Expert Systems with Applications 38 (2011) 1069610704

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Expert Systems with Applications

journal homepage: www.elsevier.com/locate/eswa

Short Survey

Empirical study on inuence of critical success factors on ERP knowledge

management on management performance in high-tech industries in Taiwan
Pang-Lo Liu
Department of Industrial Engineering and Management, Ta-Hwa Institute of Technology, No. 1, Dahua Rd., Qionglin Shiang Hsinchu County 307, Taiwan, ROC

a r t i c l e

i n f o

Keywords:
ERP
Knowledge management
ERP KM
Critical success factor
Management performance

a b s t r a c t
The rapid development of information technology and the emergence of the Internet have created a borderless business environment and intensied market competition. Riding on the globalization trend,
high-tech companies have been gradually leveraging information technology in order to shorten their
manufacturing processes, enhance productivity with lower costs and prompt delivery to meet the customers needs. To achieve these targets and maintain competitive advantages, companies have been
introducing enterprise resource planning (ERP) and knowledge management (KM).
This paper nds, via literature review, that most scholars focus only on the deployment of ERP systems
and improvement of ows. Few have introduced the KM concept into ERP systems. This paper collated
the literature relevant to ERP and KM and integrates the ndings to introduce the ERP KM concept.
The most important thing is to establish a detailed introduction plan and a prior understanding of the
critical success factors (CSFs) for ERP KM introduction. This paper summarizes the CSFs for ERP KM introduction via literature review and examines the inuence of these CSFs on management performance. A
questionnaire survey is conducted to collect the relevant data and SPSS 10.0 (statistics software) is run
for statistical and multiple regression analyses. Among these CSFs, support from senior managers, corporate vision, reengineering of corporate ows and project management, selection of appropriate consulting
rms and software suppliers, the identication of suitable employees to take part in ERP introduction and
the proper training and education programs have positive inuences on management performance. In the
multiple regression analysis, all of the individual constructs are positively and signicantly correlated.
The explanatory power of individual variables is high. It is hoped that the research nding can serve
as a reference for ERP KM introduction to corporations.
2011 Elsevier Ltd. All rights reserved.

1. Introduction

1.1. Research background and motives

The advancements and developments in information technology have accelerated the pace of globalization and competition.
The previous mass production and standardized manufacturing
patterns are being replaced with a growing variety and small
quantities of products. To efciency pursue and enhance service
quality, cooperation between upstream and downstream players
is becoming increasingly more closely-knit and complex.
To achieve the above targets, companies have been introducing
ERP and integrating the KM concept into their ERP systems. This
has formed a new ERP KM model that improves management
performance.

Since the 1990s, the high-tech industry in Taiwan has become

the production hub for the world. Bleicher and Paul (1983) indicated that the high-tech industry is both capital and technology
intensive. The focus is on know-how, R&D and the development
of technology talent. The industry is known for high technology
intensity, large economies of scale, high risks and high returns.
Gould and Keedle (1984) suggested that the high-tech industry
should be evaluated with three metrics, which are the percentage
of R&D expenses as a total of revenue, the speed of technological
innovation and the breakdown of managers, technical personnel
and R&D staff. Shanklin and Ryans (1984) proposed that companies
must possess strong science and technology foundations so that
new technologies can rapidly emerge and replace old ones. The
application of new techniques can construct or change the market
demand and landscape. Any sector that meets the above three conditions can be classied as high-tech. Rogers and Larson (1984)
argued that the high-tech industry should meet the following four

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doi:10.1016/j.eswa.2011.02.045

P.-L. Liu / Expert Systems with Applications 38 (2011) 1069610704

criteria: (1) a high percentage of scientists and engineers on the

production lines; (2) high speed of growth; (3) a high percentage
of R&D expense as a portion of revenue; (4) global markets. Riggs
(1985) suggested that high-tech companies refer to the companies
that utilize technologies as a major competitive strategy or tool.
These companies pay attention to R&D functions. The product life
cycles are short. The risks are great and the market changes are rapid. The high-tech industry in Taiwan can be classied into the following six sectors: (1) integrated circuit; (2) computers &
peripherals; (3) telecommunications; (4) optical electronics; (5)
delicate machinery; (6) biotech. To sum up, the industry has been
moving towards high tech focused under planned efforts from the
government and as a response to industry trends. It is foreseen that
Taiwan can become a technology oriented country with the hightech industry as a strategic pillar and innovations as the driver
for economic development.
In order to win more orders from international companies, the
high-tech companies in Taiwan have come to understand the
importance of ERP. Meanwhile, they have been actively introducing ERP KM. To sum up the above literature review, this paper divides the high tech industry in Taiwan into six sectors: (1)
integrated circuits; (2) computers & peripherals; (3) telecommunications; (4) optical electronics; (5) delicate machinery; (6) biotech.
Questionnaires were issued to these six sectors.
1.2. Research purposes
This paper sets out the following two research purposes:
1. To examine the CSFs for the introduction of ERP KM and the
inuence of these CSFs on management performance in the
Taiwanese high-tech industry.
2. To apply statistical techniques explore and analyze the inuence of the introduction of ERP KM on management performance in the Taiwanese high-tech industry.
2. Literature review
This section examines the issues regarding ERP, KM, ERP KM,
CSFs of the introduction of ERP KM and management performance.
2.1. ERP
Bingi, Sharma, and Godla (1999) suggested that ERP systems
provide a common language for companies to facilitate the integration of global operations. ERP systems play a pivotal role in driving
the globalization of operations and shortening product life cycles.
This is why ERP systems are now everywhere. Li (1999) indicated
that ERP is an efcient method (i.e. packaged software) for providing all kinds of information throughout the company so that members at different levels can effectively perform business operations.
Stephen (2000) argued that ERP consists of all the features of MRP
and MRPII. It also includes some value added after-sale service systems and marketing support systems. However, the structure does
not involve integrating current systems in related databases.
Stephen (2000) divided the development history of the ERP system
into three stages as follows: (1) Material resources planning (MRPI) (1970s1980s); (2) Manufacturing resources planning (MRP-II)
(1980s1990s); (3) Enterprise resources planning (ERP) (1990s
future).
SAP (2001) (http://www.sap.com) suggested that the steps to
introduce ERP systems include project preparations, company
blueprints, implementations, online preparations, coming online
and support stages. Oracle (2001) (http://www.oracle.com) proposed a proprietary methodology for management system applications. According to this methodology, the introduction stage can be

10697

divided into the following steps: (1) introduction planning; (2)

operations analysis; (3) solutions planning; (4) online preparations. To sum up the above literature review, this paper refers to
nancial management, accounting management, human resources,
production management, materials management, quality management, distribution management and sales management as the
eight constructs of the ERP system.
2.2. Knowledge management, ERP knowledge management
Davenport, De Long, and Beers (1998) suggested that knowledge
management is the management of knowledge as an important asset. The establishment, denition, acquisition, organization, sharing
and use of knowledge assets as a series of activities are all part of
the knowledge management activities and content. Nonaka and
Takeuchi (1995) indicated that the creation of knowledge is the result of continuous interactions involving implicit and explicit
knowledge. Davenport et al. (1998) analyzed 24 companies and a
total of 31 KM projects to generalize eight CSFs: (1) the combination
of KM with corporate strategies or competitive advantages; (2) KM
as the infrastructure of organizational structures and information
technology; (3) exible and standardized KM structure; (4) corporate culture encouraging distribution, sharing and innovation of
knowledge; (5) clearly denitions, targets and wording of KM; (6)
encouragement and enticement in KM to change the behavior of
employees; (7) different channels for knowledge transfers within
the organization in order to create the value added effects of KM;
(8) support from senior managers in KM verbally and in resource
allocations and project management. Wiig (1995) stated that
knowledge management is a set of clearly dened procedures or
methods to uncover and manage the critical knowledge among
different operations. The purpose is to identify new products or
strategies and enhance human resources management to achieve
corporate targets. Holtshouse (1998) suggested that knowledge is
a ow concept. Namely, knowledge can be shared and exchanged
between knowledge suppliers and requesters. Nonaka, Toyama,
and Konno (2000) argued that for knowledge creation and innovation, sharing between individuals or groups is the starting point for
the next wave of knowledge swirls.
The main purpose of knowledge management is knowledge
creation, such as the absorption of information and knowledge via
the interactions of organizational members to enhance the organizations competitiveness. This enables existing knowledge within
the organization to be shared and integrated to facilitate the creation of new knowledge. Hendrike (1999) indicated that knowledge
sharing is formed with the delivery of knowledge from knowledge
owners to knowledge seekers. While an individual may be both a
knowledge owner and knowledge seeker at the same time, the motivations of sharing are different for a knowledge owner as opposed to
a knowledge seeker. Hansen, Nohria, and Tierney (1999) proposed
that for hundreds of years, the owners of family businesses passed
down their business intelligence to their offspring. Masters spared
no effort in teaching their craft to their apprentices. Workers
exchanged thoughts and skills at work. However, it was not until
the 1990s that the top managers of the corporate world began to talk
about knowledge management. Davenport, Jarvenpas, and Beers
(1996) concluded from successful knowledge management cases
that KM systems constructed by companies consist of knowledge
banks of talents and skills and supporting online inquiry systems.
Successful KM requires matching a combination of people and
techniques. To sum up the above literature, this paper denes KM
as the acquisition, creation, storage and sharing of knowledge. These
four processes are the main constructs in the study of KM.
Chen (2001) indicated in a study on the correlation between
ERP and KM that both governments and industries are embracing
the knowledge experience wave. In the US, 40% of the experience

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P.-L. Liu / Expert Systems with Applications 38 (2011) 1069610704

is contributed by knowledge capital. The source of knowledge is

data and ERP is the data collector. This includes the storage of receipts for each transaction in and out of the inventory, vouchers
for payments, delivery details and revenue breakdowns, and invoices. Chang and Gable (2001) suggested in a paper concerning
ERP KM application that given the current high staff turnover, it
is imperative to avoid a situation in which ERP died away along
with the departure of certain personnel. This is a daunting challenge for companies in knowledge management to maintain the
integrity of ERP knowledge but keep the momentum of innovations
and reengineering. It is an urgent issue. To sum up the above literature review, this paper denes ERP KM as the following: (1) ERP
system KM; (2) ERP customized engineered KM; (3) ERP reengineered KM; (4) ERP training and education for employees in the
area of KM. These four areas are the constructs of ERP KM.
2.3. CSFs for introduction of ERP KM
Laughlin (1999) suggested that the CSFs of the introduction of
ERP KM are robust planning. This should cover (1) clear and denite visions; (2) successful transformation management; (3) tight
and effective schedules; (4) powerful support and commitment
from senior managers; (5) good communication; (6) solutions to
relevant issues; (7) focused and denite project scope; (8) early
successful experience; (9) suitable project team members; (10)
outstanding project management. Leslie Willcocks (2000) proposed that the CSFs for ERP construction are as follows: (1) support
and participation of senior managers; (2) formulation of introduction timetables; (3) total involvement of organizational members;
(4) the possession of relevantly strong IT capabilities; (5) establishment of a good project team. Oracle (2001) (http://www.
oracle.com) indicated that the CSFs for the introduction of ERP systems include (1) support and commitment of senior managers; (2)
training of the relevant staff; (3) successful installation of hardware and software; (4) project teams understanding of Oracle
application; (5) involvement of project team members; (6)
employees acceptance of changes; (7) testing of solutions; (8)
establishment of solutions; (9) conrmation of nalized solutions;
(10) the investment by the project team and involvement of human resources by users; (11) constant updating of documents;
(12) training of users; (13) tests of all operations; (14) negotiations
of online operations; (15) effective support online from Oracle.
Holland and Light (1999) divided these CSFs into strategic and
tactical. Welti (1999) suggested that the CSFs for ERP introduction
are (1) the owners undertake management tasks; (2) mutual trust
among project members; (3) brief, clear and measurable project
goals; (4) powerful and effective planning and management; (5)
simple and clear planning and organization; (6) appropriate project members; (7) full-time project members; (8) open and honest
information strategies; (9) completion in-time of the conversion
and interfaces; (10) pre-determined concepts as project criteria;
(11) good consultants; (12) corporate ow reengineering after project introduction; (13) continuous and regular project control.
Bingi et al. (1999) mentioned that the issues that inuence the
introduction of ERP are (1) commitment from senior managers;
(2) corporate reengineering; (3) software integration; (4) ERP consultants; (5) timing of introduction; (6) expenses of introduction;
(7) ERP software suppliers; (8) selection of suitable employees;
(9) training of employees; (10) conviction of employees. Sumner
(1993) pointed out the CSFs are (1) the denition of introduction
costs according to project scales; (2) conrmation of introduction
strategies; (3) support from top management; (4) reengineering;
(5) re-training of employees; (6) external consultants; (7) effective
management structure; (8) standardized software; (9) effective
communication; (10) maintenance of quality staff; (11) avoidance
of software changes; (12) combination of consultants and internal

personnel into the project team; (13) management of the resistance from users. Ehie and Modsen (2005) indicated that ERP system introduction success requires clearly dened purposes, work
planning and resource planning. The conrmation of performance
targets is a critical factor for ERP introduction success. Ko, Kirsch,
and King (2005) suggested that effective communication mechanisms can reduce the frequency of back and forth changes to the
ERP systems. It allows each communication and coordination to
be effectively implemented. Good communication should exhibit
encoding and decoding capability. Motwani, Subramanian, and
Gopalakishna (2005) indicated that the participation of users has
been considered an important issue throughout the information
system development process. A positive and proactive attitude is
desired before the introduction. OBrien (2002) pointed out that
CSFs are a small number of major factors that senior managers believe to be the key to the success of their companies. These key factors can assure the success of performances and the achievement
of organizational goals. Schoemaker (2002) argued that CSFs are
the factors resultant from the inuence of certain activities, resources or capabilities on success and such inuence is greater
than other activities, resources and capabilities in a given industry.
Heizer and Render (2001) suggested that CSFs are the key activities
or factors that achieve competitive advantages. Daniel (1961) indicated that most industries have three to six CSFs. To be successful,
a company has to master these factors.
To sum up the above literature review, this paper generalizes
the CSFs for ERP KM introduction as follows: (1) support from senior managers and corporate visions; (2) reengineering and project
management; (3) appropriate consultants and software suppliers;
(4) suitable employees and training/education. These are the four
constructs in the study of CSFs for the introduction of ERP KM.
2.4. Management performances
Management performances of companies can be assessed in
various aspects. Therefore, scholars have their varying perspectives. This paper summarizes the relevant literature as follows.
Venkatraman and Ramanujam (1986) proposed three concepts to
measure management performance. These three metrics are as
follows:
(1) Financial performance. Achievement of economic targets.
The most frequently used indicators are after-tax earnings,
revenue, revenue growth, returns on assets, returns on capital and prot margins.
(2) Business performance: the combination of nancial metrics
and operational metrics. Examples are product market share,
product quality; value added percentage and marketing
effectiveness.
(3) Organizational effectiveness. These metrics cover the widest
range. Apart from the previous two, this set of metrics also
includes conict resolution, target achievement by related
parties, employee morale and target performance.
Ven de Ven and Ferry (1980) indicated that traditional nancial
metrics are most commonly used by researchers to evaluate the
operating results of organizations. These metrics include returns
on investment, sales and protability. Chakravarthy (1986) divided
the classications and measurements of management performances into four categories (1) operating targets: business plans,
such as annual budgets, capitalization increase, capacity expansion,
joint ventures and acquisitions; (2) productivity: utilization of facilities and equipment; (3) prots: appropriate use of funds, expressed in returns on investment and calculated by growth in
protability; (4) long-term competitive resources: the foundation
with which companies achieve sustainable operations and constant

P.-L. Liu / Expert Systems with Applications 38 (2011) 1069610704

growth. De Brentani (1989) integrated the literature concerning

product innovations and service marketing, and sampled 115
companies in Canada. This research nds that the approach that differentiates the characteristics of services and products yield different measurement results. Kaufman (1988) suggested that
performance indicators aim to discriminate, and validated whether
the pre-determined goals have been achieved. The standard for
these measurements and assessments are called performance criteria. From the perspective of performance management, the key is to
implement strategies and to manage the process of goal achievements. Fortuin (1988) regarded performance indicators as a variable to evaluate the efciency or effectiveness of the systems as a
whole or in part, in order to establish an understanding of whether
the operational process can meet the pre-determined targets.
MacArthur (1996) proposed that measurements can be classied
into quantitative and qualitative. Quantitative variables such as
lead time can be assessed with numbers. The qualitative variables
are measured with non-quantiable subjective judgments. Eccles
and Pyburn (1992) argued that nancial indicators play an important role in the assessment of management performances of companies. Under the control of managers, nancial indicators are the
orthodox and important indicators to the understanding whether
corporate assets are properly utilized to increase shareholders
value. Bonin, Hasan, and Wachtel (2005) examined the balance
sheets and income statements of the 451 banks in six developing
countries, and applied Stochastic Frontier Model to investigate
the operating efciency of four types of banks. Their empirical
study nds that:
1. Foreign banks report the best operating efciency. The worst
performing group is state-owned banks.
2. Domestic banks enhance local advantages in the fee service
markets.
3. Privatization does not increase efciency. The efciency of the
banks that were privatized early is higher than those privatized
later.
Boubakri, Cosset, Fischer, and Guedhami (2005) sampled 81
banks in 22 developing markets during the privatization period
of 19861998 and conduct regression analysis to examine the performances of the privatized banks. Their empirical nding is as
follows:

10699

Thang (2007) examined the management efciency of a total of

474 tourist hotels in Vietnam by applying Stochastic Frontier Production Function Model and Technical Inefciency Model.
In sum, this paper denes management performance as (1)
nancial performance; (2) business performance; (3) organizational performance; (4) long-term competitive resources as the
constructs in the study.

3. Research method
3.1. Research structure
To understand the inuence of ERP KM introduction on management performance in the Taiwanese high-tech industry, this
paper conducted a questionnaire survey to gather data and performed statistical analysis. The four CSF constructs are: (1) support
from senior managers and corporate visions; (2) reengineering and
project management; (3) appropriate consultants and software
suppliers; (4) proper employee and education training. Fig. 1
shows the research structure.

3.2. Research hypotheses

Based on the literature review and theoretical analysis, this paper intends to validate the following empirical hypotheses:
1. Relationship between ERP KM and management performance.
H1: The stronger the capability in ERP KM, the stronger the
inuence it is on management performance.
H1-1: The stronger the ERP system KM capability, the stronger
the inuence on management performance.
H1-2: The stronger the ERP customized engineered KM capability, the stronger the inuence on management performance.
H1-3: The stronger the ERP reengineered KM capability, the
stronger the inuence on management performance.
H1-4: The stronger the ERP employee training/education KM
capability, the stronger the inuence on management
performance.
2. Relationship between CSFs and management performances.

1. On average, the economic efciency of privatized state-owned

banks was lower than before the privatization. Their leverage
was also higher than pre-privatization days.
2. The protability increases after the privatization. However, the
improvement or deterioration of operating efciency, credit
risks, interest risks or the asset liquidity is related to the ownership pattern.
3. Privatized banks see signicant improvement in operating efciency and risk exposure overtime.
4. Ownership of privatized banks falls under the hand of industrial
organizations. Credit risks and interest risks both rise after
privatization.
Other studies relevant to management performance in other
industries include Barros (2005), who examined the operating efciency of tourist hotels in Portugal. He applied Data Envelopment
Analysis to analyze the operating efciency of the 43 tourist hotels
in Portugal in 2001. A total of seven input items and three output
items are examined. These seven input items are the number of
full-time employees, employees wages, number of guest rooms,
area size of hotels, nature of book reservations, optional expanses
and extra expenses. The three output items are the number of
booked rooms, number of tourists and evening spending.

H2: The CSFs introduced to measure management performances report signicant inuence.
H2-1a: The level of support from senior managers has a signicant inuence on management performance.
H2-1b: The stronger the inuence of support from senior managers, the stronger the impact on management performance, if the
ERP KM is better.
H2-2a: The level of reengineering and project management has a
signicant inuence on management performance.
H2-2b: The stronger the inuence from the level of reengineering
and project management the stronger the impact on management performance, if the ERP KM is better.
H2-3a: The level of appropriate consultants and software suppliers has a signicant inuence on management performance.
H2-3b: The stronger the inuence from the level of appropriate
consultants and software suppliers, the stronger the impact
on management performance, if the ERP KM is better.
H2-4a: The level of suitable employees and training/education
has a signicant inuence on management performances.
H2-4b: The stronger the inuence from the level of suitable
employees and training/education the stronger the impact on
management performance, if the ERP KM is better.

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P.-L. Liu / Expert Systems with Applications 38 (2011) 1069610704

ERP system
1. Financial Management
2. Accounting Management
3. HR Management
4. Production Management
5. Materials Management
6. Quality Management
7 Distribution Management
8. Sales Management

Industry/Corporate Status
1. Industry characteristics
2. Company scale
H3a

Integrate

Knowledge Management
1. Knowledge acquisition
2. Knowledge creation
3. Knowledge storage
4. Knowledge sharing

ERP KM
1. ERP System KM
2. ERP Customized Engineered KM
3. ERP Reengineered KM
4. ERP Employees
Training/Education KM

H3b

H1

Management Performances
1.Financial performances
2. Business performances
3. Organizational performances
4. Long-term advantageous resources

H2b
CSFs
1. Support from senior managers and corporate visions
2. Reengineering and project management
3. Appropriate consultants and software suppliers
4. Proper employee and educational training

H2a

Fig. 1. Research structure.

3. Relationship between industry/corporate status and management performances.

H3: Industry/corporate status inuence ERP KM and management performance.
H3-1a: Industry characteristics exhibit signicant inuence on
management performance.
H3-1b: Given different industry characteristics, the stronger the
ERP KM, the stronger the inuence it has on management
performance.
H3-2a: Company scales exhibit a signicant inuence on management performance.
H3-2b: Given different company scales, the stronger the ERP KM,
the stronger the inuence it has on management performance.
3.3. Targets for questionnaire survey
This study performed an in-depth analysis of the inuence of
ERP KM introduction on the management performance of the
Taiwanese high-tech industry. The questionnaires were issued to
well-known, high-tech companies in Taiwan that experienced
ERP KM introduction. They are in the following six sectors: (1) integrated circuits; (2) computers and peripherals; (3) telecommunications; (4) optical electronics; (5) delicate machinery; (6) biotech. A
total of 630 questionnaires were issued with 105 are recovered, for
a recovery rate of 16.67%. There were 101 effective questionnaires,
making the effective recovery rate of 16.03%.
3.4. Questionnaire design and measurements
This questionnaire consists of six sections. The rst ve sections
are measured with the Likert ve scales. Section 1 is on knowledge
management, including (1) knowledge acquisition; (2) knowledge
creation; (3) knowledge storage; (4) knowledge sharing. Section 2
is on ERP system, including (1) nancial management; (2) accounting management; (3) HR management; (4) production management; (5) materials management; (6) quality management; (7)
distribution management; (8) sale management. The measurement
centers on these eight issues. Section 3 is on ERP KM, consisting of
(1) ERP system KM; (2) ERP customized engineered KM; (3) ERP
reengineered KM; (4) ERP employee training/education. The

measurement centers on these four issues. Section 4 is on CSFs,

including (1) support from senior managers and corporate visions;
(2) reengineering and project management; (3) appropriate consultants and software suppliers; (4) suitable employees and training/education. The measurement focuses on these four constructs.
Section 5 is on management performances, such as (1) nancial
performances; (2) business performances; (3) organizational effectiveness; (4) long-term competitive resources. The measurements
were about these four issues. Section 6 discusses basic data from
the responding companies, including industry characteristics and
corporate status.
3.5. Data analysis method
This study designed a structured close-ended questionnaire
based on the literature review, and used SPSS 10.0 for Windows
to analyze the data.
3.6. Reliability and validity tests
This study designed the questionnaire based on literature reviews and relevant studies, and established reliable validity on
the contents and wording of the modied questionnaire after the
rst trial. The Cronbach a is calculated for each construct of questions based on the score of the answers provided. The validity of
the question is also tested. The greater Cronbach a, the larger the
correlation with the questions under the same construct and the
higher the internal consistency is. For most fundamental researches, Nunnally (1978) believes that a reliability of anything
above 0.7 is acceptable. In this paper, the reliability of KM, ERP system, ERP KM, CSFs for introductions and management performances is 0.792, 0.781, 0.763, 0.775, and 0.735, respectively.
Since all the reliability values are above 0.7, these constructs report
good reliability and the measurements see good internal
consistency.
4. Results
Empirical study was conducted on the inuence of ERP KM
introduction on management performance in the high-tech industry in Taiwan. The research ndings are as follows.

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P.-L. Liu / Expert Systems with Applications 38 (2011) 1069610704

4.1. Relationship of KM to management performances

Table 1 shows the inuence of the respective constructs of KM
on industry management performance. Knowledge acquisition
(p = 0.000), knowledge creation (p = 0.001), knowledge storage
(p = 0.005), and knowledge sharing (p = 0.000) all report signicant
inuence. This shows that knowledge management enhances substantial inuence on management performance.

Table 1
T-tests on inuence of KM mechanism on new product development performance.
Knowledge management

Knowledge
Knowledge
Knowledge
Knowledge
Note: p < 0.1;

Management performances

acquisition
creation
storage
sharing

p < 0.05;

T value

p value

0.064
1.898
0.773
0.037

0.000
0.001
0.005
0.000

p < 0.01.

4.2. Relationship of ERP system to management performances

Table 2 shows the inuence of the respective ERP system constructs on management performance. Financial management
(p = 0.000), accounting management (p = 0.003), HR management
(p = 0.001), production management (p = 0.000), materials management (p = 0.003), quality management (p = 0.000), distribution
management (p = 0.000), and sale management (p = 0.005) all report signicant inuence. This shows that ERP systems have substantial inuence on management performance.
4.3. Relationship of ERP KM to management performances
Table 3 shows the inuence of the respective ERP KM constructs
on management performance. ERP system KM (p = 0.000), ERP customized engineered KM (p = 0.000), ERP reengineered KM
(p = 0.004), ERP employee training/education KM (p = 0.005) all report signicant inuence. This shows that ERP KM enhances substantial inuence on management performance. Hypothesis H1 is
validated.
4.4. Relationship of respective constructs of CSFs and management
performance
The management performance measurement based on the Balance Scorecard constructs is summarized in Table 4. The support
from senior managers and corporate visions, reengineering and
project management, appropriate consultants and software suppliers and suitable employees and training/education all report positive and signicant inuence on the management performance
measurement. Hypothesis H2a is validated.
4.5. Relationship of CSFs to ERP KM
The measurement of the respective ERP KM constructs based on
the CSF constructs for ERP introduction is summarized in Table 5.
ERP system KM, ERP customized engineered KM, ERP reengineered
KM and ERP employee training/education KM all report positive
and signicant inuence. Hypothesis H2b is validated.
4.6. Inuence of Industry/Corporate status on management
performances
The measurement of industry/corporate status inuence on
management performance is shown in Table 6.
(1) Industry characteristics to nancial performance (p = 0.000),
business performance (p = 0.000), organizational effectiveness (p = 0.005), long-term competitive resources (p = 0.001).
(2) Company sizes to nancial performance (p = 0.000), business
performance (p = 0.000), organizational effectiveness
(p = 0.000), long-term competitive resources (p = 0.000).
Both report positive and signicant inuence. Hypothesis H3a is
validated.

Table 2
T-tests on ERP system inuence on management performances.
ERP system

Management performances

Financial management
Accounting management
HR management
Production management
Materials management
Quality management
Distribution management
Sale management
Note: p < 0.1;

p < 0.05;

T value

p value

2.168
1.216
2.135
2.906
1.301
0.978
0.073
2.568

0.000
0.003
0.001
0.000
0.003
0.000
0.000
0.005

p < 0.01.

Table 3
T-tests on ERP KM inuence on management performance.
ERP KM

ERP
ERP
ERP
ERP

Management performances

system KM
customized engineered KM
reengineered KM
employee training/education KM

Note: p < 0.1;

p < 0.05;

T value

p value

1.108
2.030
2.055
0.732

0.000
0.000
0.004
0.005

p < 0.01.

4.7. Inuence of industry/corporate status on ERP KM

The measurement of the inuence of industry/corporate status
on ERP KM is shown in Table 7.
(1) Industry characteristics to ERP system KM (p = 0.000), ERP
customized engineered KM (p = 0.005), ERP reengineered
KM (p = 0.000), ERP employee training/education KM
(p = 0.005).
(2) Company scales to ERP system KM (p = 0.000), ERP customized engineered KM (p = 0.001), ERP reengineered KM
(p = 0.000), ERP employee training/education KM (p = 0.001).
Both report positive and signicant inuence. Hypothesis H3b is
validated.

4.8. Multiple regression on inuence of KM, ERP KM, CSFs on

management performance
Multiple regression analysis aims to understand the linear relationship between a set of predictor variables and a criterion
variable. The multiple regression analyses conducted by this paper
are listed in Tables 810. According to these tables, B values, Beta
values and t values all prove signicant and positive inuence for
all the hypotheses.
The Beta in Model 1 (Table 8) is shown in the table.
The model is:

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Table 4
T-tests on inuence of CSFs on management performance.
CSFs

Management performance

Support from senior managers and corporate visions

Reengineering and project management
Appropriate consultants and software suppliers
Suitable employees and training/education
Note: p < 0.1;

p < 0.05;

Financial
performances

Business
performances

Organizational
effectiveness

Long-term competitive
resources

T value

p value

T value

p value

T value

p value

T value

p value

3.151
2.435
1.509
0.129

0.002***
0.000***
0.005***
0.001***

3.104
3.828
0.126
1.540

0.000***
0.000***
0.005***
0.003***

2.052
2.694
1.755
0.641

0.000***
0.005***
0.000***
0.001***

1.951
2.423
2.514
1.155

0.003***
0.000***
0.005***
0.000***

p < 0.01.

Table 5
T-tests on inuence of CSFs on ERP KM.
CSFs

ERP KM

Support from senior managers and corporate visions

Reengineering and project management
Appropriate consultants and software suppliers
Suitable employees and training/education
Note: p < 0.1;

p < 0.05;

ERP system KM

ERP customized engineered

KM

ERP reengineered KM

ERP employee training/

education

T value

p value

T value

p value

T value

p value

T value

p value

1.051
1.893
1.028
2.721

0.001***
0.000***
0.003***
0.005***

2.954
1.453
1.513
2.976

0.000***
0.001***
0.000***
0.000***

2.453
2.718
1.256
2.693

0.000***
0.005***
0.001***
0.005***

2.703
2.804
1.885
0.513

0.008***
0.000***
0.002***
0.000***

p < 0.01.

Table 6
T-tests on inuence of industry/corporate status on management performance.
Industry/corporate status

Industry characteristics
Company scales
Note: p < 0.1;

p < 0.05;

Management performances
Financial performances

Business performances

Organizational effectiveness

Long-term competitive resources

T value

p value

T value

p value

T value

p value

T value

p value

3.043
5.563

0.000***
0.000***

0.691
6.580

0.000***
0.000***

1.959
2.110

0.005***
0.000***

1.489
3.167

0.001***
0.000***

p < 0.01.

Table 7
T-tests of the inuence of industry/corporate status on ERP KM.
Industry/corporate status

Industry characteristics
Company scales
Note: p < 0.1;

p < 0.05;

ERP KM
ERP system KM

ERP customized engineered KM

ERP reengineered KM

ERP employee training/education

T value

p value

T value

p value

T value

p value

T value

p value

8.104
9.677

0.000***
0.000***

7.332
5.177

0.005***
0.001***

9.066
5.902

0.000***
0.000***

3.583
7.788

0.005***
0.001***

p < 0.01.

y1 0:158X 1 0:137X 2 0:112X 3 0:338X 4 e1

(Let X1 be knowledge acquisition, X2 knowledge creation, X3 knowledge storage, X4 be knowledge sharing.) They are all positively and
signicantly correlated. The Adjusted R is 0.761. The explanatory
powers of all the variables are rather high.
The Beta in Model 2 (Table 9) is shown in the table.
The model is:

y2 0:159X 5 0:139X 6 0:175X 7 0:103X 8 e2

(Let X9 be the support from senior managers and corporate visions,

X10 reengineering and project management, X11 appropriate consultants and software suppliers, X12 suitable employees and training/
education). They are all positively and signicantly correlated. The
Adjusted R is 0.781. The explanatory powers of all of the variables
are rather high.
Table 8
Multiple regression analysis of inuence of KM on management performance.

(Let X5 be ERP KM, X6 ERP customized engineered KM, X7 ERP reengineered KM, X8 ERP employee training/education KM). They are all
positively and signicantly correlated. The Adjusted R is 0.795. The
explanatory powers of all the variables are rather high.
The Beta in Model 3 (Table 10) is shown in the table.
The model is:

Variable

y3 0:141X 9 0:202X 10 0:135X 11 0:985X 12 e3

Adjusted R2

Knowledge
Knowledge
Knowledge
Knowledge

Model 1

acquisition X1
creation X2
storage X3
sharing X4

Std. E

Beta

T value

0.158
0.137
0.112
0.338

0.070
0.049
0.048
0.044

0.221
0.284
0.239
0.054

2.273
2.778
2.359
0.539

0.761

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P.-L. Liu / Expert Systems with Applications 38 (2011) 1069610704

Table 9
Multiple regression analysis of inuence of ERP KM on management performance.
Variable

ERP
ERP
ERP
ERP

system KM (X5)
Customized Engineered KM (X6)
Reengineering KM (X7)
employees training/education and KM (X8)

Adjusted R2

Model 2
B

Std. E

Beta

T value

0.159
0.139
0.175
0.103

0.044
0.037
0.040
0.034

0.307
0.325
0.373
0.258

3.610
3.790
4.329
3.036

0.795

Table 10
Multiple regression analysis of inuence of CSFs on management performance.
Variable

Model 3
B

Std. E

Beta

T value

Support from senior managers and corporate vision (X9)

Reengineering and project management (X10)
Appropriate consultants and software suppliers (X11)
Suitable employees and training/education (X12)

0.141
0.202
0.135
0.985

0.092
0.093
0.055
0.075

0.044
0.087
0.109
0.115

0.283
0.655
0.753
0.437

Adjusted R2

0.781

5. Conclusions
This paper presented an empirical study on the CSFs for ERP KM
introduction and the inuence of these CSFs on management
performance improvement in this industry. Through theoretical
discussions and literature review, a questionnaire survey and
statistical analysis on the high-tech industry in Taiwan, this study
found that ERP KM introduction does have a positive inuence on
management performance. These hypotheses are supported in part
with statistical signicance. This paper refers to the CSFs for ERP
KM introduction as the constructs for the measurement and analysis of ERP KM inuence on management performance in the
Taiwanese high-tech industry. This research determined that
among all the CSFs, support from senior managers, corporate
vision, reengineering of corporate ows and project management,
selection of appropriate consulting rms and software suppliers,
the identication of suitable employees to take part in the introduction of ERP and proper training and education programs have
positive inuence of management performances. In multiple
regression analysis, all of the individual constructs were positively
and signicantly correlated. The explanatory power of individual
variables is high. It is hoped that this research nding can serve
as a reference for ERP KM introduction for companies. This paper
also found that the CSFs of ERP KM introduction have positive
and signicant inuences on management performance improvement in this industry. The introduction of ERP KM requires a large
amount of human resources and funds. It is a complex task.
Therefore, companies must gain full understanding of the CSFs
and potential reasons for failures at the outset of the introduction.
It is hoped that this research nding can serve as a reference for the
industry in the introduction of ERP KM and provide a great help in
enhancing overall management performance and competitiveness.

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