ABSTRACT 
 
 
 
 
Title of Document: UTILIZATION OF ENTERPRISE RESOURCE 
PLANNING TOOLS BY SMALL TO 
MEDIUM SIZE CONSTRUCTION 
ORGANIZATIONS:  A DECISION-MAKING 
MODEL   
  
 Sam Negahban, Doctor of Philosophy, 2008 
Directed By: Professor Gregory B. Baecher, Ph.D. 
Civil & Environmental Engineering 
 
 
 
Enterprise Resource Planning (ERP) utilization in the Construction Industry has been 
limited to a few large organizations. Significant segments of the industry are either 
not aware of or have not been able to adopt this new technology successfully. The 
largest groups of construction organizations that either have failed in their efforts to 
adopt this technology, or are not familiar with it are the Small to Mid Size 
Construction Organizations (SMSCO). Failure in or refusing to adopt ERP by this 
group, despite all its potential benefits, was the problem that was addressed in this 
research.   
This research sets out not only to formulate the reason(s) why SMSCO fail to utilize 
ERP systems, but also to propose a decision-making model which could be utilized 
when they decide to adopt an ERP system.  
After a careful review of existing technology models, a new ERP Adoption Model 
(EAM) is formulated and projected. This model adopted a new paradigm shift 
proposed by Bagozzi (2007) and incorporated it?s a new decision making core. 
Prohibitive criteria that are at play and prevent SMSCO members from successfully 
adopting and implementing ERP systems were redefined as prohibitive/self-
regulation criteria and introduced into the model. Utilizing the results obtained from a 
field questionnaire distributed among industry experts, these criteria were analyzed 
and ranked in order to increase the understanding of their impact on EAM?s 
processes.   
A case study to verify EAM in general and impact of prohibitive/self-regulation 
criteria was conducted. Ultimately EAM, incorporating the study?s findings 
associated with prohibitive/self-regulation criteria was finalized and proposed to be 
utilized by SMSCO in order to increase the chances of successful implementation of 
ERP system. The results of this study provides SMSCO members that are currently 
not utilizing ERP systems, but are contemplating its use, with a decision making tool. 
ERP Adoption Model (EAM) provides a road map that could be utilized as a decision 
making tool by SMSCO.   
 
 
UTILIZATION OF ENTERPRISE RESOURCE PLANNING 
TOOLS BY SMALL TO 
MEDIUM SIZE CONSTRUCTION ORGANIZATIONS: 
A 
DECISION-MAKING MODEL  
 
 
 
By 
 
 
Sam Negahban 
 
 
 
 
Dissertation submitted to the Faculty of the Graduate School of the  
University of Maryland, College Park, in partial fulfillment 
of the requirements for the degree of 
Doctor of Philosophy 
Spring 2008 
 
 
 
 
 
 
 
 
 
Advisory Committee: 
Professor Gregory B. Baecher, Chair 
Professor Miroslaw J. Skibniewski 
Professor John Cable 
Professor Ralph D. Bennett AIA 
Professor Donald W. Vannoy 
 
? Copyright by 
Sam Negahban 
Spring of 2008 
 
 ii
Dedication 
To my family for their support and encouragement.
 
 iii
Acknowledgements 
I would like to express my sincere gratitude to my advisor Dr. Gregory Baecher, for 
his moral support and patience over the many years he has committed to the 
completion of this research. 
I would like to thank members of E-Construction Group at University of Maryland 
College Park for their support and assistance in various stages of this research. Their 
thoughtful criticism of this research played an elemental role in its completion. 
I would like to thank all of the organizations and personnel who assisted me in 
conducting my field research, and the people who responded to researcher's 
questionnaires. Without their participation this research could not been completed.  
Finally, and most notably this research would have not been possible without support 
and encouragement of my family. My only remorse lies in fact that my father did not 
live long enough to see the completion of it, and it is to him that I dedicate this 
dissertation. 
 
 iv
Table of Contents 
 
Dedication..................................................................................................................... ii 
Acknowledgements......................................................................................................iii 
Table of Contents......................................................................................................... iv 
List of Tables .............................................................................................................. vii 
List of Figures.............................................................................................................. ix 
CHAPTER 1 INTRODUCTION .................................................................................. 1 
Section 1.1 Background............................................................................................ 1 
Section 1.2 Problem Statement................................................................................. 5 
Section 1.3 Research Objectives............................................................................... 8 
Section 1.4 Research Scope & Methodology ......................................................... 11 
Section 1.5 Organization of Dissertation................................................................ 14 
CHAPTER 2 LITERATURE REVIEW ..................................................................... 16 
Section 2.1 Current Status of ERP Utilization........................................................ 16 
Section 2.1.1 ERP Use in the Construction Ind., Key Implementation Issues ... 19 
Section 2.1.2 Benefits of ERP Use by SMSCO.................................................. 25 
Section 2.1.3 Risks & Causes of ERP Failure .................................................... 29 
Section 2.1.3.1 Failure Criteria for Large Organizations................................ 30 
Section 2.1.3.2 Risk Assessment .................................................................... 44 
Section 2.1.4 Obstacles in Use of ERP by SMSCO ........................................... 45 
Section 2.1.4.1 Prohibitive Criteria for SMSCO ............................................ 47 
Section 2.2 ERP Research in Academia ................................................................. 47 
Section 2.2.1 ERP Optimization ......................................................................... 48 
Section 2.2.2 ERP & Management Systems....................................................... 49 
Section 2.2.3 ERP Design Issues ........................................................................ 51 
Section 2.2.4 ERP & Supply Chain Management .............................................. 52 
Section 2.2.5 ERP Case Studies.......................................................................... 54 
Section 2.2.6 ERP Alternative Systems.............................................................. 55 
Section 2.2.6.1 Web-based Project Management Systems (WPMS).............. 56 
Section 2.2.6.2 Pre-Packaged Software .......................................................... 62 
Section 2.2.7 ERP in SMSCO ............................................................................ 65 
Section 2.3 Strategic Decision-making Process in Theory..................................... 67 
Section 2.4 Chapter Summary ................................................................................ 69 
CHAPTER 3 THEORETICAL FOUNDATION & RESEARCH MODEL .............. 71 
Section 3.1 Theory of Reasoned Action Model (TRA) .......................................... 71 
Section 3.2 Theory of Planned Behavior Model (TPB).......................................... 73 
Section 3.3 Technology Acceptance Model (TAM)............................................... 75 
Section 3.4 Paradigm Shift ..................................................................................... 78 
Section 3.4.1 Short Comings with TAM ............................................................ 79 
Section 3.4.1.1 Critical Framework Gaps....................................................... 80 
Section 3.4.1.2 Problem with PU, PEU and other Determinants.................... 81 
Section 3.4.1.3 Group, Cultural & Social Aspects ......................................... 82 
Section 3.4.1.4 Emotions ................................................................................ 84 
Section 3.4.1.5 Self-Regulation ...................................................................... 85 
Section 3.4.2 New Core ...................................................................................... 85 
Section 3.5 Conceptual ERP Adoption Model (EAM)........................................... 87 
 
 v
Section 3.5.1 Adoption of Paradigm Shift.......................................................... 88 
Section 3.5.2 Structure of the Model .................................................................. 88 
Section 3.5.2.1 Problem Identification ........................................................... 89 
Section 3.5.2.2 Information Search................................................................. 90 
Section 3.5.2.3 Planning ................................................................................. 90 
Section 3.5.2.5 Evaluation .............................................................................. 94 
Section 3.5.2.6 Self-Regulation ...................................................................... 94 
Section 3.5.2.7 Choice .................................................................................... 95 
Section 3.5.2.8 Implementation ...................................................................... 95 
Section 3.6 Chapter Summary ................................................................................ 96 
CHAPTER 4 PROHIBITIVE CRITERIA CONFIRMATION .................................. 97 
Section 4.1 Design of Field Questionnaire ............................................................. 97 
Section 4.2 Choice of Data Collection Method ...................................................... 98 
Section 4.3 Data Collection .................................................................................. 100 
Section 4.3.1 Targeted Respondents................................................................. 100 
Section 4.3.2 Questionnaire Distribution & Responses.................................... 101 
Section 4.3.3 Problems Encountered ................................................................ 102 
Section 4.3.4 Validity of the Questionnaire...................................................... 102 
Section 4.4 Descriptive Analysis of the Questionnaire Results............................ 104 
Section 4.4.1 Respondent?s Profile................................................................... 105 
Section 4.4.2 Attitude & Understanding of Project Management Systems...... 109 
Section 4.4.3 Perceived Benefits ...................................................................... 115 
Section 4.4.4 Perceived Prohibitive Criteria..................................................... 121 
Section 4.5 Critical Determinants Identification .................................................. 127 
Section 4.5.1 Cost ............................................................................................. 128 
Section 4.5.2 Time ............................................................................................ 129 
Section 4.5.3 Functionalities............................................................................. 131 
Section 4.5.4 Security ....................................................................................... 132 
Section 4.6 Chapter Summary .............................................................................. 133 
CHAPTER 5 PROHIBITIVE/SELF-REGULATION CRITERIA ANALYSIS 
QUESTIONNAIRE .................................................................................................. 134 
Section 5.1 Design of Questionnaire .................................................................... 134 
Section 5.1.1 Structure of the Field Questionnaire........................................... 135 
Section 5.1.2 Initial Review of the Field Questionnaire................................... 138 
Section 5.2 Web Based Field Questionnaire......................................................... 138 
Section 5.3 Data Collection .................................................................................. 139 
Section 5.3.1 Targeted Respondents................................................................. 139 
Section 5.3.2 Questionnaire Distribution & Responses.................................... 140 
Section 5.3.3 Problems Encountered ................................................................ 140 
Section 5.4 Validity of Questionnaire................................................................... 141 
Section 5.5 Chapter Summary .............................................................................. 141 
CHAPTER 6 PROHIBITIVE CRITERIA DATA ANALYSIS............................... 143 
Section 6.1 Cost Criteria....................................................................................... 143 
Section 6.2 Time Criteria...................................................................................... 147 
Section 6.3 Functionality Criteria......................................................................... 151 
Section 6.4 Security Criteria................................................................................. 155 
Section 6.5 Inter-criteria comparisons .................................................................. 159 
Section 6.6 Alternative Systems Comparison....................................................... 166 
 
 vi
Section 6.7 Chapter Summary .............................................................................. 168 
CHAPTER 7 CASE STUDY.................................................................................... 170 
Section 7.1 Case Study Methodology................................................................... 170 
Section 7.2 Case Description ................................................................................ 171 
Section 7.2.1 Selection Criteria ........................................................................ 171 
Section 7.2.2 Company General Information ................................................... 171 
Section 7.2.3 Existing Operating Systems........................................................ 172 
Section 7.2.4 EAM Stages ................................................................................ 172 
Section 7.2.4.1 Problem Identification ......................................................... 173 
Section 7.2.4.2 Information Search............................................................... 175 
Section 7.2.4.3 Planning ............................................................................... 176 
Section 7.2.4.4 Self-Regulation .................................................................... 178 
Section 7.2.4.5 Selection/Short List.............................................................. 181 
Section 7.2.4.6 Evaluation ............................................................................ 182 
Section 7.2.4.7 Choice .................................................................................. 185 
Section 7.2.4.8 Implementation .................................................................... 185 
Section 7.3 Chapter Summary ...................................................................... 185 
CHAPTER 8 ERP ADOPTION MODEL (EAM) DISCUSSIONS......................... 187 
Section 8.1 ERP Adoption Model (EAM) ............................................................ 187 
Section 8.2 Hierarchical Ranking of Criteria........................................................ 189 
Section 8.3 Prohibitive/Self-regulation Criteria ................................................... 189 
Section 8.4 Vendor Participation .......................................................................... 191 
Section 8.5 Process Re-engineering...................................................................... 191 
Section 8.6 Role of Suppliers and Sub-contractors .............................................. 192 
Section 8.7 Iterative Nature of EAM?s Elements ................................................. 193 
Section 8.8 Chapter Summary .............................................................................. 194 
CHAPTER 9 CONCLUSIONS AND RECOMMENDATIONS............................. 195 
Section 9.1 Research Summary ............................................................................ 195 
Section 9.2 Research Results & Contributions..................................................... 197 
Section 9.3 Practical Guidelines for Utilization of EAM ..................................... 200 
Section 9.4 Limitation of the Research................................................................. 204 
Section 9.5 Future Research ................................................................................. 206 
Appendices................................................................................................................ 208 
Appendix A: Prohibitive Factors Questionnaire................................................... 209 
Appendix B: Prohibitive Criteria Analysis Questionnaire.................................... 213 
Appendix C: SPSSS Outputs ................................................................................ 224 
Bibliography ............................................................................................................. 235 
 
 vii
List of Tables 
 
 
Table 1 Descriptive Statistics for Cost Criteria ERP................................................ 143 
Table 2 P Values for Cost Criteria ERP ................................................................... 145 
Table 3 Descriptive Statistics for Cost Criteria WPMS............................................ 146 
Table 4 P-Value for Cost Criteria WPMS ................................................................ 147 
Table 5 Descriptive Statistics for Time Criteria ERP............................................... 148 
Table 6 P-Value for Time Criteria ERP ................................................................... 148 
Table 7 Descriptive Statistics for Time Criteria ....................................................... 150 
Table 8 P-Value for Time Criteria............................................................................ 150 
Table 9 Descriptive Statistics for Functionality Criteria ERP.................................. 152 
Table 10 P-Values for Functionality Criteria ERP................................................... 152 
Table 11 Descriptive Statistics for Functionality Criteria WPMS............................ 154 
Table 12 P-Values for Functionality Criteria WPMS............................................... 154 
Table 13 Descriptive Statistics for Security Criteria ERP........................................ 156 
Table 14 P-Values for Security Criteria ERP........................................................... 156 
Table 15 Descriptive Statistics for Security Criteria WPMS.................................... 158 
Table 16 P-Values for Security Criteria WPMS....................................................... 158 
Table 17 Overall Descriptive Statistics ERP ............................................................ 160 
Table 18 Overall P-Values for ERP.......................................................................... 160 
Table 19 Correlation Coefficients ERP .................................................................... 161 
Table 20 Overall Descriptive Statistics for WPMS .................................................. 162 
Table 21 Overall P-Values for WPMS ..................................................................... 163 
Table 22 Correlation Coefficient WPMS ................................................................. 164 
 
 viii
Table 23 Mean Values for Alternative Systems ....................................................... 167 
 
 
 
 ix
List of Figures
Figure 1 Research Methodology................................................... 11 
Figure 2 Theory of Reasoned Action ............................................ 72 
Figure 3 Theory of Planned Behavior TPB (Ajzen, 1991)............ 74 
Figure 4 Technology Acceptance Model TAM (Davis et al. 1989)
....................................................................................................... 75 
Figure 5 Updated Technology Acceptance Model, TAM2 
(Venkatesh & Davis 2000)............................................................ 77 
Figure 6 The Decision Making Core (Richard Bagozzi, 2007).... 86 
Figure 7 The Proposed ERP Adoption Model .............................. 87 
Figure 8 Organization Category ................................................ 105 
Figure 9 Gross Billing ................................................................ 106 
Figure 10 Familiarities with Web............................................... 107 
Figure 11 Contract Size.............................................................. 108 
Figure 12 Web Access................................................................. 109 
Figure 13 Senior Management?s Attitude................................... 110 
Figure 14 Level of Familiarity with Project Management Web-
Technology Tools........................................................................ 111 
Figure 15 Alternative Project Management Tools Utilization ... 112 
Figure 16 Respondent?s Willingness to Adopt New Systems...... 113 
Figure 17 Perceived Impact on Profit ........................................ 114 
Figure 18 Level of Familiarity with IT Tools ............................. 116 
Figure 19 Perceived Improvements in Operational Areas......... 117 
Figure 20 Potential Benefits ....................................................... 118 
 
 x
Figure 21 Communication Findings........................................... 119 
Figure 22 Impacts on Bottom Line ............................................. 120 
Figure 23 Cost Criteria for Not Using ERP/Project Management 
Web Tools.................................................................................... 122 
Figure 24 Relative Importance of Cost Categories as Prohibitive 
Factor.......................................................................................... 123 
Figure 25 Additional Prohibitive Criteria.................................. 124 
Figure 26 Security as a Prohibitive Factor ................................ 125 
Figure 27 Additional Critical Prohibitive Criteria .................... 126 
Figure 28 Self Evaluation Form ................................................. 174 
Figure 29 RFP Requirements ..................................................... 181 
Figure 30 Vendor Evaluation Form ........................................... 184 
Figure 31 ERP Adoption Model (EAM)...................................... 188 
Figure 32 Guideline for Measuring Impact of Self-regulation 
Criteria ? WPMS Alternative...................................................... 201 
Figure 33 Guideline for Measuring Impact of Self-regulation 
Criteria ? Pre Packaged Software Alternative ........................... 202 
Figure 34 EAM Utilization Guideline......................................... 203 
 
 
 1
 
CHAPTER 1 INTRODUCTION 
Section 1.1 Background 
The nature of the construction industry has been evolving since the beginning of the 
twentieth century. The advent of new technologies has hastened this pace. 
Construction organizations suffer from the ?temporary status? mindset. Projects are 
mostly unique, one-time jobs. Teams are put together for a specific purpose and 
disbanded as soon as the tasks are completed. People are trained and motivated to 
complete difficult tasks within short period of time and under strict budgetary 
constraints. Difficult problems are routinely resolved to meet the unique requirements 
of different projects. Jobs are competitively bid across the globe with varying rules 
and regulations. People come and people go. Tasks change in the middle of 
implementation. Materials do not show up in time, and at times, are not available all 
together. Labor issues become time bombs that can easily derail the entire project; 
however, amid all this chaos, jobs are completed successfully. The reason for this 
success can be mostly attributed to the knowledge that collectively resides within the 
minds of the members the project team. This knowledge, even though essential to the 
success of the organization and created at a great cost, has not been recognized as 
such and therefore been allowed to dissipate from the organization.  
The process of managing this knowledge has been impacted by the evolution of 
technology in this area. Just as any other topic on the edge of the scientific platform, 
its definition and nature has evolved. The process of knowledge management has 
been defined to mean the path by which knowledge is created, acquired, 
communicated, shared, applied, and effectively utilized and managed, in order to 
 
 2
 
meet existing and emerging needs, to identify and exploit existing and acquired 
knowledge assets (Egbu & Bootterhill, 2002). At the same time, the process of 
knowledge management has been defined to be set of management activities that 
frame and guide knowledge production in an organization (Koch, 2002). 
Additionally, this process has been defined as identification, optimization, and active 
management of intellectual assets to create value, increase productivity, and gain and 
sustain competitive advantage (Web, 1998).     
It is apparent that in order to clearly and simply define the knowledge management 
process one must first define what knowledge is. Knowledge must be distinguished 
from information. It is critical to make this distinction so that the focus does not shift 
on to Information Systems. Knowledge itself has been defined as a dynamic human 
process of justifying personal belief toward the ?truth?, i.e. a justified true belief 
(Nonaka & Takeuchi, 1995). In addition, it has been simply defined as know ? why, 
know ? how, and know ? who. Knowledge is built from data, which is first processed 
as information. Information becomes knowledge when it enters the system and is 
validated as a useful tool to be re-used.  
With the advances made in IT technology and its ever expanding possibilities, hopes 
were raised that the means and methods in the construction industry will be 
revolutionized by the application of IT technology. It was understood that utilizing 
this technology would allow the industry to harness the power of collective 
knowledge. In addition, regulatory and competitive forces, financial demands of 
owners, and an ever-shortening timeline to finish projects contributed to an increased 
pace of the utilization of this technology in the construction industry. It took the 
construction industry longer than other industries to realize the importance of the 
 
 3
 
utilization of IT applications in improving the possibility of ultimate success in an 
integrated project environment.  
One of the concepts that have been evaluated and, at times, utilized by construction 
organizations in achieving the goal of improved efficiency thru better management of 
collaborated knowledge is Enterprise Resource Planning (ERP). ERP systems have 
been defined to be a ?computer program that provides a general working platform for 
all departments of an enterprise with their management functions being integrated 
into the program? (Jingsheng & Halpin, 2003). These systems have been utilized to 
optimize the company?s internal and external processes. ERP has been a very rapidly 
growing business. By early 2000, the ERP revolution generated over $20 billion in 
revenues annually for suppliers and an additional $20 billion for consulting firms 
(Willcocks and Sykes, 2002). Originally ERP was created and implemented for and in 
the industrial manufacturing sector as a planning tool. The original systems or 
Material Requirement Planning (MRP) were utilized as tools to maximize the 
efficiency of ordering and managing the inventory of materials required for the 
production processes by using forecast sales (Laudon, & Laudon, 2002). Later, these 
systems were modified to also handle management of resource allocation for 
equipment and labor as well, by forecasting financial and production issues, as 
demand changed. With the advances made in information technology, MRPs were 
converted into ERPs, as they were modified to integrate additional front and back 
office functions such as warehousing, distribution, quality control, purchasing, 
financials, human resources, sales force, and electronic commerce. Historically in 
construction, ERP-type concepts have been utilized by large organizations to manage 
materials at different stages of project implementation. Various Material Management 
 
 4
 
Systems (MMS) have been utilized to integrate the functions of material requirement 
planning, takeoff, purchasing, expedition, shipping, receiving, inventory, distribution, 
and even accounting functions (Bell & Stukhart, 1987).  
ERP applications that are currently in use by the construction industry can be 
categorized into two separate groups: pre-packaged Software, and Web-based Project 
Management System (WPMS). Currently, the world?s largest pre-packaged ERP 
software providers include SAP, Oracle, PeopleSoft, J.D. Edwards, and Baan. SAP is 
said to have about 60% of the world market (Holland, Light, Kawalek, 1999). Among 
all various different types of software packages that are available, the most popular 
system is SAP R/3 (O?Conner and Dodd 1999; Jacobs and Whybark 2000).  
The number of architecture, engineering, and construction firms that are currently 
using or are planning to use WPMSs is on the rise. Currently, there are three 
implementation options for WPMS.  The first of these options is Application Service 
Providers (ASPs), which are those systems that can be rented or leased from a web- 
based service provider. The second option consists of the group that provides a 
comprehensive family of project management software solutions that can be 
purchased and installed to work in conjunction with the existing legacy systems. 
Finally project centric & web-based programs, which are created by the 
organization?s employees and utilize web technology to collaborate and manage 
specific projects.  
 
 5
 
Section 1.2 Problem Statement  
ERP has become an integral part of business process across the globe. Utilization of 
ERP worldwide in other industrial sectors has been steady and growing. Its critical 
influence in creating new business environments and processes has been significant.  
Different organizations in various sectors have committed to spending and have 
already spent large sums of capital for the implementation of ERP in their 
organizations. These same companies have been able to document major 
improvements, both tangible and intangible, in their operations as a result of ERP 
implementation. 
Acceptance of ERP as a valuable tool by various organizations has been well 
documented. Large numbers of Fortune 500 corporations have turned to ERP to 
integrate their operation and make it more efficient and profitable. Globally, the same 
observation can be made for some of the most successful corporations in the world. 
The question needs to be asked - why is this? What are some of the perceived benefits 
that cause corporations to commit to the implementation of ERP in their 
organizations? As indicated by Oliver, & Romm (2002), ?in common with other types 
of investment activity the adoption of an ERP system is a purposive intervention by 
an organization for bringing about a new state of affairs that is judged to be superior 
to the current state?. The following is the list of most significant factors that are often 
mentioned as a reason for committing to the implementation of ERP: 
? Integration 
? Information Access 
? Standardization & Process Improvement 
 
 6
 
?  Business Considerations 
?  Dissatisfaction with out dated legacy systems 
Once committed to an ERP system, companies have been able to improve customer 
relations, strengthen supply chain partnerships, enhance organizational flexibility, 
improve decision-making capabilities and reduce project completion time and cost 
(Ahmed, and Ahmed, Azhar, Mallikarjuna, 2003). Some organizations that have 
implemented full ERP packages reported 30% to 300% net return on their investment 
(Shi, & Halpin 2003).   
Even though Enterprise Resource Planning (ERP) has been fully implemented by 
various organizations internationally, in almost all of the other major industrial 
sectors, its utilization in the construction industry has been limited to use by a few 
large organizations. Significant segments of the industry are either not aware of or 
have not been able to adopt this new technology successfully. The largest groups of 
construction organizations that have either failed in their efforts to adopt this 
technology, or are not familiar with it are Small to Mid Size Construction 
Organizations (SMSCO). These organizations constitute the backbone of the 
construction industry and have their own particular financial and operational needs. 
Failure or refusal of SMSCO to adopt ERP, despite all its potential benefits, is a 
problem that needs to be addressed.   
It can be hypothesized that; 
Hypothesis #1: There are number of critical/prohibitive criteria that 
lead to failure or lack of utilization of ERP by SMSCO. These criteria 
need to be identified and studied.   
 
 7
 
Hypothesis #2: It is important to make an attempt to evaluate the level 
of impact for each of the prohibitive criteria in order to obtain a 
hierarchy of importance. 
 Hypothesis #3: Available alternative systems in the market at this 
time are not addressing the problem with the same level of success.  
Hypothesis #4: A comparison of the currently-available alternative 
ERP systems can be made showing the effect of prohibitive criteria on 
specific platform in an SMSCO environment. 
 Hypothesis #5: A decision-making model that can be utilized by 
SMSCO in selecting and adopting an ERP system is needed and can be 
formulated.  
Studies that have been conducted so far to identify the prohibitive factors are limited 
in nature and results. They are mostly based on limited case studies or anecdotal 
evidence provided by stories in the trade press. To date, there is no large scale 
empirical study that addresses the issues of why the use of ERP is not as widespread 
as it should be in SMSCO.  
In addition no study has been conducted that deals with creation of a decision-making 
model for adoption of ERP system by SMSCO. The research agenda presented here 
will identify a decision-making model which will incorporate the prohibitive criteria 
and their hierarchy of importance, leading to an increased implementation of ERP 
tools by SMSCO, and thereby resulting in realization of additional benefits for this 
important group.
 
 8
 
Section 1.3 Research Objectives 
In order to facilitate an increase of utilization of ERP tools by SMSCO, a proper 
understanding of prohibitive criteria and their role in the decision-making process is 
vital. Detail analysis of the above-mentioned criteria including their relative 
importance and impact on alternative ERP platforms will be studied. In addition it is 
the objective of this research to; based on existing theory of information technology 
adoption models, formulate a decision-making model that would incorporate the 
prohibitive criteria in its process. 
Several opinions/facts exist regarding status of utilization of ERP by SMSCO. These 
opinions are either cited in literature or commonly perceived by industry insiders, and 
are as follows; 
1. A large majority of SMSCO do not utilize current ERP tools to manage their 
projects. 
2. There are number of criteria that cause ERP implementation to fail. 
3. There are number of critical criteria that prohibit SMSCO from use of ERP 
tools. 
4. There are adequate alternative systems that can be utilized by SMSCO to 
adopt ERP. 
5. There is no decision-making model that could be utilized by SMSCO to 
properly evaluate and adopt the right system. 
The above mentioned opinion/facts would lead one to raise the following questions 
regarding the failure or lack of utilization of ERP tools in the management of projects 
by SMSCO: 
 
 9
 
1. Why do substantial numbers of SMSCO do not use ERP tools to manage their 
projects? 
2. What are the major prohibitive criteria with ERP implementation by SMSCO? 
3. Knowing the prohibitive criteria in play, what critical attributes or measures 
should be used to evaluate the performance of a particular ERP system? 
4. What are the relationships, if any, between these criteria and can they be 
ranked? 
5. Can a decision -making model to adopt an ERP system be formulated to be 
utilized by SMSCO? 
This research is intended to provide answers to all of the aforementioned questions, 
from which the following objectives are derived: 
1. Formulate the reason(s) why SMSCO fail to utilize or are not successful in 
implementing any existing ERP tools in managing their projects. 
2. Identify the prohibitive criteria that should be analyzed in order to increase the 
understanding of and the chance for selection of the most proper ERP system, 
leading to a larger acceptance of ERP tools by SMSCO. 
3. Examine the impact of these prohibitive criteria operating on an alternative 
ERP system platform.  
4. Establish a hierarchical ranking for the prohibitive criteria, reflecting their 
level of importance and overall impact. 
5. Based on existing theory of information technology adoption, generate a 
decision-making model and guidelines that could be used by SMSCO in order 
to properly adopt ERP systems. 
 
 10
 
6. Incorporate the role and impact of prohibitive criteria into the decision making 
model. 
The results of this research can be beneficial to all SMSCO organizations that 
currently are not taking advantage of the potential savings that a proper ERP system 
can generate for them. In addition, for those organizations that have attempted and 
failed to properly implement an ERP system, this research will act as a guide so that 
they can correct the miscalculation. Altogether, the results of this research can lead to 
a more widespread acceptance of ERP systems in SMSCO. 
 
 
 11
 
Section 1.4 Research Scope & Methodology 
The research tasks were divided into five major phases, which proceeded according to 
the proposed methodology shown in Figure 1.  
 
                                                 Research Methodology
Phas
e -
 
5
Phas
e -
 
4
Phas
e -
 
3
Phas
e -
 
2
Phas
e -
 
1
Problem
Identification
Literature
Review
Prohibitive
Criteria
Confirmation
Questionnaire
& Analysis
Prohibitive/
Self-regulation
Criteria
Questionnaire
Data Analysis
ERP Adoption
Model (EAM)
Discussions
Case Study
Guidelines &
Conclusions
Theories &
Research
Model (EAM)
Problem Formulation
Prohibitive Criteria Confirmation
Self-Regulation Analysis
ERP Adoption Model (EAM) Discussions
Guidelines & Conclusions
Chapter - 1 Chapter - 2 Chapter - 3
Chapter - 4
Chapter - 5
Chapter - 6
Chapter - 8
Chapter - 7
Chapter - 9
 
 
 
 
Figure 1 Research Methodology 
 
A detailed description of each phase of the research is as follows: 
Phase 1 - Problem Formulation   
After identification of the problem to be resolved by this research was completed,   
comprehensive literature review was conducted in the area of ERP applications in all 
 
 
 
 12
 
industrial sectors with special attention given to the construction industry. In 
particular, ERP applications utilized by SMSCO were scrutinized, and in order to 
obtain an in depth knowledge of this subject, on-site interviews relating to their ERP 
experiences were conducted with various owners of SMSCO.  
Current understandings of technology adoption process, associated risks and benefits 
of ERP application were studied. Number of existing and prominent technology 
adoption models were reviewed and based on their applicability to technology 
adoption in construction three of them were further scrutinized.  
Based on this review a proposed paradigm shift in technology acceptance model was 
adopted and incorporated into development of a new research model. Based on 
literature reviews and interviews, it was decided that the first step in advancing this 
topic would be to identify the prohibitive criteria leading to lack of utilization by 
SMSCO. 
 Phase 2 - Prohibitive Criteria Confirmation 
A questionnaire was designed, pilot-tested, and used as the primary instrument to 
survey the SMSCO sector and collect the necessary data. Based on the analysis of the 
results obtained from this questionnaire, number of critical prohibitive criteria that 
would affect adoption and implementation of ERP by SMSCO was identified.  
Alternative ERP systems that are currently available for utilization were categorized 
and investigated. It was decided that in order to confirm and complete the required 
analysis to gauge the impact of the prohibitive criteria and their potential role in self-
regulation part of proposed decision-making model, a second questionnaire be 
designed and submitted to industry experts for completion. These experts were 
chosen because they had previous relevant experience with the implementation of 
 
 13
 
ERP systems. The second questionnaire was distributed via SurveyMonkey, a web-
based service.  
Phase 3 ? Self-Regulation Analysis 
The data obtained as a result of the second field questionnaire were analyzed to 
formulate a hierarchical ranking system for the prohibitive criteria and establish a 
thorough understanding of their role as self-regulating elements in the decision-
making model. The relationships of the prohibitive criteria were analyzed. The results 
obtained for alternative ERP systems were compared so that the final 
recommendations could address the applicability and adoptability of a system. 
Various statistical methods were utilized to complete this analysis. In order to 
validate the research model a case study that dealt with a medium size general 
contracting firm?s adoption of an ERP system was conducted. 
Phase 4 ? ERP Adoption Model (EAM) Discussions  
As a result of data analysis and the case study conducted, the previously mentioned 
ERP Adoption Model (EAM) was completed. Prohibitive criteria and their ranking 
were adopted by getting incorporated into the self-regulation element of research 
model. Each individual element was further analyzed and its sub parts were 
identified. Issues of importance to the final version of EAM were presented and 
discussed in detail.  
Phase ? 5 Guidelines & Conclusions 
Practical guidelines to be used by other SMSCO members were generated. Finally 
major findings of the research were reviewed and applicable limitations were 
highlighted. In addition, recommendations for future research in this area were made. 
 
 14
 
Section 1.5 Organization of Dissertation  
The contents of the remaining chapters of this dissertation are organized as follows:  
? Chapter 2 reviews the literature produced by previous research related to ERP 
implementation in the construction industry and other relevant topics. 
Particular attention is given to issues affecting SMSCO. Potential benefits of 
ERP utilization by SMSCO are highlighted. Research dealing with the risk 
and failure of ERP implementation by SMSCO is scrutinized. Prohibitive 
criteria, leading to the creation of obstacles to the ERP implementation in the 
SMSCO environment that have been identified by previous research, are 
discussed. Existing ERP systems are categorized and reviewed for SMSCO 
applicability. In addition existing theory about decision making process are 
reviewed.  
? In Chapter 3, three of the most prominent technology adoption models and a 
proposed paradigm shift in technology adoption are presented to form the 
theoretical background of the research model, and then the research model and 
its components along with their inter relationships is presented.  
? In Chapter 4 Prohibitive Criteria questionnaire is discussed fully. In order to 
validate the prohibitive criteria identified by literature review, a questionnaire 
was designed and distributed to SMSCO?s executives for completion. A 
descriptive analysis for answers obtained for each question is provided. Based 
on the findings of the questionnaire and previously conducted literature 
review, critical determinants are identified and set as prohibitive criteria.  
? Chapter 5 deals with the Self-regulation questionnaire. The prohibitive criteria 
that were identified previously are further broken down into subcategories and 
 
 15
 
a new questionnaire dealing with relative strength and impact of these 
measures is deigned and distributed to industry experts.  
? Chapter 6 includes the study that analyzes the findings of the second 
questionnaire. This study establishes the ranking of various critical prohibitive 
criteria and their relative impact on the successful implementation of an ERP 
system across alternative ERP system platforms. In addition, inter-criteria 
comparisons will be conducted.  
? Chapter 7 includes the conduct of a case study dealing with a decision making 
process of ERP adoption by a medium size general contractor utilizing the 
research model. The findings of the case study are utilized to validate the 
research model and its processes.  
? Chapter 8 presents a final version of the research model EAM. Theoretical 
version of EAM is amended to reflect the impact of the prohibitive/self-
regulation criteria. Issues of importance to the final version of EAM are 
presented and discussed in detail. 
? Finally, Chapter 9 presents practical guidelines to be utilized by members of 
SMSCO in adopting ERP systems. In addition summary and conclusions of 
this research, its limitations and recommendations for future work are 
presented. 
 
 16
 
 
CHAPTER 2 LITERATURE REVIEW 
Section 2.1 Current Status of ERP Utilization  
What is ERP and what does it represent? The first step in achieving the objectives of 
this study requires a clear definition of ERP. These systems are very complicated and, 
without a clear definition, they could mean different things to different entities. In the 
past, ERP has been defined by Ohlsson & Ollfors (2001), to be ?A type of computer 
system that assists international companies in managing their information flows?. 
More definitively it has been described as a system able to ?reduce the financial 
reporting, purchasing, and support expenses of management information system 
(MIS), and lead to more timely analysis and reporting of sales, customer, and cost 
data? (Wagle, 1998). The most concise definition of ERP has been offered by Tsung, 
(2004), ?ERP is a system that aims to integrate the main business functions across all 
the departments within an organization.? In addition ERP has been viewed by (Irani 
& Love, 2001) to be ?a structural iterative business process, which offers 
organizational learning during the life cycle of technology?. The definition of ERP 
should be modified for construction to be ?information technology based computer 
platform that allows for integration of various business processes of an organization 
in order to increase efficiency, and thus profits, using a single database?. 
ERP originally was created for and implemented in industrial manufacturing sector as 
a planning tool. The original systems or Material Requirement Planning (MRP) were 
utilized as tools to maximize the efficiency of ordering and managing the inventory of 
materials required for the production processes by using forecast sales (Laudon, & 
 
 17
 
Laudon, 2002). Later, these systems were modified to also handle management of 
resource allocation for equipment and labor as well, by forecasting financial and 
production issues, as demand changes. With the advances made in information 
technology, MRPs were converted into ERPs as they were modified to integrate 
additional front and back office functions such as warehousing, distribution, quality 
control, purchasing, financials, human resources, sales force, and electronic 
commerce. Historically in construction, ERP-type systems have been utilized by large 
organizations to manage materials at different stages of project implementation. 
Various Material Management Systems (MMS) have been utilized to integrate the 
functions of material requirement planning, takeoff, purchasing, expedition, shipping, 
receiving, inventory, distribution, and even accounting functions (Bell and Stukhart, 
1987).  
The acceptance of ERP as a valuable tool by various organizations has been well 
documented. Large numbers of Fortune 500 corporations have turned to ERP to 
integrate their operation and make it more efficient and profitable. On a wider scale, 
the same observation can be made for some of the most successful corporations in the 
world. By early 2000, the ERP revolution generated over $20 billion in revenues 
annually for suppliers and an additional $20 billion for consulting firms (Willcocks 
and Sykes, 2000). ERP has become an integral part of business process across the 
globe. 
New software applications are entering the market place at a steady rate. There are 
numerous venders that advertise their product as the ultimate solution for the 
industry. Current vendors in the market are a mixture of some original companies and 
many more that have been created as result of industry mergers. Innovative visions, 
 
 18
 
adaptability, simplicity, cost, support services, and non-generic solutions are among 
some of the factors that have helped these organizations survive the tumultuous 
market place. 
Presently the world?s largest ERP providers include SAP, Oracle, PeopleSoft, J.D. 
Edwards, and Baan. SAP is said to have about 60% of the world market (Holland et 
al., 1999). Among the various different types of software packages available, the most 
popular system is SAP R/3 (O?Conner and Dodd 1999; Jacobs and Whybark 2000). 
In the construction industry, because of the fragmented nature of the business, ERP 
implementation and utilization has not reached the same level as the other industrial 
sectors; however, the construction industry has finally awakened to importance of 
ERP, even though it is lagging behind other major industries that have been utilizing 
ERP to improve their efficiencies and bottom lines. Construction organizations have 
initiated various efforts to develop and/or, at times, invent techniques/technologies 
that could be utilized in the implementation of their overall enterprise resource 
planning strategy. Large construction organizations are utilizing software 
technologies to improve their bottom lines much more quickly than in the recent past.  
Investments in IT represent a large financial commitment by the organization 
therefore the issue of evaluation of ERP has been a topic of interest among 
academics. As indicated by Frisk and Planten (2004), despite many different attempts 
in the literature to find solutions for and explanations of how IT evaluation should be 
conducted, researchers are still far away from generally accepted common concepts. 
The research conducted by Frisk and Planten (2004), indicated that most papers 
dealing with ERP evaluation focus on a management perspective. They identify the 
 
 19
 
following to be main categories under which different approaches to ERP evaluation 
have been conducted; economic, technical, and interpretative.  
Section 2.1.1 ERP Use in the Construction Ind., Key Implementation 
Issues 
As indicated previously, one of the key issues impacting ERP implementation is the 
human factor. Abdinnour-Helm and Lengnick-Hall (2003), indicate that pre-
implementation involvement is a key issue for having a positive attitude towards the 
ERP. The impact of cultural aspects on the success of the implementation is also 
analyzed in several papers. Jones, Cline, and Ryan, (2004), suggest a multi-site case 
study showing that a similar culture facilitates knowledge sharing during ERP 
implementation. Yen and Sheu (2004), claim national culture to be a critical factor in 
multi-national settings. Amoako-Gyamph and Salam (2004), agree that shared beliefs 
may make implementation easier through better acceptance of the system. Lander, 
Purvis, McCray, and Leigh (2004), consider the trust building mechanism between 
team members and other participants of the project as a major factor in the 
implementation process. Botta-Genoulaz et al., (2005), indicate that the impact of 
company cultural issues is considered as a key dimension of the implementation 
process as also discussed by Yusuf, Gunasekaran, Abthorpe (2004). As complicated 
as ERP systems are, it is apparent that during the implementation process a number of 
conflicts and difficulties occur. Luo and Strong (2004), even suggest a method for 
controlling the tensions during and after the completion of the project.  
The process of implementation and the steps that need to be taken in that process are 
addressed by number of studies (Ohleson, et al., 2001; Powel, Barry 2005: Botta-
Genoulz et al. 2005). Research conducted by Somers and Nelson (2003), resulted in a 
 
 20
 
new methodology to identify a critical step in implementation. They use a 
probabilistic description to identify which activities associated with various steps of 
the ERP implementation are important. Botta-Genoulaz et al. (2005), identify the key 
aspects of the implementation process as training, communications, and/or role of the 
steering committee, but they have yet to be analyzed in detail. Additional research 
suggests decision support tools for the participants of multi-agent system are also 
essential (Lea and Gupta, 2005). These tools deal with collecting information and 
interacting with users in order to facilitate ERP implementation. Research conducted 
by Mabert, Soni, and Venkataramanan, deals with the identification of the most 
suitable implementation processes for different organizations. They base their 
findings on the results obtained in case studies completed in U.S. The research 
suggests that the implementation method is dependant upon the size of the company. 
Parr and Shanks (2000), suggest taxonomy of ERP implementation categories. Wu 
and Wang (2003), focus on the industrial sector, particularly the size of the industry, 
to compare the differences in implementation, whereas Huin (2003), specifically 
address the implementation of ERP systems in South Asian SMEs. 
Since one of the main objectives of this study deals with finding the reasons for a lack 
of utilization of ERP by SMSCO, it naturally followed that the reasons for 
committing to ERP must be investigated in more detail.     
The following is the list of most significant factors that are often mentioned as a 
reason for committing to an implementation of ERP: 
? Integration 
? Information Access 
? Standardization & Process Improvement 
 
 21
 
?  Business Considerations 
?  Dissatisfaction with outdated legacy systems 
The most significant factor identified by various corporations as a main reason to 
implement ERP has been integration. Most corporations see ERP as a tool that allows 
them to integrate functions of their front and back offices into a single platform. A 
study done by Oliver, et al. (2002), indicated that, ?integration was the most 
important rationale in terms of the frequency of reference in each of the technology 
and organization dimensions and was the most important single rationale.?  The 
importance of integration as a justification for ERP adoption emerged strongly in the 
study completed by Oliver, et al. (2002). Ross (1999); Alvarez (2000); and Markus, 
Petrice, and Axline (2000), also identified integration as an important issue in ERP 
adoption (Oliver, et al. 2002). Creation of single platform or a single software product 
increases usability by creation of a friendly environment in which employees are able 
to access central information in a timely fashion. Integration is believed to advance 
the cause of teamwork in an organization. 
Improved access to reliable information is a by-product of proper implementation of 
an ERP system. The flexibility and ease of use provided by ERP systems allow for 
unrestricted access to timely information that could be used to enhance completion of 
various tasks in an organization. A study done by Oliver, et al. (2002), indicates that 
organizations anticipate that the improved access to information will result in a better 
central control. This same study indicates that approximately 16% of all justificatory 
statements for ERP adoption were based on improved information access.   
Standardization & process improvement is another one of the critical justifications 
provided for implementation of ERP. Most organizations that have implemented an 
 
 22
 
ERP system had been operating under some type of inefficient legacy system. 
Installation of an ERP system is considered to be an opportunity to correct problems 
associated with older legacy systems. In addition, ERP systems are utilized as an 
agent of business process re-engineering. The organization is introduced to and forced 
to adhere to new procedures. This procedural approach cuts across functional 
departments and widens the functions that an employee can perform. Adherences to 
ERP systems also provide uniformity throughout the organization so that all 
inefficiencies associated with different interpretations are eliminated.  
Botta-Genoulaz, et al. (2005), indicate that the alignment of the standard ERP 
processes with the company?s business processes has been considered a critical step 
of the implementation process, and has been covered by number of different 
researchers. Van der Aalst and Weijters (2004), indicate that process mining is 
introduced as a precursory step in ERP implementation while Chiplunker, Deskmukh, 
and Chattopadhyay, (2003), suggest the capture of a complete business environment 
in a business process re-engineering (BPR) project, with the help of information 
technology. Daneva (2004), considers that reusing business processes and data 
requirements is a major issue of implementation. Daneva (2004), also defines the 
reuse measurements. Soffer, Golany, and Dori, (2003), suggest a reverse engineering 
process for obtaining an ERP model, which can be aligned with the needs of the 
enterprise. Daneva (2004), defines the problem of process alignment in term of 
composition and reconciliation: a general set of business processes and data 
requirements is established, then standard ERP functionalities are explored to see how 
closely it match the organization?s process and data needs. Luo and Strong (2004), 
see the alignment in terms of customization of the standard ERP processes, while an 
 
 23
 
elicitation-based method is suggested by Kato, Saeki, Ohnishi, Nagata, Kaiya, 
Komiya, Yamamoto, Horai, and Watahiki, (2003) for comparing user requirements to 
existing packages. 
Business considerations also have played a significant role in adoption of ERP. The 
global nature of today?s economy has forced organizations to adjust their operations 
to encompass the new realities caused by different cultures and time zones. 
Implementation of ERP has made it possible for these organizations to be able to 
operate across the globe, providing their products and services at the most 
competitive rates possible. This increase in the size of their market has resulted in 
significant growth in their revenues. Maintaining market share and being able to stay 
with competition has been perceived to be among other business considerations taken 
into account by organizations. This finding is unfortunately not supported by existing 
research as indicated by Botto-Genoulza et al. (2005). According to Beard and 
Sumner (2004), it is due to the ?common systems? approach used for the 
implementation of most ERP systems. They argue that this goal can be achieved with 
a careful planning and successful management of ERP projects, refinement and re-
engineering of the organization, and the post implementation alignment of the ERP 
system with the organization?s strategic direction. From a study of five manufacturing 
firms, Yen and Sheu (2001), investigate the relationship between ERP 
implementation practices and a firm?s competitive strategy, and confirm that ERP 
implementation should be aligned with competitive strategy, proposing specific 
guidelines. 
Hunton, Lippincott, and Reck, (2003), examined the longitudinal impact of ERP 
adoption on firm performance by matching firms that had adopted ERP with firms 
 
 24
 
that had not. Their results indicate that return on assets, return on investment, and 
asset turnover were significantly better over a 3 year period for adopters. Their study 
deals with a productivity paradox associated with ERP systems and suggest that ERP 
adoption helps firms gain a competitive advantage over non-adopters. ERP makes 
possible deep changes in relationships, culture, and behaviors that can be crucial 
sources of advantage in the knowledge economy, but the structure and cultures most 
able to achieve this level of change are a poor fit with ERP requirements. To 
reconcile this paradox, Lengnick-Hall, Lengnick-Hall, and Abdinnour-Helm, (2004), 
propose to consider ERP as an enabling technology to build and augment social and 
intellectual capital, rather than as an information technology solution for 
organizational inefficiencies, and to use ERP as a foundation for social and 
intellectual capital formation. 
As mentioned previously, a study by Oliver, et al., (2002), indicated that among 
organizations that have adopted ERP, there existed dissatisfaction with existing 
legacy systems. These systems were considered to be old and outdated. They were 
described by Oliver, et al. (2002), to be ?ageing, unworkable, costly, inadequate, 
inefficient, outmoded, expensive, poorly coordinated, inflexible, disparate, limited, 
old, idiosyncratic, redundant, cumbersome and technologically inferior?.  As can be 
seen by the depth of emotions that had been shown about these legacy systems, 
organizations were more than glad to have an opportunity to discard them for a more 
efficient system. 
Why it is that SMSCO, being part of the same industry and, at times, in a more dire 
need of utilizing ERP systems, have so far refused or failed to adopt them? 
 
 25
 
Section 2.1.2 Benefits of ERP Use by SMSCO 
What are some of the perceived benefits that lead corporations to commit to the 
implementation of ERP in their organizations? As indicated by Olliver and Romm 
(2002), ?in common with other types of investment activity the adoption of an ERP 
system is a purposive intervention by an organization for bringing about a new state 
of affairs that is judged to be superior to the current state?. Botta-Genoulaz, Millet, 
and Garbot (2005), indicate that two distinct research streams are observed from the 
literature.  The first one focuses on the fundamental corporate capabilities driving 
ERP as a strategic concept, and the second, on the details associated with 
implementing an information system and their relative successes and costs. Problems 
of sociological and cultural factors influencing the implementation success as well as 
the implementation steps have been addressed earlier in literature. 
As indicated by Chen, (2001), ?planning for ERP adoption generally occurs when an 
organization realizes that current business processes and procedures are incompetent 
for their current and or future strategic needs?. As the result of various external and 
internal forces, the SMSCO operating environment is changing and their procedures 
are becoming ?incompetent?. They are not able to maximize their efficiency and 
therefore, profit. Any tools that would enable these organizations to reverse this trend 
must be considered. In order to promote the use of ERP by SMSCO, a more 
comprehensive look of the potential benefits that could be achieved must be 
completed. To that end, an extensive review of existing literature was conducted with 
the emphasis placed on identification and types of potential benefits. Within this 
context, benefits are defined to be acts that promote increase of efficiency in 
operation and additional profits generated from operation. 
 
 26
 
Typically, process-based benefits that arise from IT investments can be divided into 
three categories, as indicated by Andersen, (2001), typical efficiency benefits, typical 
effectiveness benefits, and typical performance benefits.  Some of the benefits that 
could be realized in an SMSCO environment as a result of ERP implementation could 
be as follows: 
1. Improved responsibilities in relation to customers 
2. Stronger supply chain partnerships 
3. Enhanced organizational flexibility 
4. Improved decision-making capabilities 
5. A Reduction in project completion time and cost 
6. Opportunity for the enterprise to re-engineer and upgrade its business 
process 
The above-mentioned benefits could further be divided into two main categories of 
tangible and intangible benefits. Historically, as indicated by Murphy and Simon 
(2002), the different treatment of tangibles and intangibles can be traced to the 
distinction between goods and services. As far back as Adam Smith, goods were 
material and could be stored, whereas services were immaterial and transitory. This 
transitory nature meant that services could not be counted as assets, but goods could. 
It logically follows that items that had been counted as investment must be tangible. 
Remenyi, Money, Sherwood-Smith, and Irani (2000), stated that a tangible benefit is 
one that directly affects the firm?s profitability; however, in today?s economy many 
investments are intangible, and these investments yield higher profits that translate to 
greater output and savings. The International Accounting Standard defines an 
 
 27
 
intangible as an identifiable non-monetary asset without physical substance held for 
use in the production or supply of goods or services, for rental to others for 
administrative purposes (Bradbury, 2001). It is very difficult to determine intangible 
benefits derived from ERP implementation. Remenyi and Sherwood-Smith (2000), 
indicated that there are seven key ways in which information systems may deliver 
direct benefits to organizations. They also indicate that information systems deliver 
intangible benefits that are not easily assessed. Nandish & Irani (1999) discussed the 
difficulty of evaluating IT projects in the dynamic environment, especially when 
intangibles are involved in the evaluation. Tallon, Kraemer, Gurbaxani (2000) cited a 
number of studies indicating that economic and financial measures fail to assess 
accurately the payoff of IT projects and suggested that one means of determining 
value is through the perception of executives. They focused on the strategic fit and 
contributions of IT projects but indicated that researchers need some how to capture 
or better represent the intangible benefits of IT. Giaglis, Paul, and Okeefe (1999), 
discussed the problematic variables associated with qualitative (intangible) benefits in 
their assessment of information systems evaluations. Litecky (1981) stated that, 
despite the perceived importance of intangibles, there has been little, if any, guidance 
on the quantification of derived benefits. He proposed some assumptions as a 
precondition to quantifying benefits. Both tangible costs and benefits are relatively 
easy to estimate, whereas intangible benefits are quite difficult to estimate. Hares & 
Royle (1994) indicated that there are four main intangible benefits in IT investment. 
The first benefit is internal improvement or infrastructure investment; tangibly 
important to the business.  The second benefit concerns the perception of the business 
by its customers. The customer-based intangible benefits, consist of those services 
 
 28
 
that the customer sees now and wants in the future, and includes customer service and 
user satisfaction. The final two categories are future-based and include market trends, 
and the ability to adopt and adjust to change.  
It is clear that ERP system investments have been categorized as strategic in nature. 
Literature review identifies the common goal to be an increase in company sales, 
reduction in production cost, reduction of lead times, and improvements in customer 
relationships. All of these areas badly in need of improvement by members of 
SMSCO. In a survey by Meta Group (Steadman, 1999), organizations turned up an 
average value of $1.5 million when quantifiable cost savings and revenue gains were 
calculated against system implementation and maintenance cost. Other research 
indicates that return on assets, return on investment, and asset turnover are 
significantly better over a 3-year period for those who adopted EPR systems as 
compared to non adopters (Hunton, Lippincott and Reck, 2003), even if the benefits 
differ by company size (Mabert, Soni and Venkataramanan), or, according to two 
organizational characteristics - interdependences and differentiating among a global 
organization (Gattiker, Goodhue, 2005). In addition, as indicated by Murphy (2002) 
improved customer service and other related intangible benefits, such as updated and 
streamlined technical infrastructure, are important intangible benefits that 
organizations are often seeking when making these investments.  
Two main difficulties that exist when it comes to the topic of ERP implementation 
and its benefits are identification and quantification (Anderson, 2001). The process of 
identifying benefits that are applicable is rather complicated and since there are no 
guidelines or standard procedures that all organizations can follow, this leads into 
inconsistencies (Anderson, 2001). As indicated by Anderson, (2001) the second area 
 
 29
 
that most difficulties have occurred is the quantification of the benefit items, 
especially intangible items. Ohlsson, et al. 2001, states that due to the ERP system?s 
multidimensional nature, intangible benefits will affect many aspects of the investing 
company. He further states that although it is hard to assign any financial values to 
these intangible benefits, at least without stretching assumptions beyond an 
acceptable level, it is still important to quantify them. The most common metrics used 
for these benefits are binary, numeric, or qualitative in nature, and by using these, it is 
possible to identify and evaluate how they will impact on the company.      
Section 2.1.3 Risks & Causes of ERP Failure  
Among large organizations that have implemented and are currently using various 
ERP systems, there are numerous success stories ; however, as Chen (2001) reports, 
?while companies such as Cisco Systems, Eastman Kodak, and Tektronix have 
reaped the expected benefits of ERP systems, many businesses are discovering that 
their ERP implementation is a nightmare?. One of the biggest examples of this type 
of failure was case of FoxMeyer Drug, a $5 billion pharmaceutical company that had 
to file for bankruptcy as a result of problems generated by a failed ERP system. In 
addition, Dell Computer spent large sum of money on ERP system that had to be 
scraped. Some other recent failures of note are cases at Boeing, Dow Chemical, 
Mobil Europe, Applied Materials, Hershey, and Kellogg?s. It is reported that 40% of 
all ERP installations only achieve partial implementations and 20 % of attempted 
ERP adoptions are scrapped as total failure. Considering these facts, one must 
investigate the reasons that attempted implementation lead to such results. Review of 
these cases reveals certain common criteria that are repeated among all cases ending 
in a failure. These criteria, which have created such a high degree of failure rate 
 
 30
 
among large organizations, have been analyzed and studied by previous research. In 
order to properly analyze each of these criteria we must first define ?failure?. 
There is an extensive amount of literature that deals with issue of failure of an 
information system. Tsung (2004), indicate that ?unlike success, only one failure 
factor need be present for the information system to be deemed a failure?. Ewusi-
Mensah & Przanyski (1995), discuss three types of failure; these are total 
abandonment, substantial abandonment, and partial abandonment. Lyytinen & 
Hirschheim (1987), divide failure up into four distinct categories; correspondence 
failure, process failure, interaction Failure, and expectation failure. Overall failure 
criteria can be categorized as either technical or non-technical.  
Section 2.1.3.1 Failure Criteria for Large Organizations 
In most organizations failure occurs when one or more of failure criteria are not 
properly addressed. In case of ERP systems, since they are mostly people oriented, 
most criteria fall into the non-technical category. These criteria can be identified as: 
? Evaluation 
? Cost ? Benefit Analysis 
? High Cost & Complexity 
? Training 
? Time Scale 
? Current Practices 
Study of the above mentioned failure criteria will help us establish a better 
understanding of the prohibitive criteria that are preventing a large number of 
SMSCO from utilizing ERP systems.  
Evaluation 
 
 31
 
Why is evaluation important in the whole concept of ERP? Evaluation has been 
defined by the Oxford Dictionary and Thesaurus, to be a process in which one can 
assess, appraise, value, estimate, gauge, calculate, figure, reckon, compute, judge, 
rate, rank, or quantify. It has also been defined by (Ohlsson, et al. 2001) as a 
weighing process to assess the value of an object or the merit of a situation. Having a 
clear and concise understanding of ERP is one of the most critical criteria in either 
successful implementation or rejection of the whole concept. We evaluate things 
when we are trying to achieve a better understanding of them, therefore proper 
evaluation of ERP and establishing a better understanding of its critical criteria are 
essential elements to the eventual successful implementation, and a must for any 
organization. Companies will have to decide on committing large amount of capital, 
both in terms of financial and manpower. This decision should not be made lightly 
and based on subjective terms, rather it must be addressed through a complete 
evaluation method that identifies and measures various risk and benefit items. It must 
be noted that current literature deals extensively with various evaluation methodology 
and framework that are available. As indicated by Irani and Love (2001), there are 
lots of studies dealing with innovative attempts to surmount the theoretical problems 
of IT evaluation, such as conventional financial and economic evaluation, techniques 
(Brynjolfsson, 1993), return on management (Strassman, 1988), and information 
economics (Parker, Benson, Trainer, 1988). In addition, others have proposed 
taxonomies of methods such as Cronk and Fitzgerald (1997), and Irani and Love 
(2001). Remenyi and Sherwood-Smith (1999) argue that a multi-metric approach will 
ensure a comprehensive understanding of the organization and the IT project being 
 
 32
 
developed. Cronk & Fitzgerald (1999), also recommends a multi dimensional 
methodology involving both quantitative and qualitative components. 
Lubbe and Remenyi (1999), argue that too much emphasis is placed upon economic 
criteria and that management should look into all aspects of the investment in a 
holistic way.  
In order to achieve the value-added benefits of the ERP process, organizations must 
address the following critical factors: 
? Strategic Match 
? Stakeholders Influence 
? System Specific  
? Organizational Impact 
? Life Cycle Approach 
? Financial Criteria 
Current literature mostly concentrates on evaluating the system and its immediate 
impact, rather than focusing on its strategic potential and match with organizations 
overall goals and strategy. Most attention is given to financial aspects and little 
attention is given to non-financial factors, such as customer service, operational 
efficiency, etc. (Kennerley, Needy 2001). The strategic impact of an ERP 
implementation must be considered in an evaluation process. ERP implementation 
goals must match and fit within the overall strategic goals of the organization. Doing 
so will force the organization as a whole to come into focus with its ultimate goal. 
These goals must be set with both short and long term views in mind.  
 
 33
 
Ballentine, Leavy, Powell, (1998) argue that IT investments should be aligned closely 
with an organization?s IT strategy and that there is also a need to align IT strategy 
with business strategy. Kefi (2002), emphasize the importance of identifying the 
strategic context before implementing a system or starting an IT project in order to 
achieve the right business focus. Gemmel & Pagano (2003), are of the opinion that it 
is necessary to make sure that the IT system also supports the business strategy during 
the post-implementation evaluation. 
The influence of stakeholders must be considered. It is critical to properly identify all 
stakeholders; both internal and external stakeholders must be considered. They each 
have an objective that must be taken into account and molded into the overall goal 
and objective of the organization.  
Frisk (2004), indicates that an analysis of the objectives and influence of the various 
stakeholders is a common part of many of the evaluation studies. External and 
internal stakeholders of the project (Huang, 2003) etc. are mentioned. Frisk (2004), 
continues with the finding that, although stakeholders appear to be an essential part of 
the evaluation, there seems to be an overall lack of explanation on how they should be 
identified and included in the evaluation (Choenni, Bakker, Baets, 2003; Van 
Grembergen & Van Bruggen 1999; Griffith& Remenyi, 2003). A number of articles 
that explore methodologies to include stakeholders, such as Hughes and Jones (2001), 
emphasize the use of grounded theory in IT evaluation to include stakeholder?s views, 
beliefs, and assumptions are very few. Pouloudi & Whitley (1997), present a 
methodology to identify stakeholders, which originally was constructed by Freeman 
and Hannan (1984). This approach emphasizes that stakeholders depend on the 
specific context, that they cannot be viewed in isolation, that stakeholder?s position 
 
 34
 
may change over time and that feasible options may differ from the stakeholder?s 
whishes. A common theme among all these papers is the fact they all focus more on a 
continuous evaluation as Irani & Love (2001), would say, they incorporate 
understanding of benefits, value and suitability of IS/IT.     
When an organization is deciding on which, if any, of the ERP tools could be used, 
they must consider the requirements needed from the system. A specification for the 
system must be generated within which all or some of the following factors must be a 
reviewed: interactivity, usability, synergism, reliability, flexibility, speed, and 
accuracy. As indicated by Frisk (2004), there are some authors that find it important 
to consider system-specific characteristics in the evaluation of general or specific type 
of systems. Martin, Bolissian, Pimendis (2003), considers the system characteristics 
as one part of the evaluation content, while others view them as the most important 
part to evaluate (Skok Kophamel, Richardson, 2001; Lee, 2001).  
If and when an ERP system is implemented within an organization, it must be 
understood that it will impact the whole organization and its transformation (Holland, 
Light, 1999), in various ways. Since each way will be significant, each must each be 
carefully analyzed and reviewed. One of the primary items an ERP implementation 
will impact is the structure of the organization. Studies confirm that the introduction 
of business practices and new organizational practices are directly correlated to labor 
productivity (Falk, 2005). Departments that are accustomed to a certain hierarchy will 
have to change ways and methods. These changes must be identified and dealt with 
by reshaping the business processes of the organization. The ability to respond to 
these required changes should be considered significant. In addition, current external 
factors within the organization?s business environment must be considered. 
 
 35
 
Government agencies, customers, suppliers, and competitors could generate these 
external factors. Finally, the impact on the system?s users and their ability to adopt 
the new technology must be considered.  
Impact of an IT investment on the organization has also been studied by researchers. 
Doherty & King (2001), are of the opinion that there needs to be an organizational 
alignment, which means that one needs to consider the organizational structure, its 
culture and also aspects of power relations, Kannellis, Lycett, and Paul, (1999), 
emphasize the importance of considering the strategic fit of an information system 
(IS) to the strategy, structure, process, technology, and environment. They conclude 
that a poor fit in the system relates to an inability to respond to change. Stefanoue 
(2001), points out that an organizational change is required if any benefits are to be 
realized. Al-Mashare and Zairi (2000), also argue that success necessitates managing 
adequately a complex context that involves organizational changes across various key 
areas.  
Some authors promote the importance of considering the external environment in 
IS/IT evaluation, especially in articles that focus on collaborative and inter-
organizational systems.  Those authors find it important to consider aspects of the 
external environment of the organization, such as integration process between 
organizations (Huang, 2003), and social relations with customers and suppliers 
(McCalla, Ezingeard, and Money, 2003). Li and Ye (1999), provide a definition of 
the environment, and why it is important that it be considered. They explain that the 
environment is the totality of outside factors consider by top managers in their 
decision-making process. Two frames of reference are used to describe the 
environment: environment as different segments (customers, competitors, 
 
 36
 
governmental agencies etc.) and environment along critical characteristics such as 
dynamism and organizational flexibility. As IT?s performance depends on contextual 
factors, it is important to have them in mind during evaluation (Mcbride & Fidler, 
1994).    
The life cycle approach to the process of evaluation is also a method that must be 
considered in the evaluation of implementation. This approach allows the 
organization to complete its evaluation in steps that have been identified by Frisk and 
Planten (2004), to consist of the following: feasibility, development, implementation, 
post implementation, and routine operations.  
There are only few papers that used a life-cycle process model (Cronholm & 
Goldkuhl, 2003; Jones & Hughes, 2001) for IT evaluation or benefit realization in 
their investigation. Most of papers address feasibility evaluation of IT in general 
(Berghout & Klompe, 1996; De Jong, Ribbers, 1999; Bannister, 2001; Kumar, 2003). 
Post-implementation evaluation was pointed out as being important by some authors 
(Skok et al, 2001; Auer, 1998) but not pursued in any papers other than those that 
used life cycle based approach (Cronholm & Goldkuhl, 2003). According to Remenyi 
and Sherwood-Smith, (1999), the evaluation activity should be more participative and 
directly aimed at the learning process so that what is learned at each step in the 
process can be carried forward into the overall development process. Irani and Love 
(2001), state that there is a need to re-think the evaluation process and make it more 
of a life cycle process that seeks to provide decision-makers with an opportunity for 
reflecting and learning rather than a process that stigmatizes failure. 
By far, the most significant criteria that need to be carefully analyzed when it comes 
to evaluation of ERP is the financial one. Most organizations are very conscious of 
 
 37
 
this factor and the impact that it might have on their operation. When dealing with 
financial criteria, we must be concerned with the metrics used to measure them; after 
all you cannot adequately evaluate something that has not been correctly quantified. 
Only relying on subjective measurements will not produce reliable results. In 
addition, organizations need to approach the investment in an ERP as capital asset 
expenditure, an asset that needs time to mature and pay dividends. Considering only a 
short-term view in evaluation of ERP will not truly reflect the potential benefits and 
costs that must be considered. Experience shows that at times, the ERP 
implementation process will take anywhere between 2 to 5 years to complete 
(Gunson, Blasis, 2001). Cost benefit analysis has been mentioned as the most often 
method used by various organizations to evaluate and justify their investment in ERP. 
This method of analysis bears such an important imprint on the evaluation process 
that it needs to be looked into with greater detail.  
Cost Benefit Analysis 
Cost benefit analysis is defined by Prest & Turvey (1965), as ?? a set of questions, 
the answers to which constitute the general principles of cost benefit analysis: 
1. Which costs and which benefits are to be included? 
2. How are they to be valued? 
3. At what rate are they to be discounted? 
4. What are the relevant constraints?? 
A cost or benefit has been defined by Parker (1982), to be as measurement of the 
amount of resources required to produce a product. As indicated by Parker (1982), 
 
 38
 
costs are normally expressed in terms of quantitative dollars required, whereas 
benefits could take the qualitative form of cost-saving, cost-avoidance.  
In an environment where numbers can dictate results, the board of directors and 
senior management of organizations in industrial sectors have felt comfortable relying 
upon cost benefit analysis to finalize their decision when it comes to investment in an 
ERP. Among all available factors affecting evaluation, it seems that this factor has 
been relied on by most to demonstrate the viability of the decision either way because 
it relies on quantitative rather than qualitative terms. It is surprising to find that as 
reported by CIRIA (1996) in the U.K. (Love, Irani, Li, Tse, and Cheng, 2000) and 
Australia, organizations in the construction industry do not use any form of cost 
benefit analysis. This could be the result of problems associated with assessing 
benefits and costs due to the construction industry?s structure, fragmented supply 
chain, and under capitalization (Anderson, Baldwin, Betts, Carter, Hamilton, Stokes, 
Thorpe, and 2000; Marsh and Flanagan, 2000).   
Among the critical elements to consider when studying cost benefit analysis is the 
cost and benefit of the tangible vs. the intangible. The tangible category has been 
defined to be the items that are easily quantifiable and directly affect the profit of the 
organization. The intangible category has been defined as all items that are difficult to 
quantify and at times do not directly impact the profit of the firm. Identifying tangible 
and direct costs and benefits are relatively simple. They are easily recognized. Their 
life cycle is clear to all concerned and the metrics to measure them are accepted 
globally. It is the intangible cost and benefit that must be scrutinized more carefully. 
Their impact on the process is not self-evident. There are no clear metrics to quantify 
them for the purpose of evaluation. At times certain costs and benefits will be seen as 
 
 39
 
?constructed? and thus the reliability of the evaluation might decrease; however, their 
inclusion in the evaluation process is critical. In a study done by Murphy and Simon 
(2002), it was demonstrated that when intangible benefits were introduced into the 
evaluation process, even in a limited form, they changed the results significantly and 
allowed the organization to proceed with implementation of the ERP.  As the system 
grows and supports the complete management structure, the role of intangible 
benefits becomes more and more significant to the point that ERP implementation 
becomes a long term capital investment. 
Another problem that must be considered when utilizing a cost benefit analysis is the 
fact as reported by Ohlsson & Ollfors (2001), that this method at times overlooks the 
issues related to risks with the investment, where by since it does not consider costs 
and benefits that are too difficult to quantify, it might encourage companies to make 
low risk investments only. 
High Cost & Complexity 
The high cost of implementing an ERP system must be analyzed as a failure criterion. 
It is reported by Chen (2001), that the total ERP cost including software, hardware, 
consulting, and internal personnel can easily run as high as 2% - 3% of a company?s 
revenues. The cost to implement a new ERP can range anywhere from $2 million to 
$4 million for a small firm, to over $1 billion for a large company. Cotteller, Austin, 
and Nolan (1998), reported a breakdown of the implementation costs for its ERP 
system integration as follows: software, 16%; hardware, 32%; system integration, 
38%; and headcount, 14%. A cost category that is included in the breakdown above, 
but is not highlighted is the cost of consultants. It is suggested by Adam and 
O?Doherty (2000), that the ratio of the software cost to consultant cost is 1 to 7, 
 
 40
 
indicating the significant impact of cost associated with hiring a consultant. The 
above mentioned direct ERP implementation cost items will also generate substantial 
other indirect and intangible costs that reverberate throughout the whole organization. 
Corporations that are not adequately prepared to deal with issue of cost from a capital 
point of view will certainly face difficulties that could cause the ultimate failure of the 
whole implementation process. ERP systems are complex systems that will require 
outside resources to be fully implemented. As indicated by Adam, O?Doherty (2000), 
consultants often advise managers to undertake some degree of re-engineering of key 
processes before acquiring ERP systems and this adds to the complexity and political 
character of the projects.  
Training 
Following the successful implementation of an ERP system organizations need to 
provide for extensive training of their personnel. This training and its associated 
issues such as cost and complexity create obstacles for the successful adaptation of an 
ERP system. Since these systems are continuously updated they require additional 
training that must be provided to the staff. All this training requires allocation of time 
and money that must be provided through the overhead budgets of various 
departments within an organization. The monetary resources that would be necessary 
to complete the required training are not readily available. In the past, senior 
management has been hesitant to commit to allocate continued funding for items such 
as training. 
 
 41
 
Time Scale 
Time to fully implement an ERP system and allow for its full effect to come to 
fruition is rather long for construction industry standards. The construction industry 
by nature is a very temporary. Results need to be achieved in a short period of time. 
Investing in an item that would result in creating additional benefits long after the 
completion of a job creates a big problem for the industry to address. 
Frisk (2004), states that according to an article in Business Week (Coy & Mullaney, 
2003) American companies today have improved their results thanks to investments 
in IT made 7 to 8 years ago. Ahmed, Ahmad, Azhar, and Malikarjuna, (2003), 
indicate that according to case studies that were conducted, the minimum 
implementation time taken was 1.5 years and the maximum was 5 years. As indicated 
by West and Daigle (2004), ?achieving many of ERP?s benefit takes time?. Frisk 
(2004), indicates that the time element associated with the realization of benefits of 
ERP implementation is one of the four major problems in IT benefit management. 
She states ?benefits evolve over time, which implies that they are not stable. This 
makes it extremely difficult to create a comprehensive catalogue of potential 
benefits?.  It is not uncommon to find companies that continue to have problems and 
not fully take advantage of their system well past the first year after the 
implementation was complete (Tsung, 2004). Web (1998), believes that organizations 
cannot afford to spend years implementing technology solutions. He indicates that in 
some industries, lengthy implementation can provide competitors with enough time to 
threaten or even overtake the market position of the implementing organization.  
A new approach to the element of time is required. As indicated by Parker (1982), it 
is time for industry to view investment into ERP as a long term capital investment. 
 
 42
 
Parker (1982), indicates that this investment unlike most other capital expenditures: 
(1) does not depreciate and, in fact, should appreciate as the number of applications is 
increased, (2) most probably cannot be sold as can other assets because of its unique 
implementation, but (3) can be copied with ease and provide to another function in 
the enterprise, with no development cost incurred by recipient.   
Current Practices  
Current practice consists of existing legacy systems that have been put together and 
utilized by the organization over a period of time. These systems could be both 
technical and or non technical in nature. Technical systems could consist of various 
software packages that have been purchased and utilized by the organization to 
provide a solution for a particular need of operations. Naturally any change from 
using the current ways will need re-thinking and re-training of the organizational 
structure its employees and culture. As indicated by Tsung, (2004), implementation of 
ERP systems requires a great deal of management change; it affects the whole 
organization and it is a people centered application.  Numerous authors have 
commented on the fact that many IT investments fail to provide the productivity and 
efficiency benefits that are expected (Wilcocks et al., 2000), often because 
information systems are used simply to automate existing processes and practices, 
rather than radically rethink them.  Organizational Change Management (OCM) is 
defined as the process of controlling changes to the infrastructure or any aspect of 
services in a controlled manner (Robins, 2001). It is a methodology that is used to aid 
in the implementation of approved changes so that there is minimum disruption 
(Lauden and Lauden, 2002). Avgerou (2002), divides changes in relation to IT 
projects into two different groups; planned radical changes and emergent, situated 
 
 43
 
changes. Planned radical change is described as ?associating the development of 
technology ? based information systems with radical organizational restructuring.? 
(Avgerou, 2002). Tsung (2004) indicates that Business Process Re-engineering (BPR) 
would fall under this category and can be described as a radical re-design of business 
processes in order to eradicate repetitive and/or paper-intensive tasks to decrease 
costs, increase quality and services, and maximize utilization of the information 
technology in place. The implementation of ERP systems will encompass both 
?planned radical ?and ?emergent, situated? changes. 
 In order for an ERP system to become fully operational and function in an optimum 
environment, it must take into account and match organization?s business process.  As 
previously mentioned, even though the majority of research indicates that in order for 
ERP system to be successfully implemented it must be fully and completely adopted, 
there are those organizations that, as indicated by Ghost, Howell, and Whittaker, 
(2002), have decided to avoid high maintenance costs or to deploy a standard 
corporate model in an international group by appropriately customizing both the ERP 
system and/or their organization; however, as predicted and indicated by Botta-
Genoulaz et al., (2005), the current ERP systems are not as flexible as needed to 
support easily newly discovered customer trends. Technical and process change 
capabilities for customization are identified to propose a framework for supporting 
management decision-making about customization choices (Luo and Strong, 2004). 
Implementation of an ERP system creates many issues that directly or indirectly deal 
with people and their interaction with the system. ERP impacts people within the 
organization as the nature of their work changes. Role responsibilities and processes 
change (Pereira, 2004). As indicated by Tsung, (2004), four issues that are centered 
 
 44
 
on the user are usability, acceptance, support, and involvement. The common element 
among all these issues is staff attitude. This attitude under goes measured changes, 
which has been studied in detail by Adam, et al., (2000). He indicates that as time 
passes, the staff?s attitude rises and falls through four distinct segments. These 
segments deal with level of enthusiasm of the end users toward ERP utilization and 
range from lack of motivation to business as usual on one side and growing 
enthusiasm to total commitment on the other side. It has been documented that 
initially a staff is very enthusiastic about the new system ; however, as it becomes 
clear that they would need to learn new ways and cannot rely on the current legacy 
systems to meet the day to day needs of their job, their hesitancy increases. How 
organizations react and deal with this phenomenon will have significant impact on the 
success or failure of ERP implantation.  
Section 2.1.3.2 Risk Assessment 
When implementing an ERP system it is crucial to consider the risks and 
uncertainties associated with the project. ?Risk is defined as situations in which the 
outcome is not certain but where the range of possible outcomes is known and the 
probabilities associated with these outcomes are known or can be estimated with 
some accuracy. Uncertainty relates to those situations when the range of outcomes is 
known, but where probabilities cannot be estimated accurately, or where even the 
range of possible outcomes is not known? (Parker, 1982). Elements that contribute to 
both risk and uncertainty associated with ERP utilization are impacted by the 
following items; financial decision, acceptance by staff, condition of legacy systems, 
technical complexity, and implementation process. A study by Ohlsson, et al., (2001), 
indicates that organizations conduct financial risk analysis because they are 
 
 45
 
concerned that the investment becomes so expensive that the company as a whole 
goes bankrupt. The same study reveals that a number of organizations performed a 
risk analysis on the risks inherent in the old or legacy systems to determine if these 
risks could be eliminated by investing in an ERP system. In some cases, the technical 
complexity of a system might necessitate equipment and experience to which the 
organization?s investor or owner does not have access, and this might lead to 
unexpected costs and time delays. Finally, Ohlsson, et al., (2001), indicates that a 
number of organizations perform a risk analysis on the implementation process and 
its impact on the culture of the organization. 
The issue of risks and uncertainties associated with ERP utilization has been 
investigated by numerous researchers in the past. Many papers that deal with the 
evaluation of risks and uncertainties use option theory oriented approaches that try to 
control and estimate the different optimal start times for various processes in ERP 
implementation (Frisk, et al., 2004). Other articles that completely ignore how the 
evaluation of risks and uncertainties should be performed and only state that it is 
important to consider them in evaluation (Banister, 2001). Ropponen and Lyytinen 
(1997), argue that software risk management can improve system development 
performance.  
Section 2.1.4 Obstacles in Use of ERP by SMSCO  
Reviewing the nature of benefits and pitfalls of ERP implementation in large 
construction organizations allows for a better understanding of these same issues in 
an SMSCO environment even though issues cannot be transferred directly from one 
environment to the other, but share significant similarities. Since one of the primary 
goals of this research is to define and analyze the obstacles in utilization of ERP by 
 
 46
 
SMSCO, a review of current literature that dealt with the validity and applicability of 
previously mentioned issues in an SMSCO environment was conducted, even though 
limited in number,  
The current literature identifies the following major common obstacles; 
1- Training 
2- Time Scale 
3- Evaluation 
4- High Cost and Complexities   
In addition, Anderson, et al., (2000), identifies the following additional obstacles in 
ERP adoption by SMSCO: conservatism of the ownership group, the high risk of 
litigation following the use of innovative solutions that subsequently fail, high rates 
of change in technology and business solutions, lack of user training investment, the 
overselling of benefits by IT solution providers, the lack of standardization leading to 
incompatibilities, conflict, and too many choices. Shi and Halpin (2003), indicate that 
a lack of additional practical functionalities that would suit SMSCO members such as 
functionalities for handling earned value, percent complete, cost forecasting for 
determining project progress, scheduling, budgeting, project tracking, procurement 
process, and reporting is also a problem. Shi and Halpin (2003), also indicate that the 
size of the system or its scale needs to be adjusted to fit the construction operations of 
SMSCO. Finally, Adam, et al., (2000), identifies the fact that ERP projects are 
complex and require reliance on many different types of expertise often sourced 
outside the organization. Clearly obtaining the services of such outside resources is 
not as readily obtainable for members of SMSCO. 
 
 47
 
Section 2.1.4.1 Prohibitive Criteria for SMSCO 
As indicated previously, a review of current literature identified a number of failure 
criteria in the concept of ERP utilization by large construction organizations. In 
addition, the same review indicated that some of the same obstacles could also apply 
to SMSCO members however it was surprising to discover that due to lack of 
available research, no definite understanding of potential prohibitive criteria exists. 
Prohibitive criteria are defined to be criteria that prevent a SMSCO from proceeding 
with the purchase and implementation of an ERP system. Merely knowing the 
obstacles that might exist in the path of an organization is not sufficient to address the 
objective of this research. This lack of clear identification by existing research 
reinforced the particular goal of this research to proceed with the task of clearly 
identifying the prohibitive criteria that prevent members of SMSCO to proceed with 
utilization of ERP systems. 
Section 2.2 ERP Research in Academia  
ERP related research has experienced a steady growth pattern for the last decade. A 
number of articles, special journal issues, and dedicated sessions in international 
conferences published about ERP have been growing steadily. As indicated by Botta-
Genoulaz, et al., (2005), this increase follows the progress of implementation of ERP 
systems in companies. It is noted that most of research is done on the periphery of the 
ERP (Botta-Genoulaz, et al., 2005). Within context of this research and in addition to 
research mentioned before, the current literature was reviewed along the following 
main categories: 
2.2.1 - ERP Optimization 
 
 48
 
2.2.2 - ERP & Management Systems 
2.2.3 ERP Tool 
2.2.4 ERP & Supply Chain Management 
2.2.5 ERP Case Studies 
2.2.6 ERP Alternatives Systems 
2.2.7 ERP in SMSCO 
Section 2.2.1 ERP Optimization 
ERP optimization issues are one of the main post-implementation areas of interest 
that have been researched by the academics. As indicated by Botta-Genoulaz et al., 
(2005), until recently, nearly all literature on ERP was focused on ERP projects and 
ERP implementation; the post implementation phase had been identified but very 
little attention had been paid to the real return on investment of such big projects. 
They define a successful ERP project as the one in which as result of it organization 
is able to better perform all its business process and when the integrated information 
system can support the performance development of the company. Botta-Genoulaz, et 
al., (2005), contend that the maintenance activity can be considered as one point of 
view of the optimization. ERP systems are very complicated and need to be 
maintained and upgraded on routine basis but unfortunately there are only few papers 
that focus on this critical task. Ng, Gable, and Chen, (2002), addressed this problem 
based on a case study of a large organization that implemented ERP. This study 
observed some distinctions of ERP maintenance and proposed a benefits-oriented 
taxonomy that better represents ERP maintenance activities, including ERP 
enhancement. Nicolau (2004), examines the process of system review during the post 
 
 49
 
implementation stage of an ERP implementation. Based on two case studies that were 
conducted he defines a construct of post implementation review (PIR) quality that 
could be used to re-examine performance relationships and more completely interpret 
their results, or lack of results, according to the extent to which organizations engage 
in high quality PIR.   
The issue of end user utilization is a key factor in overall optimization and increase in 
productivity that could be caused by implementation of the ERP system. Orlikowski 
and Barley (2001), suggest that both the technological changes and the institutional 
contexts that are reshaping economic and organizational activity have contributed to 
the transformations currently occurring in the nature of work and organizing. Wu, 
Wang, Chang-Chein and Tai, (2002), conducted a survey to identify user satisfaction 
patterns.  They identified several areas of low ERP satisfaction, like feelings of user 
involvement, system understanding, or system integrity. This aspect is also studied by 
Casilir and Calisir (2004), who from 51 end users in 24 companies, examined various 
usability factors affecting end user satisfaction with ERP system; their results indicate 
that both perceived usefulness and the ability learn determine the end user 
satisfaction. 
Section 2.2.2 ERP & Management Systems 
Botta-Genoulaz, (2005), indicates that ERP systems are the major managerial tool 
and technology that requires the multi-disciplinary attention of operations 
management, information systems, finance, marketing, organizational behavior, and 
human resources fields (Sarkis and Sundarraj, 2003). This observation was confirmed 
sby the importance of research publication in management and business journals - 
since 1997, half of the publications are including ?enterprise resource planning? in 
 
 50
 
their abstract. Management?s strategy for ERP adoption is a key factor in overall 
success of implementation. Bendoly and Kaefer (2004), show transaction efficiency is 
magnified when ERP implementation precedes B2B initiative. De Vaujany (2003), 
identifies ?appropriative trajectories? of organizational change facing computer and 
software growth, linked to specific ?logics of control?. 
The role of ERP in creating business best practices is also investigated from 
management?s point of view. Gardiner, Hanna, and Latour (2002), indicates that a 
streamlined sales order process with managerial implications to pursue the reduction 
of marketing cycle times and enhances customer service results from the 
implementation of ERP system however as indicated by Botta-Genoulaz, et al., 
(2005), there are some studies that reveal the contrary, that ERP systems have led to 
relatively small changes in management accounting and control procedures. This 
seems to be linked with the extension of integration.  As in most cases, advanced 
management accounting techniques as well as many traditional techniques are 
operated in separate systems (Granlund and Malmi, 2002). 
Another important issue from management?s point of view is the issue of the 
company?s culture and sociologic dimensions. Studies by Yen and Sheu (2004), and 
Amoako-Gyampah and Salam (2004), cover the cultural issues in operational use of 
ERP such as shared belief that users form about the benefits of the technology, or 
national culture in a multi-national ERP setting, or cultural differentiation of Japan, 
where ERP includes an active interaction with institutional systems. Kumar, 
Maheshwari, and Kumar (2002), have studied in detail the unique culture of 
government organizations, their added social obligations, higher legislative, and 
 
 51
 
public accountability, and how that makes for a specific challenge to control the 
enterprise system. 
Section 2.2.3 ERP Design Issues 
Recently some studies dealing with ERP architecture, design, data model, and web 
services have been completed. As indicated by Botta-Genoulaz, et al., (2005), until 
2002, less than 25% of ERP related research had a focus on IT aspects, however 
recently they indicate that this rate has increased to 40%.  
The potential architecture of the information system has been one of the main areas of 
interest for various researchers. Maheshwarf, (2003); Smith, O?Brien, and Barbacci, 
(2002), indicate that the information system has to support distributed systems. 
Kovacs, and Paganelli, (2003), suggest that the requirements for planning and 
operations in networked organizations and supply chain are solved using web server 
(MES) using mobile software agents. Some research includes a multi-agent engine in 
the ERP architecture (Lea, Gupta, 2005; Symeonidis, Kehagias and Mitka, 2003). 
Kim (2004), cites process modeling as a key point for ERP control however 
Abdmouleh, Spandoni, and Vemadat, (2004), indicate that existing enterprise 
modeling methods like UEML or CIMOSA do not seem to be utilized for ERP, even 
though they could propose a distributed architecture definition. 
Studies by Maheshwari, (2003); Carey, (2004); and Lam and Shankararaman, (2004) 
deal with languages, systems and norms for integration, and internal-use enterprise 
application. Commonly, integration uses XML languages (Maheshwari, 2003; Hu, 
2003; Touir, Mathour, and Al-Naeem, 2003). Consequences for ERP of business 
 
 52
 
process management norms like BPML (Smith, et al., 2002), ebXML (Choi and 
Raghu, 2004), are also dealt with. 
As indicated by Botta-Genoulaz, (2005), the design and engine of ERP logic are 
discussed beyond the traditional transactional server based on a relational database 
containing enterprise data. They further state that new approaches are proposed to 
enhance query (Carey, 2004; Chen and Chen, 2005; ), to define a computational 
model suited to the data model using ontology (Hu, 2003), to reuse components with 
design patterns methodologies (Touir, et al., 2003), to include process mining to 
monitoring operational processes (Van Der Aslat, et al., 2004). Smets-Solanes and 
Atem, (2003), propose a radical re-engineering, redesigning ERP as a content 
management system, where each object is firstly defined as a document including 
data needed for transaction. 
Section 2.2.4 ERP & Supply Chain Management 
The relationship between ERP and supply chain management (SCM) has been subject 
of increasing research. The relationship created as a result of ERP being a platform 
for other core business applications such as SCM (Ragowsky and Somen, 2002), is 
not fully understood.  
Some recent studies deal with integration between ERP and advance planning 
systems, or advanced planning and scheduling systems. Some of them have extended 
the integration to other software components, like manufacturing execution systems, 
warehouse management systems (WMS) and transportation management systems 
(TMS) (Botta-Genoulaz, et al. 2005). Liu, Chua, Lam, Wang, Cai, and Yin (2002) 
address the system integration of an APS system with ERP and MES. They propose 
 
 53
 
an integration model structure and illustrated it by the system integration mechanism 
taking into account the required frequency of data integration and different 
approaches of data transfer.  Chen and Chen (2005) develop a tactical level decision 
model that solves the production scheduling problem, as analogous to the sale and 
operations planning, the authors proposed a scheme that can be used as a coordination 
centre of the APS system within a generic ERP framework, which integrates and 
coordinates distinct function within a firm. Verwijmeren (2004) presents software 
component architecture for supply chain management across dynamic organizational 
networks. The author proposes a local management in the architecture, which is done 
by existing ERP, WMS, and TMS systems, while the whole management is executed 
by supply chain engines. Gayialis and Tatsiopoulos (2004) utilize advanced IT 
systems to effectively support the planning and management of distribution 
operations, and particularly, the transportation process. The combination of SCM 
application with a geographical information system (GIS) integrated with ERP 
software resulted in a decision support tool (Botta-Genoulaz, et al. (2005). 
Supply chain coordination, which is composed of several legal entities, and 
contribution of ERP to that has also been also studied as an issue. Akkermans and 
Van Helden (2002) studied the future impact of ERP systems on supply chain 
management. They observed that a panel of experts saw only a modest role for ERP 
in improving future supply chain effectiveness and a clear risk of ERP actually 
limiting progress in SCM. ERP was observed to be having a positive contribution to 
only four of the top twelve future supply SCM support. Botta-Genoulaz, et al. (2005) 
indicate that the first generation of ERP products has been designed to integrate the 
various operations of an individual firm, whereas in modern SCM, the unit of analysis 
 
 54
 
has become a network of organizations, making these ERP products inadequate in the 
new economy. Kelle and Akbulut (2005) state that even ERP software provides 
different tools that can support supply chain integration and at the same time it has 
several features that prevent the integration with business partners. They based their 
analysis on the inventory management aspects of supply chain coordination and their 
results can be used in enterprise software to measure the potential monetary value of 
policy coordination, to promote cooperation, and minimize the total supply chain 
system cost.  
Kovacs and Paganelli (2003) state that the case of virtual (extended) enterprise, which 
is distributed in space and/or which are composed of a temporary joint venture of 
legally different units. They propose software solutions for designs, planning, and 
operation management of complex, networked organizations represented as nodes of 
networks, and proposed a complex, web-based solution to manage large, expensive, 
multi company projects using any type of ERP and flow management solutions.   
Section 2.2.5 ERP Case Studies 
Companies in general and SMSCO in particular are very reluctant to make their 
internal information available for review and analysis by an outside source therefore 
the number of case studies completed about ERP is limited. To the degree possible, 
researchers have attempted to complete studies that deal with various ERP issues. 
Yen and Sheu (2004) utilized direct observations and systematic interviews as a 
method to complete a case study at five U.S. and Taiwanese manufacturing firms to 
identify two variables, national culture, and government/corporate policies as being 
critical to ERP implementation in multi national settings. They considered the relation 
between implementation practices and the competitive strategy of the firms.  
 
 55
 
Sarkis and Sundarraj (2003) describe a case study at Texas Instruments, and Yusuf et 
al. (2004) discuss implementation issues at Rolls Royce. Van Merode, Groothuis, and 
Hasman (2004), discuss the interest of ERP systems for managing the planning 
process in hospitals. Mauldin and Richtemeyer (2004) discuss the issues of 
communication about ERP implementation. They consider a sample of firms which 
have or have not mentioned their ERP implementation in their annual report. Results 
suggested that the choice not to disclose about the ERP is significantly associated 
with capital market transactions, firm performance, firm size, and industry.  
Section 2.2.6 ERP Alternative Systems 
For the purpose of this research, definition of the ERP system has been expanded and 
defined to be any computer-based system that would allow the organization to 
optimize its operation and increase its profitability. This expanded definition has been 
so categorized to enable the particular needs and concerns of SMSCO to be addressed 
properly. As indicated previously, the focus of this study remains the lack of 
implementation of any ERP system by SMSCO. Under the definition above for ERP 
systems, applications currently in use by construction industry can be categorized into 
two separate groups: Web-based Project Management Systems (WPMS), and various 
pre-packaged software groups that can be purchased as a whole or in parts.  
The current literature was reviewed not to catalog and analyze these systems in detail 
but rather to establish an understanding of overall systems and with what capabilities 
are available to be utilized by SMSCO. In addition, since various critical attributes 
will be analyzed, to study the impact via their utilization within these different 
systems, it was clear that a basic understanding of these alternative systems is 
required. These systems are considered to be a part of a solution that can be utilized.  
 
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Section 2.2.6.1 Web-based Project Management Systems (WPMS) 
Web-based Project Management Systems (WPMS) are defined by Skibniewski and 
Nitithamyong (2004) to be any electronic project management system that is 
conducted through private network, which uses internet protocols to transmit 
information. O?Brien (2000), indicates that WPMS basically provide a centralized, 
commonly-accessible, reliable means of transmitting and storing project information. 
Mead (1997), points out that there are four general categories of construction project 
information that are normally carried out through WPMS: project, design, 
management, and financial information. Implementation of WPMS can be carried out 
via the following three options groups; those that provide full CPM service on-line, 
those that provide a comprehensive family of web-enabled PM software, and those 
that are created for a company and are project specific. 
The first group includes vendors that are referred to as Application Service Providers 
(ASP) and provide various collaborative services via web access and the largest 
providers among them include Buzzsaw by Autodesk, Viecon, Project Talk by 
Meridian Project Systems, Vista 2020 by Market Street Technologies, e-builder, 
BuildOnline, and Hard Dollar. These services can be obtained for either an annual or 
monthly fees depending on the level of services and storage required. The key 
components of these systems include low start up cost, low maintenance cost, and 
remote data storage. 
The second group consists of the group that provides a comprehensive family of PM 
software solutions. Among the largest providers in this group we could mention 
Microsoft Project, Primavera, Concentric, and Sage Timberline. The key components 
of these systems include ownership and localized storage of data. 
 
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The third group mentioned consists of in-house packages that have been created by 
various organizations utilizing outside consultants and for their own project specific 
use.  The key component of this group is lower total cost, and project adoptability. 
Among these groups there are a number of similar critical topics. The existing 
literature was reviewed for coverage on these critical topics that were identified to be: 
features, benefits, disadvantages, and reasons for failure. 
Shi and Halpin, (2003) identify the following features as what typical WPMS should 
be: project-oriented, integrated, parallel and distributed, open and expandable, 
scalable, remotely accessible, transparent, reliable, and robust. Anderson, 
Christenson, and Howard (2003), indicate that WPMS has been mainly seen and used 
as a tool to enhance the exchange of information. Patterson, (2002) declares that 
WPMS needs to satisfy the following criteria; provide easy access to project 
information, offer an easy-to-use interface, minimize information overload, and 
provide for timely schedule updating. Skibniewski, et al., (2004), list the features that 
can be supported by ASP?s as follows: document management, project overflow, 
project directory, central logs & revision control, advanced searching, conferencing & 
white-boarding, online threaded discussion, schedule & calendar, project camera, file 
conversion, printing, service, website customization, offline access, messaging 
outside the system, wireless integration, archiving of project information, information 
service, financial service, e-bidding, and procurement. 
The common and dominant benefits that could be realized as a result of WPMS 
utilization vs. other alternative ERP systems are:  
? More efficient information sharing & collaborative flexibility 
 
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? Increased efficiency in communication  
? Operational optimization 
? Lower cost of ownership 
Skibniewski, et al., (2004), categorizes the advantages of web technologies in 
construction into three areas; the support of relevant information services, 
communication between project participants, and engineering and management 
computing. 
Utilization of WPMS has been shown to increase the efficiency of communication 
and information sharing among all participants (Malcolm, Lai, 2001). Alshawi, et al 
(2003) indicates that more and more firms in the construction industry started to 
realize the benefits of improving communications between the projects and 
participants, which can lead to improved cost efficiency, better quality, and 
competitive advantage. Malcom and Lai (2001), indicate that it is considered that the 
use of web-based project management would facilitate the flow of information on the 
project between the members of the project?s team and would release meeting time 
for synergy-generating activities such as brain-storming and team interaction, instead 
of the meetings being merely a vehicle for the transmission and understanding of 
information. Anderson, et al., (2003), conducted a study that reflected a lower total 
cost for utilization of WPMS to alternative ERP systems in completing project tasks.  
Common disadvantages that have been observed and studied under current literature 
can be itemized as follows: 
? Lack of standardization 
? Security/access 
 
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? Ownership of data 
? Legal complications 
Extensible Markup Language (XML) as web language describing information and 
data has been utilized in various WPMS systems. Even though the construction 
industry has been able to make some progress by the adoption of aecXML, not 
enough standardization for AEC terminology has been developed (Cohen, 2000). This 
lack of standardization has resulted in unsuccessful attempts by project managers to 
easily access and manage project information (Alshawi, et al. 2003). According to 
Alshawi and Underwood, (2003) the IT systems that are available and currently used 
by industry do not consider the needs of widely dispersed participants in large 
construction projects. In addition Skibniewski, et al., (2004), indicate that the 
technical difficulties caused by the incompatibility of systems have become an 
important inhibitor to the adoption of PM-ASP, a type of WPMS. 
Alshawi, et al (2003) declares security is a major issue, which need to be addressed 
for any online collaboration between project team members. They indicate that even 
though new technological advances have helped to provide security and prevent 
unauthorized access to sites, they impose a lot of financial constraints on project 
teams.  
Skibniewski, et al., (2004), indicates that system security is one of the most important 
issues for AEC industry.  They conclude that the current ?schemes? to protect access 
to these systems are not adequate and thus have created a low confidence level in 
construction industry when it comes to security issues.   
 
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The construction industry as a result of its conservative nature, views the physical 
ownership of data as a big impediment. Alshawi, et al., (2003) indicates that 
designers perceive that holding data centrally (e.g. design information), downloading 
them when necessary (e.g. the case of 3COM phase II) from the server, and printing 
at the downloaded destination infringes their copyrights. In addition, they indicate 
that when designs are held centrally, they could lose control of the project. 
Skibniewski, et al. (2004), states that ownership and control of data after project 
completion is of considerable importance when implementing PM-ASPs. 
Finally, as indicated by Skibniewski, et al., (2004), new collaborative tools such as 
PM-ASPs change the work method, making legal responsibilities in this new 
environment unclear. They continue with the fact that online contracts pose risks, 
particularly in the area of jurisdiction and enforcement. Results of case studies 
conducted by Anderson, et al., (2003) indicates that an important constraint in 
implementation of WPMS is that paper versions of documents were considered as the 
legally binding documents and this had significant impact on usage of WPMS. 
An attempt was made to review the existing literature for documented reason for 
implementation failures of various WPMS systems. This review made it clear that lot 
more research needs to be conducted in this area. Common and most dominant 
reasons that have been identified by various researchers are as follow; 
? Lack of Planning 
? Lack of Clear Objective 
? Lack of Compatibility among users 
?  Change Management & Corporate Culture 
 
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Case studies conducted by Anderson, et al., (2003) indicate that the companies that 
participated in the study all had limited success in implementation of WPMS and a 
common characteristic in the three case studies was that the companies rushed into 
execution of the WPMS, which resulted in the ill considered and imprecise planning 
and preparation of the WPMS.  
They also made the observation that another critical factor in the unsuccessful 
implementation attempts made by the three companies was a lack of clear objective. 
Andersen, et al., (2003), further states that it is necessary to decide what the project 
should gain from a new approach.  Does the company need (a) a faster exchange of 
digital information, (b) more accurate CAD-drawings or (c) a reduced number of 
plots? It was concluded that having an attitude of achieving whatever benefits that 
occur as a result of WPMS implementation in usage in all three companies not to be 
planned and coordinated and therefore only partially successful.  
Compatibility among the participants in various WPMS schemes was identified by 
Alshawi, et al., (2003), as being one of the more significant problem areas. Their case 
studies indicate that technical issues such as inability to deal with large file sizes and 
various other issues had to be overcome and although systems worked well with the 
principle members of the team, some subcontractors found it difficult to match the 
technology. 
These same case studies identified corporate cultural issues such as management of 
the change process as another one of the main reasons for unsuccessful 
implementation of WPMS. Alshawi, Et al., (2003), concludes that it will be extremely 
difficult for construction organizations to achieve the required results of 
 
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implementing web-enabled tools without fully addressing the management of change 
and how people can best be taken on board. 
Section 2.2.6.2 Pre-Packaged Software 
ERP packages have been defined by Laudon, et al., (2002), to be a system that aims 
to integrate the main business functions across all the departments within an 
organization. Smyth, (2001), further declares that these software packages have a 
high level of integration, with all applications sharing a single corporate database. 
These systems are designed for an on-line client/server environment. They found that 
these packages are also intended to provide the best practice, in a global sense, 
through a range of standardized business processes.  
At this time, there are three major players that supply ERP systems via prepackaged 
software: they are Oracle, SAP and PeopleSoft. A survey conducted by Bradford and 
Richtermeyer (2002), indicate the following market share for the top three vendors;  
? SAP 35% 
? PeopleSoft 28% 
? Oracle 10% 
A brief description of the top three vendors has been provided by Tsung, (2004), as 
follows: 
?SAP is a German company that was founded in 1972. The largest inter-enterprise 
software company and the third-largest software supplier, SAP is the recognized 
leader in e-business solutions for all types of industry.? 
 
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Oracle began business in 1977. ?Today Oracle (NASDAQ:ORCL) is still at the head 
of the pack. Oracle technology can be found in nearly every industry around the 
world and in the offices of 98 of the Fortune 100 companies. Oracle is the first 
software company to develop and deploy 100% internet-enabled enterprise software 
across its entire product line: database, business applications, and application 
development and decision support tools. Oracle is the world?s leading supplier of 
software for information management, and the world?s second largest independent 
software company.? 
PeopleSoft is the youngest company out of the three major competitors. It was started 
in the 1980s, founded by Dave Duffield and Ken Morris. ?Today, PeopleSoft is the 
world?s second largest enterprise application provider, with $2.8 billion in annual 
revenue, 13000 employees, and more than 11,000 customers in 150 countries. And 
the visionary innovation that made PeoplSoft an industry leader continues to fuel its 
expansion into new technologies, new markets, and new industries. In July 2003 
PeopleSoft acquired JD Edwards, creating the second largest enterprise application 
software company in the world.? 
A study done by Ahmed, et al., (2003), indicates that following functions are 
provided by various ERP packaged programs: accounting, project management, 
construction management, scheduling, contact management, estimating, budgeting, 
historical cost tracking & projections, project documentation, CADD, photography 
management, office administration tools, messaging, project collaboration, human 
resources, payroll, corporate finance, fixed asset management, equipment/fleet 
purchasing, mailing lists, and document storage. 
 
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Utilization of these pre-packaged systems has the major advantage of either creating 
or strengthening the following: partnering, standardized reporting, common 
understanding of terms/functions, single data sources, wider integration opportunities, 
simplify contracting, subcontractor vendor interface, sharing contractor systems, and 
mapping work process (Tsung, 2004).  In addition to the general benefits gained by 
an ERP system implementation pre-packaged software systems have the following 
advantages:  
?Only one software vendor to deal with.? 
?Comparability between systems within the organization.? 
?A more unifying strategy for the organization.? (Tsung, 2004) 
These same systems also have some major disadvantages that could occur as a result 
of their utilization. They are described by Curtis and Cobham (2002), as follows: 
?The high initial cost of purchase and subsequent maintenance?..The need 
sometimes for business to align itself with the off-the-shelf package?.The lack of 
flexibility of the system when business need change.? Additionally, as indicated by 
Forrester Research (2004), who conducted a software usability study, states that 
?several applications required ?inordinate patience and expertise? to complete the 
tasks, and many fell short on overall usability? (Gilbert, 2003). 
A survey conducted by IBM indicated that ?Chief financial officers do not make full 
use of their enterprise resource planning (ERP) systems? (Frauenheim, 2003). Finally, 
utilizing these pre-packaged systems will result in reduction of organizational 
innovations (Davenport, 1998; Prahalad, Krishnnan, 1999). 
 
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Section 2.2.7 ERP in SMSCO 
A survey conducted by Everdingen, and Wiedersheim, (2000), among the mid size 
organizations in European market, indicated that potential size of ERP market just in 
Europe among SMSCO exceeds the staggering amount of $50 billion per year. As 
indicated by this study, the functional areas in which SMSCO members are interested 
consist of the following: purchase and sales order management, inventory and 
materials management, production and assembly, transportation, service and 
maintenance, marketing and sales, warehouse management, financial accounting, and 
human resource management (Everdingen, Hillegersberg, Waarts, 2000). In addition 
and contrary to the existing media reports that ERP systems are for large 
organizations because of the costs and implementation (Jeanne, 1999), a study by 
Adam and O?Doherty, (2000), indicates that a significant number of participants in 
their study were small to medium size organizations. This same study shows that 
large numbers of SMSCO were involved in the ERP implementation to a large extent.  
In an article in the April, 2000 issue of Communication of the ACM, Everdingen, et 
al., (2000) present the results of a survey that was conducted to identify the selection 
criteria that are utilized by SMSCO to be the following items listed in an order of 
importance; fit, flexibility, cost, user-friendliness, scalability, and support. The results 
of this study show the most important criterion used in selecting an information 
system is the best fit with the current business procedures. In addition this same 
study?s data shows that European midsize companies tend to focus on product 
characteristics rather than on the vendor of the product. It was concluded that it made 
little difference whether the vendor was a market leader, an international oriented 
company, or a company with a superior image. 
 
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Adam, et al., (2000), in an study that concentrated on lessons learned from ERP 
implementations in Ireland, indicated that the duration of ERP implementation for a 
small organization were far shorter than those reported for large organizations. It was 
concluded that the duration of the implementation of ERP software may be related to 
the size and complexity of the client organization and that SMSCO can expect to have 
an easier time implementing ERP. This fact was substantiated by results of the study 
conducted by Everdingen, et al., (2000), in which data revealed that SMSCO 
members mostly used one vendor to automate the various functional areas using one 
ERP vendor. This resulted in shorter implementation time and reduced complexities 
hence, some of the difficulties in integrating ERP software from different vendors 
often seen in large companies were not an issue for SMSCO members. 
The effects of role and relationship with software implementers were studied and 
found to be critical, not only in technical terms, but also in managerial and political 
terms, because they can help their clients in correcting their expectations and 
perceptions of ERP systems and ERP implementations (Adam, et al., 2000).  
Analysis of data collected by Adam, et al., (2000) revealed that the impact of actions 
taken by senior managers of participating companies was significant. They were 
shown to be pursuing a strong managerial rationale in implementing ERP rather than 
just following a trend. Based on this finding, Adam, et al., (2000), conclude that 
managers implementing ERP systems should pursue specific managerial targets 
through the acquisition of such systems and that deciding to acquire ERP software 
may not be sufficient in itself. Finally, it was mentioned that in order to obtain high 
efficiencies of the IT adoption the business process change needs to expand to a wider 
transformation of the entire process (Skibniewski, et al., 2004). 
 
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Section 2.3 Strategic Decision-making Process in Theory 
Decision-making is an important part of any construction project manager?s daily 
tasks. Hard decisions need to be made by good managers all the time. These decisions 
often will have a strategic impact on the overall success or failure of the project. A 
common definition used for these strategic decisions as provided by Mintzbereg, 
Raisinghani, and Theort (1976), states that a strategic decision is important, in terms 
of the actions taken, the resources committed, or the precedents set.  
Strategic decision-making consists of three distinct categories that are as follows; 
rationality and bounded rationality, politics and power, and garbage can (Douglas, 
Von Garaguly, 2005). The rationality and bounded rationality models assume that 
manager?s decisions are rational. The other two categories contradict the rational 
mode.    
The political perspective on decision-making demonstrates that decisions are a result 
of the process where decision makers all have individual goals, and come together in 
groups and the group with most power will make the decision. The garbage can 
theory contends that decisions occur in random meetings of choices looking for 
problems, problems looking for choices, and solutions looking for problems to 
answer, and decision makers looking for something to decide (Eisenhardt, Zbaracki, 
1992).  
Douglas and Von Garaguly (2005), state that rationality is a concept from economics, 
which holds that individuals make choices that are utility maximizing. According to 
this theory, decision makers will never choose one feasible option over another if they 
prefer the second. This theory is normative, meaning that it shows what a decision 
maker should do, not because of morality but instead because of rationality.  
 
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In initial stages of the decision-making process, decision makers gather information 
needed to form an understanding about the various alternatives and then use this 
information to determine the final result (Dean, Sharfman, 1993). Dean and Sharfman 
(1993), define rationality within this context as ?the extent to which [the] decision 
process involves the collection of information relevant to the decision, and the 
reliance upon analysis of this information in making the choice?. For the purpose of 
this research it is assumed that the rationality and bounded rationality theory apply to 
the process of decision-making framework, and this definition is adopted. 
The research conducted by Dean and Sharfman (1996), showed that strategic 
decisions are influenced by the process used, more specifically, that managers who 
used analytical techniques made decisions that were more effective than those who 
did not, and that managers who engaged in the use of power or pushed hidden 
agendas were less effective than those who did not. 
Frederic and Sammon (2002), indicate that the process whereby managers and, by 
extension, organizations make decisions has been one of the most researched topics in 
the extended management area. Dewey (1993), and Simmon (1960, 1977), state that a 
number of normative models of decision-making have been put forward that broke 
down this complex process into a variety of phases.  
Mintzberg et al. (1976), and Langley et al. (1995), have presented excellent syntheses 
of this literature. These models are extremely useful in shedding light and putting 
some order onto managerial decisions that sometimes remain black boxes. March 
(1962), has claimed that some decision-making processes appear to be without any 
order and researchers may be tempted to assign them to the decision-making ?garbage 
 
 69
 
can? (Cohen, March, and Olsen, 1972), as soon as their observations or case data lack 
coherence.  
The decision-making models mostly consist of a number of different stages. For 
example Simon (1977), presents one of the simplest normative models, which 
consists of four separate stages: (1) intelligence, (2) design, (3) choice and (4) review. 
The application of this model to current studies of ERP implementations reveals how 
few research projects have looked at the first and fourth phases (Sammon and Adam, 
2000). The first stage indicated by this model is very critical since, if alternatives are 
not considered initially, then it would be very unlikely to be brought into the picture 
at a later stage. In case of ERP it must be understood why managers decide to 
implement ERP and what alternatives they consider (Adam, Sammon, 2002).   
The software selection process and its impact on ERP decision-making were also 
reviewed. Researchers have commented on the confusing nature of many recorded 
instances of ERP decision-making (Saint-Leger and Savall, 2001; Sammon and 
Adam, 2000; Sammon & Lawlor, 2001), and the presence of political decision-
making (Shakir, 2000; Sammon & Lawlor, 2001). March and Olsen (1976), talk of 
?reducing the confusion slightly in organizational? in their approach to organizational 
decision-making. Adam (1996), points out that the organizational decision process 
and the resultant outcomes can appear very difficult to understand and follow for an 
outside observer and Langley et al. (1995), have pointed out the short-cuts that many 
researchers take when describing such confusing processes.  
Section 2.4 Chapter Summary 
This chapter presented the current status and key issues of ERP utilization in the 
construction industry. The potential benefits of ERP use by SMSCO, and risks & 
 
 70
 
causes of ERP failure were also discussed. Researches dealing with both tangible and 
intangible benefits and ways to identify and quantify them were reviewed. Various 
elements that contribute to both risk and uncertainties were identified and reviewed. 
Obstacles impeding the use of ERP by SMSCO were analyzed. Optimization of ERP 
and its role in the management system were reviewed. Various ERP tools were 
identified and the relationship between ERP and supply chain management was 
discussed. A number of different case studies that dealt with issues of interest were 
reviewed. Research dealing with different ERP alternatives and their issues was 
completed.  
Issues of evaluation and implementation of ERP in SMSCO were reviewed. Reasons 
for adoption of ERP by large organizations were identified and discussed. As 
anticipated, it was discovered that not much research had been completed dealing 
with failure factors of ERP implementation among SMSCO members. Most of the 
above mentioned and existing research had been completed based on the results 
obtained from various surveys.   
 
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CHAPTER 3 THEORETICAL FOUNDATION & RESEARCH 
MODEL 
 
In order to establish a better theoretical understanding of ERP acceptance and 
adoption systems by SMSCO, previous research on user acceptance models for 
information technology must be reviewed. Venkatesh, V., Morris, M., Davis, G.B., 
and Davis Fred D. (2003 - 4.31) indicate that ?explaining user acceptance of new 
technology is often described as one of the most mature research areas in the 
contemporary information systems literature?. There are number of competing 
theoretical models that have been created as a result of previous research in 
information technology (IT) acceptance. These models each have different set of 
acceptance determinants and routinely explain over 40 percent of the variance in 
individual intention to use technology (Davis, et al. 1989; Taylor and Todd 1995). 
This research will review three of the most prominent of these models namely; 
Theory of Reasoned Action (TRA), Theory of Planned Behavior (TPB), and 
Technology Acceptance Model (TAM). In addition a paradigm shift dealing with 
short comings of TAM is reviewed and adopted in creation of a new and proposed 
research model to be utilized by SMSCO. 
Section 3.1 Theory of Reasoned Action Model (TRA) 
Theory of Reasoned Action (TRA) is a general and very basic model based on 
intention based theory (Fischbein & Ajzen, 1975). According to TRA, beliefs 
influence an attitude, which in turn shapes intentions, which then guide or dictate 
 
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behaviors. TRA has been very well researched in predicting and explaining behavior 
across a wide variety of topics.  
The main determinants in TRA are attitude toward behavior, and subjective norm. 
Based on TRA a users performance of a specified behavior is determined by his or 
her behavioral intention (BI) to perform the behavior, and BI is jointly determined by 
the persons attitude (A) and subjective norm (SN) concerning the behavior in 
question ( Figure 2). 
 
 
 
 
Figure 2 Theory of Reasoned Action 
 
BI is a measure of the strength of one?s intention to perform a specified behavior 
(Fishbein and Ajzen, 1975). Attitude (A) is defined as an individuals positive or 
negative feelings about performing the target behavior (e.g., Fishbein and Ajzen, 
1975). Subjective Norm (SN) refers to ?the person?s perception that most people who 
 
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are important to him think he should or should not perform the behavior in question? 
(Fishbein, and Ajzen, 1975). As shown in Figure 2, according to TRA person?s 
attitude toward behavior is determined by his or her beliefs and evaluation of the 
consequences of performing the behavior. The evaluation term is defined to be ?an 
implicit evaluation response? to the consequence (Fishbein and Ajzen, 1975). TRA 
theorizes that an individual?s subjective norm (SN) is determined by a multiplicative 
function of his or her normative beliefs and his or her motivation to comply (Fishbein 
and Ajzen, 1975). 
As indicated number of different research dealing with TRA has been conducted in 
the past that has resulted in a large amount of supportive empirical data ( Ajzen and 
Fishbein 1980; Fishbein and Ajzen 1975; Ryan and Bonfield 1975; Shepard, 
Hartwick and Warshaw, 1980).   
Section 3.2 Theory of Planned Behavior Model (TPB) 
Theory of Planned Behavior TPB is a well establish intention model that establishes 
perceptions influence intentions which in turn influence the actual behavior of the 
individual. Theory of Planned Behavior model or TPB extends from TRA by 
adopting and additional construct element of perceived behavioral control, to account 
for situations in which a user does not have substantial control over the targeted 
behavior (Ajzen,1991). As indicated in Figure 3  
 
 
 
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Behavioral Belief Attitude
Norm, Belief
Control Belief
Subjective Norm
Perceived
Behavioral Control
Behavioral
Intention
 
 
 
 
Figure 3 Theory of Planned Behavior TPB (Ajzen, 1991) 
 
TPB has three main core constructs namely Attitude toward Behavior, Subjective 
Norm, and Perceived Behavioral Control. TPB exclaims that individual?s behavior is 
influenced by his or her behavioral intention, which is jointly influenced by attitude, 
subjective norms, and perceived behavioral control. Perceived behavioral control is a 
unique construct in TPB and refers to an individual?s perceptions of the presence or 
absence of requisite resource or opportunities necessary for performing a behavior 
(Ajzen & Madden, 1986).  
Ajzen (1991) has presented a review of several studies that successfully used TPB to 
predict intention and behavior in a wide variety of settings. In addition TPB has been 
successfully applied to the understanding of individual acceptance and usage of many 
different technologies (Harrison et al. 1997; Mathieson 1991; Taylor and Todd 1995). 
 
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Section 3.3 Technology Acceptance Model (TAM) 
TAM is based on the Theory of Reasoned Action or TRA. This model is among the 
most popular technology adoption models. It was designed specifically to explain 
computer usage (Davis, Bagozzi, Warshaw, 1989) and the role of behavioral intention 
to use the system.  A key purpose of TAM is to provide a basis for tracing the impact 
of external factors on internal beliefs, attitudes, and intentions (Davis, Bagozzi, 
Warshaw, 1989). TAM proposes that perceived usefulness (PU) and perceived ease 
of use (PEU) are the main constructs in explaining the behavioral intention to use IS 
and therefore, systems (Figure 4). Davis (1989) defined perceived usefulness as ?the 
degree to which a person believes that using a particular system would enhance his or 
her job performance? and defined perceived ease of use as ?the degree to which a 
person believes that using a particular system would be free of effort?. TAM 
postulates that computer usage is determined by a behavioral intention to use a 
system, where the intention to use the  
 
 
 
 
Figure 4 Technology Acceptance Model TAM (Davis et al. 1989) 
 
system is jointly determined by a person?s attitude toward using the system and its 
perceived usefulness. 
 
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As indicated before TAM is more focused on users of IT applications and therefore 
was singled out by this research for additional investigation and a basis of adoption. 
Simple structure of TAM and its flexibility made it that much more applicable to 
study of ERP adoption in an SMSCO environment. 
Most of previous studies about TAM deal with relatively simple but important 
systems such as word processing, e-mail, personal computing and spread sheet 
software. Legris et al. (2003) found that most TAM studies examined the introduction 
of office automation software or systems development applications. They pointed out 
that TAM research would benefit from examining the introduction of business 
process applications and concluded that it would be better if it was completed in a 
business environment. Kwasi and Salam (2003 ? 4.10) showed that both training and 
project communication influence the shared beliefs that users form about the benefits 
of the technology and that the shared beliefs influence the perceived usefulness and 
ease of use of the technology.  
Number of other studies deal with role and impact of attitude on the main constructs. 
Venkatesh and Davis (1996) removed attitude from their revised model because 
attitude did not appear to mediate fully the effect of perceived usefulness and 
perceived ease of use on behavioral intention as originally anticipated (Chau, Hu, 
2001 ? 4.37). Rao (2001 -4.8) studied the importance of user motivations and 
perceptions in determining his behavior to use indigenous technology using TAM. He 
concluded that prior experience in handling innovations and purchase practices to 
have significant effects on user?s extrinsic and intrinsic motivations.   
Inclusion of Subjective Norm into TAM has created TAM2 (see Figure 5). 
 
 
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Figure 5 Updated Technology Acceptance Model, TAM2 (Venkatesh & Davis 2000) 
 
Originally Davis did not include this into his model because of all the uncertainty 
associated with subjective norm?s theoretical and psychometric status, and limited 
effect on TAM?s main constructs. However Hartwick and Barki (1994) identified 
mixed findings about subjective norm, indicating that subjective norm had a 
significant impact on intention in mandatory system use but not involuntary settings. 
TAM2 includes subjective norm as an additional predictor of intention in case of 
mandatory system use, and additional theoretical constructs including social influence 
and cognitive instrumental processes (Venkatesh and Davis, 2000).   
 
 
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Section 3.4 Paradigm Shift  
Among the existing technology adoption models, amount of either direct or related 
research for TAM is the most significant (Lee, Kazar, and Larsen, 2003). The reason 
for this can be attributed to the prominent role that TAM has been playing in defining 
technology acceptance in general and information technology in particular. TAM has 
been the leading model of technology acceptance for the last few decades. TAM?s 
prominent role and its simplicity resulted in this research?s selection of it as a basic 
model to be studied and adopted if possible. 
Previous research has attempted to add and expand TAM in order to accommodate 
the uniqueness of different situations. Over a period of time long list of additional 
constructs have been added to the main simple model. However, Bagozzi (2007) 
indicates that no research has deepened TAM in the sense of explaining PU and PEU, 
reconceptualizing existing variables in the model, or introducing new variables 
explaining how the existing variables produce the effects they do. In the past some 
researchers have introduced moderators into TAM to qualify the effects of PU and 
PEU on intentions. According to Bagozzi (2007) these researchers have focused on 
demographic variables (e.g., gender, age), experience, or a crude classification into 
voluntary versus mandatory contexts of use (Venkatesh et al., 2003). Bagozzi (2007) 
continues with the fact that ?the problem with most tests of moderating effects are 
that little theoretical insight is provided into the mechanism, or ?the why?, behind 
proposed interaction effects, and a potentially infinite list of such moderators exists, 
making such broadenings of TAM both unwieldy and conceptually impoverished?. It 
is argued that introduction of any new variables should be based on theory and be 
with the goal of including policy variables.  
 
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The main strength of TAM lies in its simplicity, yet this same simplicity has been the 
main reason for its shortcomings. The simple structure of the model has made it 
possible for the researchers to over look its limitations. When an attempt was made to 
apply TAM to ERP adoption by SMSCO it was discovered that the many limitations 
exist that could not be overlooked. In addition the revised models that constituted 
extension of TAM not only did not provide any relief rather added to the confusion 
thereby creating an unwieldy process. Some of extended version of TAM is based on 
so many independent variables that make their application in construction industry 
impossible. A good example of this group of models is a proposed Unified Theory of 
Acceptance and Use Technology (UTAUT, Venkatesh et al., 2003) which has 41 
independent variables for predicting intentions and at least 8 independent variables 
for predicting behavior.  The shear number of variables creates an unmanageable 
process when applied to a construction setting. It became obvious that when dealing 
with technology adoption a more unified yet simple model was required. This finding 
was augmented by the findings of the study done by Bagozzi (2007). Bagozzi states 
that ?the field is at the threshold of crisis, if not chaos, in regard to explaining 
technology acceptance, and a paradigm shift is needed if progress is to be made.? He 
further states that ?as it stands the field of IS is at risk of being overwhelmed by 
growing piecemeal evidence behind decision making in regard to technology 
adoption/rejection?. 
Section 3.4.1 Short Comings with TAM 
In order to be able to propose a new model it became evident that a better 
understanding of TAM?s short comings was essential. These short coming have been 
identified by Bagozzi (2007) to be the following; (1) two critical gaps in the 
 
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framework, (2) the absence of a sound theory and method for identifying the 
determinants of PU and PEU, as well as other bases for decision making, (3) the 
neglect of group, social, and cultural aspects of decision making, (4) the reliance on 
na?vet? and over simplified notions of affect or emotions, and finally (5) the over 
dependence on a purely deterministic framework without consideration of self-
regulation process.   
Section 3.4.1.1 Critical Framework Gaps 
Two significant gaps in the current framework of most adoption models including 
TAM, TPB, and TRA exists that have been identified by Bagozzi (2007). They are; 
(1) Gap between reaction to use information technology and intentions to use 
information technology, and (2) gap between intention to use the technology and the 
actual use.  
Most models including TAM consider only two or three main constructs for the 
decision maker to take into account in the formation of an intention to act. However, 
as indicated by Bagozzi there could be many more constructs that can have an impact 
on the decision maker?s intentions. Extensions of TAM or other models have 
attempted to clarify this problem without any success. In addition as per Bagozzi 
(2007), PU and attitudes do not have to contain or constitute motives to act for any 
particular decision maker. The other main issue to be considered, while discussing 
this gap, is how multiple reasons for acting or not, be reconciled and transformed into 
a decision or intention to act (Bagozzi, 2007). 
The second gap that needs to be addressed is the gap between intention to use and 
actual use. Most Preeminent models including TAM treat behavior as an ending point 
in the process where in reality and especially in construction it is just the start of a 
 
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whole new set of processes in order to achieve a particular goal. When and if a 
member of SMSCO decides to adopt a particular technology it is usually with 
potential and associated increased in profit and productivity in mind. In addition 
Bagozzi (2007), indicates that ?the use-to-goal-attainment gap is neglected in TAM 
except as an anticipated belief up-stream in the model?. Another major issue to 
consider is the existence and effect of a large time lapse between intention to use and 
the actual use. Within this time new obstacles might arrive that could alter intentions, 
and therefore create a significant impact on the actual use. Bagozzi (2007) states that, 
?it is important to consider various psychological and instrumental steps that go on 
between intention formation and action initiation?. Decision makers often anticipate 
problems and temptations that arise after they have made their decision. They 
anticipate uncertainty and plan for a fluid situation. As a result decision makers often 
focus on trying (Bagozzi, 2007), to adopt an action or buy into a new technology. 
This focus results in actions that are fundamentally different if the focus was only on 
behavior (Bagozzi, 2007).  
Section 3.4.1.2 Problem with PU, PEU and other Determinants 
The second short coming identified by Bagozzi was the theory and methodology for 
identifying determinants of PU, PEU, as well as of A, SN and PBC. These 
determinants consist of distinct salient beliefs, and under the TRA and TPB these 
beliefs are multiplied by corresponding evaluations or importance and the product 
terms summed to form an overall summary term (Bagozzi, 2007).  Both Bagozzi 
(2007), and Benbasat and Barki (2007) recommend that focus in the future be placed 
on salient beliefs and their role in TAM and TPB. Bagozzi (2007) recommend that 
researchers abandon the summated multiplicative models so constitutive of the TRA 
 
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and TPB for the following four reasons. First, the summated models treat all belief-
evaluation pairs as equal in importance and obscure the differential contributions of 
salient beliefs, if any, to PU, PEU, A, SN and PBC. Second, belief-evaluation 
representations fail to allow for or specify an underlying structure of salient beliefs. 
Third, the summative representations do not take into account or represent 
relationships among salient beliefs. Fourth, because measures of belief and 
evaluations are not ratio scaled, it is necessary to model all additive and multiplicative 
effects in summative models with multiple regressions. 
Bagozzi (2007), deals with these problems by conceiving of a qualitative goal-setting 
methodology that can be used to ?derive goal, motive, or value hierarchies, and the 
individual goals, motives, or values, plus their linkages, which can be treated as 
independent variables predicting PU, PEU?. In this methodology determinants are 
functions of goals, motives, or values organized hierarchically, depending on the 
circumstances (Bagozzi, Bergami, and Leone, 2003). In this methodology according 
to Bagozzi (2007) if we think of decision making in goal-setting terms goal-setting 
becomes a precursor to goal striving, (goal-setting ? goal desire ? goal intention ? 
goal striving). Goal striving in term consists of action desire ? action intention? 
planning ? trying.  
Section 3.4.1.3 Group, Cultural & Social Aspects 
A quick review of TAM, TPB, and TRA reveals the fact that group, cultural, and 
social aspects of technology acceptance is not considered in any of them. As indicated 
by Bagozzi (2007) this is another one of the shortcomings of TAM.  
Bagozzi (2007), indicates that decisions with regard to technology acceptance and 
actual usage are often made collaboratively or with an aim to how they fit in with, or 
 
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affect, other people or group requirements. However, TAM has been set up with a 
decision making by a single individual in mind (Venkatesh et al., 2003). Bagozzi 
(2007), further states that ?social influence processes? have been addressed only in a 
limited sense of either a constraint or force on the decision maker and perceived as 
originating from other people whose opinion are important to the decision maker.  
As indicated previously group, cultural, or social aspects of decision making has not 
been thoroughly considered in technology acceptance research. In order to integrate 
these aspects into technology acceptance Bagozzi (2007) recommends the following 
four issues that need to be discussed in more detail.  
First, it is important to differentiate between social normative influence and role of 
group norms. Social normative influence is defined by Kelman (1974) to be the 
influence that is a species of compliance and is based on the need for approval, 
acceptance, or fear of reprisal, while group norm functions differently from 
compliance and works in group context.  
Second, another social process important to technology acceptance that must be 
considered is identification. Kelman (1974) defines identification as self defining 
relationship a person has with another person or group. The influence of this social 
identity on the decision maker must be considered. 
Third, issues of conceptualization and specification of decision making are neglected 
in TAM and must be considered. Intentions in TAM could be characterized as 
personal intentions, in that they refer to person?s individual decision or plan to 
achieve a goal. However, as per Bagozzi (2000, 2005, and 2007) group and social 
decision making involve what has been termed, based on discussions in philosophy 
on plural subject theory as collective intentions. It is further stated that one kind of 
 
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collective intention that must be considered is actually a personal intention to do 
something with a group of people or to contribute to, or do one?s part of, a group 
activity. 
Fourth, Bagozzi (2007) suggests that group, cultural, and social aspects must be 
integrated into technology acceptance by considering individual differences between 
cultures. Decision makers with different cultures react differently when it comes to 
technology acceptance and this fact needs to be considered. 
Section 3.4.1.4 Emotions 
  Impact of emotions in technology acceptance has been treated in a very limited and 
unique way by TAM and extended version of TAM. Bagozzi (2007) argues that 
attitudes, classically constructed as evaluative responses, and emotions are distinct 
phenomena. He states that treatments of affect with respect to technology acceptance 
have not been grounded in theories most appropriate to the decision processes people 
go through, and the fact that new specific theories are needed. 
As indicated by Bagozzi (2007) some recent developments in psychology are worth 
considering in this regard. One way to address the impact of emotions is by 
considering attitudes (Bagozzi, Moore, and Leone, 2004) and emotions (Bagozzi, 
Baumgartner, and Pieters, 1998) as pre-factual appraisals of achieving and failing to 
achieve one?s technology use goals. Pre-factual attitudes are posited to be dynamic 
construction of how a decision maker feels about anticipated effort and outcomes 
related to a personal goal (Bagozzi, 2006, Bagozzi et al., 2004). There have been 
number of other studies about pre-factual attitudes. Finally it must be pointed out that 
affective commitment is an essential component of social identity.  
 
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Section 3.4.1.5 Self-Regulation 
Lack of concept of Self-regulation in TAM is identified by Bagozzi (2007) to be the 
final shortcoming of TAM. TAM, TPB, and TRA are deterministic model, meaning 
that there exists a cause and effect relationship  in the model. Bagozzi (2007) points 
out that in TAM the mechanisms governing the dependence of an effect on a cause 
are built into the rationales linking causes to effects. TAM does not allow human 
agency, which is rooted in casual powers, to be alternatives or compliment to their 
specifications. Human agency is defined by Bagozzi (2007) to be the fact that a 
decision maker is capable at times of choosing to act in a way that is neither 
impulsive, compulsive, habitual, coerced, nor bribed, but rather results as an 
intentional response.  
Bagozzi (2007) concludes that deterministic theories of behavior explain it as 
physical processes going on in the brain in the form of either automatic reactions to 
outside stimuli, or hard-wired responses following law-like information processing, 
while self-regulation operates on felt deterministic urges or desires via reasoning 
processes.  
Section 3.4.2 New Core 
A new and unified apparoach explaining technology adoption/acceptance/rejection 
has been introduced by Bagozzi (2007). This new approach consists of a common 
core of basic variables and processes that are universal in scope. Bagozzi (2007) 
brands this core as the technology user acceptance decision making core (see Figure 
6). 
As indicated in Fig. 6 the main elements of this new core consist of goal desire ? 
goal intention ? action desire ? action intention. They each have causes and effects 
 
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(A, B, C, and D). This process also spans the entire spectrum between goal setting 
and goal striving, making overall goal directed behavior the center of focus for user 
acceptance. This core as mentioned before represents a fundamental process of a 
universal kind because it addresses the essential decision making processes that occur 
in most user acceptance situations. 
 
 
Goal Desire Goal Intention Action Desire Action Intention
Self-
Regulation
A
C
B
D
 
 
 
Figure 6 The Decision Making Core (Richard Bagozzi, 2007) 
 
Up to this point the new core has had a unique but only a deterministic approach. 
Bagozzi (2007) introduces the element of Self-regulation as a feature of human 
agency with an aim to engage in practical decision making.  
Self-regulation consists of two separate categories namely; reflectivity and reflexivity 
(Bagozzi, 2007). Bagozzi (2006) defines Reflective self-regulation, to be the active 
imposition of personal moral or self-evaluative standards to a felt or possible goal 
 
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desire or action desire. Emphasis in this research is placed on Self-evaluative 
standards. As indicated by Bagozzi (2007) self-regulation can also occur reflexively. 
This means that learned values, dispositions, traits, virtues, and vices can function as 
moderators of desires on intentions.  
Section 3.5 Conceptual ERP Adoption Model (EAM) 
The paradigm shift proposed by Bagozzi (2007) was adopted by this research because 
it represented practical and realistic solution to an existing problem. The new decision 
making core was incorporated into the new and proposed ERP Adoption Model 
(EAM) as shown in Figure 7. 
 
 
Figure 7 The Proposed ERP Adoption Model 
 
The elements of the proposed model were superimposed on top of Bagozzi?s decision 
making core. Additional causes and effects where also identified that would play a 
role in the adoption process by SMSCO.  
 
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 Section 3.5.1 Adoption of Paradigm Shift 
Applicability of existing technology adoption models in construction industry is 
highly questionable. The existing models deterministic approach to the process of 
decision making while very simple does not offer adequate solutions for the problems 
encountered in the process. Decision making process in an SMSCO is a rather 
complicated process that is driven by number of construction specific variables. 
These variables and their unique nature can not be very clearly and completely be 
defined by existing technology acceptance models. In addition the extensions that 
have been developed for the existing models, have just added to the confusion.  
Shortcomings that were previously identified by Bagozzi as ?TAM?s short comings? 
easily apply to the scenario of technology adoption in an SMSCO. Realizing that 
present models were not providing any relief it became apparent that a new 
methodology was needed. Bagozzi?s paradigm shift was adopted since it was based 
on solid theoretical understanding and made practical sense. 
Section 3.5.2 Structure of the Model 
EAM as shown in Figure 7 consists of 8 different elements namely; Problem 
Identification, Information Search, Planning, Selection/Short List, Evaluation, Self-
Regulation, Choice, Implementation. EAM begins with Problem identification and 
ends with implementation. EAM has a deterministic core but some of the processes 
are iterative and could be done concurrently. Each process is casual and results in 
deliverables that are used by another process. 
As indicated activity between some of the processes is highly iterative even though 
the EAM overall has a sequential progression that take the organization from the 
 
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problem identification to implementation. Iterative sequence of activities is associated 
with the Self-regulation element of the model.     
Section 3.5.2.1 Problem Identification 
This element as discussed previously by Bagozzi represents a cause to the planning 
element (Goal Desire). Problem identification must be initiated by formation of an 
investigative/project team that can complete an organizational review and verify or 
nullify existence of a problem. Initially a project leader must be selected. This person 
must be a senior member of organization?s management level and familiar with the 
concept of ERP. Other members of the team must be selected so that the following 
skills are present; user-area defined/function-specific, technical, leadership, 
managerial, organizational, problem solving, decision making, administrative, and 
negotiation.  
If possible each individual team member needs to have skills that enable them to 
assume a specific set of tasks or responsibilities within the project. In order to achieve 
this goal cross-functional and multidisciplinary team members should be selected.  
Role of individual must be identified and defined. The following roles should be 
included: project leader, task-specific for information search, role of liaison between 
the vendors and project team, department/user-area-specific roles such as for finance, 
human resources, etc., role of technical team leader, role of users on the team, roles of 
department like purchasing, etc.  
An assessment must be made to see if services of outside consultants to complement 
the project team are necessary. It is critical to have members on the team that are 
familiar with purchasing and IT in addition to member of departments that will be 
affected. When selecting team members their long term availability and commitment 
 
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must be considered. These same members should be involved in the remaining 
processes of decision making process. 
Various methodologies can be utilized to verify the nature and scope of problem if 
any. In house self evaluation or outside reviews could be viable alternatives. 
Existence of ?No Problem? answer must be considered and accepted if that be the 
case. However, if a problem is identified by the team it must be clearly defined and 
tabulated. 
Section 3.5.2.2 Information Search 
Information Search also is considered to be a constraint to the element of planning 
(Goal Desire). This element should consist of an iterative process since information 
always will be feeding the planning process. It could consist of two principal 
elements: information screening and information sources. Information sources, both 
internal and external sources, provide the planning process with differing types of 
information. This information must be screened in accordance with the level of 
scrutiny warranted by the stage at which the acquisition team is in the process. Some 
of the key factors that must be considered are as follows: (1) the type and nature of 
the information that is to be gathered, (2) the credibility of the sources whether 
internal or external, (3) the credibility of the information that was obtained, (4) 
reliability of the sources whether internal or external, (5) reliability of the information 
obtained, (6) outside references, (7) client referrals from the vendors, (8) and 
possibility of information overload and confusion. 
Section 3.5.2.3 Planning 
EAM?s Planning element represents the Goal Desire process of Bagozzi?s decision 
making core, where activities lead to formation of a focal goal. Organizations must 
 
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commit and spent significant amount of time in planning process with planning and 
preparations being done for other parts of the utilization process. Planning should 
start shortly after the decision is made to investigate the possible purchase of an ERP 
system. In planning process organizations must address as many issues as possible 
and plan for various activities and processes of EAM.  
Each organization must develop an acquisition strategy that reduces uncertainty 
associated with the process. Some of the strategies that should be consider are briefly 
as follows: visit vendors sites, contact vendor references, have vendors provide for on 
site demonstration, request that vendors respond to the same RFP, make the 
acquisition process a two step process consisting of technical and price section.  
The planning team must define the organization?s requirements for the ERP solution. 
Each team must analyze and define: (1) their organization?s existing technological 
environment; (2) the functional requirements; ( 3) the security requirements; (4) the 
cost limitations; (5) the time allocation; (6) the technical requirements; (7) the 
organizational (business, procedural, and policy) requirements; (8) existing processes 
in the areas that were to be affected by the new software; (9) technical staff role 
definition; (10) project team training requirements; (11) required maintenance 
program; (12) role of outside consultants. 
Each team must establish their individual criteria for selection, evaluation, and choice 
stages prior to contacting any vendors or looking at ERP solutions. These criteria 
must be based on information that is gathered from users and other sources. Each 
stage must be broken down into its finer subcategories and criteria that would help 
zoom in on achieving the associated objectives of these subcategories be established. 
The defined criteria then need to be utilized to complete various processes within 
 
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each stage such as market analysis, grid/matrices for selection and choice processes. 
Each organization must take into account realistic goals and limitations as it applies 
to its operations. Above mentioned criteria must be chosen in order to enhance 
planning team capabilities in accomplishing and measuring their particular tasks.  
Organization?s planning team must consider as many applicable issues as possible at 
this stage. One of the major issues to be considered should be business process 
reengineering (BPR). It must be understood that ERP implementation would require 
new BPR that will result in standardization and improvement in efficiency of 
operation. ERP adoption should not be used to just enhance the existing systems 
rather to change them for the better.  
Another issue to consider would be the process of change management. Difficulties in 
accepting significant required changes in the existing operating process by the staff 
should be anticipated and planned for. Initial participation of representatives, for 
various end user groups, in this stage is a critical element that must be accomplished. 
During market analysis, the acquisition team should determine who the major players 
are in the marketplace for the ERP system that they are seeking. Within this analysis 
functionalities provided and technical features presented for each vendor must be 
reviewed and ranked. Ultimately a short list of vendors to be contacted must be 
produced. 
There must be a fixed number of deliverables that are to be produced at the end of 
process. These deliverables need to be result oriented and applicable to each 
particular stage, for example deliverables could consist of formation of the acquisition 
team, the compilation of RFP, creation of list of criteria for review of various stages, 
and formation of potential vendors list.  
 
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 Section 3.5.2.4 Selection/Short List 
The Selection/Short List element of EAM represents Bagozzi?s Goal Intention 
process. This element is the intermediary stage between the planning/filtering 
processes and the evaluation stage. Within this process the following two principal 
concepts must be considered: ?Evaluate RFI/RFP/RFQ Responses? and ?Create Short 
list of Vendors/Technologies.? 
Completion of proper evaluation of RFI/RFP/RFQ must be the main concern of 
project  team at this stage. It is anticipated that some recursive activities between this 
process and planning process will occur. These activities will result in teams 
revisiting their plans and refining their criteria. Decisions arising from adjustments in 
their plans will lead the teams to revisit the information search process. The recursive 
nature of the these activities will also cause the planning team to re-contact the 
vendors with request to resubmit in part or in full, their RFI/RFP/RFQ responses 
according to the teams refined criteria. Then when amended responses are received 
from the vendors, the team will have to repeat the evaluation process. Responses that 
are provided by various vendors must be reviewed once again so that a short list of 
vendors can be generated.      
 The second concept or deliverable of this stage must consist of generation of a short 
list of vendors that need to be thoroughly evaluated. It is recommended that the 
number of vendors included in this short list be realistic and no less than three. Once 
this short list is generated each vendor must be notified and be requested to 
participate in the full evaluation process. 
 
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Section 3.5.2.5 Evaluation 
Evaluation is a very critical and complicated process that must be conducted by the 
project team. It is not the intention of this research to cover this topic in detail 
however some of the critical elements that are to be considered must be mentioned. 
The topic of evaluation is very well covered by previous research and there exist 
number of different ways that any team can conduct an evaluation of any ERP 
system. Critical factors to be considered by the team must include the following: 
strategic match, stakeholders influence, system specific, organizational impact, life 
cycle approach, financial criteria. Each of these critical factors has been previously 
discussed in detail. 
Within this process vendors, the functionalities provided by ERP system, and 
technical issues must be evaluated. It must be anticipated that vendor evaluation will 
be carried out over several of the stages within the EAM processes. As for the 
functional and technical evaluations, they should be carried out, in part, during the 
selection process and then, more intensively, during the functional and technical 
evaluation processes. The criteria and strategies that are established during the 
planning process should be utilized to complete the evaluation process. The 
deliverables of this stage must consist of a vendor and functionalities/modules that 
should be utilized.   
Section 3.5.2.6 Self-Regulation 
Within this research particular attention has been paid to the nature of this element, 
with its variables and constraints. Self-Regulation was introduced into EAM in order 
to account for possible impact of ?human agency? into the decision making process. 
 
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Self-Regulation when properly conducted will allow for a reality check that is critical 
to the success of the technology adoption.   
It is anticipated that within this process SMSCO members will have to deal with 
factors that would impact their decision making process. These factors collectively 
represent prohibitive criteria that could result in failure of adoption for an ERP 
system. It is the intent of this research to identify these criteria and also rank them as 
to their hierarchy of importance.   
Section 3.5.2.7 Choice 
This stage is the natural culmination of the evaluation process. Once the deliverable 
of the evaluation process has become clear it must be recommended to the entire 
ownership group. In the case of SMSCO it is of the utmost importance to obtain the 
approval of, if not all of ownership group, at least the majority of them. This stage 
was singled out so that the ownership group has an opportunity to independently 
review the finding of the process and make a full commitment to the implementation 
process. 
Section 3.5.2.8 Implementation 
Implementation, like evaluation, is a topic that should be investigated in full detail. 
As the last stage of the EAM it represents the final series of activities that are required 
to successfully select and implement an ERP system by SMSCO.  
The negotiation part of this stage should consist of the business and legal segment. As 
many issues as possible must be addressed in the business negotiation between the 
SMSCO members and the potential vendor. Then, once tentative agreements are 
reached and the choices made, legal negotiations between parties must be conducted 
that culminates in singing of final contract.   
 
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Section 3.6 Chapter Summary 
This chapter presented the current status and key issues of three major technology 
adoption models namely, TRA, TPB, and TAM. Each model was discussed in some 
detail and their theoretical background was investigated. Some of the major 
shortcomings associated with these models were identified and reviewed. Particular 
attention was given to TAM since it was deemed to be the most applicable to ERP 
adoption or rejection within SMSCO.  
Bagozzi?s paper (2007) identifying the short comings of TAM was reviewed and 
major points highlighted. The paradigm shift proposed by him was investigated and 
adopted for the purpose of creating a new ERP Adoption Model (EAM) for SMSCO.  
Taking into consideration the proposed decision making core by Bagozzi a new 
model for ERP adoption for SMSCO was created. This model consisted of 8 different 
elements. Each of these elements and their content were discussed in detail.    
 
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CHAPTER 4 PROHIBITIVE CRITERIA CONFIRMATION 
 
One of the initial objectives of this research was to identify the reasons for SMSCO?s 
failure to utilize and or implement ERP systems. A review of literature identified 
number of criteria that hereafter are referred to as ?Prohibitive Criteria?.  Prohibitive 
criteria are defined to be those criteria that cause the process of ERP implementation 
by a member of SMSCO be terminated for a cause.  
In order to reaffirm these criteria with real life experiences of members of SMSCO it 
was decided to conduct a paper based questionnaire (see Appendix A: Prohibitive 
Factors Questionnaire). This chapter presents the process that was followed to design, 
collect, analyze data and validate/confirm the existence of prohibitive criteria.   
Section 4.1 Design of Field Questionnaire  
The Prohibitive Criteria Confirmation Questionnaire is divided into four sections. 
Section one consists of four questions to collect the following general information 
about the respondent: business category, organization?s size, familiarity with internet, 
contract profile, and familiarity with various functionalities provided by ERP.  
Section two consisted of six questions that dealt with issues of potential ERP 
acceptability by members of SMSCO. The level of available IT infrastructure within 
the organization and familiarity with Web-Technology and ERP was investigated, as 
was the attitude of senior managers in the organization and their willingness to adopt 
ERP?s new approaches. The member?s opinion about the impact of having ERP on 
the success of business was also investigated.  
 
 98
 
Section three consisted of five questions that investigated the perceived benefits to be 
gained from ERP adoptability.  Respondents were asked to identify the areas of 
functionality that would be most utilized by them. In addition they were asked to 
indicate their opinion about what other project functions would benefit from ERP 
implementation. Finally, they were asked to expand on the impact of ERP 
implementation on project communication. 
Section four consisted of five questions that were arranged to either confirm or 
identify all of the major prohibitive criteria that are at play. Respondents were asked 
to identify the most significant prohibitive criteria affecting their utilization of an 
ERP. Concerns about security and legality were further examined. Attitude and the 
opinions of respondents with regard to number of project conditions were measured.  
Section 4.2 Choice of Data Collection Method  
Qualitative & quantitative methodologies are two principle ways to conduct scientific 
research. Qualitative research has been utilized in the human and social science 
disciplines (Denzin, Lincoln, 1998). As indicated by Denzin and Lincoln (1998), 
qualitative research is a ?multi-method in focus, involving an interpretive, naturalistic 
approach to its subject matter?. It attempts to study things in their natural settings and 
interpret the meanings humans bring to them. Qualitative studies also provide 
researchers with a rich description and help them gain a comprehensive 
understanding of the socially structured nature of reality by building an intimate 
relationship between researchers and what they studied, capturing the individual?s 
point of view, and examining the constraints of every day life (Denzin and Lincoln, 
1998). Examples of the qualitative methods include case studies, action research, and 
ethnography. 
 
 99
 
?Quantitative research emphasizes the measurement and analysis of causal 
relationships between variables, not process? (Denzin, Lincoln, 1998). It is most often 
used in positivist studies to test hypotheses objectively or to test models that are built 
based on theories (Kaplan and Duchon 2000). It is a robust and systematic way to 
examine and measure developed research models significantly (Denzin and Lincoln, 
1998). The most common examples of quantitative methods include survey, 
laboratory and field experiments and mathematics modeling (Shadish, Cook, and 
Campbell, 2002).   
Before deciding on what method to use for data collection for this research, a number 
of factors were considered. As indicated by Ohlsson, et al., (2001), it is common to 
make a distinction between two different types of data, namely primary and 
secondary data. They have identified primary data as the information collected and 
used for the first time, and usually through direct examination, whereas secondary 
data consists of information already available, i.e. it has been collected or produced 
by a third party and perhaps for a different purpose (Eriscsson & Wiedersheim, 
1999). Because of the nature of topic and the unavailability of relevant information 
this thesis will use primary data to address and analyze various research problems.  
For the collection of primary data a number of collection methods were investigated, 
e.g. experiments, surveys, and case studies. Based on the nature of this research and 
at this stage of investigation it was decided that a paper-based questionnaire would 
generate the best results. Surveys/questionnaires are commonly used for research 
projects that are based on descriptive and explorative research approach (Ohlsson, et 
al., 2001). This collection method was also impacted by time frame, data availability, 
and characteristics of the respondents. 
 
 100
 
The list of targeted respondents was created utilizing several sources, i.e. construction 
related organizations, personal knowledge, trade magazines, and the local business 
network. A combination of electronic mail and postal mail was used to distribute the 
questionnaires. After the questionnaires were sent to each respondent, it was followed 
up with a phone conversation that promoted and solicited their ultimate response.  
The size of the population and the nature of research questions in play dictate the type 
of data that needs to be collected. Data types are divided into two groups, namely 
quantitative and qualitative. Quantitative data is primarily used when the aim of the 
research project is to answer questions like, ?How often??, ?How much??, ?How 
many??, or ?How usual??, meaning that there is an aspiration to quantify the result 
(Ohlsson, et al., 2001). The collected data is then analyzed in a quantified way. On 
the other hand, qualitative data is better suited for research projects that use data that 
cannot easily be quantified, and qualitative data is often suited for research projects 
that aim to understand or find a specific pattern (Ohlsson, et al., 2001). This research 
utilizes a combination of both qualitative and quantitative data to address research 
questions.  
Section 4.3 Data Collection    
Before the questionnaire was sent out, it was reviewed by three SMSCO executives 
and two academics. Several detailed meetings were held to ensure that that the 
questionnaire was comprehensive and understandable. 
Section 4.3.1 Targeted Respondents 
Two hundred participants that included SMSCO construction industry executives, 
construction management personnel, A/E construction managers, and resident 
 
 101
 
engineers, with detail working knowledge of operation for a small to medium size 
construction company were contacted. To gain access to all targeted respondents, 
executives from each organization were contacted and a brief explanation of the 
purpose of the questionnaire was given. In the majority of cases, these executives 
were helpful but non-committal. 
The common denominator among all participants was their knowledge of the day to 
day operation of an SMSCO. In addition their familiarity with general web 
technology applications was targeted. Since it was anticipated that ERP utilization 
among this group was to be limited, their detailed knowledge of it was not selected as 
a targeting critical factor.   
Section 4.3.2 Questionnaire Distribution & Responses 
A combination of electronic mail, postal mail, and personal deliveries was chosen as 
the means to circulate the questionnaire. The questionnaire was delivered to every 
participant with instructions on how to complete and return the questionnaire. A 
follow up phone call was made to encourage and increase the number of participants. 
The questioning was conducted between January and April of 2004, and 29 responses 
were obtained. In addition 15 respondents indicated that since they did not have any 
experience with the use of ERP or web-technology in their business and therefore 
could not complete the questionnaire ; however, they requested that they receive a 
summary of results. The rate of response to the questionnaire was 14.5%. Given the 
state of ERP utilization among SMSCO, this response rate was not unpredictable. 
There were significant number of participants that were not familiar with the concept 
of ERP.  
 
 102
 
Section 4.3.3 Problems Encountered 
During the process of data collection, a number of problems were encountered. The 
most significant problem that was confronted was the lack of familiarity of members 
of SMSCO with concept of web-tech/ERP applications in their business. Most 
participants, even though familiar with the internet and its reach, were not quite sure 
about how it could help or impact their venture.  
The other significant problem that was raised had to do with the conservative nature 
of construction organizations and their resistance to share any information that could 
be constituted as competitive. Participants were reluctant to answer questions that 
dealt with possible operational procedures and or cost benefit analysis.  
Finally the last problem that was identified by some respondents had to do with the 
time that it took to complete the questionnaire. Even though the whole process was 
set up to be completed in about only 10 to 15 minutes it was considered as ?long 
time?. These phenomena can be attributed to the fact that, in today?s competitive 
environment, members of SMSCO are under constant time constraints to finish their 
daily work routines quickly and handle emergencies that arise within various projects.  
Section 4.3.4 Validity of the Questionnaire 
Validity is a key quality that is measured for this questionnaire. This quality 
determines whether a questionnaire is good or bad (Nachimas, Nachimas 1992; 
Alreck, Settle 1995; Litiwn 1995).  
As indicated by Nachimas and Nachimas (1992), validity is concerned with how well 
a question measures what it intends to measure. Three basic methods utilized are 
content validity, empirical validity, and construct validity.  
 
 103
 
Content validity is defined to be a subjective measure of how appropriate the 
questions seem to a set of reviewers who have some knowledge of the subject matter. 
Two common tests of content validity are face validity and sampling validity. Face 
validity is based on the investigator?s subjective evaluation. Sampling validity is 
concerned with whether a given population is adequately sampled by a questionnaire 
and is commonly used when investigators attempt to construct a questionnaire and 
employ it for the first time (Nachmias, Nachmias 1992). 
Empirical validity is concerned with the relationship between a questionnaire and its 
outcomes. Two methods of empirical validity are concurrent validity and predictive 
validity. Concurrent validity assesses the validity of a questionnaire by comparing it 
with a ?gold standard? for measuring the same subject. Predictive validity is the 
correlation coefficient between the results of a questionnaire and an external criterion, 
and is also considered as the ability of a questionnaire to forecast future outcomes 
(Nachimas and Nachimas 1992).  
Construct validity is concerned with the relationship between a questionnaire and a 
general theoretical framework; whether a questionnaire is tied to the concept and 
theoretical assumption employed (Nitithamyong, 2003). Litwin (1995), commented 
that this type of method is the most valuable, yet is the most difficult to assess, and 
often is determined only after years of experience with the survey. 
For the purpose of this questionnaire, validity assessment was performed using the 
content validity method since the other two methods, empirical validity and construct 
validity, were not applicable due to the lack of a ?gold standard? survey in the 
research area and limited time available. This assessment positively validated the 
 
 104
 
questionnaire. As indicated previously, the two methods of content validity are face 
validity and sampling validity and are discussed below: 
? Face Validity: In order to establish face validity for the field questionnaire, a 
comprehensive literature review and the unstructured interviews with industry 
practitioners were conducted to ensure that reasons or criteria that cause 
members of SMSCO not to utilize ERP were adequately included in the 
questionnaire. The feedback that was obtained from these steps was 
incorporated into the design of the questionnaire.  
? Sampling Validity: The targeted respondents of the questionnaire were 
construction management personnel who are familiar with the day to day 
operation of and SMSCO organization. The questionnaire itself included a 
question asking whether the respondents were familiar with project 
management tools based on web-technology. In order to overcome the 
unfamiliarity of the SMSCO with the concept of ERP application, the 
questionnaire did not refer to ERP, rather it attempted to utilize the general 
terminologies such as ?project management tools based on web-technology?. 
Section 4.4 Descriptive Analysis of the Questionnaire Results  
For the purpose of this analysis the content of the questionnaire was divided into the 
following four categories; profile, applicability, perceived benefits, and prohibitive 
criteria. The questions were then segmented into the above-mentioned categories and 
each category and its associated questions were analyzed, in turn, to establish a clear 
understanding of the respondent?s message.  
 
 105
 
Section 4.4.1 Respondent?s Profile   
Within this category, questions were organized to establish some facts about the 
respondents. The nature of the organization, size of the organization, familiarity with 
internet, and scale for utilization opportunity were the prime area of interest. Figure 8 
illustrates the nature of the respondents? organization. 
 
 
Figure 8 Organization Category 
 
As indicated by the results, a majority of respondents consisted of contractors, in one 
form or the other. A combination of general contractors and subcontractors 
constituted 41% of respondents, indicating a high degree of familiarity with the day to 
day operation of the SMSCO organization. The next largest group was owners or 
owner?s representatives. Figure 9 summarizes the distribution of the organizations 
according to their fiscal size. Fiscal size was chosen as a measure to decide if they 
could be considered to be a member of SMSCO. For the purpose of this research and 
Organization Category
GC
34%
Sub
7%
Sup
7%
Owner 
28% 
A/E 
17% 
Other
7%
GC 
Sub 
Sup 
Owner 
A/E 
Other 
 
 106
 
utilizing the federal guidelines defining small to medium size business, an upper limit 
of $20 million dollars of gross billing was chosen to be the defining limit for 
members of SMSCO. 
 
Gross Billing
< $1 mil
3% $1 mil - $7 mil
28%
$10 mil - $20 
Mil
48%
>$20 mil
21%
< $1 mil
$1 mil - $7 mil
$10 mil - $20 Mil
>$20 mil
 
Figure 9 Gross Billing 
 
Based on this definition, 79% of respondents were identified to be members of 
SMSCO. This was a clear indication of sampling validity of this questionnaire. 
Clearly this group was very familiar with issues facing SMSCO, either as contractors 
or as other professional categories such as A/E, Suppliers, or Owners.  
The status of the respondent?s familiarity with web/IT was investigated, and as shown 
by results indicated in Figure 10, a majority of respondents, 76%, were very familiar 
with web technology. 
 
 
 107
 
Familiarity with Web
Very
76%
Some
24%
Not
0%
Very
Some
Not
 
Figure 10 Familiarities with Web 
 
 Since initial interviews had indicated a minimal familiarity level with ERP 
terminology, it was decided to measure the conceptual understanding of the subject 
by measuring respondents? familiarity with web technology first. Conversations with 
SMSCO executives had indicated that this would be a good starting point to define 
the profile of respondents.  
In order to obtain a better understanding of respondents' thinking of the potential 
contract size that could provide an opportunity for the use of ERP/project web 
applications, they were asked to indicate the fiscal value of a contract that they would 
be willing to use these tools for. 
 
 108
 
Contract Size
<$1,000,000
21%
<$5,000,000
3%
Will not Use
14%
<$100,000
45%
<$500,000
17%
<$100,000
<$500,000
<$1,000,000
<$5,000,000
Will not Use
 
Figure 11 Contract Size 
 
It was surprising to discover that 45% of respondents would be willing to use project 
web application for projects of even less than $100,000.00 (Figure 11). Even though 
this finding was encouraging, it must be pointed out that these results might be 
skewed by the fact that the respondents were not familiar with the total cost of 
implementing an ERP system ; however, it still indicates a willingness to implement 
ERP tools.  
It was the intent of this questionnaire to reach valid members of SMSCO and utilize 
their understanding to validate existence of potential prohibitive factor. A profile 
established by the first segment of this questionnaire clearly defines the respondents 
to be members of SMSCO with understanding of web/IT technology. 
 
 109
 
Section 4.4.2 Attitude & Understanding of Project Management Systems 
The next area of interest to investigate was the understanding and attitude of 
respondents towards project management systems. Initially, it was important to see if 
respondents had access to internet at their job site.  
 
Access to Web
Yes
93%
No
7%
Yes
No
 
Figure 12 Web Access 
 
As indicated by the results shown in Figure 12, the majority of respondents had 
access to internet at their job site. This indicates the existence of an adequate level of 
infrastructure within the construction industry. Existence of this infrastructure is a 
critical element in the possible future implementation of ERP application for 
SMSCO.  
Since the attitude of senior management towards the use of IT/web technology within 
the organization has been shown to be a critical element in a successful 
implementation of project management tools, it was measured. Results are shown in 
Figure 13. 
 
 110
 
 
 
Figure 13 Senior Management?s Attitude 
 
Unfortunately, as indicated by the results still a majority, 59%, of senior managers in 
these organizations do not have a clear understanding or are not willing to commit to 
implementation of IT related project management tools within their organization ; 
however, it must be pointed out that results also reflect an existence of a significant 
portion of the respondents that enjoy an enthusiastic support of their senior managers 
in implementation of IT related project management in their projects. If the contractor 
sub-group within the respondents is singled out, the fact becomes more evident that a 
larger percentage of senior managers have a positive and more enthusiastic attitude. 
This indicates that a potential for the acceptance and implementation of various IT 
related project management tools among SMSCO does exist and needs to be 
enhanced. 
Attitude of Senior Management
Enthusiastic
41%
Halfhearted 
38% 
No Value 
21% 
Enthusiastic
Halfhearted
No Value
 
 111
 
The next question investigated the level of familiarity with project management tools 
based on Web-Technology. As indicated by Figure 14, the majority of participants 
indicated no familiarity at all.  
 
Familiarity with PM Web Tools
Yes
45%
No
55%
Yes
No
 
 
Figure 14 Level of Familiarity with Project Management Web-Technology Tools 
 
The result of this question closely follows that of the senior manager?s attitude 
towards the use of web technology within their operation. It is apparent that the same 
41% of senior managers of SMSCO who enthusiastically supports the implementation 
of ERP/web technology are also familiar with the capabilities of these systems. It can 
therefore be concluded that familiarity is a key component; that once established it 
creates acceptance of ERP and other project management tools. 
In order to investigate this familiarity, the next question was proposed and put to the 
participants. In this question, the concern was to investigate the level of acceptance 
and utilization of various alternative project management tools. 
 
 112
 
 
Web Base System Used
PM - ASP
0%
In House 
Software
28%
Comm. Pack.
22%
Not used
50%
PM - ASP
In House Software
Comm. Pack.
Not used
 
 
Figure 15 Alternative Project Management Tools Utilization 
 
Once again, as indicated by Figure 15, the majority of the same group that is familiar 
with and enthusiastic about the utilization of various project management tools, 
utilizes in-house software packages that have been created by their own organizations 
in a very rudimentary and basic way. This fact indicates an existence of great 
potential for project management tool utilization among members of SMSCO. 
 
 113
 
 
 
Figure 16 Respondent?s Willingness to Adopt New Systems 
 
It is a known fact that the construction industry is very conservative in nature and 
does not adopt changes easily. In order to investigate the impact of this phenomenon 
on ERP/Project management tools utilization among members of SMSCO, the next 
question was formulated. As indicated by Figure 16, the majority of respondents 
indicated a willingness to adopt new systems. 
The answers reveal the fact that even the senior managers who do not know about the 
project management tools are willing to revamp their existing business procedures 
and systems so that web-technology could be implemented. This level of willingness 
to change could be result of their understanding for potential benefits that could 
improve their bottom line. This thinking or impression could be an indicator of pent 
up demand or willingness to adopt new ERP/Project management tools. 
Would You Adjust Your Ways?
Yes
90%
No 
10%
Yes
No 
 
 114
 
The perceived impact of project management tools on the bottom line of the business 
was further investigated. Respondents were asked to indicate if they are of the 
opinion that their lack of commitment to utilization of ERP/Project management tools 
has resulted in reduction in their profit (Figure 17). 
 
 
 
Figure 17 Perceived Impact on Profit 
 
As could be anticipated, a majority of respondents indicated no impact on their profit 
as a result of lack of utilization of ERP tools. It must be noted that as stated 
previously, a significant percentage of the participants had indicated that they are not 
familiar with these tools in totality therefore, these results should have been 
anticipated; however, the interesting fact lies in the group that indicates that they 
either have seen an increase in their profit and or can perceive an increase in their 
profit.  
Did You Lose Business?
Yes
17%
No
69%
Use Web
14% 
Yes
No 
Use Web
 
 115
 
Overall, as indicated by previous literature review it can be concluded that even 
though majority of participants had access to web, they were not familiar with various 
ERP/project management tools; however, they also indicated a willingness to adjust 
their business procedures in order to utilize IT oriented project management tools.  
Among these participants a majority did not enjoy the broad and full support of their 
senior management. Those who were familiar with project management tools only 
utilized rudimentary and basic in house software packages that had been developed 
by them. 
Section 4.4.3 Perceived Benefits 
In order to measure the understanding and applicability of the benefits that could 
result from the implementation of IT related project management tools among 
SMSCO, the next section of questionnaire was designed to first identify those 
benefits. The nature and impact of perceived benefits on the operation of members 
plays a critical role in acceptance of ERP/project management tools by the decision-
makers. It was the intent of the questionnaire to identify and study the particular areas 
that could benefit most from the implementation of various ERP/project management 
tools.   
Figure 18 indicates the level of familiarity of the respondents with various IT related 
tools that have been utilized on various project. 
 
 
 116
 
Tools Used
e-mail
47%
Instant 
Messaging
8%
Collaboration
5%
Doc. 
Management
11%
Video 
Conferencing
2%
File & data 
transfer
27%
e-mail
Instant Messaging
File & data transfer
Collaboration
Doc. Management
Video Conferencing
 
Figure 18 Level of Familiarity with IT Tools 
 
As indicated, the majority of respondents were very familiar with e-mail and its 
applications. A significant portion, 27%, was aware of and had worked with file & 
data transfer applications. Unfortunately, only 5% had indicated any familiarity with 
collaborative tools. This result confirms the thinking that was presented previously as 
part of defining the problem that members of SMSCO are not familiar with the 
potential benefits that could be gained thru the proper implementation of ERP/project 
management tools.  
 
 117
 
The next question was generated in order to identify what particular areas would best 
benefit from ERP implementation in an SMSCO organization. Areas that are most 
critical to the operation of an SMSCO were singled out (see Figure 19). 
  
 
 
Figure 19 Perceived Improvements in Operational Areas 
 
A majority of respondents indicated that cost & time controls were the areas that 
could benefit the most by application of ERP tools. This was followed by 
procurement and estimating. Design, e-commerce, and planning completed the list. 
Cost & time, as could be anticipated, play the most prominent role in thinking of 
senior managers of SMSCOs.  
In the next question, further investigation of this concept was attempted by asking 
participants to identify what areas would benefit most from the application of 
ERP/project management tools. The following four major areas were identified to be 
communication, control, administration, procurement (Figure 20). 
Tools Would Use to Improve
Planning
11%
Design
10%
Estimating 
17% 
e-commerce 
6% 
No use 
4% 
Cost & Time 
Control
35%
Procurement/ 
Bidding 17% 
Planning 
Cost & Time Control 
Design
Procurement/Bidding
Estimating 
e-commerce 
No use
 
 118
 
Areas That Would Benefit
Communication
42%
Control
20%
Administration
20%
Procurement
16%
Other
2%
Communication
Control
Administration
Procurement
Other
 
 
Figure 20 Potential Benefits 
 
Communication was singled out to be the area that could benefit from implementation 
of ERP/project management tools the most. It was followed by controls, 
administration, and procurement. The main reason for this result could lay in the fact 
that everyone has become very familiar with and utilizes e-mail. Issues of 
communication needed further investigation and analysis therefore another question 
was dedicated to achieve this goal. 
 
 119
 
Figure 21 breaks down communication issues and possible outcomes. Respondents 
were asked to indicate their opinions about number of statements dealing with 
implications of ERP/web tool application within the organization. The results 
indicated that a significant majority of respondents believe that ERP implementation 
in their organization will result in a more standardized procedures.  
Compared to the issue of standardization, the other criteria were measured to be not 
as significant. Respondents indicated that communication will still play a critical role, 
face to face meetings will not be eliminated, and communication issues will still 
remain critical. 
 
Communciation Issues
No More 
Comm. Issue
14%
Comm. Non 
Critical
10%
No Face to 
Face
7%
Standardized
69%
No More Comm. Issue
Comm. Non Critical
No Face to Face
Standardized
 
 
Figure 21 Communication Findings 
 
 120
 
The next question investigated the impact of ERP/project management tools on the 
ultimate profits of the operations. As indicated by Figure 22 and as could have been 
anticipated, the majority of the participants indicated that they had not utilized these 
tools to a point that they could gage the impact on their profit however interestingly 
enough, if we consider the fact that Figure 14 indicated that 45% of participants were 
familiar with PM web tools, Figure 22 indicated that majority of this group have seen 
an impact on their bottom line.  
 
Bottom Line Improvement
Yes
28%
No
3%
No Web Use
69%
Yes
No
No Web Use
 
 
Figure 22 Impacts on Bottom Line 
 
Overall, it can be concluded that majority of participants were familiar with some 
ERP/web project management tools, with e-mail being the most prominent one of the 
group. Participants also indicated that cost and time related areas were the areas that 
could improve most positively as a result of tool implementation. In addition, they 
indicate that communication is another area that could improve substantially from 
 
 121
 
implementation of these tools; the issue of standardization was identified as the one 
that would benefit the most. Finally, even though the majority, when asked, stated 
that they had neither used these tools nor would not anticipate any increase in their 
profits, of the group that had utilized these tools, the majority indicated an 
improvement to profits levels.  
Section 4.4.4 Perceived Prohibitive Criteria 
Hypothesis #1 of this research stated that ?it is evident that there are number of 
critical/prohibitive criteria that lead to a failure or lack of utilization of ERP by 
SMSCO?. Completed literature review supported this hypothesis and in order to 
further investigate the nature and extend of these criteria, the next series of questions 
were designed. The goal was to those who completed this questionnaire to present a 
set of questions that would help them identify the perceived prohibitive criteria. In 
preliminary interviews with some SMSCO executives it was indicated that the level 
of familiarity of potential participants with technical terminologies within this 
segment of the industry is very primitive thus knowing the fact that participants 
would not be very familiar with highly technical terminology, an attempt was made to 
address the questions in terms more familiar to them. The criteria that had been 
identified by the literature review to be of a prohibitive nature were considered. The 
most prominent ones were as follows; training, time scale, evaluation, high cost, 
complexities and security.  
Initially participants were introduced to the following three criteria: cost, training, and 
infrastructure. Cost was designed to be a comprehensive category that would be 
further studied at later stage. Infrastructure was addressed to discover its relative 
importance against cost and training. 
 
 122
 
Factors for Not Using Web
Cost
37%
Training
33%
Infrastructure
30%
Cost
Training
Infrastructure
 
 
Figure 23 Cost Criteria for Not Using ERP/Project Management Web Tools 
 
Results shown in Figure 23 indicate the agreement and confirmation that cost is one 
of the main prohibitive criteria. Strong response to training that encompasses time 
and complexity, suggests it to be a prohibitive factor. In contrast, only 30% of 
participants indicated that infrastructure could be a potential prohibitive factor. The 
findings that can be concluded as a result of answers obtained from this question 
further support findings of the literature review with regard to existence of cost, time, 
and functional complexities as a prohibitive factor.     
 
 123
 
Cost, being such an important prohibitive factor, was designated to be investigated 
further therefore the next question was designed to study the impact that respondents 
placed on different types of existing cost. Cost categories that were singled out were 
initial cost, maintenance cost, and training cost. 
 
Cost Factor Reduction for More Web Use
Initial Cost
31%
Maintenance 
Cost
24%
Cost Not a 
Factor
16%
Training Cost
29%
Initial Cost
Maintenance Cost
Training Cost
Cost Not a Factor
 
 
Figure 24 Relative Importance of Cost Categories as Prohibitive Factor 
 
As revealed by Figure 24, the majority of respondents indicated that in their opinion, 
initial cost was the most prominent obstacle to overcome. This was followed by 
training and maintenance costs. This result was anticipated since most of the time, 
members of SMSCO are working with very small margins on jobs that cannot carry 
large overhead items. The view of capital expenditure and accounting methodology 
they utilized, within which all costs are assigned to a particular project, makes it very 
difficult to justify the initial cost of implementation of ERP/web project management 
tools.       
 
 124
 
The literature review and initial interviews had identified legal liabilities, security, 
and level of complication of functionalities as potential prohibitive criteria therefore 
the next questions were design to clarify some of the related issues. 
As indicated by Figure 25, data reliability was identified to be a major factor. This 
was followed by level of complication, security, and legality as potential prohibitive 
criteria. 
 
Areas of Concern
Legal
18%
Security
20%
Reliability
30%
Too 
Complicated
32%
Legal
Security
Reliability
Too Complicated
 
 
Figure 25 Additional Prohibitive Criteria 
 
Once we isolated the contractors as a sub group in the respondents, it became evident 
that they were more concerned about the level of complication of functionalities 
followed closely by reliability of data. The level of concern shown by respondents 
reaffirmed the fact that these criteria all could be considered as prohibitive factors. 
The respondents were asked to indicate their level of concern for security of 
information when utilizing web tools as an issue, in order to get a better handle on its 
 
 125
 
depth and nature. When security was isolated, a significant majority expressed a high 
level of concern.  
 
Information Security
Very 
Concerned
62%
Some What
38%
Very Concerned
Some What
 
 
Figure 26 Security as a Prohibitive Factor 
 
 
As indicated by Figure 26, 62% of participants indicated that they were very 
concerned about security. Physical ownership and the location of a company?s 
sensitive data, has always been a major concern of the construction industry, and the 
results obtained by the answers given to this question confirms this fact.  
The construction industry, as indicated before, is very conservative in nature. 
Changes occur very slowly. Knowing what events would motivate participants to 
accept changes and comparing that to the existing procedures for actual happenings of 
the same events is critical in identifying potential prohibitive criteria. To this end, the 
next question was designed to investigate three issues in further detail. Owner?s 
 
 126
 
requirements, market competition, and level of complication of available tools were 
chosen. As indicated by Figure 27, the majority of respondents indicated that if the 
available tools were made less complicated or more user-friendly, they would become 
more desirable to use. 
 
Critical Factors for Web Use
Owner's Req.
24%
Market
24%
Tech Support
13%
User Friendly
39%
Owner's Req.
Market
User Friendly
Tech Support
 
 
Figure 27 Additional Critical Prohibitive Criteria 
 
This further enhances the role of functionality as a prohibitive factor. Market trends 
and owner?s requirements were selected as other criteria. At the present time, the 
majority of owners for whom SMSCO perform various projects, do not see enough 
benefits for the project to require implementation of ERP/web project management 
tools. Their fear arises from the opinion that additional cost and time would be 
required to implement ERP/web project management tools. This fact affirms the role 
of cost and time as potential prohibitive criteria. Among the contractors subgroup, the 
 
 127
 
role of owner?s requirements and market competition/trend were identified as more 
significant factors than level of complication of functionalities.  
Overall, it can be concluded that the significant majority of participants confirmed 
cost as a primary prohibitive factor. This was followed by training and infrastructures. 
Within cost, the subcategory of initial cost was selected as a primary concern among 
all cost sub groups. Respondents also expressed their significant concern about 
security reliability and level of complications associated with different functionalities. 
Finally, it can be concluded that since the common denominator among most criteria 
is time, it becomes another significant prohibitive factor.   
Section 4.5 Critical Determinants Identification   
Results of the field questionnaire confirmed the existence of prohibitive criteria that 
were identified by a literature review. This same fact verified the true nature of 
Hypothesis #1 of this research.  
Hypothesis #2 had been summarized as the attempts that must be made to evaluate 
the levels of contribution of these criteria in order to obtain a hierarchy of importance. 
Completing this task required a selection of certain critical determinants that could be 
utilized to measure a hierarchy of importance. Based on the following criteria, 
findings of questionnaire, initial interviews, literature review, and practical 
applicability, the following prohibitive criteria were selected and set as critical 
determinants: 
? Cost 
? Time 
? Functionalities 
? Security     
 
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In order to satisfy the second objective of this research each of these critical 
determinants needed to be analyzed further to discover their subcategories and their 
role in various ERP system performance measures. 
Section 4.5.1 Cost 
A review of answers given to the field questionnaire dealing with identifying and 
confirming prohibitive criteria clearly delineated cost as a major factor that needs to 
be addressed. Respondents singled out the initial cost, maintenance cost and training 
cost as other sub categories that needed to be considered. 
The literature review indicated that the actual cost of ERP implementation, consisting 
of its various sub categories, is very high considering the economic realities of an 
SMSCO. Chen (2001), reports that the cost of implementing an ERP system could be 
as high as 2% to 3% of total organization?s revenue. A new ERP implementation can 
range anywhere from $2 to $4 million for small firm to over $1 billion for a large 
company (Chen, 2001). ERP systems in general, are expensive and very complicated 
to implement. According to a survey of 15 implementations, the ERP implementation 
costs ranged from $2 million to $130 million, (Ross, 1999). Assuming that 
implementing an ERP system for an SMSCO member will have a cost closer to the 
lower range of this survey, it still would represent a significant financial burden. In 
order to overcome this obstacle members of SMSCO need to view the expenditure 
required by implementation of ERP more as a long term capital investment rather 
than direct job cost. Parker (1982) indicates that as database-oriented systems grow 
they provide increasing intangible benefits and perhaps the system should be treated 
as a long term capital investment, since it can no longer be readily expensed to 
 
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products or product lines because of its sphere of influence over the total management 
structure of the enterprise.  
The complicated nature of intangible cost items also create a problem for SMSCO 
members, since they do can not readily identify and deal with all of them. This lack of 
identification becomes a problem when, as part of evaluation of ERP implementation, 
SMSCO members attempt to get a full picture of the financial impact on their 
organization. Knowing that potential cost items that cannot be identified exist, senior 
managers are reluctant to commit the organization. 
As previously mentioned respondents to the field questionnaire identified the 
following cost categories as important; initial cost, maintenance cost, and training 
cost. This finding was supported by the literature review that was conducted. In order 
to further isolate the relationship and the impact that the initial cost item might have, 
it was decided to divide cost in two separate groupings - implementation cost and 
initial cost. Each was respectively defined to be as follows: 
? Implementation cost ? Cost to implement the program and to include items 
such as software & licenses, procedural changes, consulting, new hires, data 
digitization, and related overhead costs.  
? Initial Cost ? cost to evaluate systems, complete planning, buy and install all 
hardware and other accessories necessary to activate the program.  
Section 4.5.2 Time   
Literature review identified the time scale as a major prohibitive factor. A study of 14 
organizations conducted by Adam and O?Doherty (2000), indicated 8.5 months as the 
average duration for implementation of ERP project. A case study of an organization 
conducted by Ding (2001) indicated that total time for integrating the whole ERP 
 
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system was 10 to 15 months. Web (1998), believes that organizations cannot afford to 
spend years implementing technology solutions. Tsung (2004), indicates that in some 
industries, lengthy implementation can provide competitors with enough time to 
either threaten or overtake the market position of the implementing organization. This 
phenomenon presents itself for members of SMSCO as limited project duration, 
which does not allow enough time to implement complete ERP package. Once 
implemented, to realize the full benefits of these systems takes far too long for the 
relatively short time frame allowed SMSCO to complete projects. Tsung (2004), 
indicates that it takes an average of 12 months, after implementation is initiated, to 
realize tangible and intangible benefits. The benefits of ERP still may not be shown 
until after companies have had it running for some time (Calogero, 2000). Ahmed, et 
al., (2003), identify the delayed return on investment as a major disadvantage of 
implementing the ERP systems. Most SMSCO are not in financial position to make 
an investment that would take a year to bear fruit. Literature reviewed also indicated 
that since quantification of benefits to be gained from ERP implementation is rather 
complex, it creates another problem for SMSCO to establish a complete picture of 
them, thus reducing their applicability.  
A number of concerns that were identified by the field questionnaire also had time as 
a common thread running through them. Cost, security, and complication of 
functionalities all are impacted by time, which is the most common shared 
denominator.  
Having confirmed and selected time as another prohibitive criterion, it was decided 
that time needed to be subdivided into the following subcategories: production time, 
implementation time, training time, and technical durability time. These subcategories 
 
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were identified and thus they could be scrutinized in more detail so that their impact 
on the ultimate framework solution can be measured. 
Section 4.5.3 Functionalities 
Since one of the objectives of this study was to generate a practical framework to be 
utilized by SMSCO to implement ERP systems, it was decided to analyze the impact 
of various functionalities that are offered by these systems. Complexities of various 
functionalities offered by major ERP systems were identified by literature reviewed 
to be another one of prohibitive criteria (Ahmad, et al., 2003). Shi and Halpin (2003), 
state that it will be hard to sell the current ERP systems to the construction industry 
for two major reasons: high cost and suitability. They indicate that existing ERP 
systems emphasize standardization and automation that are well suited for large scale 
and repetitive operations and management process. Project management functions 
have been widely researched on projects, processes, and activity levels covering 
many areas such as project controls and administration however research is still 
incomplete with integrating these findings into an ERP environment that could be 
utilized by SMSCO. The ranking or level of importance assigned to each 
functionality was not clearly identified by literature reviewed however a number of 
authors dealt with their taxonomy (Ahmed, et al., 2003), and role as a prohibitive 
factor (Skibniewski, et al., 2004).  
The field questionnaire also verified the level of concern that SMSCO have for 
various functionalities such as project administration, project controls, project 
collaboration, and project contract management. Respondents expressed their concern 
about standardization, complications and communication issues. Based on the 
literature reviewed and results obtained from the questionnaire, it was decided to 
 
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identify the following as subcategories of functionality; project collaboration, 
modularity/flexibility, project controls, project administration, project contract 
management.  
Section 4.5.4 Security 
Literature reviewed identified system security, data reliability, and legal issues as 
major prohibitive criteria. Skibniewski, et al., (2004) and Shear and Everdingen, et 
al., (2000; 2004), identified system security as the most important issue considered by 
A/E/C firms when implementing PM-ASPs and participating in e-commerce. They 
declare that the current security scheme provided by PM-ASPs, an alternate ERP 
system, to protect unauthorized access to their site is too simple and inadequate. 
The construction industry relies heavily upon data generated as a result of project 
completion, therefore data reliability and accessibility is of utmost importance to 
them. A case study completed by Irani and Love (2001), identified poor data 
reliability as one of the major failure criteria in implementation of ERP system. In the 
case of PM-ASP, Skibniewski, et al., (2004), indicate that data reliability is a 
prohibitive factor since, when servers are down, users become disconnected and 
unable to work online.  
At the present time almost all SMSCO members manage their work in an 
environment that is paper-based. All binding issues dealing with legality of contracts 
are dealt with in a paper format. Responsibilities are not accounted for unless a paper 
trail is generated therefore the potential confusion that would be created as a result of 
implementation of ERP systems creating electronic accountability is a major 
prohibitive factor. This finding was verified by declarations such as the one provided 
by Skibniewski et al., (2004) which state that, ?...new collaborative tools such as PM-
 
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ASPs change the work method, making legal responsibilities in this new environment 
unclear?.    
Respondents to the field questionnaire also confirmed the existence of security and 
legal issues as major prohibitive criteria. In two different occasions they expressed 
significant concern for these issues. Based on the literature review and answers 
obtained from the field questionnaire, it was decided to select the following 
subcategories for further analysis; data access, data control, data reliability, and legal 
issues.  
Section 4.6 Chapter Summary  
This chapter presented the research approach and processes that were followed to 
design, collect, and analyze data, and validate/confirm the existence of prohibitive 
criteria. The idea behind the design of each section of the field questionnaire was 
discussed. Both quantitative and qualitative data were utilized to answer research 
questions. The field questionnaire was presented to a select group of industry 
executives and experts, and 29 responses were received. Lack of familiarity of the 
SMSCO member with the concept of ERP was the most significant problem that was 
encountered in the process of obtaining answers from participants. The validity 
assessment for the questionnaire was performed using the content validity method. 
The findings affirmed the validity of the questionnaire. For the purpose of this 
analysis the content of the questionnaire was divided into the following four 
categories; profile, applicability, perceived benefits, and prohibitive criteria. 
Responses obtained for each question were individually discussed and analyzed. 
Prohibitive criteria were identified to be cost, time, functionalities, and security.  
 
 
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CHAPTER 5 PROHIBITIVE/SELF-REGULATION CRITERIA 
ANALYSIS QUESTIONNAIRE 
 
This chapter discusses the development and data collection processes of the field 
questionnaire utilized to gather the necessary data to establish a hierarchical ranking 
of previously identified prohibitive/self-regulation criteria and the relationships of 
forces at work between them. The architecture of the questionnaire, targeted 
respondents, questionnaire distribution, responses received, and the problems 
encountered during the data collection process are discussed, as well as the validity 
and reliability of the questionnaire.  
Section 5.1 Design of Questionnaire   
This research called for application of the prohibitive/self-regulation criteria in self-
regulating process of EAM.  The proposed research model recommended that 
SMSCO utilize these criteria in order to self regulate their requirements and 
perspective for a potential new ERP system. Therefore, following the confirmation of 
prohibitive criteria, a more in-depth investigation of each of these criteria was 
warranted. This investigation was necessary to measure the relative strength, 
hierarchical ranking, and impact of the criteria.   
In order to examine the impact of these criteria on the level of acceptance and 
adoptability of existing ERP systems for an SMSCO environment, it was decided to 
design a questionnaire that would be distributed among select group of construction 
industry professionals who are familiar with ERP systems and their applications. A 
self-administrated web-based field questionnaire (Appendix B: Prohibitive Criteria 
 
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Analysis Questionnaire) was selected because it offered the most cost effective, yet 
efficient, method to reach the respondents that were located all across the world.   
Section 5.1.1 Structure of the Field Questionnaire 
The field questionnaire began with an introduction page explaining its objectives, and 
completion instructions. Following the introduction page, the questionnaire was then 
separated into ten sections. Section 1 consisted of four questions to collect general 
information about the respondents, including, industry type, years of experience, and 
familiarity with ERP and its implementation. Questions were selected so that the 
validity of the questionnaire could be verified. In section 2, separate alternatives for 
ERP systems were identified, and defined to be as follows: 
? ERP ? existing software packages that aim to integrate the main 
business functions across all departments within an organization, such 
as SAP3, Oracle, and IFS program. 
? Web-based Project Management Systems (WPMS) ? any electronic 
project management system that is conducted through a private 
network that uses internet protocols to transmit information. 
These two systems were utilized as a measuring vehicle for determining the impact of 
various criteria on the operation of organization. In the following sections each 
critical criteria, the prohibitive criteria, were measured across the platform of two 
alternative systems.  
Section 3 consisted of four questions that dealt with cost criteria. Cost as prohibitive 
criteria was broken down to the following sub-components which were defined to be 
as follows: 
 
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? Initial Cost ? the cost to evaluate systems, complete planning, and buy 
and install all hardware and other accessories necessary to activate the 
program. 
? Implementation Cost ? the cost to implement the program and to 
include items such as software & licenses, procedural changes, 
evaluation, consulting, new hires, and related overhead costs. 
? Maintenance Cost ? the cost to update and maintain the system once 
implemented, and to include cost of upgrade purchases, staff time, and 
associated administrative overheads. 
? Training Cost ? the cost to setup and train necessary staff to utilize the 
system project wide. 
Section 4 consisted of questions dealing with time-sensitive criteria. Time as a 
prohibitive criterion was broken down into the following sub-components which were 
defined to be as follows: 
? Production Time ? the time savings that result from higher operating 
efficiency. 
? Implementation Time ? the time that it will take to evaluate, purchase, install, 
and go live with the system company wide. 
? Training Time ? the time required for training the project staff to learn how to 
utilize the system for the day to day operations of the project.  
? Technical Durability Time ? the length of time for which the current software 
will be useful before requiring a major upgrade. 
 
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Section 5 contained five questions that dealt with functionality criteria. Functionality 
as a prohibitive criterion was broken down into the following sub-components which 
were defined to be as follows; 
? Project Collaboration ? the capabilities that enable team members to 
work jointly in reviewing and completing project tasks, both internally 
and externally. 
? Modularity/Flexibility ? the availability and the ease with which one 
uses the options to purchase and implement independent modules to 
complete different tasks. 
? Project Controls ? the tasks associated with items such as schedule, 
budget, change orders, RFI, shop drawings, and the document 
management process. 
? Project Administration ?all tasks that were directly or indirectly 
required for proper administration of the project such as payroll, 
human resources, and associated main office operations. 
? Contract Management ?all tasks necessary to manage contractual 
obligations such as subcontract agreement, purchase orders, insurance 
requirements, and safety compliance. 
Section 6 dealt with the security criteria and was composed of four questions. 
Security as a prohibitive criterion was broken to the following subcomponents which 
were defined to be: 
? Access ? the means and methods provided for protection of data from 
internal and external threats. 
 
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? Control ? the accessibility and dependability of existing and historical 
project data. 
? Reliability ? the degree of accuracy and availability of data in a timely 
manner. 
? Legality ? the issues dealing with accountability and responsibility of 
various personnel?s interface with the system. 
Section 7 initiated the pair-wise comparison analysis of the criteria. A brief 
description of the correct way to answer the questions was given. Sections 8 through 
11 were designed so that a pair-wise data comparison for each of criteria could be 
obtained.  
Section 5.1.2 Initial Review of the Field Questionnaire 
The field questionnaire was initially shared with a number of construction industry 
experts, academicians, and SMSCO executives. Detailed discussions about the 
questionnaire were held utilizing web, e-mail, and face to face meetings. This 
preliminary review confirmed the structure, wording, format, and the concept of 
measuring the criteria across the two separate alternative systems. It also ensured that 
the questions were understandable, comprehensive, and clear. The comments received 
from the initial reviewing group resulted in some modifications that ultimately 
confirmed that all data required for the research could be obtained.    
Section 5.2 Web Based Field Questionnaire 
After reviewing the comments provided by the initial review group it was decided to 
administer the field questionnaire through the internet via the services provided by 
SurveyMonkey.  The advantages of using this service to make the questionnaire 
 
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available to all respondents included cost reduction, quick turnaround time, ease of 
access, global availability, and respondent?s convenience. SurveyMonkey provided a 
platform via the web that could easily be accessed. This service allowed for flexibility 
of design for the questions from multiple choices, to rating scale, to open-ended text. 
It also provided a simple yet very effective collection. A simple link was sent to 
participants via e-mail that gave them access to the questionnaire.  
Section 5.3 Data Collection  
The field questionnaire was designed and distributed to participants starting from 
December 1, 2006 thru April 20, 2007. SurveyMonkey?s platform was utilized to 
collect data. In addition to its previously-mentioned benefits, use of this system also 
provided for the possibility of simultaneous response collection.  
Section 5.3.1 Targeted Respondents 
The target respondents of the questionnaire were construction industry personnel and 
executives of SMSCO who had experience with various ERP systems. To gain access 
to all of the targeted respondents, organizations, industry advisory councils, and 
companies whom have either utilized ERP systems or are familiar with its application 
were contacted. Within each organization an expert was identified, who was then 
contacted to participate in the questionnaire. Respondents were asked to answer all of 
the questions. The common thread among all participants was their familiarity with 
ERP. Since the opinions provided by these experts were so heavily relied upon, their 
extensive familiarity with ERP represented a key prequalification that had to be met 
by each participant. 
 
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Section 5.3.2 Questionnaire Distribution & Responses 
The field questionnaire was made available to thirty participants. Of the total number 
of potential participants invited, 24 responded (80%). The questionnaire, distributed 
via the SurveyMonkey platform, was completed by representatives of the following 
organizations: SAP AG, Oracle, Laing O?Rourke, BAM Groep nv, High Concrete 
Structures, Inc., Bechtel Corporation, Flatiron Construction Corp, Dassian, Beutler 
Corp., and PGCSite. The majority of respondents, 87.5%, indicated that they were 
affiliated with the following industries; IT, consulting, construction. 
79.2% of respondents indicated that they had more than 10 years of experience 
working in the construction industry. 50% of the respondents were currently working 
in construction industry. A significant part of the group, 83.3%, indicated that their 
company currently utilizes ERP systems as previously defined. 92% of respondents 
indicated that they have been involved in ERP implementation projects.  
Section 5.3.3 Problems Encountered 
Problems were encountered during the data collection process that led to some 
discussion back and forth with the respondents. Most problems were detected via e-
mails that were received from respondents while completing the questionnaire online.  
Most problems reported by respondents were related to internet congestions and the 
unavailability of the link. It was found that internet congestion was the most common 
problem encountered by the respondents at peak hours. The time selected to complete 
the questionnaire was the main factor. 
Another problem faced by some respondents was the interpretation of the definitions 
provided for ERP system alternatives. Two respondents indicated some confusion 
 
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with the definition of WPMS. These problems were solved by providing additional e-
mail information.  
Section 5.4 Validity of Questionnaire 
Validity is concerned with how well a questionnaire measures what it intends to 
measure. The method of content validity was utilized to verify the validity of the 
questionnaire. Since content validity, as indicated in Chapter 3, consists of face 
validity and sampling validity tests, both were applied to this questionnaire as 
follows: 
? Face Validity: to establish the Face Validity for this questionnaire, results 
obtained from the previous questionnaire and unstructured interviews with 
industry experts were utilized.   
? Sampling Validity: the targeted respondents of the questionnaire were, by 
large percentage, members of construction industry that were very familiar 
with ERP utilization and implementation. A number of questions in the 
questionnaire were dedicated to this issue, since extensive knowledge of ERP 
by participants was deemed so important.  
Section 5.5 Chapter Summary 
This chapter presented the process that was followed to design, distribute, and collect 
the field questionnaire. The findings of this questionnaire were to be utilized in the 
creation of a decision framework to be used by SMSCO. The structure of the field 
questionnaire was discussed and each of its 10 separate sections reviewed. The initial 
review conducted prior to distributing the questionnaire was discussed. It was decided 
that the survey services available via web such as SurveyMonkey, provided the best 
 
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platform to conduct this questionnaire. Data was collected between December of 
2006 and April of 2007. Construction industry personnel and executives of SMSCO 
who had experience with various ERP system application and implementation were 
chosen to participate. The field questionnaire was made available to thirty 
participants, of which 24 responded. The organizations that were represented were 
among industry leaders. Internet congestion represented the most significant problem 
encountered while collecting data. The validity of the questionnaire was confirmed 
using method of content validity.
 
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CHAPTER 6 PROHIBITIVE CRITERIA DATA ANALYSIS 
 
This chapter reviews the analysis that was performed for each of prohibitive criteria 
and their relationships. Comparative analysis for each alternative system was also 
performed.  
Section 6.1 Cost Criteria  
Four cost criteria were considered for this analysis. The types of costs were initial 
cost, implementation cost, maintenance cost and training cost. These four criteria 
were ranked in a 9-point Likert scale, with a 1 implying that the item had a ?Very 
Low? value as a criterion for the choice of ERP, and 9 implying that the item had a 
?Very High? value as a criterion for the choice of ERP. The following table shows 
descriptive statistics for the responses to these items: 
 
                                                        Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
CostInitialERP 21 5.00 9.00 6.4762 1.40068 
CostImplemERP 21 5.00 9.00 7.0476 1.39557 
CostMaintERP 21 3.00 9.00 5.8095 1.50396 
CostTrainERP 21 3.00 9.00 5.8571 1.45896 
Valid N (listwise) 21         
 
Table 1 Descriptive Statistics for Cost Criteria ERP 
 
As can be seen in Table 1, the item that had the highest average value as a criterion 
for the choice of ERP was implementation cost, for which the average response was 
 
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7.04. Following this item was initial cost (M = 6.47), training cost (M = 5.85) and 
maintenance cost (M = 5.80). 
Although the means provide a hierarchy for the value of this items (in this case, 
implementation cost had the highest value, while maintenance cost had the lowest 
one), it is possible that the difference in the average scores were due to normal 
sampling variability.  In order to assess whether either of the items had a significantly 
higher or lower value than the other items, multiple paired t tests were carried out. 
The objective of these tests was to assess whether the observed differences among the 
average scores were significantly different from zero. This test is useful for 
comparing two responses that were given by the same subject or rater. One 
assumption for this test is that the variables are normally distributed. A Kolomogorov-
Smirnov test was used in order to assess whether the variables were normally 
distributed. For all variables, the null hypothesis that the data followed a normal 
distribution was not rejected at the 0.05 level, the minimum p value was 0.08, and 
therefore there is evidence to support of the idea that the assumptions for the paired t 
tests were satisfied. 
A 0.05 significance level was used for this analysis. Table 2 shows the p values 
associated to each pair of variables that was compared. A p value lower than 0.05 
would imply that the difference between the two average scores was significantly 
different; while a p value higher than 0.05 would imply that the difference was not 
significant. 
 
 
 
 
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  Initial Implementation Maintenance 
Implementation 0.062   
Maintenance 0.059 <.001  
Training 0.05 0.001 0.867 
 
Table 2 P Values for Cost Criteria ERP 
 
As can be gleaned from this table, the difference between maintenance and training 
was not significant (p = 0.867) so there is no evidence to conclude that maintenance 
would rank higher than training in terms of its value as a criterion for the choice of 
ERP. For all other comparisons, the p value was either lower than 0.05 or very close 
to it. This would suggest that all other differences were significant. With no 
significant differences in the average values of these items it appears that 
maintenance and training costs were considered the lowest valued criteria. Both of 
these items had a significant higher value than initial cost, which, in turn, had a 
significantly higher value than implementation cost. The hierarchy among these items 
could thus be defined as: 
1. Implementation 
2. Initial 
3. Maintenance and Training (at the same level) 
This ranking matches well with the previous understandings established in the 
literature reviewed. Since the magnitude of the implementation cost could be so much 
greater than the other cost criteria, it seems that its financial impact on the 
organization is most significant. The ranking presented here is strongly affected by 
 
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the associated and actual monetary amounts, from the most expensive to the least 
expensive. This fact makes perfect sense for any construction company. Construction, 
being bottom line oriented industry, has always paid particular attention to costs at all 
levels.  
This same analysis was also conducted for the choice of WPMS. The methodology 
that was followed was identical to the one for ERP. Table 3 shows descriptive 
statistics for cost criteria related to the choice of WPMS: 
 
 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
CostInitialWPMS 21 3.00 8.00 5.0000 1.44914 
CostImplemWPMS 21 1.00 9.00 5.4286 1.71963 
COstMaintWPMS 21 2.00 8.00 4.9524 1.39557 
CostTrainWPMS 21 1.00 7.00 4.8571 1.71131 
Valid N (listwise) 21         
 
Table 3 Descriptive Statistics for Cost Criteria WPMS 
 
 
As outlined in this table, the highest average score was associated with 
implementation costs (M = 5.42), followed by initial costs (M = 5), maintenance costs 
(M = 4.95) and training costs (M = 4.85).  
Again, paired t tests were carried out in order to assess significant differences among 
these items. The results are presented in Table 4: 
 
 
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  Initial Implementation Maintenance 
Implementation 0.196   
Maintenance 0.871 0.066  
Training 0.642 0.069 0.748 
 
Table 4 P-Value for Cost Criteria WPMS 
 
According to the results in this table, there were no significant differences between 
any pair of items at the 0.05 level. This would suggest that all items were at the same 
level in terms of value for the choice of WPMS.  
Results indicate that cost as criteria is not as significant as other prohibitive criteria 
while utilizing WPMS. This could be the result of lower monetary values associated 
with tangible cost items, and not having a clear value for intangible cost items.  
Section 6.2 Time Criteria 
Four time criteria were considered for this analysis. The types of time criteria were 
production time, implementation time, training time, and technical durability time. 
These four criteria were ranked in a 9-point Likert scale, with a 1 implying more 
?negative? levels of the attribute (i.e. longer implementation time, or shorter 
durability time) for the choice of ERP, and 9 implying more ?positive? levels (i.e. 
shorter implementation time, or longer durability time). Table 5 shows descriptive 
statistics for the responses to these items: 
 
 
 
 
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Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
TimeProdERP 18 3.00 9.00 5.1111 1.64098 
TimeImpERP 18 1.00 9.00 3.5000 2.28164 
TimeTrainERP 18 1.00 9.00 4.6111 2.09028 
TimeDurabERP 18 4.00 9.00 6.7778 1.62899 
Valid N (listwise) 18         
 
Table 5 Descriptive Statistics for Time Criteria ERP 
 
 
As evidenced by the data in this table, technical durability time had the highest 
average value (M = 6.77), production time had the second highest (M = 5.11), 
followed by Training Time (M = 4.61) and Implementation Time (M = 3.5). 
Again, paired t tests were carried out in order to assess significant differences among 
these items. Results are presented in Table 6: 
 
        
  Production Implementation Training 
Implementation 0.005   
Training 0.421 0.004  
Durability 0.007 <0.001 0.002 
 
Table 6 P-Value for Time Criteria ERP 
 
 
 
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As stated by the data in Table 6, all average scores, except for the pair production-
training (p = 0.421) were significantly different at the 0.05 level. These results 
suggest that technical durability had a significantly higher average score than all other 
variables. The next highest score would correspond to both production and training 
times. Both of these scores were significantly higher than implementation time. The 
hierarchy among these items could thusly: 
1. Technical Durability 
2. Production and Training (at the same level) 
3. Implementation 
The pace of advances made in the applicable IT science in ERP is the main reason for 
technical durability having such a significant impact. The major concern highlighted 
here deals with the fact that the industry is very concerned with making a major 
investment in a system that will be outdated in short order. As indicated by the above 
ranking for ERP, technical durability is followed by production and training as other 
prohibitive criteria. Same concern that is reflected in technical durability can be 
observed in these criteria. Organizations are not willing to commit to the program if 
they fear that time required to train staff and produced a product will be wasted since 
the whole system will have to be updated in short period of time. The reason 
implementation as prohibitive time criterion is last among the other criteria could 
stem from the fact that this time is seen by the management as ?part of the job? and 
therefore not as significant as others.  
This same analysis was conducted for the choice of WPMS. The methodology that 
was followed was identical to the one for ERP. The following table shows descriptive 
statistics for time criteria related to the choice of WPMS: 
 
 150
 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
TimeProdWPMS 18 1.00 7.00 4.3333 1.49509 
TimeImpWPMS 18 1.00 7.00 5.0000 1.78227 
TimeTrainWPMS 18 1.00 7.00 5.2778 1.60167 
TimeDurabWPMS 18 2.00 8.00 5.7778 1.59247 
Valid N (listwise) 18         
 
Table 7 Descriptive Statistics for Time Criteria 
 
 
As seen in Table 7, the highest average score was associated with technical durability 
(M = 5.77), followed by training time (M = 5.27), implementation time (M = 5) and 
implementation production time (M = 4.33). Again, paired t tests were carried out in 
order to assess significant differences among these items. Results are presented in 
Table 8: 
 
        
  Production Implementation Training 
Implementation 0.175   
Training 0.063 0.311  
Durability 0.006 0.172 0.337 
 
Table 8 P-Value for Time Criteria 
 
 
 
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While production-training was close to significance, the results show that the only 
pair that was significantly different at the 0.05 level was production-durability. The 
hierarchy for these items could thus be defined as: 
1. Technical Durability 
2. Training 
3. Implementation and Production (at the same level) 
In the case of WPMS, technical durability remains the most significant prohibitive 
criterion; however, training moves up into second position alone. This could be a 
result of the fear that organizations have about required staff training in order to 
become familiar with the particulars of any new provider, and its cascading effect on 
their subcontractor and back office communities.  
Overall it is very clear that in both alternative systems technical durability is the main 
prohibitive criterion. Since the pace of advances in IT science will not be slowed 
down, SMSCO organizations need to approach this not as prohibitive criterion but as 
a ?reality check?. The objective should be systems that can perform and produce 
meaningful results; these systems need not be updated for every new gadget.   
Section 6.3 Functionality Criteria 
Five functionality criteria were considered for this analysis. The types of functionality 
criteria were collaboration, modularity, project controls, administration and contract 
management. These five criteria were ranked in a 9-point Likert scale, with a 1 
implying that the item had a ?negligible? importance as a criterion for the choice of 
ERP, and 9 implying that the item had an ?imperative? importance as a criterion for 
the choice of ERP. Table 9 shows descriptive statistics for the responses to these 
items: 
 
 152
 
 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
FunCollabERP 18 3.00 9.00 6.2778 1.48742 
FunModulERP 18 3.00 9.00 6.3889 1.78684 
FunControlERP 18 5.00 9.00 7.7222 1.52646 
FunAdminERP 18 5.00 9.00 7.4444 1.58011 
FunContractERP 18 4.00 9.00 7.1667 1.68907 
Valid N (listwise) 18         
 
Table 9 Descriptive Statistics for Functionality Criteria ERP 
 
 
The highest score in this table corresponded to project controls (M = 7.72), followed 
by administration (M = 7.44), contract management (M = 7.16), modularity (M = 
6.38) and collaboration (M = 6.27).  
Again, paired t tests were carried out in order to assess significant differences among 
these items. Results are presented in Table 10: 
 
          
  Collaboration Modularity Controls Administration 
Modularity 0.777    
Controls 0.005 0.017   
Administration 0.013 0.006 0.368  
Contract Mgmt. 0.053 0.059 0.066 0.056 
 
Table 10 P-Values for Functionality Criteria ERP 
 
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In all cases (except for the pairs Collaboration-Modularity, with p = 0.777 and 
Administration-Controls, with p = 0.368), Table 10 shows all the p values were either 
lower than 0.05 or very close to that level. This would suggest that the hierarchy of 
importance of these functionalities would be: 
1. Project Controls and Administration (at the same level) 
2. Contract Management 
3. Collaboration and Modularity (at the same level) 
Project controls & administration present themselves as most significant of 
prohibitive criteria for ERP in this category. The reason behind this stems from the 
fact that organizations are very concerned with relying on a particular system for their 
controls and administrative functions. These functions require a high degree of 
familiarity among team members thus increasing the size of the circle of people that 
need to be trained and be able to operate the system.  
Contract management is the next prohibitive criterion presented in the ranking 
produced for ERP alternate. Since most of the tasks associated with this criterion also 
involve members from different part of the team, getting them familiar with and 
efficient in operating within the systems could be the cause for its ranking.  
Results indicate that for ERP systems collaboration & modularity are very close when 
it comes to ranking as a prohibitive criterion and in fact, they rank on the bottom. In 
comparison to other three criteria in the case of ERP alternate, these two are not as 
significant as others because they spread the management responsibilities and risks.  
This same analysis was also conducted for the choice of WPMS. The methodology 
that was followed was identical to the one for ERP. Table 11 shows descriptive 
statistics for functionality criteria related to the choice of WPMS: 
 
 
 154
 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
FunCollabWPMS 18 3.00 9.00 6.7222 1.70830 
FunModulWPMS 18 3.00 8.00 5.5000 1.72354 
FunControlWPMS 18 3.00 9.00 6.7778 2.28950 
FunAdminWPMS 18 2.00 9.00 5.5556 2.38185 
FunContractWPMS 18 3.00 9.00 6.1667 2.17607 
Valid N (listwise) 18         
 
Table 11 Descriptive Statistics for Functionality Criteria WPMS 
 
The highest average score in Table 11 was assigned to project controls (M = 6.77), 
followed by collaboration (M = 6.72), contract management (M = 6.16), project 
administration (M = 5.55) and modularity (M = 5.5).  
Again, paired t tests were carried out in order to assess significant differences among 
these items. Results are presented in Table 12: 
 
          
  Collaboration Modularity Controls Administration 
Modularity 0.018    
Controls 0.918 0.01   
Administration 0.069 0.908 0.05  
Contract Mgmt. 0.263 0.062 0.119 0.179 
 
Table 12 P-Values for Functionality Criteria WPMS 
 
 
 
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Given these results, the hierarchy for these items could be defined as: 
1. Controls, Collaboration, and Contract Management 
2. Administration and Modularity 
In the case of WPMS, controls still remains as one of the main prohibitive criteria ; 
however, the difference between it and collaboration & contract management is 
reduced. The reason behind controls being a prohibitive criterion remains the same, as 
in the case of ERP. Collaboration and contract management became critical because 
the issues of access to WPMS and efficient operation of by all team members became 
critical. Since the administration function required for this alternate is provided by 
outside sources, it does not have the same individual impact on the ranking. Finally, 
modularity was ranked as the lowest criteria because, in the case of WPMS, 
modularity is provided by the providers and is not so essential to the organization that 
it would be considered an option.   
Overall, project controls ranked the highest for both alternates. Project controls, 
which consist of items such as project budget, project schedule, change orders, RFI 
processing, and shop drawing management, are very important to proper management 
and successful completion of all projects therefore any issue related to this topic is 
very sensitive to the organization. The possibility of any impact on controls by any 
outside source would alter the results of the operation so significantly that its risk can 
not be tolerated.   
Section 6.4 Security Criteria 
Four security criteria were considered for this analysis. The types of security criteria 
were access, control, reliability and legality. These four criteria were ranked in a 9-
point Likert scale, with a 1 implying the lowest degree of concern about those 
 
 156
 
security criteria, and a 9 representing the highest degree of concern for the choice of 
ERP. Table 13 shows descriptive statistics for the responses to these items: 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
SecAccessERP 18 1.00 9.00 6.5000 2.33263 
SecControlERP 18 1.00 9.00 6.2222 2.34033 
SecReliabERP 18 1.00 9.00 6.9444 2.31294 
SecLegalERP 18 1.00 9.00 6.1667 2.64019 
Valid N (listwise) 18         
 
Table 13 Descriptive Statistics for Security Criteria ERP 
 
As can be gleaned from Table 13, reliability had the highest average score (M = 
6.94), followed by access (M = 6.50), control (M = 6.22) and legality (M = 6.16).  
Again, paired t tests were carried out in order to assess significant differences among 
these items. Results are presented in the following table: 
 
        
  Access Control Reliability 
Control 0.263   
Reliability 0.238 0.033  
Legality 0.513 0.902 0.039 
 
Table 14 P-Values for Security Criteria ERP 
 
 
 
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In Table 14, the only significant differences were observed for the pairs reliability-
control (p = .033) and reliability-legality (p = 0.039). All other pairs were not 
significantly different. This would suggest that the hierarchy of importance of these 
security criteria would be: 
1. Reliability 
2. Access, Control and Legality (at the same level) 
Reliability was defined to be the degree of availability of data in timely manner. The 
results indicated that not having confidence in this matter is a significant prohibitive 
factor for ERP users. Data availability is one of the most critical elements of any 
construction operation. These operations consist of various tasks such as, estimating, 
bidding, negotiating, material ordering and availability, resource allocation, and 
equipment availability. It can easily be understood how this would take precedent in 
the ranking of security criteria. As indicated by the results, other criteria were very 
close and could not be ranked individually.   
This same analysis was also conducted for the choice of WPMS. The methodology 
that was followed was identical to the one for ERP. Table 15 shows descriptive 
statistics for Security criteria related to the choice of WPMS: 
 
 
 
 
 
 
 
 
 158
 
 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
SecAccessWPMS 18 2.00 9.00 6.2778 2.08088 
SecControlWPMS 18 2.00 9.00 6.3333 1.78227 
SecReliabWPMS 18 3.00 9.00 6.7222 1.96456 
SecLegalWPMS 18 1.00 9.00 5.8889 2.54116 
Valid N (listwise) 18         
 
Table 15 Descriptive Statistics for Security Criteria WPMS 
As shown, the highest average score was associated to reliability (M = 6.72), 
followed by control (M = 6.33), access (M = 6.27) and legality (M = 5.88). Again, 
paired t tests were carried out in order to assess the significant differences among 
these items. Results are presented in the Table 16: 
 
        
  Access Control Reliability 
Control 0.842   
Reliability 0.354 0.274  
Legality 0.415 0.367 0.105 
 
Table 16 P-Values for Security Criteria WPMS 
 
As shown in Table 16, there were no significant differences between any pair of items 
at the 0.05 level. This would suggest that all items were at the same level in terms of 
value for the choice of WPMS. 
 
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Even though the results obtained in this research highlighted a significant level of 
concern for security criteria by WPMS, users it did not reveal a tangible difference 
among individual criterion.  
The most significant prohibitive criterion identified in this category was reliability. 
Lack of confidence in the availability of data is a detrimental factor for any 
construction organization.    
Section 6.5 Inter-criteria comparisons 
Similar analyses were conducted in which the relative importance of cost, time, 
functionality, and security criteria as a whole was compared. In order to do this we, 
computed overall cost, time, functionality, and security scores by averaging the 
responses to the items within each category. In this way, the overall importance of 
cost was computed as the average of the responses to initial cost, implementation 
cost, maintenance cost, and training cost. A similar procedure was carried out for 
each of the other criteria. In order to verify that the items within each criterion were 
actually measuring the same construct, we computed Cronbach?s alpha for each of 
them. Values close to 1 in this statistic suggest that there is a high correlation among 
the items that compose each construct, and thus it can be assumed that they are all 
measuring the same. Values of 0.7 or higher for Cronbach?s alpha are usually 
considered high enough to assume that the items measure the same construct. In all 
cases, we found that Cronbach?s alpha was relatively high (the minimum was 0.83), 
which implies that the items within each construct are measuring the same dimension. 
This implies that it would be conceptually correct to average all items in order to 
generate overall cost, time, functionality, and security scores.  
 
 160
 
The following table shows descriptive statistics for these overall scores (related to 
ERP): 
 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
CostScore 21 3.50 8.00 5.2976 1.17691 
TimeScore 18 3.25 9.00 5.0000 1.29479 
FunScore 18 5.00 9.00 7.0000 1.26305 
SecScore 18 1.00 8.75 6.4583 2.20169 
Valid N (listwise) 18         
 
Table 17 Overall Descriptive Statistics ERP 
 
In Table 17, the highest average score was assigned to functionality (M = 7), followed 
by security (M = 6.45), cost (M = 5.29) and time (M = 5). Again, paired t tests were 
carried out in order to assess significant differences among these items. Results are 
presented in Table 18: 
 
        
  Cost Time Functionality 
Time 0.338   
Functionality <0.001 <0.001  
Security 0.056 0.021 0.211 
 
Table 18 Overall P-Values for ERP 
 
 
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As shown, functionality-security (p = 0.211) and time-cost (p = 0.338) were not 
significantly different. All other pairs were significantly different. This would suggest 
that the hierarchy of importance of these criteria would be: 
1. Functionality and Security 
2. Cost and Time 
Correlation coefficients were computed among these overall variables in order to 
assess whether there were significant relationships between each of the pairs. Results 
are presented in Table 19: 
 
    CostScore TimeScore FunScore SecScore 
Pearson Correlation 1 -.021 .310 .313 
Sig. (2-tailed) .934 .210 .206 
CostScore 
  
  
N 
21 18 18 18 
Pearson Correlation -.021 1 .322 .111 
Sig. (2-tailed) .934 .193 .661 
TimeScore 
  
  
N 
18 18 18 18 
Pearson Correlation .310 .322 1 .597(**) 
Sig. (2-tailed) .210 .193 .009 
FunScore 
  
  
N 
18 18 18 18 
Pearson Correlation .313 .111 .597(**) 1 
Sig. (2-tailed) .206 .661 .009   
SecScore 
  
  
N 
18 18 18 18 
 
** Correlation is significant at the 0.01 level (2-tailed). 
 
Table 19 Correlation Coefficients ERP 
 
 
 
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The only correlation that was significantly different from zero was the correlation 
between functionality and security. The correlation coefficient was positive, at 0.597. 
This coefficient would imply that subjects that assigned higher scores to the 
functionality criteria also tended to assign higher scores to security criteria. For all 
other pairs, the correlations were not significantly different from zero, so it was not 
possible to conclude that there was a relationship among them. It is possible; 
however, that the non-significant result is due to the fact that the sample size was 
relatively low, which would cause the test for significance of the correlation to be low 
powered. 
This inter-criteria comparison was also carried out for the items related to WPMS. 
The methodology used was the same as for ERP.  Table 20 shows descriptive 
statistics for the four criteria, as related to WPMS: 
 
Descriptive Statistics 
 
  N Minimum Maximum Mean Std. Deviation 
CostScoreWPMS 21 1.75 7.25 5.0595 1.34607 
TimeScoreWPMS 18 1.75 6.50 5.0972 1.08851 
FunScoreWPMS 18 3.40 8.80 6.1444 1.63031 
SecScoreWPMS 18 2.75 8.75 6.3056 1.79574 
Valid N (listwise) 18         
 
Table 20 Overall Descriptive Statistics for WPMS 
 
 
 
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The highest average score was assigned to security (M = 6.30), followed by 
functionality (M = 6.14), time (M = 5.09) and cost (M = 5.05).  
Again, paired t tests were carried out in order to assess significant differences among 
these items. Results are presented in Table 21: 
 
   
 
    
  Cost Time Functionality 
Time 0.886   
Functionality 0.004 0.019  
Security 0.004 0.011 0.629 
 
Table 21 Overall P-Values for WPMS 
 
Except for functionality-security (p = 0.886) and cost-time (p = 0.629), all other pairs 
were significantly different. This would suggest that the hierarchy of importance of 
these criteria would be: 
1. Functionality and Security 
2. Cost and Time 
It is interesting to note that this hierarchy was the same as that for the choice of ERP 
alternate. 
Correlation coefficients were computed among these overall variables in order to 
assess whether there were significant relationships between each pair. Results are 
presented in Table 22: 
 
 
 164
 
     
CostScoreWPM
S 
TimeScoreWPM
S 
FunScoreWPM
S SecScoreWPMS 
Pearson Correlation 1 .185 .596(**) .506(*)
Sig. (2-tailed) .463 .009 .032
CostScoreWPMS 
  
  
N 
21 18 18 18 
Pearson Correlation .185 1 .249 .304
Sig. (2-tailed) .463 .320 .221
TimeScoreWPMS 
  
  
N 
18 18 18 18 
Pearson Correlation .596(**) .249 1 .674(**)
Sig. (2-tailed) .009 .320 .002
FunScoreWPMS 
  
  
N 
18 18 18 18 
Pearson Correlation .506(*) .304 .674(**) 1 
Sig. (2-tailed) .032 .221 .002   
SecScoreWPMS 
  
  
N 
18 18 18 18 
 
** Correlation is significant at the 0.01 level (2-tailed). 
* Correlation is significant at the 0.05 level (2-tailed). 
 
 
Table 22 Correlation Coefficient WPMS 
 
As can be seen in Table 22, three correlation coefficients were significantly different 
from zero: cost-functionality (r = 0.596, p = 0.009), cost-security (r = 0.506, p = 
0.032) and functionality-security (r = 0.674, p = 0.002). In all cases, the significant 
coefficients were positive, suggesting that high levels of one member of the pair were 
usually associated with high levels in the other members, for example, subjects that 
valued cost highly also tended to value functionality highly. For all other pairs, the 
correlations were not significantly different from zero, so it was not possible to 
conclude that there was a relationship among them. It is possible; however, that the 
 
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non-significant result is due to the fact that the sample size was relatively low, which 
would cause the test for significance of the correlation to be low powered. 
As indicated by the results the following overall ranking can be established for both 
alternates; 
1- Functionality & Security 
2- Cost & Time 
Among functionality criteria, as indicated previously, controls represented the most 
significant prohibitive criterion. Practitioners of both systems indicated that not 
having confidence in a system that would allow effective utilization of project 
controls would result in its ultimate failure. 
Reliability as a security criterion represented the most significant prohibitive criterion 
in this category, and once again this was the same for both alternative systems. 
Indicating that in this case, the platform for ERP application is not the critical factor, 
rather the availability of data, becomes a cause for acceptance or rejection of any 
system. 
Implementation cost was the most significant criterion in cost category. Based on 
literature reviewed and initial interviews conducted, it was anticipated that the cost 
criteria in general, and implementation cost in particular, would rank higher in the 
overall ranking of all prohibitive criteria.  This finding contradicted that thought by 
confirming cost as a secondary prohibitive criterion. 
Technical durability was confirmed as the most significant prohibitive criteria in time 
category. As indicated, it is evident that the fear of having to adjust or upgrade 
existing procedures to accommodate for new versions of ERP systems, regardless of 
 
 166
 
its platform, represent the main reason for technical durability being ranked the 
highest among other criteria in this segment.             
Section 6.6 Alternative Systems Comparison 
Paired t tests were carried out in order to assess whether there were significant 
differences in the value of each criteria between ERP and WPMS. Table 23 shows the 
mean score for each criterion and for each alternative, and the p value corresponding 
to the paired t test. Values lower than 0.05 would imply that the difference in value 
between ERP and WPMS for the corresponding criteria was significantly different 
from zero. Criteria with significant differences are shown in boldface. 
Table 23 shows that no significant differences were observed in most of the criteria. 
The cases where significant differences were observed were administration, a 
criterion of functionality, for which the value for ERP was higher than the value for 
WPMS, and all the cost criteria (initial, implementation, maintenance, and training). 
In these cases, the value for ERP was higher than the value for WPMS, suggesting 
that cost criteria are more important for the choice of ERP than for the choice of 
WPMS. On the other hand, there were no significant differences for any of the other 
criteria. 
 
 
 
 
 
 
 
 
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  ERP WPMS p value 
Cost Initial 6.476 5.000 0.000 
Cost Implementation 7.048 5.429 0.002 
Cost Maintenance 5.810 4.952 0.041 
Cost Training 5.857 4.857 0.025 
Time Productivity 5.111 4.333 0.159 
Time Implementation 3.500 5.000 0.057 
Time Training 4.611 5.278 0.255 
Time Durability 6.778 5.778 0.095 
Funct. Collaboration 6.278 6.722 0.331 
Funct. Modularity 6.389 5.500 0.167 
Funct. Control 7.722 6.778 0.077 
Funct. Administration 7.444 5.556 0.010 
Funct. Contract 7.167 6.167 0.076 
Security Access 6.500 6.278 0.726 
Security Control 6.222 6.333 0.854 
Security Reliability 6.944 6.722 0.562 
Security Legal 6.167 5.889 0.688 
 
Table 23 Mean Values for Alternative Systems 
 
The fact that all four cost criteria were significantly more important for the choice of 
ERP than for the choice of WPMS stems from the fact that there is significant 
monetary difference between them. In case of the ERP alternate, organizations need 
to commit to a far larger financial investment. The magnitude of this investment and 
 
 168
 
the way it is viewed in the organization is the main reason for it being labeled as a 
prohibitive criterion.   
Section 6.7 Chapter Summary 
This chapter presented the statistical analysis that was conducted on the results 
obtained from field questionnaire. Each prohibitive criterion and their subcategories 
were reviewed and analyzed.  In addition comparative analysis for each alternative 
system was conducted. 
Rankings were established for each of the criteria based on multiple paired t tests. All 
possible pairs of criteria were assessed for significant differences. Criteria that were 
not significantly different were placed in the same ranking level.  
In the case of Cost Criteria (ERP alternate) following ranking was established: 
1- Implementation 
2- Initial 
3- Maintenance and Training 
In case of cost criteria for the WPMS alternate, no significant differences were found 
among the four cost criteria. 
Results from the analysis conducted for time criteria for the ERP alternate indicated 
the following ranking: 
1- Technical Durability 
2- Production & Training 
3- Implementation 
The only difference observed for the WPMS alternate was the fact that production as 
a prohibitive criterion dropped to the bottom level. 
Functionality criteria ranking for ERP alternate was as follows: 
 
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1- Project Controls & Administration 
2- Contract Management 
3- Collaboration & Modularity 
The same criteria?s ranking for WPMS alternate was as follows:     
1- Project Controls, Collaboration, and Contract Management 
2- Administration & Modularity 
Security criteria ranking for the ERP alternate was as follows: 
1- Reliability 
2- Access, Control & Legality 
In the case of the WPMS alternate, no significant differences were found among the 
four security criteria. 
Overall criteria rankings for both alternates were discovered to be the same. They 
were as follows: 
1- Functionality & Security 
2- Cost & Time 
It was also observed that all four cost criteria are significantly more important for the 
choice of an ERP alternate than for the choice of an WPMS alternate. Administration 
functionality was also significantly more important for the choice of the ERP 
alternate than for the choice of the WPMS alternate. 
 
 170
 
CHAPTER 7 CASE STUDY 
 
Since the topic of interest in this research dealt with contemporary events within 
which the relevant behavior can not be manipulated and available empirical data are 
limited, it was decided to use the case study method to apply and validate the research 
model.  
Section 7.1 Case Study Methodology 
Case study methodology is a qualitative and descriptive way to examine the 
participation of an individual or an organization in a specific context. The case study 
method has been used in various domains, particularly in sociological investigations 
(Yang, Wu, Tsai, 2007). The case study research is not sampling research (Yin, 
2003). However selecting suitable cases must be done so as to maximize what can be 
learned in the period of time available for the study (Yang, et al., 2007).There are 
three types of case study method: exploratory, explanatory, and descriptive (Yin, 
2003).  
This methodology was selected since it would allow for an in-depth investigation of 
application of EAM within a particular member of SMSCO. In this research since 
issues of interest dealt with operation of the organization it was decided to utilize 
exploratory types of questions. In addition the case study was utilized to verify the 
applicability of EAM in general and components of Self-Regulation element in 
particular.  
 
 
 171
 
Section 7.2 Case Description 
In order to address the issues of interest it was decided to convince a sample member 
of SMSCO to commit their organization to application of EAM in investigating the 
possible adoption of an ERP system.    
Section 7.2.1 Selection Criteria 
In order to be able to successfully conduct a case study utilizing an organization it 
was critical for the organization to meet certain criteria. The most important and 
obvious criteria was the size and the nature of the organization. For the purpose of 
this study the organization had to be an SMSCO. In addition it was of paramount 
importance to have commitment from the ownership group to participate fully in the 
case study and be willing to share the findings of the study. Finally this organization 
had to be in a financial and operational position to realistically implement an ERP 
system. Company X, a regional general contracting was identified to have met the 
above mentioned criteria and therefore was selected for the case study. 
Section 7.2.2 Company General Information 
The studied company is a regional general contracting firm operating in mid Atlantic 
region of the United States of America. The company was established in 1980 and 
has a staff of about 150 persons. Company X annual revenue is about $40 million 
dollars, which would rank them as a mid size member of SMSCO grouping. Their 
portfolio of works consist of a mix of infrastructure, highways, hi-tech buildings, and 
educational institutions projects. Company X had two offices in the region. 
 
 172
 
Section 7.2.3 Existing Operating Systems 
Company X had developed and purchased several single-functionality programs to 
facilitate independent management. For example their payroll and accounting system 
was managed by a software package named Computerease, while scheduling for 
various project was prepared utilizing Microsoft Project and Primavera. Microsoft 
Outlook acted as the platform for conducting various communication tasks required 
by the operation. In addition numerous company oriented templates (Excel base) were 
created and utilized. Despite being out of date and uncoordinated, the systems were 
able to meet the basic requirements of a conventional construction organization.  
However, Company X had experienced significant growth in its annual work load, 
which had resulted in pushing the existing operating systems to their maximum limit. 
The ownership group had become concerned about being able to handle the growth 
utilizing only the existing systems. Having realized the need to be able to provide 
more timely and coordinated information to both the senior level management and the 
staff, Company X decided to utilize EAM to decide if it would be advisable to adopt 
an ERP system.   
Section 7.2.4 EAM Stages 
Various elements/stages of EAM were studied by the ownership group in order to 
establish an overall understanding of the process and its possible findings. Having 
understood the process, company?s ownership group decided to play an active role in 
the day to day activities associated with EAM utilization. Decision was made to 
follow the stages of EAM as closely as possible and document the process and its 
findings. 
 
 173
 
A project team under the direct supervision of an executive partner of the firm and 
consisting of three other members representing various affected departments of the 
organization were assembled. The criteria for selection of project team members 
consisted of the following conditions: (1) an individual must have experience with 
application of computer technology in construction, (2) an individual must be a senior 
level staff with sufficient computer skills, (3) an individual must represent a 
department that would be affected by ERP implementation directly or indirectly, (4) 
an individual had to be an employee of the organization for sufficiently long enough 
time to be familiar with business processes to be modified or eliminated.  
Section 7.2.4.1 Problem Identification 
The project team identified ?Problem Identification? as the first task to analyze. In 
order to be able to properly evaluate the current company systems, the project team 
created an evaluation form as shown in Figure 28. Critical criteria that needed to be 
measured in order to properly evaluate the necessity of change and existence of a 
problem were identified. Previously defined prohibitive criteria were taken into 
account and project team considered their impact within the existing system. The 
objective of this task was to identify any problem with the current systems and 
measure the level and severity of the required changes to the same systems.  
 
 
 
 
 
 
 
 174
 
Company X  
     
Evaluation Items 
  Weight Score  
Necessary Change  System Completeness 10    
on Existing Systems System Compatibility 10    
  System Usability 10    
  System Functionality 10    
Necessary Changes on existing Organization needs to be adjusted 5    
business processes Process needs to be improved 5    
Necessary Changes Bidding 10    
for competitiveness Estimating 10    
Decision Mechanism Information accuracy & effectiveness 5    
  Information retrieve speed 5    
Change necessary for  Knowledge can be used to  5    
knowledge management improve competitiveness 10    
  Experience accumulation and sharing 5    
 
Figure 28 Self Evaluation Form 
 
the relative weight associated with each item was decided by the majority vote of the 
project team members so that sum of all weightings in all items equals 100. This scale 
was selected so that a higher score would represent the higher need for changing the 
current system. Company X set the average value of 80 as a threshold for advancing 
the ERP adoption process. Self evaluation of the system was conducted by team 
members on an independent basis within a one week period. The average score 
 
 175
 
obtained for this evaluation was 85, therefore requiring Company X to proceed to the 
next stage of the process.   
Section 7.2.4.2 Information Search 
Since previously in this research it was decided to divide the ERP systems into two 
classifications namely, prepackaged and WPMS, project team began their work by 
adopting the same classification. After a limited review of the current vendors in each 
category was completed it was decided to select 3 vendors in each category to be 
further studied in detail. The plan called for short listing of one in each category, so 
that the ultimate decision can be made between the final two.  
The following vendors were selected to be studied; 
Prepackaged Software: 
1- Oracell 
2- SAP 
3- JDEdwards 
WPMS 
 1- Net Suite 
 2- Plexus 
 3- Ace Project 
General information on each vendor was obtained and reviewed. Sources utilized for 
this purpose consisted of, internet, technical journals, and trade publications.    
Since the element of Information Search is a precursor to the element of planning, it 
was decided to collect enough information at the preliminary level so that proper 
planning for detail evaluation be completed. Project team realized that activities 
 
 176
 
within this element will have iterative nature, meaning that they might have to be re-
visited based on activities in planning element.    
Section 7.2.4.3 Planning 
In planning process project team attempted to address as many issues as possible and 
made plans for various activities and processes of EAM. Initially a project leader was 
selected. This person was a senior member of organization?s management level and 
familiar with the concept of ERP. Other members of team were selected so that the 
following skills were present; user-area defined/function-specific, technical, 
leadership, managerial, organizational, problem solving, decision making, 
administrative, and negotiation.  
Role of individuals were defined. The following roles were assigned: project leader, 
task-specific for information search, role of liaison between the vendors and 
acquisition team, department/user-area-specific roles such as for finance, human 
resources, etc., role of technical team leader, role of users on the team, roles of 
department like purchasing, etc.  
An assessment were made to see if services of outside consultants were necessary to  
complement the project team. Long term availability and commitment of the team 
members were considered before their selection.  
Project team then developed a strategy that reduced uncertainty associated with the 
process. Some of the strategies that were considered were briefly as follows: visit 
vendors sites, contact vendor references, have vendors provide for on site 
demonstration, request that vendors respond to the same RFP, make the acquisition 
process a two step process consisting of technical and price section.  
 
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The project team defined the organization?s requirements for the ERP solution. Team   
defined: (1) their organization?s existing technological environment; (2) the 
functional requirements; ( 3) the security requirements; (4) the cost limitations; (5) 
the time allocation; (6) the technical requirements; (7) the organizational (business, 
procedural, and policy) requirements; (8) existing processes in the areas that were to 
be affected by the new software; (9) technical staff role definition; (10) project team 
training requirements; (11) required maintenance program; (12) role of outside 
consultants. 
Project team then established criteria for self-regulation, selection, evaluation, and 
choice stages prior to contacting any vendors or looking at ERP solutions. These 
criteria were based on information that was gathered from users and other sources. 
Each stage was broken down into its finer subcategories and criteria that would help 
zoom in on achieving the associated objectives of these subcategories were 
established. The defined criteria were then utilized to complete various processes 
within each stage such as prohibitive criteria impact analysis, market analysis, 
grid/matrices for selection and choice processes. The organization accounted for 
realistic goals and limitations as it applied to its operations. A realistic schedule and a 
scoring methodology to be used for evaluation of the potential vendors were 
discussed and adopted.   
Issue of business process reengineering (BPR) was considered by the team and it was 
understood that ERP implementation would require a new BPR that would result in 
standardization and improvement in efficiency of operation. ERP implementation was 
used not to just enhance the existing systems rather to change them for the better.  
 
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Another issue that was considered was the process of change management. 
Difficulties in accepting significant required changes in the existing operating process 
by the staff was anticipated and planned for. Initial participation of representatives, 
for various end user groups, were sought out to address this issue. 
The current market place for ERP providers was analyzed. During this analysis, the 
acquisition team determined who the major players were in the marketplace for the 
ERP system.  
Deliverables for the planning stage consisted of formation of the planning team, the 
compilation of RFP, creation of list of criteria for review of various stages, scoring 
methodology, schedule, and formation of potential vendors list.  
Section 7.2.4.4 Self-Regulation 
Particular attention was given to the progress of Self-Regulation element. This stage 
was utilized by the organization to introduce a dose of reality into the entire process. 
During the planning stage it was decided to use the process of Self-Regulation to 
account for and match the critical requirements of the organizations with the 
capabilities offered by various products. Project team adopted the previously 
identified prohibitive criteria as individual factors that had to be considered in this 
element as a filtering process. In addition the hierarchy established by the findings of 
previous questionnaire was adopted. It was concluded that for the purpose of 
evaluation, weighting factors reflecting the ranking of particular criterion, be assigned 
and utilized. By adopting this methodology the organization accepted the relative 
impact of each criterion on the process. 
Project team considered the functionalities that were essential for their particular 
operation. These Functionalities included the criteria that have been discussed as part 
 
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of the previous sections of this study. Project Controls and Admin functions were 
ranked the highest among functionalities considered. Project controls consisted of 
items such as a project budget, project schedule, change orders, RFI processing, and 
shop drawings management. While Admin functions consisted of items such as 
payroll, HR, and other associated back office tasks.  
Much discussion was held about the reliance on the particular system for performing 
the functionality tasks. Initially there was substantial misgiving about accepting the 
changes that would be required. However over period of time and as result of 
providing internal studies that reflected the problems with current systems and 
possibilities for improvement the team decided to accept the proposed functionalities 
as organization?s requirement.  
Security was the second of the self-regulation categories to be reviewed. Project team 
reviewed the security related issues for their organization and established criteria and 
standards that would have to be satisfied. Since company X conducted most of its 
business with various government related organization security was of prime concern. 
Reliability of data and access to it was identified to be the most prominent of sub-
criteria considered. Information items that were considered to be included in this data 
consisted of bidding, estimating, budgeting, resource allocation, and scheduling 
values. The current systems were evaluated and their short comings were identified. 
Among the most prominent short comings were; multiple entry of data, timely 
availability of data, organization of data, and historical perseverance of data. It was 
decided to list requirements to be addressed by a new system.  
Cost was the next self-regulation criteria to be reviewed. Cost as criteria was broken 
down to its subcomponents, which were ranked according to their level of impact. 
 
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Implementation cost was identified to be the most prominent among the group. Other 
cost categories considered were initial cost, training cost, and maintenance cost.   
Project team proposed a realistic budgeted amount for each cost category that was 
accepted and approved by the ownership group. Factors that played major role in 
defining these numbers included; current financial position of the company, item 
breakdowns for each category, and result of internal cost benefit analysis.  
Budget numbers that were proposed and accepted, set the marker for project team 
when it came to evaluation of a particular system. It was understood that systems with 
cost over budgeted amount would not be considered.  
Time was the last of self-regulation criteria to be considered by the project team. 
Majority of projects conducted by company X were of short duration. Quick 
turnaround time of their jobs forced the project team to establish realistic time tables 
for various time criterions that were considered. Project team proposed an 
implementation schedule that span the period of one year. 
The most critical of time sub-criteria considered was technical durability. Technical 
durability was defined to be the time that the current software will be useful before 
requiring major upgrade. Ownership group had substantial problem with this issue. 
Their major concern was the technical viability of a system over a period of time. 
Considering the fact that it was anticipated that the entire implementation process 
would take about one full year, major concern had to do with advances that would be 
made in the field that would not be reflected in the particular software package. In 
order to address this issue it was decided to have vendors respond in their proposal 
with specific information about the updating procedures and cost for their particular 
systems. 
 
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Section 7.2.4.5 Selection/Short List 
Project team utilized the findings of self-regulation element to create an RFP that 
could be sent to various vendors. As indicated in Figure 29, each vendor was 
requested to address each of RFP requirements.  
ERP Purchase - RFP Requirements for Company X 
Vendor Information 
          
Company Name           
Address           
Contact           
Tel. No.           
e-mail           
Fax. No.           
Package Information 
          
Name           
Capabilities 
          
Functionalities (Collaboration, Modularity, Controls, Admin, Cont. Mmgt.)   
Security (Data Access, Data Control, Data reliability)     
Cost (Purchase Price, Maintenance Cost, Training Cost)     
Time (Implementation, Update)         
Terms 
          
References 
          
Tech Support Services 
        
Training Programs 
          
 
Figure 29 RFP Requirements 
 
 
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Having defined the critical criteria to be considered in the remaining parts of EAM, 
project team utilizing the information that was gathered in the information search 
stage selected 6 vendors to be contacted. Vendors were divided into two grouping of 
Pre-packaged software, and WPMS. As called for by the planning stage three vendors 
in each category were analyzed. Once it was decided that these vendors had the 
possibility of meeting the RFP requirements initial contacts were made. RFP 
requirements were transmitted to them either via fax, e-mail, or mail.   
During the process of obtaining RFP from vendors? number of difficulties were faced. 
Among the most prominent ones were the nature of vendor interest. Some major 
vendors did not show any interest in participating in the RFP process. It was 
understood that they were interested in participating with a ?small organization?. 
Some other significant vendors indicated that their systems were not totally 
applicable to an SMSCO. As a result of this and in order to end up with at least three 
major vendors in each category, project team was forced to repeat some of the past 
procedures that had led to the selection of vendors. This recursive nature of activity 
was observed between information search, planning and selection/short list elements. 
Ultimately two vendors one from each group was selected for detail evaluation.  
Section 7.2.4.6 Evaluation 
Evaluation was a critical and complicated process that was completed by the project 
team team. Critical factors that were considered by the team included the following: 
strategic match, stakeholders influence, system specific, organizational impact, life 
cycle approach, financial criteria.  
Within this process vendors, the functionalities provided by ERP system, and 
technical issues were evaluated. Project team developed an scoring methodology that 
 
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was utilized to evaluate the short listed vendors. The methodology used was based on 
weighting score that were assigned to each task. As shown in Figure 30 items that 
were previously identified in the RFP requirement list were further broken down to 
their core elements and individual score based on the team?s understanding of their 
over all impact was assigned.  
In addition to the overall score two item of references and warranty period were noted 
and compared.  
It was anticipated that vendor evaluation would be carried out over several of the 
stages within the EAM processes. The recursive nature of the these activities also 
caused the team to re-contact vendors with request to resubmit in part or in full, their 
RFP responses according to the teams refined criteria.    
As for the functional and technical evaluations, they were carried out, in part, during 
the selection process and then, more intensively, during the complete evaluation 
processes. The criteria and strategies that were established during the planning 
process were utilized to complete the evaluation process. The deliverables of this 
stage consisted of a vendor and functionalities/modules that should be utilized. 
 
 
 
 
 
 
 
 
 
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Company X 
        
Evaluation Items   Max. Score Vendor A Vendor B Comments 
  Controls 8       
  Admin. 8       
Functionalities Contract Management 6       
  Modularity 5       
  Collaboration 5       
  Data Reliability 9       
Security Data Access 7       
  Data Control 6       
  Data Legality 5       
  Implementation Cost 7       
Cost Initial Cost 6       
  Maintenance Cost 5       
  Training Cost 5       
  Technical Durability 7       
Time Production 4       
  Training  4       
  Implementation   3       
Score Total   100       
References Checked           
Warranty Period           
 
Figure 30 Vendor Evaluation Form 
 
  
 
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Section 7.2.4.7 Choice 
This stage was the natural culmination of the evaluation process. Once the deliverable 
of the evaluation process became clear it was forwarded to the entire ownership 
group. Project team decided to obtain the approval of the entire ownership group in 
order to strengthen the commitment of the organization to the entire program. In turn 
the complete ownership group took this opportunity to conduct an independent 
review of the finding of the project team and approved the implementation process. 
Section 7.2.4.8 Implementation 
Implementation, as the last stage of the EAM it represented the final series of 
activities that had to be carried out to successfully select and implement an ERP 
system.  
The negotiation part of this stage consisted of the business and legal segment. As 
many issues as possible were addressed in the business negotiation between Company 
X and the selected vendor.  
Section 7.3 Chapter Summary 
This chapter presented the case study of Company X?s application of EAM in 
investigating the possible adoption of an ERP system. Company X was a mid size 
general contacting firm operating in Mid Atlantic region of the United States of 
America.  
Each element of EAM was utilized by Company X?s project team in order to either 
adopt of reject an implementation of an ERP system. The existing operating systems 
of the Company X were evaluated to verify existence of potential operational system 
problems. The current ERP systems were divided into the following two categories; 
 
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WPMS, and Pre-packaged Software. Utilizing various sources information was 
gathered about six vendors, three in each category.  
Within planning stage project team was finalized and utilized to develop strategies 
that were followed. Project team defined organization?s goals and objectives along 
with its requirements. Element of self-regulation was utilized to define and prioritize 
the requirements of Company X for a future ERP system.  
During processing of elements of selection and evaluation each vendor was reviewed 
and evaluated based on a system that was developed by the project team. Initially two 
vendors were selected from each category, and then one was identified to be the most 
compatible for Company X. 
Project team recommended vendor A to the ownership group for final review and 
approval.  Upon verification of project team?s recommended findings the ownership 
group decided to accept the selection of vendor A and started the final negotiations to 
purchase and adopt the system.   
 
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CHAPTER 8 ERP ADOPTION MODEL (EAM) DISCUSSIONS 
 
This chapter introduces a final version of the research model EAM. The proposed 
final version incorporates the findings of previously conducted questionnaires and the 
case study.  In chapter three, EAM was introduced in its theoretical format. 
Subsequently two questionnaires were prepared and distributed so that thru analysis 
of their data, prohibitive/self-regulation criteria could be identified and analyzed. 
Theoretical version of EAM was then amended to reflect the impact of these criteria. 
In addition logic, practical application, and processes of EAM for SMSCO, were 
verified by the findings of a case study which was completed. Issues of importance to 
the final version of EAM are presented and discussed here in more detail. 
Section 8.1 ERP Adoption Model (EAM) 
Previously in this research four prohibitive/self-regulation criteria were identified and 
confirmed. These criteria that were discovered to act as prohibitive factors in 
utilization of ERP systems by SMSCO were introduced into EAM not only as 
prohibitive in nature, rather as prohibitive/self-regulation criteria. As shown in Figure 
31 the final version of EAM reflected the imbedded prohibitive/self-regulation 
criteria in self-regulation element. 
The final version of EAM was utilized in the case study that was completed for 
company X. These criteria were adopted by the company X as part of processing their 
self-regulation element.  
Having to consider the prohibitive/self-regulation criteria in self-regulation element 
forced the organization to deal with issues that became critical in their decision 
making process. In fact it was anticipated that this would occur, and that is why it was  
 
 188
 
 
Figure 31 ERP Adoption Model (EAM) 
 
incorporated into EAM at rather early stage. With utilization of this concept the 
organization had an opportunity to conduct a self evaluation of their current 
procedures and operations. Completing this self evaluation process allowed the 
organization to compile a list of requirements that were both realistic and reflective of 
their organization.  
Issue of reflectivity is a critical issue that must be considered by each organization.  
Within construction industry in general and SMSCO in particular uniqueness of the 
particular organization?s operation is a known and accepted fact. Therefore in order 
for the organization to utilize any decision making model, that model must be able to 
address organization?s uniqueness. In utilizing the decision making model the 
organization must be able to reflect on who they are. EAM allows for this reflectivity 
thru utilization of prohibitive/self-regulation criteria. As a result of having to deal 
with these criteria the SMSCO will have to establish goals and objective, review their 
current procedures, identify their current short comings, develop realistic 
requirements for the new system, prepare and provide adequate resources to 
implement the system.    
 
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Completion of the case study identified some critical issues with utilization of EAM 
that need to be discussed in further detail so that lessons learned can be identified and 
shared.  
Section 8.2 Hierarchical Ranking of Criteria 
Successful completion of the case study in general, and the observed impact of the 
self-regulation element of EAM in particular, provided strong evidence to support the 
validity of the hierarchical rankings of prohibitive/self-regulation criteria. Having to 
deal with prohibitive/self-regulation criteria, in the order that it was proposed, forced 
the organization to set realistic goals and objectives at a very early stage of the 
decision-making process.    
In addition it was noticed that while the ranking of the criteria had to be maintained, 
their subcategories could be redefined in broader terms to include organization 
specific items. For example while one company defines payroll as a task to be 
included in Admin. section of Functionality criterion, another company can place it 
within Contract Management section of Functionality. This flexibility allows each 
SMSCO to tailor the process closer to their actual operation.  
Section 8.3 Prohibitive/Self-regulation Criteria 
As it was stated before, this research paid particular attention to the study of 
prohibitive/self-regulation criteria and their impact on utilization of EAM. In general 
the completed case study verified their significance, and impact on EAM. However, it 
must be noted that the case study also raised some new issues that need to be 
discussed and addressed. 
 
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When dealing with functionalities it became apparent that issue of modularity is a 
very significant one. Having the capability of adopting a limited version of an ERP 
system that could be subsequently added on is critical for SMSCO. Systems that are 
able to provide capabilities in a modular format will have substantial advantage to 
their counterparts that must be adopted as whole. SMSCO can justify and handle the 
adoption of new ERP systems on a modular basis a lot easier and quicker. 
When dealing with security in the case study, access level by employees and other 
collaboration members, became an issue that had to be dealt with. SMSCO more so 
than their larger counter parts will have difficulty accepting access to their sensitive 
data. In order to overcome this problem it is recommended that project team utilize 
educational resources that any vendor would be able to provide in order to establish a 
comfort level for the ownership group.  
Cost as a prohibitive/self-regulation criterion has a significant impact on the overall 
decision-making process as anticipated. In the case of company X within the element 
of self-regulation of EAM they had to deal with the issue of cost. Company X 
conducted a cost benefit analysis and utilized its findings to compute a budget item 
that included individual line items for different cost categories. In their case company 
X?s project team established an understanding that budget numbers for the cost had to 
be met and would not be allowed to exceed.  
Even though ranking for cost criterion, placed it third among all criteria, its impact 
must not be taken lightly. The allocation of cost and its assignment by the 
organization must be considered. SMSCO members must consider the associated cost 
items not only as a direct project expense, but rather as a capital expenditure that need 
 
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to be treated as an asset. Company X was able to justify the substantial expenditure 
required by treating it as an asset that was to be depreciated over a period of time.   
When reviewing Time as prohibitive/self-regulation criterion it must be understood 
that technical durability is rightly an issue that must be reviewed. However, it is 
important for the organization to establish an understanding of their requirements and 
not be concern with every new ?gadget?.  As long as the system is capable of 
addressing the needs of the organization it must be considered as an adequate.      
Section 8.4 Vendor Participation 
Vendor participation in the processes of EAM must not be taken for granted. Some 
vendors even though claim to have software that would be suitable for SMSCO are 
not interested in participating in the process since the size of potential account will 
not be large. Company X experienced this phenomenon when they attempted to 
obtain interested vendors to participate in their process. Lack of interest shown by 
vendors to company X?s representative was not limited to a particular category, and 
should be anticipated by other SMSCO members.     
In order to overcome these problem SMSCO members must plan to play a pro-active 
role when it comes to solicitation process. It must be understood that in order to find a 
vendor that is willing to work with the organization ample amount of resources in 
form of employee time must be provided.  
Section 8.5 Process Re-engineering 
It should be anticipated that each member of SMSCO will have a unique set of 
business processes that has been utilized with some degree of success in the past. 
Customizing the functionalities of a new system for an existing organization will 
 
 192
 
generate number of dilemmas. It is expected that each organization would like to 
minimize the changes in their business processes, however it should be understood 
that ERP system customization to fit existing operations can not be always completed 
successfully. After all ERP systems bring a whole new way of thinking to an existing 
operation that has been deemed change worthy. It is recommended that SMSCO 
members consider changing their existing processes to fit the ERP system rather than 
the other way around. 
Timing of this change is also very critical. If both ERP implementation and business 
process changes were to be completed at the same time the organization will face 
number of difficult scenarios. It is recommended that SMSCO members must 
complete the process re-engineering of their operation prior to ERP system 
implementation. In addition it is suggested that for a period of time shortly after ERP 
system implementation a parallel set of operational procedures be carried out so that 
the confidence level of the organization in the new system is enhanced.   
Finally it must be pointed out that all of proposed changes ultimately deal with 
people. Therefore the process of change management must be people friendly. 
Attempts should be made to get the people of the organization to buy into the process. 
Some of the strategies to use would be as follows; introduce the change on an 
incremental basis, educate the staff as to the benefits of the proposed changes, show 
strong senior management commitment to changes, and provide adequate training 
time for the staff. 
Section 8.6 Role of Suppliers and Sub-contractors 
An issue that was not considered as strongly as it should have been in the case study 
was the impact that suppliers and sub-contractors potential utilization of the ERP 
 
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system would have on the success of the entire system. Members of SMSCO usually 
collaborate with suppliers and subcontractors that are either the same size or most 
often smaller than them. Therefore in order for ERP system to be successfully utilize 
as a collaborative tool the role to be played by this second tier users must be 
reviewed.  
The second tier user?s technical capabilities must be studied and correctly 
documented. Their familiarity and use of computer technology applications in their 
operation must be realistically verified. The level of required hardware and software 
for proper utilization of the system at the second tier level must be identified and its 
existence or lack of among the group should be checked out.  
Without adequate infrastructure second tier user will not be able to either provide data 
in necessary format or access the information available. Attempts must be made to 
either encourage the existing second tier users to adopt proper infrastructure and 
technical know how or to find new suppliers and sub-contractors that can properly 
participate in a collaborative environment.  
Section 8.7 Iterative Nature of EAM?s Elements 
Self-regulation element of EAM is designed and placed to have an iterative influence 
on the entire process. The thinking behind this fact was to allow the iterative nature of 
this element to address the issues that arise from self evaluation conducted by the 
organization. The nature of the iterative processes indicates 
activities/feedback/adjustment/input. It is anticipated that as a result of completing 
self-regulation element project team might have to re-visit the process starting with 
selection/short list element. However it should be pointed out the iterative nature of 
self ?regulation element can impact at both end of the main decision core.   
 
 194
 
Section 8.8 Chapter Summary 
This chapter presented the ERP Adoption Model (EAM) for SMSCO to successfully 
implement an ERP system within their organization. The proposed EAM consists of 
eight different elements. 
Hierarchical ranking and the role of the prohibitive/self-regulation criteria in self-
regulation element were verified and discussed. Each individual criterion was 
discussed and its potential impact on EAM was analyzed.  Issues dealing with 
participation of vendors in the process were also highlighted and discussed to extend 
possible utilizing the findings of the case study completed for company X. Process of 
re-engineering the existing operational processes was reviewed and suggestion was 
made that SMSCO should prepare to adjust their process first before they implement 
an ERP system and initially plan to operate both systems in parallel for a period of 
time. Potential participation by suppliers and sub-contractors was discussed and 
suggestions were made in order to address issues. Finally the iterative nature of self-
regulation element and its impact on EAM was reviewed.    
 
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CHAPTER 9 CONCLUSIONS AND RECOMMENDATIONS 
 
This chapter will review the significant findings, and summarizes the formulation 
utilized to answer research questions. Practical guidelines to be utilized by SMSCO in 
their decision making process for adoption of ERP systems will be presented. The 
level of achievement of the research objectives will be scrutinized, and research 
limitations and recommendations for future work will be made. 
Section 9.1 Research Summary 
This research set out not only to formulate the reason(s) why SMSCO fail to utilize 
ERP systems, but also to propose a decision-making model which could be utilized 
when they decide to adopt an ERP system.  
This research was completed in five phases that consisted of problem formulation, 
prohibitive criteria confirmation, self-regulation analysis, ERP Adoption Model 
(EAM) Discussions, and guidelines & conclusions. 
After identification of the problem to be resolved by this research was completed,   
comprehensive literature review was conducted in the area of ERP applications in all 
industrial sectors with special attention given to the construction industry. In 
particular, ERP applications utilized by SMSCO were scrutinized, and in order to 
obtain an in depth knowledge of this subject, on-site interviews relating to their ERP 
experiences were conducted with various owners of SMSCO.  
Current understandings of technology adoption process, associated risks and benefits 
of ERP application were studied. Number of existing and prominent technology 
 
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adoption models were reviewed and based on their applicability to technology 
adoption in construction three of them was further scrutinized in detail.  
After a careful review of existing technology models, a new ERP Adoption Model 
(EAM) was formulated and projected. This model adopted a new paradigm shift 
proposed by Bagozzi (2007) and incorporated it?s a new decision making core.  
In order to identify the prohibitive criteria leading to lack of utilization of ERP 
systems by SMSCO a questionnaire was designed, pilot-tested, and used as the 
primary instrument to survey the SMSCO sector and collect the necessary data. Based 
on the analysis of the results obtained from this questionnaire, number of critical 
prohibitive criteria that would affect adoption and implementation of ERP by 
SMSCO was identified.  Alternative ERP systems that are currently available for 
utilization were categorized and investigated. It was decided that in order to confirm 
and complete the required analysis to gauge the impact of the prohibitive criteria and 
their potential role in self-regulation part of proposed decision-making model, a 
second questionnaire be designed and submitted to industry experts for completion. 
These experts were chosen because they had previous relevant experience with the 
implementation of ERP systems. The second questionnaire was distributed via 
SurveyMonkey, a web-based service. 
The data obtained as a result of the second field questionnaire were analyzed to 
formulate a hierarchical ranking system for the prohibitive criteria and establish a 
thorough understanding of their role as self-regulating elements in the decision-
making model. The relationships of the prohibitive criteria were analyzed. The results 
obtained for alternative ERP systems were compared so that the final 
 
 197
 
recommendations could address the applicability and adoptability of a system. 
Various statistical methods were utilized to complete this analysis.  
In order to validate the research model a case study that dealt with a medium size 
general contracting firm?s adoption of an ERP system was conducted. As a result of 
data analysis and the case study conducted, the previously mentioned ERP Adoption 
Model (EAM) was completed. Prohibitive criteria and their ranking were adopted by 
getting incorporated into the self-regulation element of research model. Each 
individual element was further analyzed and its sub parts were identified. Issues of 
importance to the final version of EAM were presented and discussed in detail.    
Section 9.2 Research Results & Contributions 
This research has delivered valid conclusions as the result of a case study and 
statistical analysis completed utilizing the data obtained through two separate field 
questionnaires. Contributions of this research consisted of the following major items:  
1. Obtaining data as a result of two field questionnaire 
2. Identification & confirmation of prohibitive criteria 
3. Analysis of prohibitive criteria 
4. ERP Adoption Model (EAM) 
5. EAM Utilization case study 
After a careful review of existing technology models, a new ERP Adoption Model 
(EAM) was formulated and projected. This model adopted a new paradigm shift 
proposed by Bagozzi (2007) and incorporated it?s a new decision making core. 
Two separate field questionnaires were successfully designed and distributed, which 
resulted in collection of valid responses. These data were then utilized to complete the 
required analysis. 
 
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Prohibitive criteria were identified and confirmed to consist of the following: cost, 
time, functionalities, and security. In turn each of these subcategories was further 
subdivided into subcategories that were individually and collectively analyzed 
utilizing statistical methods. 
Rankings were established for each of the criteria based on multiple paired t tests. All 
possible pairs of criteria were assessed for significant differences. Criteria that were 
not significantly different were placed in the same ranking level.  
In the case of cost criteria for the ERP alternate, the following ranking was 
established: 
1. Implementation 
2. Initial 
3. Maintenance and Training 
In case of cost criteria for the WPMS alternate, no significant differences were found 
among the four cost criteria. 
Results from the analysis conducted for time criteria for the ERP alternate, indicated 
the following ranking: 
1. Technical Durability 
2. Production & Training 
3. Implementation 
The only difference observed for the WPMS alternate was the fact that production as 
a prohibitive criteria dropped to the bottom level. 
The functionality criteria ranking for ERP alternate was as follows: 
1. Project Controls & Administration 
2. Contract Management 
 
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3. Collaboration & Modularity 
The ranking of the same criteria for the WPMS alternate was as follows:     
1. Project Controls, Collaboration, and Contract Management 
2. Administration & Modularity 
The security criteria ranking for ERP alternate was as follows: 
1. Reliability 
2. Access, Control & Legality 
In the case of WPMS alternate, no significant differences were found among the four 
security criteria. 
Overall criteria rankings for both alternate were discovered to be the same. They were 
as follows: 
1. Functionality & Security 
2. Cost & Time 
It was observed that all four cost criteria were significantly more important for the 
choice of ERP alternate than for the choice of WPMS alternate. Administration 
functionality was also significantly more important for the choice of ERP alternate 
than for the choice of WPMS alternate.   
A case study to verify EAM in general and impact of prohibitive/self-regulation 
criteria was conducted. Ultimately EAM, incorporating the study?s findings 
associated with prohibitive/self-regulation criteria was finalized and proposed to be 
utilized by SMSCO in order to increase the chances of successful implementation of 
ERP system.  
 
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Section 9.3 Practical Guidelines for Utilization of EAM 
One of the objectives of this research was to develop practical guidelines for SMSCO 
to be utilized in conjunction with EAM. Utilizing the ranking that was developed for 
prohibitive/self-regulation criteria, guidelines for measuring impact of the said criteria 
were developed. As indicated by Figure 32and Figure 33 each of the criteria were 
further subdivided into their sub-components and in addition to ranking their relative 
impact score was computed and provided. Relative Impact score is an indicator of 
importance of the criteria and where the greatest returns could be anticipated. This 
score should be utilized by SMSCO in order to maximize the return on their 
investment.    
In addition some general guidelines were developed to be utilized in conjunction with 
utilization of EAM. As indicated by Figure 34 the following stages of EAM were 
selected to have guidelines developed for:   
? Problem Identification 
? Information Search 
? Planning 
? Selection/Short List 
? Evaluation 
? Self-regulation 
These guidelines even though very general in nature are presented in order to provide 
a road map to be utilized by SMSCO members. 
 
 
 
 
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Guideline for Measuring Impact of Self-
Regulation Criteria         
WPMS Alternative     
Self-regulation Criteria Ranking Relative 
    
Impact 
Score 
Functionalities     
Control 1 22.1
Collaboration 2 21.9
Contract 3 20.1
Administration 4 18.1
Modularity 5 17.9
Security     
Data Reliability 1 26.7
Data Control 2 24.1
Data Access 3 24.9
Legality 4 23.3
Cost   
Implementation 1 26.8
Initial 2 24.7
Maintenance 3 24.5
Training 4 24
Time     
Durability 1 28.3
Training 2 25.9
Implementation 3 24.5
Productivity 4 21.3
 
Figure 32 Guideline for Measuring Impact of Self-regulation Criteria ? WPMS Alternative 
 
 202
 
 
 
 
Guideline for Measuring Impact of Self-Regulation 
Criteria       
Pre-Packaged Software Alternative     
Self-regulation Criteria Ranking Relative 
    
Impact 
Score 
Functionalities     
Control 1 22
Administration 2 21.3
Contract 3 20.5
Modularity 4 18.3
Collaboration 5 17.9
Security     
Data Reliability 1 26.9
Data Access 2 25.2
Data Control 3 24.1
Legality 4 23.8
Cost   
Implementation 1 28
Initial 2 25.7
Training 3 23.3
Maintenance 4 23
Time     
Durability 1 33.9
Productivity 2 25.6
Training 3 23.1
Implementation 4 17.4
 
Figure 33 Guideline for Measuring Impact of Self-regulation Criteria ? Pre Packaged Software 
Alternative 
 
 
 
 
 
 
 203
 
 
 
  
Element Description  Action to be Taken 
Problem Identification Establish project Team 
  Investigate Consultant Role 
  Complete self assessment - Utilize form 1 
  Report specific findings 
Information Search Identify Information Source ? Internal & External 
  Screen Information 
  Generate Leads 
Planning Set Goals & Objectives 
  Create an schedule 
  Create a budget 
  Create a selection criteria 
  Prepare for BPR Changes 
  Prepare RFP ?Utilize form 2 
  Visit Vendors 
  Deliverables (RFP, Criteria List, Vendor List) 
Selection/Short List Selection Criteria 
  Preliminary Evaluation of Vendors RFP 
  Create Short List of Vendors 
Evaluation Detail Vendor's scoring - Utilize form 3 
Self-regulation  Identify Criteria 
  Rank Criteria 
  Complete self application of criteria 
 
Figure 34 EAM Utilization Guideline 
 
 
 
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Section 9.4 Limitation of the Research   
Even though this research delivered valid findings, it had shortfalls that were 
generated as a result of limitations experienced. Addressing these limitations would 
enhance the accuracy of the results even further. The major limitations are as follows: 
? The temporary nature of the construction industry and its resistance to 
adopting new ideas presented one of the main limitations of this 
research. Existing legacy systems that are in use have created 
committed end users who are not willing to entertain new systems. 
This same group was not interested in participating in this and other 
similar research. Confidentiality was another factor that created a 
shortcoming for this research in obtaining valid information.  
? Familiarity of SMSCO community with concept of ERP was another 
major shortcoming of this research. It was discovered that in order to 
obtain answers from SMSCO participants in field questionnaire, ERP 
concept had to be explained in more elementary forms so that they 
were understood. The answers provided had to be interpreted so that 
they could be applied to the ERP related question. 
? The number of the participants in the field questionnaire was another 
major issue for this research. The number of willing participants was 
fairly limited, mainly because of this group?s lack of understanding 
and knowledge about ERP systems. On the first field questionnaire the 
majority of participants were from mid-Atlantic region of United 
States of America. It is possible that if there were additional 
participants from other geographical regions, the findings would have 
 
 205
 
been impacted. Overall if more people participated, the quality of 
statistical analysis that was conducted would have increased.  
? The experts selected to complete the second field questionnaire all had 
extensive experience with ERP systems, and their implementation 
however it is anticipated that their individual opinions were biased 
toward the particular alternative ERP system that they were 
accustomed to working with. Ideally, experts should have similar 
experience working with both defined alternative ERP systems in 
order to be able to respond to the questions posed to them by this 
research. 
? For the purpose of this research alternative ERP systems were defined 
to consist of the following two categories: ERP, and WPMS. These 
two main categories could be broken down to more specific sub 
categories and then analyzed to provide an enhanced understanding of 
this topic. 
? The time required to study IT related technology in general, and ERP 
in particular, presents an issue since the advancement pace of science 
in this area is rather fast. New products and services are constantly 
being introduced that could significantly impact the market place. Due 
to the limited time available for this research and the nature of 
construction industry, it was not possible to accommodate some of 
market changes.  
? This study defined number of prohibitive criteria that would impact 
implementation of an ERP system within an SMSCO environment. 
 
 206
 
There remains the possibility that other prohibitive factors exist that 
need to be considered and analyzed.  
Section 9.5 Future Research 
Although this research has made practical and theoretical contributions to SMSCO 
members, there remains a significant potential for future advancements in this topic. 
Some of the possible areas that could be further investigated in future are as follows: 
? The proposed ERP Adoption Model (EAM) that was generated by this 
research needs to be studied in more detail. Additional case studies and 
empirical research should investigate the relationship between the 
various elements of the model. In addition the relationship between 
various elements and external factors that have an impact on them 
must be studied.  
? The role of prohibitive/self-regulation criteria in evaluation of 
particular ERP system could be looked at in further detail. In addition 
evaluation as an element of EAM has such a high impact on the 
process of decision-making that it needs to be studied in more detail. 
? Establishing SMSCO-wide ERP implementation standards would be 
another topic of interest that could be pursued. These standards could 
help members of SMSCO establish a clear understanding of minimum 
requirements of an ERP implementation program. The addition of 
existing standards would increase the ability of the ERP community to 
better address the needs and requirements of SMSCO client category. 
? A study could be done as to how to best educate and familiarize the 
SMSCO community with the concept of ERP. As it stands, members 
 
 207
 
of the SMSCO community are rarely aware of ERP systems and their 
capabilities. They are not familiar with the many benefits that could be 
generated from the implementation of an ERP system. Efforts must be 
made to communicate the beneficial features of ERP systems to 
SMSCO?s executives so that they become aware and plan to utilize 
ERP within their organizations.
 
 208
 
Appendices
 
 209
 
Appendix A: Prohibitive Factors Questionnaire
 
 210
 
 
 
 
 211
 
 
 212
 
 
 213
 
Appendix B: Prohibitive Criteria Analysis Questionnaire 
 
 214
 
 
 215
 
 
 216
 
 
 217
 
 
 218
 
 
 219
 
 
 220
 
 
 221
 
 
 222
 
 
 223
 
 
 224
 
Appendix C: SPSSS Outputs 
 
 225
 
 
 226
 
 
 227
 
 
 228
 
 
 229
 
 
 230
 
 
 231
 
 
 232
 
 
 233
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 234
 
 
 
 
 
 235
 
 
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