ARTICLE IN PRESS

Int. J. Production Economics 113 (2008) 245–268

www.elsevier.com/locate/ijpe

ERP II: The involvement, benefits and impediments of

collaborative information sharing
S.C.L. Koha,, A. Gunasekaranb,1, D. Rajkumarc
a
Management School, University of Sheffield, 9 Mappin Street, Sheffield S1 4DT, UK
b
Department of Management, University of Massachusetts-Dartmouth, 285 Old Westport Road, North Dartmouth, MA 02747-2300, USA
c
Wipro Infotech, New Delhi, India
Received 10 March 2006; accepted 3 April 2007
Available online 24 July 2007

Abstract

(ERP) II is a way of managing information and designing work processes to facilitate all of this. In sounding as
profound as the concept does, it also raises a number of questions. This research seeks to establish a set of clear business
benefits and impediments, hindrances to success. It initially builds this set through an extension of pertinent literature on
ERP (as ERP is retained at the heart of ERP II) and through logical deduction (cause and effect) of the current (anecdotal)
literature on ERP II. It then tests these sets, through an online survey, with select industry experts on ERP who are
anticipated to be amongst the first to move to ERP II. The survey also gives these respondents an opportunity to add their
‘free’ thoughts to construct the ERP II involvement further. Part of this research also deals in formalising the collaborative
structures suitable for ERP II. The research finds that most existing benefits/impediments of ERP can still be carried
forward besides ‘new’ ones built through logical deduction. The research further finds a number of future research
objectives that spawn from the respondents’ concerns. Finally, it identifies three collaborative structures suitable to aid
information exchange in a real-time collaborative scenario, namely joint ventures, networks and Japanese-style ‘purchasing
partnership’.
r 2007 Elsevier B.V. All rights reserved.

Keywords: Information technology; Questionnaires surveys; Technology management

1. Introduction enterprise resource planning (ERP) (of the many

Microsoft and IBM, two of the world’s best-
known software companies, run most of their
business on software neither of them makes, the
SAP (AG) R/3 ERP package (O’Leary, 2000).
Amongst the most complete current definitions of
Corresponding author. Tel.: +44 114 222 3395;
fax: +44 114 222 3348.
E-mail addresses: s.c.l.koh@sheffield.ac.uk (S.C.L. Koh),
agunasekaran@umassd.edu (A. Gunasekaran).
1
Tel.: +1 508 999 9187; fax: +1 508 999 8776.
floating around) is as stated by Wallace and
Kremzar (2001):
An enterprise-wide set of management tools that
balances demand and supply, containing the
ability to link customers and suppliers into a
complete supply chain, employing proven busi-
ness processes for decision making, and provid-
ing high degrees of cross-functional integration
among sales, marketing, manufacturing, opera-
tions, logistics, purchasing, finance, new product
development, and human resources, thereby

0925-5273/$ - see front matter r 2007 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2007.04.013
 ARTICLE IN PRESS
246 S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
enabling people to run their business with high
levels of customer service and productivity, and
simultaneously lower costs and inventories; and
providing the foundation for effective e-com-
merce. (p. 5)
This proposition could be further summarised
as—ERP is a set of internal (‘enterprise-wide’) tools
that facilitate better management and integration of
production and other back office operations within
the enterprise. These tools further provide means
for effective interfacing of the aforesaid ‘better
managed internal activities’ with front office jobs
such as customer/supplier relationship manage-
ment. This interfacing in turn assists the enterprise
to open its doors for online commerce.
Amongst the earliest and most widely followed
definitions of ERP was stated by the American
Production and Inventory Control Society (Cox and
Blackstone, 2004); an ERP system is
1. An accounting-oriented information system for
identifying and planning enterprise-wide re-
sources needed to take, make, ship, and account
for customer orders. An ERP system differs from
the typical MRP II system in technical require-
ments such as graphical user interface, relational
database, use of fourth generation language, and
computer-assisted software engineering tools in
development, client server architecture, and
open-system portability.
2. More generally, a method for the effective
planning and control of all resources needed to
make, take, ship, and account for customer
orders in a manufacturing, distribution, or
service company.
ERP then evolved into a much practised but
loosely named iteration called extended ERP.
Extended ERP reflected the fact that many non-
manufacturing industries turned to ERP systems for
‘backbone’ financial transaction processing capabil-
ities (GRG, 2000). The next iteration was called the
enterprise application suite (EAS). The same
authors postulate that as enterprises looked to
applications that would provide supply-chain man-
agement (SCM), customer relationship management
(CRM) and e-business functionality to enable them
to jump ahead of their competitions, ERP vendors
responded by pursuing the vision of the EAS,
through partnerships, acquisitions or native product
20
15
Count
10 45.45%
45.45%
27.27%
27.27
% 27.27%
27.27%
5
0
Implementers Functional Suppliers
(Parent)
Users
Industry Type
Fig. 1. Respondent classification.
developments. Fig. 1 displays this evolution graphi-
cally.
The earlier stated definition of ERP by Wallace
and Kremzar (2001) was highlighted as being
‘current’. It can now be seen that they were in
effect describing the most current ‘avatar’ of ERP
that the GRG terms as EAS.
There are a number of issues that implementers
might face before, during and after ERP II
adoption. As no significant research or detailed
publications are available (as of this writing),
virtually all (regulated) research in the ERP II
arena will contribute to a fresh body of knowledge,
albeit the direction initial and subsequent research
should take is open for deliberation. A simple way
to go about this is to first list the possible issues that
might emanate in the process of adoption, and then
to solve the necessary operational constructs needed
to mitigate these issues. Care should be taken that
these are not carried out in isolation and studies
draw from other findings to build a ‘common’ body
of knowledge.
The present study is structured in a similar vein. It
first ‘constructs’ a list of issues—the perceived
benefits of, and impediments to, ERP II adoption
and then seeks to mitigate one of the required
operational concern that of formalising structure
types required for inter-firm collaboration (IFC)
(collaboration is necessitated by, and is vital for
ERP II).
Although the issues of perceived impediments and
benefits of ERP II, and collaborative structure
 ARTICLE IN PRESS
S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
building may initially seem disparate, collaborative
structure building does remain an important opera-
tional construct for ERP II success. It is imperative
for participating companies to strategically align
themselves to build a ‘common vision’, before a
‘reengineering’ of the business processes of the
supply-chain, before considering an architectural
solution and before inviting consultants in (i.e.
other operational constructs). In other words, this
research is justified based on the need for these
companies to evaluate how they can ‘functionally’
come together whilst carrying out an ex-ante
evaluation of the benefits and impediments of
ERP II.
As mentioned, a number of constructs emerge
from the current anecdotal literature and publishing
on ERP II. For example, what will be the technical
architecture of ERP II systems, what are the
possible implementation roadmaps and critical
success factors (CSFs), how would return on
investment (ROI) be calculated, what are the
social/cultural enablers to success and so on.
Although vital, these issues are not deliberated on
as they assume a slightly delayed precedence in
requiring a detailed examination. For the present
context, therefore, the need is to
1. Visualise the perceived benefits of/impediments
to the success for ERP II.
2. Establish appropriate collaborative structures for
seamless, real-time information exchange facil-
itation as advocated for ERP II.
2. Background for the research
There are two distinct sections in this literature
review. The first section initially provides for a
progressive perspective on the transformation,
market penetration and strategic impact of ERP
systems. This then leads to assessing the pre-
adoption considerations of ERP—the involvement,
established benefits and impediments to success.
Continuing with the ‘progressive’ approach, this
section then goes on to catalogue the proposed
moves to collaborative, ‘extended’ ERP II systems.
Herein, both the assertions of the GRG and the
initial reactions of select industry analysts are
catalogued and critiqued.
The next section deliberates on the subject of
industrial collaboration (rationale and value crea-
247
tion, the available structure types and the barriers to
‘collaborative’ success). The purpose is to establish
the ‘right’ kind of structure type(s) needed to
conduct meaningful information exchange, and
how these should be managed for continuity. The
importance of this section is further heightened by
that fact that without effective partnerships, ERP II
(as has been defined) has no merit and no identity.
Although the path from ERP to ERP II has been
deliberated on earlier, there remains the issue of
how ERP was ‘invented’ in the first place. There is
consensus in the literature that the roots of ERP lay
in the need of the manufacturing industry to
effectively manage its resources for better opera-
tions and planning (Wallace and Kremzar, 2001; Al-
Mashari et al., 2002; Leon, 2003; Koh and Saad,
2006). On the one hand, in spite of the ‘hopeful’
nature of ERP investments, many companies have
ended up in litigation over ERP implementation
issues. To support this, Beard and Sumner (2004)
highlight some high-profile ‘implementation fail-
ures’ at Mobil Europe, Dell Computers, Hershey,
Dow Chemical and Fox Meyer Drugs. Even for
firms where ERP systems were implemented prop-
erly, post-implementation benefits found by some
authors appear moderate at best. Poston and
Grabski (2001) for example examined the effect of
ERP on firm performance over a 3-year period.
They found a significant decrease in the ratio of
employees to revenues in all 3 years, and a reduction
in the ratio of cost of goods sold to revenues in year
3. However, they reported no significant improve-
ment in the ratio of selling, general and adminis-
trative expenses to revenues, or residual income (net
operating income minus imputed interest). Thus, it
can be implied that although adoption appears to
yield efficiency gains in some areas, higher offsetting
cost-to-revenue increases elsewhere leave residual
income unaffected.
On the other hand (albeit using different criteria),
in a Conference Board survey of 117 companies in
17 countries implementing ERP (McNurlin, 2001),
34% of the companies were found to be satisfied
with ERP, 58% were somewhat satisfied, 7% were
somewhat unsatisfied and only 1% were unsatisfied.
Echoing McNurlin’s views, Hunton et al. (2002) in
another study compared firm performance (on
scales such as return on assets (ROA) and ROI) of
63 firms over 3 years that did adopt ERP systems
with peer ‘non-adopting’ firms and found the
returns on the said scales to be significantly better
for the adopting firms. The authors even deduced
 ARTICLE IN PRESS
248 S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
that ERP adoption help firms gain competitive
advantage over non-adopters. On the issue of ERP
and competitive advantage, Beard and Sumner
(2004) who view ERP adoption from the resource-
based perspective propose more ‘considered’ find-
ings. They find that ERP systems may not provide a
competitive advantage based on the premises of
system value, distribution and imitability. Instead,
the source of competitive advantage may lie in the
careful planning and successful management of
ERP projects, refinement of the reengineering of
the processes and the post-implementation align-
ment of ERP system with the organisation’s
strategic directions.
In October 2000, the Gartner Research Group
(GRG) touted its new ‘ERP II’ vision in ‘ERP is
dead, long live ERP II’. This serves as the only
credible source of information on the (exact) subject
(as of this writing). This sub-section summarises
these ‘insights’—the concept and reasoning behind
ERP II, and further recommendations made by
GRG to considering firms—as an introduction to
ERP II. The proceeding sub-section reviews reac-
tions and interpretations by other (selected) indus-
try analysts and vendors on ERP II, to build in a
broader perspective.
ERP II is an evolution from ERP that extends
business processes, opens application architectures,
provides vertical-specific functionality and is cap-
able of supporting global enterprise-processing
requirements (Zrimsek, 2003). Further, ERP II is
a business strategy and a set of industry domain-
specific applications that build customer and share-
holder value by enabling and optimising enterprise
and inter-enterprise, collaborative operational and
financial processes (GRG, 2000).
In elucidating the principal drivers behind the
ERP II concept, Zrimsek (2003) draws upon the
changes in the role and construction of the
enterprise itself. The enterprise is perceived herein
as the supply chain—a virtual organisation that if
looked in entirety, is the provider of goods and
services (as opposed to an isolated organisation). As
individual firms focus on their core competencies,
there is increased incidence of collaborative depen-
dence. This in turn increases the need for B2B
collaborative commerce or simply c-commerce
between firms. The quality of information shared
should be high and in near real time because the
collaborating real-time organisation needs to make
tactical decisions speedily for operational efficiency.
Traditional ERP systems need further outward-
facing elements to facilitate this. This changes the
entire value proposition of ERP that was an inward-
facing ‘monolith’ (Loh and Koh, 2004). Thus, the
level of coordination and collaboration required
places new value on business applications that
enable the efficiency of the virtual, real-time
enterprise. Furthermore, the performance enterprise
delivers earnings, growth and efficiency. Many
practitioners and vendors are turning to solutions
for business intelligence and data warehousing to
provide better information about enterprise perfor-
mance. These new solutions are taking shape under
the banner of corporate performance management
(CPM). CPM is more than just software. It includes
processes to manage corporate performance (such
as strategy formulation, budgeting and forecasting),
methodologies that may drive some of the processes
(such as the balanced scorecard or value-based
management) and metrics that assess performance
against preset goals. Traditionally, ERP implemen-
tations treated the processes and metrics of CPM in
silos, usually approaching them as afterthoughts or
follow-on phases to the initial implementation.
Conversely, ERP II enables CPM to be leveraged
holistically (Zrimsek, 2003).
Zrimsek (2003) further warns that the path to
ERP II will be more complicated and involved than
that for ERP and suggests the following recommen-
dations: users seeking to adopt an ERP II strategy
should:
1. Focus application deployment on the manage-
ment of critical relationships and key perfor-
mance metrics.
2. Deploy internal processes and enterprise systems
that are capable of connecting with other virtual
enterprise participants in a seamless, near-real-
time manner.
3. Combine a business intelligence framework with
their transactional systems to manage and
monitor various levels of corporate performance.
Again, stress is on collaborating from both a
managerial and informational perspective (Steps 1
and 2) and using corporate business intelligence
systems (Step 3).
Industry analysts are cautiously optimistic in
their reviews and perceptions of ERP II. While
most acknowledge that the new business drivers,
speed, adaptability, flexibility and responsiveness
would usher in ERP II, other authors disagree.
Particularly damning is the article loosely coupled
 ARTICLE IN PRESS
S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
that unfortunately disparages ERP II only through
examining failures of old ERP concepts (Hayler,
2003). The argument centres on one principal
theme—standardisation ‘fantasy’, and suggests that
ERP does not acknowledge diversity and imposes
commonality where it does not make sense, and on
this basis, the ERP II reimplementation needs are
questioned. While this has been accepted as an
essential component of ERP problems, this issue
has been duly considered while defining ERP II.
Zrimsek (2003) advocates vendors to provide
products that are neutral regarding language,
currency and statutory requirements and further
suggest that from the monolithic architectures of
ERP, [users] will create ERP II deployment
strategies that best fit the needs of the enterprise
without relying on a single vendor to deliver all
application components. This reflects a lack of
understanding, and a possible, lingering bias from
earlier ERP experiences.
3. Research methodology
Care should be taken that inaccurate secondary
data do not percolate into the present study. There
are a number of options for collecting primary data
such as organisation records, books, journals,
newspapers, surveys, census, government publica-
tions and so on (Saunders et al., 2003).
A range of secondary data were collected for this
study such as published findings on success/failure
rates of ERP, spending/investment figures on ERP,
findings on benefits/impediments of ERP, perceived
strategic implications for ERP II and so on.
Secondary data were sourced essentially from top
ranking, contemporary journals in this area. It was
also collected from recognised researcher houses
such as the GRG, AMR research, etc. and from
ERP vendors’ publishing, e.g. Oracle and SAP.
Where secondary data do not provide enough
information for decision-making, primary data are
required. What is looked for, asked about and
collected herein depends on the research problems
and research design. Normally, primary data are
collected through observations, experiments, sur-
veys and interviews. There are various issues with
collecting primary data—the time and cost in-
volved, access difficulties, proficiency issues with
data analysis and level/commitment of respondent
involvement that might affect their response quality
(Saunders et al., 2003). Only two valid methods exist
for the present purpose as experimentation and
249
observations are not applicable for a ‘future’
concept. Interviews were initially selected but were
rejected owing to response quality. A questionnaire
was therefore used for primary data collection
(necessitated by non-availability of specific informa-
tion), although inputs from various secondary
sources were used in the design of the questionnaire
itself.
Sampling techniques provide a range of methods
that enable researchers to reduce the data needed by
considering data from a sub-group (sample) rather
than the population.
The primary purpose of a survey is to obtain
information from, or about, a defined set of people
or population. Sampling aids in constructing a
subset of the population, which is representative in
the main areas of interest. It is then possible to infer
statistically the likelihood that a pattern observed in
the sample would be replicated in the population.
A total sample size of 40–50 was planned, a
sample deemed adequate in a wide number of
pertinent research papers (e.g. Lee et al., 2003;
Gattikar and Goodhue, 2003). This modest re-
sponse is expected because of the need to identify
and contact ‘specialists’. Of the many sample
selection options available under probability and
non-probability sampling, the present sample was
selected as per the guidelines and requirements of
the purposive or judgemental sampling of which the
homogeneous sampling strategy (Saunders et al.,
2003) was chosen. Purposive sampling was required
because of the need for the aforementioned specia-
lists (only those respondents who have implemented
or were directly involved with at least one ERP cycle
was kept as the qualifying criterion). The homo-
geneous strategy was chosen, as there was a need to
classify respondents under sub-groups based on
existing relationships with ERP (Integrators/ERP
Consultants/Software houses were one category:
Implementers; functional users from parent compa-
nies: Functional (parent) users; and functional users
from suppliers/subsidiary companies: Suppliers.
Snowball sampling was also used to aid this process
(if experts were identified, they were encouraged to
pass the questionnaire/online link to their peers).
Snowball sampling does create a problem both of
repetition and of validity, but only those respon-
dents personally known were encouraged to for-
ward the questionnaire to the ‘right’ people. For this
reason, the response rate cannot be established to a
degree of exactness but is estimated to be anywhere
between 30% and 40%. Respondents were selected
 ARTICLE IN PRESS
250 S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
from the aforementioned sub-groups (from four
countries—India, Sri Lanka, UK and USA) and 44
responses were selected (46 in total, two were
rejected for incomplete response) and 37 (84%)
respondents had requested anonymity. Thus, all
personal references to companies or respondents
will be withheld except analysis resulting from their
sub-group status.
Questionnaires work best with standardised
questions that facilitate uniform interpretation
(Robson, 2002). Respondents, and not interviewers,
fill them out, appointments are not necessary, and
once administered the researcher has little to do
besides processing incoming questionnaires. In
contrast to telephone and face-to-face surveys,
questionnaires do not require decision-making on
an immediate, high-pressure basis. They also mini-
mise sampling error at relatively low cost. Further-
more, the aspect of inherent anonymity for the
respondent is considered (Dillman and Salant,
1994).
Possibly, the greatest concern of questionnaires
stems from their sensitivity to non-coverage error.
Some people are less likely to respond to the
questionnaire than others are (for various rea-
sons—poorly designed, difference in interviewee–in-
terviewer status, etc.). Additionally, researchers
have little control over what happens to the
questionnaire after it is administered. They cannot
control whether questionnaires are filled out com-
pletely. Respondents may purposely skip over
difficult and boring questions, or inadvertently
overlook some items. It is also possible that the
respondent might not understand the question
clearly or interpret it in the way the researcher
intended to mean and hence may result in erroneous
analysis (Robson, 2002).
An online version of the questionnaire was
developed following a review of the ERP/ERP II
literature. A list of attributes compiled therein was
reviewed and prioritised for the questionnaire. Both
open- and closed-ended questions were used. The
open-ended questions were descriptive (single/multi-
line) including personal/demographic/workplace de-
tails and a question (near the end of the ques-
tionnaire) that prompted the respondents to add
any comments on ‘the issue’, which, as anticipated,
provided insights and pointers not found in the
literature. The closed questions were of two types,
the first was a slight departure from a pure
dichotomous (Yes/No) question in that it gave a
‘Maybe’ clause in asking ‘No—But it might later’.
The second was a 5-point Likert scale, a common
form of attitude analysis that creates a much richer
discrimination set vis-à-vis dichotomous (Yes/No)
questions (McCall, 2001). Brassington and Petit
(2003) recommend a series of general principles, e.g.
ensuring the question is unambiguous, whilst
drafting questions for the survey (that have been
duly considered).
The questionnaire was administered through easy
to read HTML-based web pages, sourced from a
survey hosting company (http://www.surveymon-
key.com). The subject area being very new, a short
refresher along with a link to an on-line site that
explained about ERP II (http://www.vnunet.com—
a respected industry analyst) was provided. All
descriptive questions (open-ended) were kept op-
tional (except for the industry type worked for) as
these do not necessarily add to the statistical results,
and respondents might not have taken the survey
because of the need for ‘corporate’ anonymity. All
closed-ended questions were mandatory and the
HTML page would warn the respondent if a choice
had been missed out.
4. Results, analysis and discussions
This section presents both the quantitative and
qualitative results of the survey. Quantitative results
are analysed statistically using SPSS version 13,
whilst the qualitative results are presented categori-
cally.
4.1. Respondent ‘brackets’
The only classification done for the respondents is
based on their relationship to ERP. Of the 44 valid
responses, 20 (45.5%) respondents were implemen-
ters, 12 each (27.3%) were functional (parent) users
and suppliers (see Fig. 1). As expected, the
implementers were more forthcoming and thus
dominate the respondent list. The lack of a more
homogeneous sample is a limitation to the present
study and this issue has been considered while
analysing the data.
4.2. Initiation responsibility
The literature is united in advocating top-
management support and initiation responsibility
for ensuring ERP success (Davenport, 2000; Leon,
2003). Due to the strategic shift in outlook, for ERP
II to be a success, this support is even further
 ARTICLE IN PRESS
S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268 251

40

30
Count

20
75.0%
75.0%

10

20.45%
20.45%
0 2.27% 2.27%
2.27 2.27
Top Systems/IT Finance Others
Management Department Department (Please Specify)*
Who initiates ERP implementations within your company (or the
companies you consult for) ?
* Head Office (1 respondent)

Fig. 2. ERP initiation responsibility.

necessitated. Respondents were asked of existing companies interested in collaborative benefits

initiation responsibility. Surprisingly, 11 (24.99%)
of the respondents still had other ‘departments’,
predominantly their Systems/IT department initiat-
ing (see Fig. 2).
For ERP II, not only should this be eliminated,
top management support needs to be kept binding
in some way, throughout the life cycle. For example,
a steering committee constituting top management
and senior officials of important departments
should be formed first for the company to set its
own ‘expectations’ from ERP II. Another forum
constituting such steering committees of important
players in the supply chain should come together to
reconcile the objectives of the participants. A
possible moderation and advisory set-up would also
be needed (constituted of independent consultants
and/or senior representatives from the participants
themselves).
4.3. Collaborative exchange trends
Question 3 asked the respondents if their compa-
nies or the companies they consulted for (in case of
implementers) the extent to which collaborative
electronic exchanges were happening or were
planned. Although these do not necessarily trans-
gress into full-blown ERP II implementations, it
does give an indication of the percentage of
through information exchange. The results were
encouraging, with 30 (68.18%) respondents replying
in the affirmative, 11 (25%) responding to this as a
possible future activity and only 3 (6.82%) replying
in the absolute negative. It was also worthwhile to
note that as the implementers was the only group
from which respondents said no to collaborative
initiatives (see Fig. 3), it could serve as a wake-up
call for them.
4.4. Perceived benefits of ERP II implementation
This question had 21 sub-questions grouped
under logical headings. Each was framed in a 5-
pont Likert scale: Strongly Agree, Agree, Neither
Agree or Disagree, Disagree and Strongly Disagree,
coded as 1, 2, 3, 4 and 5, respectively. Besides
descriptive cross-tabulations—perceptions vs. in-
dustry types—the overall modes are highlighted
within and across the different groups.
ANOVA analyses the variation within and
between groups of data by comparing means.
Amongst the considerations for running an ANOVA
test (Saunders et al., 2003), if the number of cases
within groups are unequal, the data for each group
need to have the same variance. The test of
homogeneity calculates the Levene statistic to estab-
lish difference/similarity in variance. Unfortunately,
 ARTICLE IN PRESS
252 S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
Industry Type
Implementers
Functional (Parent) Users
Suppliers
30
15.91%
25
20
18.18%
Count
15
10
11.36%
34.09%
5
9.09%
0.0%
6.82%
4.55%
0 an overall increase of productivity levels as more
Yes No No - But it might
in the future
Does your company (or the companies you
consult for) collaborate/talk to its/their
partners/suppliers electronically ?
Fig. 3. Collaborative information exchange trends.
the test revealed differences in inter-group variances
for almost all the sub-questions. The SPSS software
help files provided an alternative to the standard
F statistic used in ANOVA when this happens. ‘‘The
Welch statistic is more powerful than the standard
F or Brown–Forsythe statistics when sample sizes and
variances are unequal’’. Instead of evaluating the
p value from the standard F test, the p value from the
Welch statistic was used as it is more robust if both
the variance and number of inter-group cases are
heterogeneous. The variation between the groups is
highlighted first (for each logical grouping of sub-
questions) before proceeding to a detailed analysis for
each sub-question.
4.4.1. Operational
There were 5 sub-questions or ‘choices’ posed to
the respondents within this category including cost
reduction, cycle time reduction, productivity im-
provement, quality improvement and customer
service improvement. Table 1a summarises the
results for the one-way ANOVA and Table 1b does
so for the Welch statistic. The p values of both the
tests are under 0.05 for the first 4 sub-questions.
This implies that the differences in perception
between the groups are statistically significant for
each of these questions. For the 5th sub-question,
while the p value of the standard F test is under 0.05,
the p value through the Welch statistic does not
support this. This variation, although high, cannot
therefore be considered statistically significant.
As evidenced from the modal distribution of each
of the sub-questions, the perceived operational
benefits carried forward from the literature on
ERP (Shang and Seddon, 2000) still hold for ERP
II, although there are subtle differences in the
responses from groups. Cost reduction is likely to
happen because of the process improvement
brought in through improved information flow; this
would also lead to cycle time reduction as apart
from the internal functions improvements, the
supply chain will be better equipped to answer to
each other’s real-time demands. This would lead to
and more partners ‘talk’ the same language, and
levels of product/delivery quality are also expected
to increase. The importance of customer service in
the coming times has been elucidated (Zrimsek,
2003), and is perhaps the prime strategic directive
that ERP II promises on.
There is general agreement for cost reduction
from the industry types. Although the p value of the
Welch test shows statistical significance in differ-
ential perceptions, this could be explained due to the
variation shown by suppliers in particular who
appear to be sceptical in their acceptance for ERP
II. The response for cycle time reduction also shows
that implementers and functional (parent) users
agree while the suppliers are in definite disagree-
ment, which is further validated by the Welch test.
The biggest sign of inter-industry conflict is shown
for productivity improvement; while implementers
strongly agree, the functional (parent) users remain
somewhat neutral, and the suppliers decidedly
disagree. Although the higher numbers of imple-
menters tilt the overall mode towards agreement,
the response is nevertheless surprising as cycle time
reduction and productivity improvement go hand in
hand (Wallace and Kremzar, 2001). The response
for quality improvement is mixed where implemen-
ters agree; the functional (parent) users remain
neutral while the implementers choose either to be
neutral or to disagree. The response for customer
service improvement is largely positive (high p value
reinforces the apparent uniformity).
4.4.2. Managerial
There were 3 sub-questions posed to the respon-
dents within this category including better resource
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Table 1a
ANOVA results for operational benefits

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Cost reduction
Between groups 8.345 2 4.173 8.070 0.001*
Within groups 21.200 41 0.517
Total 29.545 43
Cycle time reduction
Between groups 21.770 2 10.885 19.517 0.000*
Within groups 22.867 41 0.558
Total 44.636 43
Productivity improvement
Between groups 25.170 2 12.585 16.798 0.000*
Within groups 30.717 41 0.749
Total 55.886 43
Quality improvement
Between groups 10.861 2 5.430 9.232 0.000*
Within groups 24.117 41 0.588
Total 34.977 43
Customer service improvement
Between groups 6.533 2 3.267 3.394 0.043*
Within groups 39.467 41 0.963
Total 46.000 43

Key: * po0.05.

Table 1b
Welch statistics for operational benefits

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Cost reduction 5.450 2 20.349 0.013*

Cycle time reduction 16.279 2 21.256 0.000*
Productivity improvement 18.422 2 20.737 0.000*
Quality improvement 9.867 2 22.336 0.001*
Customer service improvement 2.741 2 21.452 0.087

Key: *po0.05.

management, improved decision-making and plan-
ning, and performance improvement. Table 2a
summarises the results for the one-way ANOVA
and Table 2b for the Welch statistic. The p value of
both the tests is under 0.05 for each of the sub-
questions, thereby establishing statistical signifi-
cance in differences of perception.
The modal distribution again points towards a
general agreement to carrying forward existing ERP
benefits (Shang and Seddon, 2000). As discussed by
Wheller (2004), ERP II enhances each of these
benefits; e.g. resources are better managed and
decision-making and planning is enhanced not only
because of the intrinsic advantages of ERP but also
because the resources of the entire supply chain are
now made available. Advanced features such as
business intelligence and data warehousing shaped
under the banner of CPM, built into the ERP II
core, are all likely to aid real-time business decisions
(Zrimsek, 2003). Interestingly, there are differences
between the beliefs between the respondent types
(p value p0.002).
The sub-questions on both better resource manage-
ment and improved decision-making and planning
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Table 2a
ANOVA results for managerial benefits

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Better resource management

Between groups 16.879 2 8.439 11.283 0.000*
Within groups 30.667 41 0.748
Total 47.545 43
Improved decision making and planning
Between groups 16.103 2 8.052 9.771 0.000*
Within groups 33.783 41 0.824
Total 49.886 43
Performance improvement
Between groups 14.679 2 7.339 8.630 0.001*
Within groups 34.867 41 0.850
Total 49.545 43

Key: *po0.05.

Table 2b
Welch statistics for managerial benefits

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Better resource management 12.467 2 21.384 0.000*

Improved decision making and planning 9.722 2 18.655 0.001*
Performance improvement 9.462 2 17.192 0.002*

Key: *po0.05.

follow a similar pattern, with the first two respondent
types principally agreeing, while the suppliers gen-
erally disagreeing. It can be seen that on the issue of
performance management, the implementers agree,
opinion is divided almost uniformly across the answer
choices for the functional (parent) users, while the
suppliers, again, disagree.
4.4.3. Strategic
There were 6 sub-questions posed to the respon-
dents within this category including support for
business growth, support for business alliance,
building business innovations, building cost
leadership and generating product differentiation.
Table 3a summarises the results for the one-way
ANOVA and Table 3b for the Welch statistic. The
p value of both the tests is under 0.05 for the 1st, 3rd
and 4th sub-questions, implying statistical signifi-
cance between these ‘choices’.
Although business should naturally grow as the
‘tie’ between the chains is strengthened, however, it
can have a downside. One of the assumptions of the
GRG (Zrimsek, 2003) was the loyalty that the
partners would have to show and the trust that
would have to be built as core competencies would
be concentrated upon more rigorously. It only
remains to be seen whether business will actually
‘grow’ horizontally at least. This was seen favour-
ably by all three respondent sets, more so by the
implementers. Alliances will be supported as that is
an important strategic foundation of ERP II
(Zrimsek, 2003). Supported both by the implemen-
ters and by the suppliers who strongly agreed, it was
downplayed by the functional (parent) users who
(within their operational realm) have little to do
with alliance building. The issue of building business
innovations should be aided by the use of tools for
product development (inbuilt) and initiatives for
joint product development. Although the first group
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Table 3a
ANOVA results for strategic benefits

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Support for business growth

Between groups 10.012 2 5.006 6.261 0.004*
Within groups 32.783 41 0.800
Total 42.795 43
Support for business alliance
Between groups 6.776 2 3.388 2.757 0.075
Within groups 50.383 41 1.229
Total 57.159 43
Building business innovations
Between groups 8.242 2 4.121 8.176 0.001*
Within groups 20.667 41 0.504
Total 28.909 43
Building cost leadership
Between groups 13.215 2 6.608 10.046 0.000*
Within groups 26.967 41 0.658
Total 40.182 43
Generating product differentiation
Between groups 4.094 2 2.047 2.406 0.103
Within groups 34.883 41 0.851
Total 38.977 43
Building external linkages /Extending the value-chain
Between groups 4.012 2 2.006 2.080 0.138
Within groups 39.533 41 0.964
Total 43.545 43

Key: *po0.05.

Table 3b
Welch statistics for strategic benefits

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Support for business growth 7.430 2 19.408 0.004*

Support for business alliance 2.843 2 21.997 0.080
Building business innovations 7.622 2 24.174 0.003*
Building cost leadership 11.871 2 20.932 0.000*
Generating product differentiation 2.400 2 23.082 0.113
Building external linkages/extending the value-chain 1.637 2 18.363 0.222

Key: *po0.05.

agreed, the other two remained neutral. How ERP
II will lead to either cost leadership or product
differentiation would ultimately depend on the
position of the dominant players and their strategic
policies, but operational, managerial, infrastructur-
al and organisational benefits (discussed next)
should aid in setting the context right. Both these
issues were agreed to by the implementers and
the functional (parent) users, with the suppliers
again being the undecided group showing high
variation across its mean responses. Amongst the
very few survey questions strongly agreed to by
each of the respondent groups was the building of
the value chain, which again is an inherent
characteristic of ERP II (Zrimsek, 2003; Wheller
2004).
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4.4.4. IT infrastructure coordinate in making these resources ‘talk’ to other

There were 3 ‘choices’ herein including building
business flexibility for current and future changes,
IT cost reduction and increased IT infrastructure
capacity. Table 4a summarises the results for the
one-way ANOVA and Table 4b does so for the
Welch statistic. The p value of both the tests is
under 0.05 for each of the sub-questions, implying
statistical significance in differences of perception
between groups.
These benefits were carried forward from the
ERP literature (Shang and Seddon, 2000). These are
expected to be magnified once the capabilities of
knowledge management (KM), supplier relation-
ship management (SRM), CRM, SCM and ulti-
mately real-time c-commerce are integrated
(Zrimsek, 2003). Both the issues of building business
flexibility and increased IT infrastructure capabil-
ities were agreed to by the respondent groups. The
issue of IT cost reduction is a little debatable at least
for the short term as not only does a company have
to spend on its own IT resources but will also
possibly disparate systems. It might even involve a
relay of existing infrastructure to newer standards-
based component systems. This point was taken by
suppliers who strongly disagreed, while the other
groups (who were possibly taking a long-term
perspective of reducing IT costs through the
common systems approach (Wheller, 2004)) gener-
ally agreed. This difference was confirmed by a p
value of 0.000.
4.4.5. Organisational
There were 4 sub-questions asked from the
respondents within this category including changing
to better, ‘optimal’ work patterns, facilitating
organisational learning, organisational empower-
ment and building a common vision. Table 5a
summarises the results for the one-way ANOVA
and Table 5b for the Welch statistic. The p value of
both the tests is p0.05 for sub-questions 1, 2 and 4,
indicating statistical significance in perception var-
iance between groups.

Table 4a
ANOVA results for IT infrastructural benefits

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Building business flexibility for current and future changes

Between groups 6.879 2 3.439 4.189 0.022*
Within groups 33.667 41 0.821
Total 40.545 43
IT cost reduction
Between groups 30.545 2 15.273 13.045 0.000*
Within groups 48.000 41 1.171
Total 78.545 43

Increased IT infrastructure capability

Between groups 9.048 2 4.524 5.911 0.006*
Within groups 31.383 41 0.765
Total 40.432 43

Key: *po0.05.

Table 4b
Welch statistics for IT infrastructural benefits

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Building business flexibility for current and future changes 4.279 2 20.709 0.028*
IT cost reduction 16.211 2 23.577 0.000*
Increased IT infrastructure capability 6.215 2 19.874 0.008*

Key: *po0.05.
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Table 5a
ANOVA results for organisational benefits

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Changing work patterns

Between groups 9.003 2 4.502 7.417 0.002*
Within groups 24.883 41 0.607
Total 33.886 43
Facilitating organisational learning
Between groups 6.315 2 3.158 5.005 0.011*
Within groups 25.867 41 0.631
Total 32.182 43
Empowerment
Between groups 2.912 2 1.456 1.664 0.202
Within groups 35.883 41 0.875
Total 38.795 43
Building common vision
Between groups 11.836 2 5.918 6.731 0.003*
Within groups 36.050 41 0.879
Total 47.886 43

Key: *po0.05.

Table 5b
Welch statistics for organisational benefits

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Changing work patterns 9.065 2 20.650 0.001*

Facilitating organisational learning 5.403 2 21.981 0.012*
Empowerment 2.130 2 20.587 0.144
Building common vision 7.102 2 18.614 0.005*

Key: *po0.05.

As evidenced from the modal distribution of each
of the sub-questions, the perceived organisational
benefits carried forward from the literature on ERP
(Al-Mashari et al., 2002; Shang and Seddon, 2000)
still hold for ERP II. Apart from the issue of
empowerment i.e. to make faster, more autonomous
decisions—which has a general consensus on agree-
ment by all three respondent types involved—all
three remaining questions vary across their mean
answers. The issue of facilitating organisational
learning will be further heightened as the concepts
of human capital and KM are given increasing
importance (Zrimsek, 2003; GRG, 2000). With
information sharing becoming paramount, the
‘amount’ and criticality of that information is in
focus. A possible situation might involve employees
knowing more about their organisations than
previously known (it could work as a double-edged
sword as sensitive information may be kept under
further wraps). This was generally agreed by all the
groups. The issue of building a common vision as a
benefit was meant—‘between departments’ (for
ERP), now it is ‘between participating firms’. The
mode for the four answers pointed to agreement,
although the suppliers were extremely divided on
the issue.
4.5. Perceived impediments to ERP II success
This question had 14 sub-questions grouped
under logical heads, and each was framed and
analysed exactly as for the previous section.
There are however increased ‘new’ impediments
tested (vis-à-vis existing, carried forward benefits for
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ERP), as although the benefits seem to increase in
intensity from ERP alone (apart from fewer ‘new’
benefits), the impediments increase in number as well
as intensity. Since ERP still is at the heart of ERP II,
the problems of ERP alone can be considered
implicit and are hence tested only if they somehow
link to the external, extra-firm issues. Other distinct
impediments easily bear out and are therefore tested
for applicability. The same parallel may not be
pertinent for benefits—as they either simply seem to
intensify or are not applicable, apart from fewer
(aforementioned) new benefits. As an example,
consider that one of the benefits for ERP was
process standardization—this could now well be-
come an impediment since information as an
outcome of these standardised processes for one
company might not be compatible with information
generated through another company’s standardisa-
tion efforts. This is not to say that standardisation
should not occur, it implies that standardisation
should not occur in isolation. Consider also that
ERP was an inward-looking enterprise system as it
catered to the needs of the organisation alone; under
the ERP II umbrella—the philosophy of a tailor-
made system for one organisation has been reversed
to cater to the wider needs of the value chain,
although ERP remains the core (Zrimsek, 2003).
4.5.1. Operational
There was only 1 sub-question within this
category, i.e. the changes in work/process pattern
necessitated. It is again reiterated that other
Table 6a
ANOVA results for operational impediments
ANOVA test (pp0.05, deciding point of significance)
The changes in work/process pattern necessitated
Between groups
Within groups
Total
Table 6b
Welch statistics for operational impediments
Robust tests of equality of means (pp0.05, deciding point of significance)
Welch
The changes in work/process pattern necessitated
operational issues mentioned in the literature (e.g.
Markus, 1999) are not tested, as they are considered
implicit. Table 6a summarises the results for the
one-way ANOVA and Table 6b for the Welch
statistic. The p value of both the tests is over 0.05,
indicating compliance of perception response be-
tween the groups.
The modal distribution confirms the expectation
that the changes in work/process patterns will
indeed be a major hindrance. It thus becomes
the prerogative of every concerned party, from the
vendors to the consultants, the implementers to the
IT partners to cater to this concern. The aim should
be to tailor a solution that addresses this concern
for all participating firms, to make the transition
fair and smooth. The uniform agreement is con-
firmed by the high p value of the tests.
4.5.2. Managerial
There was again only 1 sub-question posed to the
respondents within this category i.e. it would be
difficult to manage within and outside the firm’s
boundaries. Table 7a summarises the results for the
one-way ANOVA and Table 7b for the Welch
statistic. The p value of both the tests is over 0.05,
indicating compliance of perception response be-
tween the groups.
The modal distribution and high p value again
confirm the expectation that it would be difficult to
mange the ERP II process as it would involve inter-
firm management. This result agrees with Johnson
and Scholes (2003), who elucidate this difficulty.
Sum of squares df Mean Square F Sig. (p)
2.376 2 1.188 2.593 0.087
18.783 41 0.458
21.159 43
Statistic (a) df1 df2 Sig. (p)
2.354 2 26.547 0.115
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Table 7a
ANOVA results for managerial impediments
ANOVA test (pp0.05, deciding point of significance)
Difficult to manage within and outside the firm’s boundaries
Between groups
Within groups
Total
Table 7b
Welch statistics for managerial impediments
Robust tests of equality of means (pp0.05, deciding point of significance)
Welch
Difficult to manage within and outside the firm’s boundaries
Some of the other issues discussed in the literature
review on managing IFC would be applicable here.
The management purview would also depend on the
collaborative structure chosen for information
exchange.
4.5.3. Strategic
There were 4 ‘choices’ offered for the respondents
to choose from. These included convincing partners in
joining the collaborative process, politics prevailing
within the partner firms, competitors might interfere
in the way the agreement for collaboration is done
and the process changes within the collaborative
community might make the whole initiative prohibi-
tive. Table 8a summarises the results for the one-way
ANOVA and Table 8b for the Welch statistic. The
p value of both the tests is under 0.05 for sub-
questions 1 and 4, indicating statistical significance in
perception variance, and above 0.05 for sub-questions
2 and 3, indicating compliance of perception response
between the groups.
The modal distribution confirms the expectation
that the convincing partners would be a challenge
(Hamel, 1991). As one of the respondents aptly
suggested, it would involve coercion and power
play. External politics are also considered as a
major challenge for ERP II. Consider a supplier as a
part of two major department stores—the dominant
players in their respective chains, if a supplier wants
to join their collaborative initiatives, he would have
to deal with the issue that neither of these major
players would be accommodating to aid the supplier
259
Sum of squares df Mean square F Sig. (p)
3.394 2 1.697 1.955 0.154
35.583 41 0.868
38.977 43
Statistic (a) df1 df2 Sig. (p)
2.748 2 23.732 0.084
if it affects their strategic objectives and sources of
competitive advantage. This would manifest as
competitors interfering with trading partners to join
in the collaborative process. This was widely agreed
to by the respondents, except for the implementers
who remain positive.
4.5.4. Financial
There was only 1 sub-question asked from the
respondents within this category, i.e. the possibly
huge investment and the (unclear) ROI. Table 9a
summarises the results for the one-way ANOVA
and Table 9b for the Welch statistic. The p value of
both the tests is above 0.05, indicating compliance
of perception response between the groups.
The modal distribution is unclear in establishing
concerns over the unclear ROI expectations. Wal-
lace and Kremzar (2001) postulate a methodology
to calculate ROI for ERP but it is still needs to be
extended for ERP II. The high p value coupled with
differences in opinions between all industry types
does express a uniform uncertainty on this issue.
The GRG (2000) does mention that all ERP II
implementations should be ROI driven, but fail to
mention how this is to be calculated, which was the
underlying basis for this question.
4.5.5. Technological
There were 3 sub-questions put in for the
respondents to choose from. These included asking
if they believed that non-availability of ERP II
‘packages’ from leading industry vendors was a
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Table 8a
ANOVA results for strategic impediments

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Convincing partners i.e. suppliers/customers in joining the collaborative process

Between groups 7.367 2 3.683 4.930 0.012*
Within groups 30.633 41 0.747
Total 38.000 43
External/inter-firm politics outside the company
Between groups 3.715 2 1.858 1.930 0.158
Within groups 39.467 41 0.963
Total 43.182 43
Competitors may interfere/influence other trading partner
Between groups 3.215 2 1.608 1.403 0.257
Within groups 46.967 41 1.146
Total 50.182 43
Process changes within the collaborative community would be prohibiting
Between groups 11.003 2 5.502 6.912 0.003*
Within groups 32.633 41 0.796
Total 43.636 43

Key: *po0.05.

Table 8b
Welch statistics for strategic impediments

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic(a) df1 df2 Sig. (p)

Convincing partners i.e. suppliers/customers in joining the collaborative process 6.806 2 24.868 0.004*
External/inter-firm politics outside the company 2.996 2 23.950 0.069
Competitors may interfere/influence other trading partners 1.440 2 23.173 0.257
Process changes within the collaborative community would be prohibiting 8.965 2 23.846 0.001*

Key: *po0.05.

Table 9a
ANOVA results for financial impediments

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Huge (re)-investment return on investment not forthcoming

Between groups 1.442 2 0.721 0.713 0.496
Within groups 41.467 41 1.011
Total 42.909 43

hindrance, if technological incompetence within
trading partners was a barrier or even if infra-
structural issues might be a concern. Table 10a
summarises the results for the one-way ANOVA
and Table 10b for the Welch statistic. The p value of
both the tests is above 0.05 for sub-questions 1 and
3, indicating compliance of perception response
between the industry groups, and below 0.05 for
sub-question 2, indicating conformity of answers
between the groups.
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Table 9b
Welch statistics for financial impediments

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Huge (re)-investment return on investment not forthcoming 0.678 2 25.613 0.517

Table 10a
ANOVA results for technological impediments

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

ERP II ‘packages’ not available

Between groups 3.245 2 1.623 1.343 0.272
Within groups 49.550 41 1.209
Total 52.795 43
Technological incompetence within trading partners is a barrier
Between groups 5.345 2 2.673 3.301 0.047*
Within groups 33.200 41 0.810
Total 38.545 43
Infrastructural issues (electricity/internet/ networking availability)
Between groups 3.442 2 1.721 0.932 0.402
Within groups 75.717 41 1.847
Total 79.159 43

Key: *po0.05.

Table 10b
Welch statistics for technological impediments

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

ERP II ‘packages’ not available 1.574 2 22.527 0.229

Technological incompetence within trading partners is a barrier 5.050 2 23.392 0.015*
Infrastructural issues (electricity/Internet/networking availability) 0.925 2 22.899 0.411

Key: *po0.05.

The modal distribution is unclear in establishing
concerns over the issue of ERP II packages not
being currently available. The results to this sub-
question were answered in the neutral by functional
(parent) users and suppliers, possibly because of
lack of awareness or because they had not yet
reached the stage of evaluating technological
choices. The current literature on ERP postulates
non-industry-specific ‘packages’ as a major hin-
drance (Leon, 2003). The implementers remain
positive about this not affecting the success of
ERP II, as some possibly accept the GRG (2000)
suggestions that componentised, systematic, ‘bolt-
on’ solutions would be implemented over the
current ERP and other ‘packaged’ systems to
minimise cost. The low p value could be attributed
to variation between the implementers, some of who
remain optimistic. The issue of infrastructural issues
was asked because this now has to be viewed
from the inter-industry perspective, if say there is a
power failure at one information-generating centre,
the real-time implications could be high with the
entire collaborative effort at risk. All groups
generally disagreed to this, but the reason is not
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very clear—whether they truly do not believe this to 4.5.7. Legal

be an impediment or whether they viewed this from
an internal perspective.
4.5.6. Organisational
There were 2 sub-questions asked from the
respondents. These included issues of inter-depart-
mental politics and problems of culture and change
management. Table 11a summarises the results for
the one-way ANOVA and Table 11b for the Welch
statistic. The p value of both the tests is above 0.05
for the questions, indicating conformity of answers
between the groups.
Opinions appear varied across each of the
industry-groups for the first sub-question, although
the mode favours agreement. This option involved
issues of inter-departmental politics within a com-
pany (Markus, 1999) that were thought to be
further manifested as the strategic purviews of the
firm are differentiated slightly in the quest for core
competencies as advocated by the GRG (Zrimsek,
2003; GRG, 2000). There was universal agreement
on the problems of culture and change manage-
ment. Both of these impediments were carried
forward from the literature on ERP (Al-Mashari
et al, 2002) but might intensify further because of
additional ‘extraneous’ factors.
There were 2 sub-questions asked from the
respondents including issues of monopolies/dom-
ination and importantly issues of information
sensitivity. Table 12a presents the results for the
one-way ANOVA and Table 12b for the Welch
statistic. The p value of both the tests is above 0.05
for question 1, indicating conformity between the
groups, and is below 0.05 for question 2, indicating
variance.
Opinions appear varied across each of the
industry groups for the first sub-question and the
opinions vary strongly across the mean for all sub-
groups (confirmed by the high p values), while it is
strongly agreed to by the functional (parent) users
and the suppliers, while the implementers remain
varied (and thus the low p value). However, for the
second question, there appears uniform agreement.
Both of these results agree with postulation in the
IFC literature (Johnson and Scholes, 2003).
4.6. Collaborative structure selection
One of the issues of concern voiced by the
respondents, and was also highlighted earlier as a
principal aim of this research, was to do with the
formalisation of collaboration. In other words,
what collaborative structure should be adopted for

Table 11a
ANOVA results for organisational impediments

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Internal/inter-departmental politics within the company

between groups 2.770 2 1.385 0.981 0.383
Within groups 57.867 41 1.411
Total 60.636 43
Problems such as culture and change management
Between groups 2.715 2 1.358 1.447 0.247
Within groups 38.467 41 0.938
Total 41.182 43

Table 11b
Welch statistics for organisational impediments

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Internal/inter-departmental politics within the company 1.059 2 25.321 0.362

Problems such as culture and change management 1.332 2 26.724 0.281
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S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268 263

Table 12a
ANOVA results for legal impediments

ANOVA test (pp0.05, deciding point of significance)

Sum of squares df Mean square F Sig. (p)

Legal issues such as monopolies/industrial domination

Between groups 0.076 2 0.038 0.025 0.975
Within groups 61.833 41 1.508
Total 61.909 43
Issues of information secrecy (i.e. how much to ‘share’ and how much ‘withhold’)
Between groups 8.548 2 4.274 5.172 0.010*
Within groups 33.883 41 0.826
Total 42.432 43

Key: *po0.05.

Table 12b
Welch statistics for legal impediments

Robust tests of equality of means (pp0.05, deciding point of significance)

Welch Statistic (a) df1 df2 Sig. (p)

Legal issues such as monopolies/industrial domination 0.025 2 21.979 0.975

Issues of information secrecy (i.e. how much to ‘share’ and how much ‘withhold’) 4.583 2 25.508 0.020*

Key: *po0.05.

the participating companies. It is a little limited in
not discussing the ‘human’ (objective building,
power-play/coercion) side of structure-establish-
ment (that again requires a specialist study on its
own). This section involves a short content analysis.
It looks at the literature to define possible structure
types and through a process of elimination estab-
lishes a suitable relationship structure for informa-
tion resource exchange and hence conduct joint,
c-commerce.
Extensive literature on IFC places emphasis on
pre- and post-conditions whilst choosing partners
(Soekijad and Andriessen, 2003; Reid et al., 2001),
or on managing the alliance (Spekman et al, 1998),
or even (at best) defining the various available
structures (Johnson and Scholes, 2003; Barringer
and Harrison, 2000) available to choose from.
Unfortunately, none of these studies has categorised
these structures based on the business activity
intended, i.e. there is no study that classifies
structure types as possible candidates based on the
business intention.
One way to use the existing studies for identifying
potential structures is to conduct a ‘trial and
elimination fit’ based on what is said about popular
structures’ usefulness and applicability. Three pos-
sible candidates have been identified, namely joint
ventures, networks and Japanese-style ‘purchasing
partnership’.
First, we look at why these structures were
deemed appropriate and second, why the others
were eliminated.
Joint ventures (JVs): These are defined as ‘‘ar-
rangements where organisations remain indepen-
dent but set up a newly created organisation jointly
owned by the parents’’ (Johnson and Scholes, 2003).
Barringer and Harrison (2000) note a particular
type of JV called ‘scale’ JV wherein the partners
collaborate at a single point in the value chain to
gain economies of scale in production or distribu-
tion or to combine their expertise. This seems to
suggest that a ‘scale’ joint venture could be formed
by the various companies in the value chain that
then becomes the responsible agent for conducting
information interchange between the companies.
Networks: These are defined as ‘‘constellations of
businesses that organise through the establishment
of social, rather than legally binding, contracts’’
(Barringer and Harrison, 2000). Network structures
tend to emerge when complex, inter-dependent
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264 S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268

Table 13
Reasons for IFC non-consideration

Structure Primary use (Source: Johnson and Scholes, 2003; Primary reason for non-consideration
Barringer and Harrison, 2000)

Opportunistic Similar to networks but focus is on a single project c-Commerce requirements are such that a long-term
alliances partnership is sought
Licensing Common in scientific industries viz. licensing the right to Unrelated to objective
manufacture a patented product
Franchising Common business tasks are split between the franchisee Could be (and is) used for other functions. It is largely
and the franchiser, a way to distribute slices of the unrelated to current objective
business cake
Subcontracting A company chooses to subcontract a particular service to Could be used for providing technological (and other)
another company assistance to the companies, but is unrelated to the
collaborative objective itself
Consortia Similar to JVs except are created for very large projects Disproportionate scale than what is required
(e.g. the Channel tunnel)
Trade association Trade associations are typically non-profit organizations Unrelated to objective
formed by firms in the same industries
Interlocking Largely to do with directorial issues between two or more Unrelated to objective
directorate companies. The firm’s resources are dependent on who
sits on the board

tasks must be completed under time pressure. Task 5. Conclusions

complexity and pressures of time, they contend,
make the sequential production of a product or
service through a traditional industry value chain
unfeasible. It has been asserted that a network of
firms tied together by a hub organisation, social
norms and clearly aligned interests can move
quickly to bring products to the market. This could
be adopted, as the hub organisation might be a
possible dominant player in a value chain that ties
its dedicated suppliers/customers together through
an ‘informational network’.
Japanese-style purchasing partnership: Dyer and
Ouchi (1993) define the Japanese-style partnership
as an exclusive buyer–supplier relationship that
focuses on maximising the efficiency of the entire
business system (value chain). Due to the success
attributed to Japanese-style partnerships, western
companies have become interested in adopting
many of the features of partnership sourcing. A
purchasing partnership can be defined as an
agreement between a buyer and a supplier that
involves a commitment over an extended period,
and includes the sharing of information along with a
sharing of the risks and rewards of the relationship.
Thus, for our purpose of effective information
exchange, a Japanese-style purchasing partnership
could also be investigated.
Table 13 gives reasons why other structures of
IFCs are not considered further.
The Gartner Research Group (GRG) (Zrimsek,
2003) credited with ‘inventing’ the extra-enterprise
notion of ERP II proposes vast changes in how a
firm is likely to perceive itself in the future.
Essentially, they suggest that if a firm, at the basic
degree of abstraction, feels that it is a provider of
goods and services then it needs to revise this
thinking somewhat. It needs to understand that the
supply-chain in totality is that provider of goods
and services but more importantly it is the creator of
customer experience. They further suggest that the
future will see a firm being increasingly core-
competence driven with increasing divestment of
non-core activities. This would lead to a heightened
supply-chain, with a multitude of firms ‘completing’
the competence to provide the aforementioned
goods and services. They further propose that in
this heightened environment of business distribu-
tion, the core drivers for advantage would be a
heightened customer experience and product/service
improvement (Zrimsek, 2003; GRG, 2000).
In this light, the GRG proposes an information
system policy that not only improves the opera-
tional and strategic capabilities of the firm but
also improves the ability of the supply-chain to
deliver faster and better. The former is done with
the aid of intra-firm tools such as ERP, performance
management, lifecycle management, knowledge
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S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
management and so on. The latter is carried out with
the aid of ‘external’ tools as SCM and supplier/
customer relationship management, and through
initiatives that promote Internet-based collaborative
commerce. This would facilitate the entire supply-
chain in opening its proverbial doors not only
amongst its own members but ultimately to the end
consumers as well. Two ends have always to be kept
in mind while strategizing—to innovate whilst keep-
ing the costs down and the customer experience high.
This information improvement, exchange and con-
solidation policy, under the core-competence-based
outlook of the firm as an extended enterprise, a
performance-based enterprise and a real-time enter-
prise, is what the GRG proposes under the ERP II
umbrella (Wheller, 2004; Zrimsek, 2003, 2002).
The GRG (Zrimsek, 2003) proposes the urgency
of implementation and the likelihood of implemen-
tations starting in the very near future. This gives
relatively less time for a multitude of involved
stakeholders to discuss and reconcile on a range of
issues. One way of going ahead could be to
concentrate on the benefits/impediments issue with
an aim to enhance the realisable benefits of ERP II
and minimising the anticipated problems in adop-
tion. At the same time, these could dictate building
the operational considerations for implementation
(i.e. issues of collaboration, inter supply-chain
coordination, technology considerations, etc.).
Thus, this research set out to achieve a prelimin-
ary set of issues—benefits of, and, impediments to
success, of this ‘new’ set of management tools—
ERP II, with a view that future deliberations on the
issue of ERP II would be aided (and possibly
guided) as mentioned, by the findings. It further set
out to subscribe collaborative structure types
suitable for information exchange that collaborative
commerce would require—one of the important
operational considerations as elucidated earlier.
From the results and ‘extra’ inputs, it can be
concluded that this research has succeeded in
building and testing a comprehensive list of
benefits/impediments, besides proposing appropri-
ate collaborative structures, which were its principal
aims. It has further been successful in articulating
future collaborative trends and directions for future
research for ERP II. The results of the survey and
the subsequent statistical analysis conducted are
summarised thus:
1. Nearly 94% of the surveyed population re-
sponded in the affirmative over ongoing/future
265
collaborations with their partners to aid on-line
commerce.
2. The benefits and impediments of ERP as men-
tioned in the literature can be carried forward for
ERP II, and while benefits increase more in
intensity than in number, impediments increase
both in number as well as in intensity. The
findings seem to agree with some of the
preliminary ‘warnings’ that early authors of
industry houses (e.g. Wheller, 2004; Farver,
2004) have made.
3. ‘New’ benefits and impediments can be ascer-
tained through causal (cause and effect) inter-
pretations of postulations of ERP II
involvement/allied fields in the literature.
4. Both benefits and impediments are not taken as
‘objective’ facts but vary in degree of acceptance
between three stakeholder groups—the imple-
menters, the functional (parent) users and the
suppliers (confirmed by the ANOVA/Welch tests
carried out for the various sub-questions in the
survey). The implementers, i.e. consultants/IT
companies who aid others in implementation, are
found to be the most optimistic in accepting or
agreeing with most of the benefits postulated and
remaining confident about handling the posed
impediments. The functional users of ERP are
more pragmatic in cautiously agreeing with the
benefits, at the same time showing concern in the
impediments listed. The suppliers, i.e. the firms
dealing principally in the B2B domain and
generally ascribing to 2–3 major players in their
supply-chains, appear the most pessimistic in
remaining either negative or at best neutral over
the benefits, and showing grave concern over the
posed impediments. This finding is in definite
agreement with that of Leon (2003) who found a
similar trend in differential perceptions for ERP.
5. A number of other ‘preliminary’ issues are
raised—concerns of dominant power-play and
soft coercion; suggestions to vendors to keep
their offerings industry and localisation specific
and to avoid large-scale implementations; con-
cerns over heightened implications of change
management; observations of getting preferential
treatment by larger companies if the systems are
‘talking’; issues of the first-mover being an
advantage or disadvantage; concerns over ERP
II actually leading to a hypercompetitive state;
unclear ROI; quantification of benefits; issues in
multiple supply-chains; technical and infrastruc-
tural issues; and steps at formalisation of
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266 S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
collaboration. These are issues and concerns for
future research as none of them have been
covered in the literature specific for ERP II.
The last issue, i.e. on how to formalise the
collaborative structures for ERP II, has also
been discussed through a short content analysis.
Three structure types have been short-listed as
JV, networks and Japanese-style purchasing
partnership.
The research conducted is a preliminary investi-
gation in areas of concern of an emerging concept.
There neither exist a wealth of knowledge in the
specific area to draw upon nor actual situations to
infer from. Therefore, this research had to ‘test’
theorised cause and effect relationships (carried out
using limited ‘anecdotal’ topic-specific literature)
with perceptions of stakeholders and ‘experts’. The
newness of the issue unfortunately also meant that
the ‘experts’ are (in all probability) still in the
process of ‘developing’ their perceptions. Thus, it
cannot be confirmed to a degree of absolution if the
reported perceptions would not change over time or
even if the tested list of benefits/impediments is
complete in itself. More involving methods such as
semi-structured interviews could have possibly
resulted in a ‘richer’ result set, which could then
have been surveyed for statistical rigour rather than
relying on a set of considerations built through an
extension of literature on ERP and through
theorised cause and effect relationships only. This
limitation was made clear in the rich data set
recorded through the one open-ended question on
the perceptions of ERP II in entirety. Completely
open-ended interviews were piloted but were quickly
rejected because of poor response rate and quality.
The sample obtained was also not homogeneous
in its uniform distribution across stakeholder
groups. This limitation was however ‘statistically’
managed by using the Welch test that takes into
account this limitation.
There was a limitation in the way the impedi-
ments issue was handled. Although these were listed
under logical headings (Strategic, Operational, etc.),
these could be more meaningful if they were
described implementation stage-wise. It is left as a
research concern for academics and vendors to
formalise how different ERP II implementation
stages are compared with those for ERP.
There are two basic sets of recommendations that
emanate from this research, suggested for the
intervening period before full-blown ERP II adop-
tions are seen:
First, for all stakeholders to ‘objectively’ use the
findings of the research and design their product/
service offerings (in the case of implementers), or
strategise their future implementations (in the case
of suppliers/users), in accordance with the benefits/
impediments established. Scenario building (John-
son and Scholes, 2003), e.g. is a method that is used
for long-term strategic planning. Now if one of the
perceived benefits of ERP II established in this
research lies in extending the value chain, scenarios
could be built (by functional users and consultants)
to simulate and quantify how this could be
applicable for the firm and its (increased) value
chain. This benefit scenario, if extended for the
‘partners’ and logically coupled with other benefit/
impediments scenarios, could then serve to provide
a quantitative enough vision (i.e. a tentative ROI) to
pursue or decline.
This might appear rather abstract, but it should
be remembered that this is only one way of going
forward. The important thing always is to calculate
clear returns through a careful analysis of the
benefits/impediments specific to the localised indus-
try sector operated in. The GRG (Zrimsek, 2003)
confirms this by adding that acceptable ROI once
established should be the single driver to aid
acceptance or decline.
Unfortunately, calculating ROI in this setting will
not be an easy task (which was difficult enough as it
is for ERP (Wallace and Kremzar, 2001)) and would
require clarity on a multitude of issues that originate
from this research. Therefore, the second set of
recommendations is a list of directions for future
research:
1. Detailed analysis on how the perceived benefits
could be realised and impediments could be
mitigated (e.g. through scenario analysis) for
specific industry sectors.
2. Complete the picture of ERP II involvement by
again giving industry-specific examples. This
could cover the possible implementation steps
for ERP II (to see how these differ from ERP).
3. What is the role of coercion and power-play in
convincing partners to join in/who takes the
initiative?
4. Is the first mover an advantage or a disadvan-
tage for ERP II (for ERP the first-mover was
generally (not always) a disadvantage as lessons
could be learnt from competitors mistakes)? It
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S.C.L. Koh et al. / Int. J. Production Economics 113 (2008) 245–268
might not be as clear for ERP II since the first
mover might drive a potential partner to
collaborate in an integrated supply-chain.
5. How do existing implementers (of ERP) prepare
technically/how should the information system
be architected?
6. Do suppliers/partners incorporating IT systems
that talk with dominant players in the supply-
chain get preferential ‘treatment’ from these
dominant players?
7. Will ERP II lead to hypercompetitive states
(this was pointed to by one of the respondents)?
8. Can a parallel be drawn between what ERP II
implies and the existing Keiretsu structures of
Japan (if so, a lot of experience gained and
published therein could be extended for ERP II)?
9. Establishing a methodology for calculating ROI
for ERP II.
10. Identifying the critical success factors for ERP
II. This would be different from existing ERP
studies in that they would have to be written
from a multitude of contexts.
11. Finally, once some empirical evidence is avail-
able, it could be found which success bracket
ERP II falls in—competitive disadvantage/
parity/advantage or even sustainable competi-
tive advantage.
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