such as speed, multiple databases, scalability, intercompany trade and electronic information exchange (see section 4.5). Thus, Axapta software is a value net (customer-aligned, collaborative and systemic, agile and scalable, fast-flowing and digital).

6.2.5.6 The e-business value chain model and Axapta software architecture

As seen above, the Axapta value chain system meets the requirements of Porter's value chain, its software is a value net and its software attributes and applications as discussed in chapter 4 enable MNEs to extend their value chain to all business partners due to e-business mechanisms. These mechanisms include e-commerce applications, the intranet and extranet, Web-based procurement and the Internet, user portals and supply chain automation. These factors influence the collaboration between organisations through e-marketplaces, in addition to improving SCM and CRM processes. Thus, the Axapta value chain lowers MNE costs and increases value in activity co-ordination and integration due to the adoption of e-commerce strategies. Axapta is therefore a virtual or electronic value chain (see figure 2.7). This strengthens the MNE's value chain system activities and processes due to the Internet-prominent application.

6.2.6 Summary (sections 6.2.3 to 6.2.4) for hypotheses 2, 4 and 5 (H2, H4 and H5)

Hypotheses 2, 4 and 5 (H2, H4 and H5) are not rejected and it can therefore be concluded that Microsoft has made Axapta software with all the modules, functionalities and key features discussed in sections 4.4, 4.5 and 4.6. It meets the requirements necessary for the basic foundation of an ERP system as pointed out in sections 6.2.1 and 6.2.2. In addition, the value chain concept architecture with IT mechanisms integrate the different applications as a net value digital system. This means that MNEs using Axapta can align their strategies with organisation management due to the IT capabilities within their value chain. This strengthens the processes and the relationships within the overall value chain locally and globally.

Axapta assessment through the value chain approach indicates that Axapta value chain activities as
depicted in figure 6.1 of section 6.2.3 are similar to Porter's value chain approach (see section
2.7.1). This indicates that Microsoft has positioned Axapta software with components and options

105

that are well structured to help MNEs to co-operate efficiently with their separate operating sites, and to integrate its various applications and modules. This strengthens MNEs' value chain processes and means that MNEs can act globally and respond quickly to a demand.

As seen above (section 6.2.3), value/cost drivers have been incorporated in Axapta software (section 2.7.4). This positions Axapta as a competitive ERP software tool due to its value proposition, and product and service attributes play a big role in terms of software standardisation, operation effectiveness and quality service promotion in the MNE by integrating and strengthening the different activities in its value chain system. Thus, Microsoft has made Axapta software capable of co-ordinating the raw material from supply to the transformation process, and to delivering the product or service to the customers. Axapta is able to integrate the supply chain and automation, and enhance logistics, which contributes to the effectiveness of the procurement and operation system, the knowledge of partnerships and the know-how of the provider. Microsoft also supports MNEs with training support and technical expertise, and substitution components to meet MNEs' changing and growth needs.

The assessment of Axapta software through Scott's value chain theory discussed in section 2.7.3, along with section 6.2.3 reveals that the software architecture favours the relationship between the MNE's value chain and its SBUs due to its customisation module, which could allow each of the MNE's SBUs to configure its activities.

A value net begins with customers, allowing them to self-design products and builds them to satisfy actual demand. Thus, Axapta software was positioned as a value net due to its digital, fast and flexible system that is aligned with and driven by customer choice mechanisms. In section 6.2.3, it was demonstrated that Axapta software has been modernised as a truly global ERP system due to the incorporation of the Internet applications within it, with the front-end e-business application for third parties. Thus, the Axapta software value chain will position MNEs to operate in the e-business environment. In addition, Axapta's attributes and requirements allow MNEs to incorporate front-end technology in their business operation, create trading communities through portals and take on joint ventures with Web-based technology in expanding the MNEs' value chain, thus benefiting all global users, suppliers, customers and organisation partners.

106

6.2.7 Axapta as an IT integrative tool for MNEs' value chain systems

Sections 6.2.1, 6.2.2, 6.2.3 and 6.2.4 revealed that Axapta is strategically IT tool, an integrative ERP software system and a value chain system due to its attributes and modules, which have functional and international architecture and configuration. This enables MNEs to integrate and enhance their supply chain operation more efficiently and effectively, resulting in greater value for the end-customer. Consequently, the tangible and intangible benefits of this value chain integration through Axapta software will be enormous for MNEs, as they allow the real-time synchronisation of supply and demand. The benefits will further be to provide support to an MNE in its efforts to become part of an extended organisation, operating beyond the electronic SCM environment. This has the effect of positioning the MNE to develop collaborative business systems and processes that can span across multiple organisational boundaries (Balls et al., 2000:82-4).

6.2.8 Summary (section 6.2.5) for hypothesis 6 (H6)

The question asked in section 2.11 was "Is Axapta software a value chain system with IT mechanisms, which facilitate the integration and the co-ordination of other ERP system applications?"

Hypothesis 6 (H6) is not rejected and it can therefore be concluded that Axapta software is an ERP system, which encompasses the e-business mechanism, as concluded in section 6.2.5.6. MNEs using Axapta software will streamline business processes in vertical markets as pointed out by Zeng and Pathak (in Ming, Fyun, Shihti & Chiu, 2004:690), and harness and tighten global co-ordination (Adam & Carton, 2003:22).

Because of Axapta's outsourcing application and electronic data interchange, the ability to share information with customers and suppliers and the production of real-time data shared across the organisation, business processes and applications are integrated and automated (Ming et al., 2004:690). Thus, e-business elements are capable of co-ordinating activities within the value chain due to Web-based procurement, Internet and integrated supply chain through B2B e-hubs for supply chain partners and the integration of manufacturing and marketing functions. Indeed, through the e-business mechanism Axapta software facilitates the vertical integration of networks for MNEs' value chains, and through the collaborative mechanism, extends the MNEs' supply chains locally and globally.

107

6.3 The findings of the empirical study for hypothesis 3 (H3)

In this section the findings of the empirical study will be reported, as detailed in chapter 5, in accordance with the research problem, primary and some of the secondary objectives and hypotheses. All tables and statistical summaries used in this section are given in full, in appendices F, G and H.

6.3.1 Section A: Demographics

6.3.1.1 Organisation profile

The three organisations involved in the survey have used SAP software for at least 10 but less than 20 years (100.0%), as is evident from table 6.3. The numbers of full-time employees for those three organisations were 701 employees or more. The MNEs consulted operated mainly in more than 20 countries (33.3% each).

Table 6.2: Organisation profile

Demographics profile No. of years of SAP software use	Number	%
At least 10 but less than 20 years	3	100.0
Full-time employees
701 employees or more	3	100.0
Geographical region		%
The organisation geographical sites of operation for the first MNE	20	33.3	100.0
The organisation geographical sites of operation for the second MNE	25	33.3
The organisation geographical sites of operation for the third MNE	23	33.3

Source: Section A: Questions a3, a4 and a5.

6.3.1.2 CEO/CIO profile

Three out of three questionnaires were returned, which is a response rate of 100% (see table 5.3: the response rate). As is evident from table 6.2, the respondents were CIOs and they have been operating SAP software for ten years or more (100.0%).

108

Table 6.3: CEO/CIO profile

Demographics profile Capacity	Number	%
CEO	0		00.0
CIO	3		100.0
Years of SAP software operation by CIO
10 years or more	3		100.0

Source: Section A: Questions a1 and a2.

6.3.1.3 Manager profile

In this study, the total of 61 out of 150 questionnaires were returned, which is a response rate of 46.6% (see table 5.3: the response rate). As is evident from table 6.4, all the respondents involved in this survey were managers from general, senior, middle and junior management level. The managers had been using SAP software at least five but less than ten years (43.7%), at least three but less than five years (28.1%) and at least one year but less than five years (8.9%). Furthermore a few of the managers had used the SAP software for less than one year (5.9%) compared to managers who had used it for at least ten but less than 20 years (13.3%).

The job levels of the managers in this study were senior and middle (9.0% and 8.2%, respectively). General managers and junior managers constituted 3.0% and 25.3%, respectively. The majority of the MNE managers (39.5%) had a post-school diploma or certificate(s), closely followed by 37.3% of the respondents that had a Grade 12 (Matric) and 15.7% with an undergraduate or equivalent degree(s). Some 1.5% had a postgraduate degree(s) and 6.0% had a high school qualification. The minimum age for the MNE respondents varied from 26 to 30 years (32.6%), 31 to 35 years (27.4%), followed by 36 to 40 years (18.5%), 20 to 25 years (13.3%), 41 to 45 years (5.2%), younger than 20 (2.2%) and 46 to 50 years (0.7%).

109

Table 6.4: Manager profile

Manager profile Number of years of using SAP software	Number	%
Less than 1 year	8	5.9
At least 1 year but less than 3 years	12	8.9
At least 3 but less than 5 years	38	28.1
At least 5 but less than 10 years	59	43.7
At least 10 but less than 20 years	18	13.3
Total	135	100.0
Current job level
General manager	4	6.5
Senior manager	12	19.6
Middle manager	11	18.2
Junior manager	34	55.7
Total	61	100.0
Age group
Younger than 20	3	2.2
20 to 25 years	18	13.3
26 to 30 years	44	32.6
31 to 35 years	37	27.4
36 to 40 years	25	18.5
41 to 45 years	7	5.2
46 to 50 years	1	.8
Total	135	100.0
Education
A high school qualification	8	6.0
Grade 12 (Matric)	50	37.3
Post-school diploma(s) or certificate(s)	53	39.5
Undergraduate or equivalent degree(s)	21	15.7
Postgraduate degree(s)	2	2.5
Total	134	100.0

Source: Section A: Questions a1, a2, a3 and a4.

When respondents were asked how many full-time employees reported to them, an overwhelming

110

79.0% of the users (106) responded that no one report to them, compared to 10.0% of the users (13) who responded that between 1 and 10 employees reported to them, as is evident from figure 6.3. Some 4.0% of the users (6) responded that between 11 and 20 employees reported to them, and 2.0% of the users (3) responded that between 21 and 30 employees reported to them. Only 2.0% of the users (2) responded that between 31 and 40 employees reported to them, compared with 3.0% of the users (4) who responded that more than 40 employees reported to them.

Figure 6.3: Full-time employees reporting

Full-time employees reporting

40%

20%

80%

70%

60%

50%

30%

10%

0%

	Between 1	B etween	B etween	B etween	M ore than
0
	and 10	11 and 20	21 and 30	31 and 40	40
79%	10%	4%	2%	2%	3%

79%

10%

4% 2% 2% 3%

Per cent

Source: Section A: Question a5.

6.3.1.4 End-user profile

In this study, the total of 73 out of 220 questionnaires were returned, which is a response rate of 33.18% (see table 5.3: the response rate). As is evident from table 6.5, most end-users had been using SAP software for at least 5 but less than 10 years (43.7%), closely followed by at least 3 but less than 5 years (28.1%), at least 10 but less than 20 years (13.3%) and at least 1 year but less than 3 years (8.9% percent). The job level for the employees in this study was end-user (54.1%) and manager (45.9%).

The majority of the MNEs' end-users (39.5%) were in possession of a post-school diploma or
certificate(s), closely followed by 37.3% of the respondents who had a Grade 12 (Matric) and

111

15.7% with an undergraduate or equivalent degree(s). On other hand 6.0% of end-users had some high school qualification and 1.5% had a postgraduate degree. The minimum age of the MNE respondents varied from 26 to 30 years (32.6%) and 31 to 35 years (27.%), closely followed by 36 to 40 years (18.5%), 20 to 25 years (13.3%), 41 to 45 years (5.2%), 46 to 50 years (0.7%) and younger than 20 (2.2%).

Table 6.5: End-user profile

Demographics profile Number of years of using SAP software	Number	%
Less than 1 year	8	5.9
At least 1 year but less than 3 years	12	8.9
At least 3 but less than 5 years	38	28.1
At least 5 but less than 10 years	59	43.7
At least 10 but less than 20 years	18	13.4
Total	135	100.0
Age group
Younger than 20	3	2.2
20 to 25 years	18	13.3
26 to 30 years	44	32.6
31 to 35 years	37	27.4
36 to 40 years	25	18.5
41 to 45 years	7	5.2
46 to 50 years	1	.8
Total	135	100.0
Education
A high school qualification	8	6.0
Grade 12 (Matric)	51	37.3
Post-school diploma(s) or certificate(s)	53	39.5
Undergraduate or equivalent degree(s)	21	15.7
Post-graduate degree(s)	2	1.5
Total	134	100.0

Source: Section A: Questions a1, a2, a3 and a4.

112

6.3.2 Section B: Views of CEOs/CIOs on strategic management, SAP and training

6.3.2.1 SAP software and training profile

The CIOs involved in this survey indicated that the SAP computer systems specialists (100.0%) attended training in their organisation and also underwent training on the job with experienced employees (100.0%).

As is evident from table 6.6, the CIOs believed that SAP software was used to a large extent (100.0%) as a strategic management tool within their organisation. They also indicated that SAP software was customised in their organisations.

Table 6.6: Views of CEOs/CIOs on strategic management, SAP and training

View of the CIOs Responsible for SAP training within the organisation	Number	%
The SAP computer systems specialists	3	100.0
The training is done on the job with experienced employees	3	100.0
SAP is used as a strategic management tool
Large extent	3	100.0
The acquisition of the SAP software
The software was customised for my organisation	3	100.0

Source: Section B: Questions b6, b7 and b8.

In response to question 9, all of the CIOs (100.0%) involved in the survey strongly disagreed that the implementation of the SAP system within their organisation was a waste of money. Furthermore two (67.0%) strongly disagreed that the SAP system hampered internal organisation of processes, and one simply disagreed (33.0%) with this statement.

When asked if it was complex to implement the SAP software, one CIO (33.0%) strongly agreed and two (67.0%) agreed. However, all three (100.0%) strongly agreed that the SAP system effectively integrates different applications and that the multifunctionality of the SAP software is of strategic importance to any organisation.

113

From the overall statements in question 9, it is evident that the issues surrounding the capabilities, characteristics and efficiency of ERP system software rely mainly on the integration status of the different applications, the modular capability and the multifunctionality of the software.

6.3.2.2 Section C: Strategic management, SAP system and value chain

All three CIOs (100.0%) involved in the survey strongly agreed with all five statements formulated in question 10.

From the overall statements in question 10, it is noted that all the CIOs were aware of the role of ERP system software in the value chain, and the importance of a strategic IT

plan in order to succeed in ERP project implementation.

6.3.2.3 Section D: General information

For question 11 (d11.1, d11.2, d11.3, d11.4 and d11.5), all three CIOs (100.0%) involved in the survey strongly agreed that the acquisition of ERP software was valuable to their organisation. Furthermore two (67.0%) strongly agreed that in their organisation the most effective ERP system had been implemented, while one disagreed (33.0%).

Regarding whether the ERP system was effectively customised for their organisation, all CIOs (100.0%) strongly agreed with this statement. Two of the CIOs (67.0%) strongly agreed that employees in their organisation made effective use of the SAP system and one (33.0%) agreed. To the question of whether SAP software users were knowledgeable about the system, two CIOs (67.0%) involved in the survey strongly agreed and one (33.0%) agreed.

From the overall statements in question 11, it can be seen that the most important factor of ERP system software is the ability to customise the system to suit the organisation structure and objectives. Furthermore the three CIOs involved in this survey pointed out that the acquisition of ERP software within their organisation was valuable.

6.3.3 Section B: Views of managers and end-users

In this study, 76.0% of the managers and end-users involved in this survey rated SAP software as an
excellent IT tool within their organisation, as indicated in figure 6.4. On other side 17.0% of the

114

participants rated the system as good and 5.0% as moderate. Contrary to this only 2% rated the system as very poor.

Figure 6.4: Views of managers and end-users of SAP software efficiency

17%

Excellent Good Moderate Very poor

5% 2%

SAP software efficiency

76%

Source: Section B: Question b 6.

When asked how the organisation acquired the SAP software, an overwhelming 69.6% (94 users) pointed out that the SAP software had been customised in the organisation, followed by 11.9% (16 users) who pointed out that the vendor had supplied the software with some modifications. On other side 9.6% (13 users) stated that the vendor had supplied the software with little or no modifications, and 8.1% pointed out that the vendor had supplied the software with major modifications (11 users). See table 6.7.

Table 6.7: Views of managers and end-users of the acquisition of SAP software

Vendor supplied the software with some modifications

Vendor supplied the software with little or no modifications

The acquisition of the SAP software

View of the manager and end-user

Number

16

13

11.9

9.6

%

115

Vendor supplied the software with major modifications	12	8.9
The software was customised for my organisation	94	69.6
Total	135	100.0

Source: Section B: Question b7.

Figures 6.5 and 6.6 reflect the training in SAP software in the organisations surveyed (Responded and non-responded). Most of the 119 users (88.0%) responded, while only 16 users (12.0%) did not responded that training was done on the job with experienced employees. On other side 98 users (73.0%) responded, while only 37 users (27.0%) did not responded that training in SAP software was done by the computer systems specialist in their organisation. In addition, 20 users (15.0%) responded, while 115 users (85.0%) did not respond that independent external clients did training in SAP software. When asked who is responsible for SAP training, 2 users (2.0%) responded, while 133 users (98. 0%) indicated `other' for the provision of training.

Figure 6.5: Responsible for SAP software training (Responded)

Responsible for SAP training

b8.4 Other

b8.3 The training is done on the job with experienced
employees

b8.2 The SAP computer systems specialists

b8.1 Independent external clients

2%

15%

73%

88%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Per cent

Marked

Source: Section B: Question b8.

116

Figure 6.6: Responsible for SAP software training (Not responded)

120%

100%

40%

20%

80%

60%

0%

b8.1
Independent
external
clients

85%

b8.2 The SAP
computer

systems
specialists

27%

Responsible for SAP training

Statement

b8.3 The training is done on t he job with experienced employees

12%

b8.4 Other

98%

Not marked

Source: Section B: Question b8.

Figure 6.7 below relates to question 9. An overwhelming 68.0 % of the users consulted in this survey strongly agreed that SAP software supported the department's objectives. Only 25.0 % of the users agreed, and 4.0 % were neutral, while 2.0 % strongly disagreed and 1.0 % disagreed. When asked if they were consulted regarding the selection of ERP software used in their organisation, 32.0 % of the users, especially the senior managers, agreed, 23.0 % strongly agreed, follows by 29.0 % of them remained neutral, and 8.0 % strongly disagreed and 8.0 % disagreed. For the end-users 29.0 % agreed, 16.0 % strongly agreed, 27.0 % remained neutral, 15.0 % strongly disagreed and 13.0 % disagreed. The majority of respondents, 55.0 % of them (the users) strongly agreed that the implementation of SAP software added value to their customers, 36.0 % agreed, 7.0 % remained neutral and 2.0 % strongly disagreed. 38.0 % of the respondents strongly agreed that sufficient funds were made available to train employees in SAP software usage, 35.0 % agreed and 19.0 % remained neutral. 7.0 % users strongly disagreed and 1.0 % of the respondent disagreed with this statement.

Respondents were asked about whether a strategic IT plan was followed in their department. An

117

overwhelming 47.0 % of the respondents strongly agreed and 34.0 % agreed, follows by 17.0 % respondents, which remained neutral and 2.0 % strongly disagreed that a strategic plan was followed in their department. In the context of the overall organisation, only 45.0 % of the respondents strongly agreed, 34.0 % of the respondents agreed, 17. 0 % remained neutral and 2.0 % strongly disagreed that a strategic plan was followed in their organisation.

Figure 6.7: Level of agreement

Level of agr eement

The IT strategic plan in our or ganisation inf luences the extent to which SAP software
can be successf ully implemented

In my or ganisation the IT strategic plan is followed
In my depar tment, the str ategic plan is followed
Suf f icient f unds were made available to tr ain employees in SAP software usage
The implementation of the SAP software adds value for to customer s

	47%		33%			17% 2%01%
	45%		36%			16% 2%01%
	47%		34%			17% 2%0
	38%		35%	19%		7%1%0
		54%		36%		7% 2%01%
16%		29%	27%		15%	13% 0
23%		32%		29%		8% 8% 0
		68%		25%		4%2%1%0

The end-users were consulted r egar ding the selection of the ERP software used in my

organisation

Senior manager s were consulted r egar ding the selection of the ERP software used in my
organisation

SAP software supports my depar tment's objectives

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Str ongly agr ee Agree Neutral Str ongly disagr ee Disagree No r esponse

Source: Section B: Question b9.

118

For the question whether the strategic IT plan in their organisation influenced the extent to which SAP software could be successfully implemented, an overwhelming 47.0 % of the users strongly agreed, 33.0 % of the users agreed, follows by 17.0 % of the users remained neutral and 2.0 % strongly disagreed.

From figure 6.7 it is evident that issues surrounding the success of ERP system implementation and usage in the MNEs relate to strategy management through the value chain approach. The reason is that an ERP system relies heavily on the factors highlighted below:

· Sufficient funds to train the employees;

· The involvement of the manager and end-users in the selection of ERP software; and

· The application of a strategic IT plan.

6.3.4 Section C: Views of managers and end-users on strategic management, SAP and training Figure 6.8, relates to question c10. An overwhelming 59.0 % of the users consulted in this survey strongly agreed that SAP software facilitates effective decision-making, follows by the 34.0 % agreed, 5.0 % remained neutral and 2.0 % strongly disagreed. When asked if the SAP software being facilitated improved productivity, 61. 0 % of the users strongly agreed, 33.0 % agreed, 4.0 % remained neutral and 2.0 %) strongly disagreed.

The majority of respondents, 47.0 % of the users strongly agreed that they received sufficient training on the usage of SAP software, 30. 0 % agreed, 16.0 % remained neutral, 3.0 % strongly disagreed and 4.0 % disagreed. 46. 0 % of the users strongly agreed that the value-adding activities were communicated to them, 44.0 % agreed, 6.0 % remained neutral, 2.0 % strongly disagreed and 2.0 % disagreed. Furthermore, when asked if their performance had been evaluated against predetermined criteria, only 50.0 % of the users strongly agreed, follows by 44.0 % agreed, and 4.0 % remained neutral and 2.0 % strongly disagreed with the statement.

From figure 6.8 below it is evident that the ERP system facilitates effective decision making and improves productivity. In addition, to operate SAP software, users must have sufficient training.

119

Figure 6.8: General information/ statement

Generalinformation/statement

Disagree

Strongly
disagree

50%

46%

Neutral

Agree

5%

2%

59%

34%

	44% 44% 30% 33% 34%		6% 16% 4%	4% 2%	2% 3% 2% 2%		2% 4%
		5%

100%

70%

40%

20%

90%

80%

60%

50%

30%

10%

0%

50%

46%

47%

61%

59%

Strongly
agree

47%

30%

16%

3%

61%

33%

4%

2%

44%

4%

44%

6%

2%

2%

2%

4%

c10.5Myperformancehasbeenevaluatedagainst predeterminedcriteria.

c10.4Valueaddingactivitiesarecommunicatedto me.

c10.3Ireceivedsufficienttraininginthe usage ofthe SAP software.

c10.2The SAP software facilitatesimproved productivity.

c10.1The SAP software facilitateseffective

decision-making.

c10.2The SAP software facilitates improvedproductivity.

c10.5Myperformance hasbeen evaluatedagainstpredetermined criteria.

c10.4Valueaddingactivitiesare communicatedtome.

c10.3Ireceivedsufficient traininginthe usage ofthe SAP software.

c10.1The SAP software facilitates effective decision-making.

Source: Section C, Question c10.

6.3.5 Results of statistical testing

Cross-tabulations were performed on each of the variables as indicated in tables 6.8, 6.9, 6.10, 6.11 and 6.12 (Refer to appendix F). The chi-square test was used to test the significance of the stated hypothesis and was significant at the 0.05 level. However, in this statistical testing, the Fisher's exact test value in the exact significance (one-sided) column is assumed as the significance (p-value). Therefore if the p-value was lower than 0.05, the hypothesis was rejected. If the p-value was higher than 0.05, then the hypothesis was not rejected. In the cases where the hypothesis was not rejected, the relationship between the variables was investigated further.

120

6.3.5.1 Job level/full-time employees cross-tabulation

To accurately determine if there is a relationship between employees at the job level surveyed and the full-time employees who report to them, a chi-square hypothesis test as listed in table 6.8 is performed.

Ho: There is no relation between job level (a2) and the full-time employee's (a5) (i.e. they are independent).

H1: There is a relation (i.e. they are not independent).

From table 6.8, since the p-value (Fisher's exact test = .000) is less than 0.05, the hypothesis is rejected and it can therefore be concluded that there is no relation between a2 and a5. This indicates that only managers have the chance that full-time employees will report to them.

Table 6.8: Cross-tabulation: a2 with a5

a2: What is your current job level?

a5: How many full-time employees report to you?

			a5 How many full-time employees report to you?			Total
			More than 0
Manager	Number	32	28		60
		53.3%	46.7%		100.0%
	Number	73	0		73
		100.0%	0%		100.0%	Total
Number		105	28		133
		78.9%	21.1%		100.0%

Chi-square tests

	Value	df	Asymp. sig. (two- sided)	Exact sig. (two-sided)		Exact sig. (two-sided)	Fisher's exact test (p- value)
			.000	.000

121

6.3.5.2 Departmental objectives/strategic IT plan cross-tabulation

To accurately determine a relationship between the support of SAP software of departmental objectives and the extent to which a strategic IT plan influences successful SAP software implementation, a chi-square hypothesis test as listed in table 6.9 is performed.

Ho: There is no relation between SAP software supporting departmental objectives (b9.1) and the extent to which a strategic IT plan influences successful SAP software implementation (b9.8) (i.e. they are independent).

H1: There is a relation (i.e. they are not independent).

From table 6.9, the p-value (Fisher's exact test = .013) is less than 0.05, so the hypothesis is rejected and it can therefore be concluded that there is no relation between b9.1 and b9.8.

Table 6.9: Cross-tabulation: b9.1 with b9.8

b9.1 SAP software supports my department's objectives.

b9.8 The strategic IT plan in our organisation influences the extent to which SAP software can be successfully implemented.

			b9.8 The strategic IT plan in our organisation influences the extent to which SAP software can be implemented successfully			Total
			Neutral/disagree
Agree	Number	105	21		126
		83.3%	16.7%		100.0%
	Number	4	5		9
		44.4%	55.6%		100.0%	Total
Number		109	26		135
		80.7%	19.3%		100.0%

Chi-square tests

	Value	df	Asymp. sig. (two- sided)	Exact sig. (two- sided)		Exact sig. (one- sided)	Fisher's exact test
			.013	.013

122

6.3.5.3 SAP software selection cross-tabulation

To accurately determine if there is a relationship between SAP software's support of departmental objectives (b9.1) and whether the senior managers were consulted regarding the selection of ERP software used in their organisation (b9.2), a chi-square hypothesis test as listed in table 6.10 is performed.

Ho: There is no relation between SAP software's support of departmental objectives and whether senior managers were consulted regarding the selection of ERP software used in their organisation (i.e. they are independent).

H1: There is a relation (i.e. they are not independent).

From table 6.10, the p-value (Fisher's exact test = .008) is less than 0.05, so the hypothesis is rejected and it can therefore be concluded that there is no relation between b9.1 and b9.2.

Table 6.10: Cross-tabulation: b9.1 with b9.2

b9.1 SAP software supports my department's objectives.

b9.2 Senior managers were consulted regarding the selection of the ERP software used in my organisation.

			b9.2 Senior managers were consulted regarding the selection of the ERP software used in my organisation			Total
			Neutral/disagree
Agree	Number	73	53		126
		57.9%	42.1%		100.0%
	Number	1	8		9
		11.1%	88.9%		100.0%	Total
Number		74	61		135
		54.8%	45.2%		100.0%

Chi-square tests

	Value	df	Asymp. sig. (two- sided)	Exact sig. (two- sided)		Exact sig. (one- sided)	Fisher's exact test
			.011	.008

123

6.3.5.4 Awareness of training cross-tabulation

To accurately determine if there is a relationship between whether sufficient funds were made available to train employees in SAP software usage (b9.5) and whether they received sufficient training in the usage of SAP software (c10.3), a chi-square hypothesis test as listed in table 6.11 is performed.

Ho: There is no relation between whether sufficient funds were made available to train employees in SAP software usage and whether they received sufficient training in the usage of the SAP software (i.e. they are independent).

H1: There is a relation (i.e. they are not independent).

From table 6.11, the p-value (Fisher's exact test = .000) is less than 0.05, so the hypothesis is rejected and it can therefore be concluded that there is no relation between b9.5 and c10.3.

Table 6.11: Cross-tabulation b9.5 with c10.3

b9.5 Sufficient funds were made available to train employees in SAP software usage. c10.3 I received sufficient training in the usage of the SAP software.

			c10.3 I received sufficient training in the usage of the SAP software			Total
			Neutral/disagree
Agree	Number	86	13		99
		86.9%	13.1%		100.0%
	Number	19	17		36
		52.8%	47.2%		100.0%	Total
Number		105	30		135
		77.8%	22.2%		100.0%

Chi-square tests

	Value	df	Asymp. sig. (two- sided)	Exact sig. (two- sided)		Exact sig. (one- sided)	Fisher's exact test
			.000	.000

124

6.3.5.5 Training/responsible for the training cross-tabulation

To accurately determine if there is a relationship between whether users received sufficient training in the usage of SAP software (c10.3) and whether the training was done on the job with experienced employees (b8.3), a chi-square hypothesis test as listed in table 6.12 is performed.

Ho: There is no relation between whether users received sufficient training in the usage of SAP software and whether the training was done on the job with experienced employees (i.e. they are independent).

H1: There is a relation (i.e. they are not independent).

From table 6.12, the p-value (Fisher's exact test = .495) is more than 0.05, so the hypothesis is not rejected and it can therefore be concluded that there is relation between c10.3 and b8.3. This indicates that the efficient use of SAP software in any organisation depends on employee training.

Table 6.12: Cross-tabulation: c10.3 with b8.3

c10.3 I received sufficient training in the usage of the SAP software. b8.3 The training is done on the job with experienced employees.

			b8.3 The training is done on the job with experienced employees			Total
			Marked
Agree	Number	12	93		105
		11.4%	88.6%		100.0%
	Number	4	26		30
		13.3%	86.7%		100.0%	Total
Number		16	119		135
		11.9%	88.1%		100.0%

Chi-square tests

	Value	df	Asymp. sig. (two- sided)	Exact sig. (two- sided)		Exact sig. (one- sided)	Fisher's exact test
			.754	.495

125

In this empirical section, the aim was to test hypothesis H3, which stipulated that users, managers and CEOs/CIOs were positive about ERP system matters relating to strategic management and the value chain concept. Regarding the outcome of the self-administered survey conducted, given in sections 6.3.1, 6.3.2, 6.3.3 and 6.3.4 involving the CEOs/CIOs, the managers and the end-users, it can be concluded that hypothesis 3 (H3) is not rejected. Therefore the employers and employees are knowledgeable about, trained in and aware of the ERP system in their organisation.

6.4 Conclusion

In this chapter the qualitative study was reported on. Responses from those surveyed in this study were organised by demographic profile of the participants (CEOs/CIOs, managers and end-users), the organisation's (MNE's) profile, and the various issues relating to the value chain integration through the ERP system, IT strategic plan and strategy management. Frequency distributions were analysed, interpreted and graphically represented where appropriate. The results of the statistical tests, which included significance and association testing, were reported.

In chapter 7 the conclusions and recommendations of this study will be discussed.

126