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CHAPTER I

1.0 Introduction

This paper will labour to explicate the intricacies of enterprise resource planning (ERP), a concept that has long fascinated many in both academic and professional work environments, including the United Nations (UN). In fact, the UN has expressed the need to implement ERP. As part of their examination into this procedure, the UN has implemented ERP at the United Nations Development Program (UNDP) in Pristine, Republic of Kosovo, and other agencies of the UN. As they look into the ramifications of ERP implementation, so does this case study. This study attempts to make predictions of the impact of ERP implementation on the business processes and organisational culture of the United Nations secretariat based on results from the UNDP.

1.1 Introduction to the Problem

Since the latter part of the 1990s, firms have rushed to implement enterprise resource planning (ERP) systems, e.g., one study showed that more than sixty percent of Fortune 500 companies had adopted an ERP system (G. Stewart et al. 2000). The United Nations, as one of the largest organisations in the world, has lagged behind in adopting the transformation in the management of its resources.

The United Nations has been seriously hampered its ability to deliver results effectively and efficiently due to the lack of an integrated information system for managing its resources (Report of the Secretary-General, 2008). According to Davis and Olsen (1985), ERP is an integrated system that provides information to support operation management and decision making functions in an organisation. Therefore, the goal of implementing an ERP system is to build an integrated global information system that fully supports the needs of the United Nations, enables the effective management of human, financial and physical resources, and is based on streamlined processes and better practices (Report of the Secretary-General, 2008).

1.2 Background of the Study

1.2.1 Existing System

Currently, the United Nations uses an in-house developed system—commonly referred to as Integrated Management Information System (IMIS)—for the management of human, financial and physical resources. The development of IMIS was a milestone in the use of information technology as a discipline that can beneficially affect many, if not all areas, of administration and management in any given organisation. IMIS was developed as a functionally integrated system, which combines all departments to support key processes such as human resources management, payroll, finance and accounting, requisitioning and funds control, budget execution and travel management. IMIS was introduced in conjunction with desktop, networked computing and office automation tools such as electronic mail in all offices where IMIS was being used. "If an organisation is not yet sure of the need for client-server networks, the state of the art in enterprise-wide computing, it has only to consider the Integrated Management Information System (IMIS) of the United Nations," (Rowe & Davis, 1996, p. 122). The launching of IMIS was subsequently affected and conditioned by major developments in the technological market, and an accelerated shift of focus in the United Nations to field activities. In short, IMIS was designed and developed at a time when the context began to change rapidly and profoundly. Yet, only a few years after the implementation of IMIS, it has become evident that the system cannot take full advantage of the advancement in technology; e.g., even though IMIS is functionally integrated, it was deployed and managed locally at each geographical location, which makes reporting and global management very difficult. The implementation in the United Nations' peacekeeping operation was partial, as it is a separate department in the UN, and was not able to support the supply chain and logistical management (Report of the Secretary-General, 2008).

"The IMIS was not an alternative communication technology to paper and telephones, but it involved the synchronization of multiple data sources and the linking of them to several mainframes," (Rowe & Davis, 1996, p. 122). An investment in tactical systems, which includes a stand-alone system and a modular integration into IMIS through interfaces, was able to address the functional gaps of IMIS. However, the organisation today faces challenges that demand profound transformation beyond the capabilities of IMIS and its ancillary legacy systems currently being used (Report of the Secretary-General, 2008).

1.2.2 The need for change

"The United Nations struggled to get everybody in their building to connect electronically. It soon realised that it was time to connect the world with a client-server network," (Rowe & Davis, 1996, p. 122). The need for the United Nations to take on the International Public Sector Accounting Standards (IPSAS) lead to the requirement of significant change in the accounting processes and systems in order to achieve compliance with the international public sector accounting standard. The requisites changes, indeed, were so fundamental that it is fair to say that the life of IMIS had come to an end after fourteen years; moreover, the benefits that the staff and managers expect from the information system in day-to-day operations and decision-making no longer match the cost of maintenance and ongoing support. This is because IMIS is no longer able to cope with the fast technological development, and the cost of maintenance and ongoing support has become very expensive (Report of the Secretary-General, 2008).

"The success of your organisation's quality initiative depends upon your ability to communicate the need for change throughout the organization," (Arcaro, 1997, p. 146). The United Nations as an organisation needs to improve the quality and cost-effectiveness of the services it provides. They report that the existing systems are not up to the standard, not integrated, duplicative, and are inefficient (Report of the Secretary-General, 2008). According to the UN, the effective management, planning and decision-making have been hampered by the lack of integration and complete data on resources (ibid). As the organisation continues to grow in complexity in its activities, they are dissatisfied with the lack of integration and data sharing between different departments as it has become a bigger problem, and the need for a new ICT global enterprise system for streamlining and simplifying processes has become more crucial as the nature of the organisation is changing itself (ibid).

1.2.3 Goals and objectives of implementing an Enterprise Resource Planning System

The United Nations reports that the implementation of an ERP system will present the opportunity to fully combine resources and functions across the organisation by replacing the existing IMIS system (Report of the Secretary-General, 2008). Minahan (1998) reports ERP to be a multifaceted system that integrates and automates the basic processes of a business such as finance and budget management, human resources management, supply chain management, central support services, and other corporate core functions. Most importantly, the main value of an ERP system is the opportunity to streamline and improve the operations of an entire organisation through process reengineering, sharing of common data, and implementation of best practices and standards, and perform as the inter-organisation information backbone for communication and collaboration (O'Leary, 2004).

According to reports from the United Nations (Report of the Secretary-General, 2008), the main objectives of the ERP project can be summarised as follows: To have a global operating system that precisely captures core resource data from each department and agency at the UN while linking them together to provide better decision-making. This will minimize the time required to perform administrative processes and enable easy access to necessary reports for each department, thus increasing the efficiency of the organisation and directing the focus to high priority situations.

The main functionalities sought from the new ERP system are expected to encompass functions such as programme planning, budgeting, contributions and performance; human resources management and administration; payroll, including management of benefits and contribution to pension, medical and insurance schemes; supply chain management, including procurement; assets and facilities management; general accounting, travel and other administrative flows; reporting to management and stakeholders, and more (Report of the Secretary-General, 2008).

Specific United Nations' peacekeeping operations functions such as logistics, transportation, fuel and rations systems need to be supported by the new ERP system, as these functions are not held in common with other organisations of the United Nations' operations.

1.3 Purpose and Significance of the Study

The research done in this study will attempt to answer the following question: What will be the impact of ERP implementation on the business transformation and business culture of the United Nations? Specifically, this study will attempt to establish the relationship between the business process transformation and organisational culture change offered as the result of ERP.

These questions and findings are expected to provide an increased ability in evaluating the performance and standardisation of the business processes within the United Nations, as well as an increased awareness of its effect on the business culture and productivity over time of the UN.

In addition, answers to these questions will subsequently enable other researchers to gain more insight into ERP implementation and business process reengineering. It will also enable the management of the United Nations to see how ERP can be a better means of technological reform, thus providing the opportunity to re-evaluate the existing business processes.

1.4 Research Questions

The question that constitutes the primary point of pivot for the paper is: What will be the probable future impact of ERP on the business process transformation and business culture of the United Nations?
The three subsidiary questions of the present work are:

> How will ERP implementation make the organisation better off in the foreseeable future?
> What will be the effect on the reformed business culture in terms of productivity?
> How does the organisation perceive the benefit of ERP on the standardisation of business processes?

1.5 Structural Approach

The rest of the thesis has been structured as follows. Chapter 2 provides a review of relevant literature including ERP, business process reengineering, and their impact on organisational culture. Chapter 3 discusses the methodologies used for the empirical analysis and describes the data and the various proxies employed for analysing ERP implementation in the United Nations. Chapter 4 provides empirical findings of the relationship between ERP implementation and its effects on business processes and organisational culture. Chapter 5 analyses the research findings. Chapter 6 concludes the research by pointing out the key impacts of ERP on the UN. Chapter 7 makes various recommendations for policy direction and potentially fruitful areas of ERP systems for further research. Chapter 8 reflects on the study as a whole.

CHAPTER II

2.0 LITERATURE REVIEW

The following Literature Review will focus on four main areas of evaluation regarding enterprise resource planning (ERP) on the business process transformation (BPR) in organisations, and more specifically, the United Nations. These are:

1. ERP: definition, evolution, implications
2. BPR: definition, evolution, implications
3. ERP and organisational culture
4. BPR and organisational change

This review will analyse the abovementioned systems and related processes insofar as the available data in the literature will allow for a comparison of ERP and BPR and their effects on the United Nations and other large organisations.

2.1 Enterprise Resource Planning (ERP): Definition, Evolution, and Implications

Enterprise resource planning (ERP) systems are commonly described as commercial software packages that allow the assimilation of data and processes throughout an organisation (Markus & Tanis, 2000, Kim et al. 2005). ERP enables the flow of information among all business areas such as "finance, human resources, manufacturing, sales and marketing," (Tan & Theodorou, 2009, p. 52). Basically, it allows data from all departments to exist in one computer system (Pang, 2001), making the managerial dream of unification of all information systems into one computer system come true (Adam & O'Doherty, 2003, cited in Revia, 2007). This unification should offer many benefits to the UN and other large organisations. Large organisations may have a more difficult time relaying information from one sector to another as they have many different departments and even multiple locations. The combination of all department in one system, presents benefits of relaying data in a timely manner. Rather than sending files through inter-office mail or needing to track down one particular staff member, each employee will have access to the information required for their job by simply logging into the system. The researcher will attempt to discover whether this unification does indeed allow for more time-efficiency as well as making simple operations' tasks easier to accomplish in the UN.

The start of ERP systems came about in the 1960-1970s with the invention of Inventory Control (IC) and Materials Requirement Planning (MPR) systems, which managed inventory in manufacturing. In the 1980s, Manufacturing Resources Planning (MRP II) systems came into use to manage both inventory and production requirements together. In 1973, the first ERP system was created with the goal of supporting all business needs. Since then, ERP systems have become much more popular. In fact, by the year 2000, enterprise resource planning systems were estimated to have serviced $23 billion USD in profits for the various organisations that have been implementing them (Pang, 2001). ERP applications are the largest, fastest growing and most influential in the industry (Corbett & Finney, 2007). This is probably why the UN has shown such interest in ERP.

The increase in ERP implementation does not seem surprising as ERP allows corporations to update to a new integrated system cutting out the previous legacy systems known for their difficulties in maintenance, large size, and old age, as they are segregated systems (Martin, 1998; cited in Boudreau, 1999). This appears to be helpful for the UN as they reported difficulty with their current legacy system (Report of the Secretary-General, 2008). It is likely that employees of the UN will be satisfied with the replacement of the legacy system due to the reported problems it has. However, there is a chance that employees may be intimidated by this change as they will have to learn an entirely new system.

Advantages of ERP systems for organisations include overcoming fragmentation by streamlining activities and processes, which provides direct access to real-time information by supplying a group of software modules that encase all departments of a business (Koch, 2003, cited in Corbett & Finney, 2007). This implies that all information accessed through the new system will be current as it is constantly being updated by various employees based on the tasks they complete. Rather than there being pieces of information in various places, all information regarding the same issue will be together implying that employees can look in one place and have all the information they need rather than searching through various documents or consulting multiple co-workers. This aspect of ERP systems will be investigated at the UNDP in Kosovo in order to determine whether this feature is beneficial.

Furthermore, ERP systems are said to provide cost-reduction in addition to increased flexibility (Siriginidi, 2000 cited in Al-Fawaz et al. 2008). As Rowe and Davis (1996) reported, the IMIS system - which is the current system being used in many UN agencies -- does not cut down the amount of paper needed in order to do processes. Switching to an ERP system would reduce costs related to this amongst other things, as suggested by the literature. For the UN, this would mean more money to use for their peacekeeping missions or other operations. The reduction of costs and flexibility appear to be linked in some way as decreasing operation costs would imply having more flexibility to perform other processes. However, it's possible for the availability of data to imply flexibility in making decisions, or flexibility could result from rearranging the organisation's processes and being better equipped to perform certain tasks.

ERP systems have been reported to enhance business performance by accelerating the merger of organisational resources as well as strengthening the operational efficiency of the company through minimising human error (Shin & Knapp, 2001, cited in Wang, 2006). The implication that ERP reduces human error seems to be correct as there is less opportunity to make a mistake for employees because there is generally only one time they need to input information for data-sharing as opposed to the multiple steps needed to take before. These benefits should assist the UN in accomplishing some of their proposed goals, such as linking all departments within one operations system, which decreases the time required for administrative processes. The UN hopes implementation will increase their operational efficiency by allowing valuable time to be spent focusing on high priority situations rather than simple operations' tasks (Report of the Secretary-General, 2008). More advertised benefits include improved information accuracy and decision-making capacity (Siriginidi, 2000 cited in Al-Fawaz, Al-Salti, and Eldabi, 2008). The UN wants to make use of these proposed advantages (Report of the Secretary-General, 2008). Decision-making is a large part of the UN as they have to make difficult decisions everyday that effect large numbers of people; making a bad decision is not necessarily easily corrected in this case. Furthermore, many situations the UN deals with are time-sensitive; if it's easier to access data, and the accuracy of that data is improved, officials can rest assured that they are making decisions with proper knowledge.

In implementing ERP, organisations no longer have to create their own applications that are then unique to their company. They now have standard software available for their business processes, referred to as Best Business Practices (BBP). BBPs came into existence around the same time as ERPs. BBPs are general guidelines to assist companies in the way of handling certain business processes, meaning that each company can now improve itself on the basis of the experience of other corporations that share similar functional processes (SAP, 2007, cited in Revia, 2007). It seems any organisation would be hesitant to implement a system that has not proved to benefit other large organisations as the risks of failure are not unlikely (Moon, 2007). BBPs should definitely help the UN as they will be benefitting from previous experiences of other corporations.

Some of the disadvantages of ERP are that the implementation requires time, costs and risks (Boudreau, 1999), as they tend to be "large, complicated, and expensive" (Mabert et al. 2001, cited in Al-Fawaz et al. 2008, p. 3). ERP implementation calls for serious time commitment from all involved as it is often the biggest project that an organisation will ever face (Moon, 2007). ERP execution requires new procedures, employee training and managerial and technical support (Shang & Seddon, 2002, cited in Al-Fawaz et al. 2008), which can be accomplished through good communication of the corporate strategy to all employees (Umble et al. 2003, cited in Al-Fawaz et al. 2008). Consequently, the biggest problem is not actually the implementation itself but the expectations of board members and senior staff as well as not having a clear plan or realistic projections (Somers & Nelson 2004, cited in Al-Fawaz, Al-Salti, and Eldabi, 2008). However, the UN has already proposed clear goals and plans for their implementation. The question is whether or not they will be able to successfully translate these goals/plans to all employees of the organisation and whether or not they will be successful.

Finally, the importance of selecting the appropriate ERP package is stressed. Corporations must make sure they select the appropriate ERP package that will match their organisation as well as its business processes (Chen, 2001, cited in Corbett & Finney, 2007). This seems obvious as every organisation is different. Some corporations strategise around providing excellent customer service while others focus on decreasing costs to customers as a way to attract more business. However, there are studies that show that customising ERP packages beyond minimal adjustments is discouraged; these studies show that organisations should adjust their processes to fit the package rather than adjust the package to fit the processes (Murray & Coffin, 2001 cited in Al-Fawaz et al. 2008).

2.2 Business Process Transformation (BPR): Definition, Evolution, and Implications

Business process reengineering (BPR) was not very popular until the release of the book Re-engineering the Corporation by Michael Hammer and James Champy (Barker, 1995). Hammer and Champy introduced the term "Business process reengineering" in 1990 and defined it as a "fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed" (Grover & Kettinger, 2000, p. 151). Business process reengineering is also defined as a strategic redesign of important business processes, including the systems and policies that support them, in order to achieve maximum productivity of an organisation (Manganelli & Klein, 1994). This would suggest a link between ERP and BPR as they are both structured around the redesign of core business processes. In fact, some goals of BPR are the reduction of cost, cycle-time, defects, and the increase of worker productivity (Hales & Savoie, 1994), very much the same as ERP. The aim of BPR is to change current business processes in order to make them more efficient overall, again mimicking ERP. In fact, Some researchers suggest that ERP systems "are the major tools for making business processes better, leaner and faster through associated business process reengineering," (Shang & Seddon, 2003, cited in Revia, 2007, p. 25).

It is not yet known whether or not BPR will be performed at the UN. It is assumed that it will as it is so closely related to ERP. Additionally, reports have shown that ERP often causes BPR to occur due to its very nature (Juszczy & Seebacher, 2002). It seems that in order for ERP to be most successful, BPR should be performed (Sumner, 2000 cited in Law & Ngai, 2007), otherwise the UN may not recognise exactly which processes are most important for their operations. Or, they may not be fully aware of the exact way in which ERP should be performed in relation to the core business processes, which is vital to understand for the selection of the proper ERP package.

BPR has its origins in the private sectors as a management tool for companies to deal with change and reorganise their work to "improve customer service, cut operational costs, and become world-class competitors," (Hamid, 2004, cited in Wang, 2006, p. 5). Generally, business process transformation takes business processes and allows them to be done routinely through a computer system. It incorporates peoples' perspectives and input to make sure that the processes fit needs specific to each corporation (Wang, 2006). This suggests benefits for ERP implementation in any organisation as the systems are supposed to be designed around core processes specific to each company. It would be helpful for the UN to determine which processes are vital to their operations. Furthermore, cutting operational costs should prove to be very valuable for the UN as many of the services it provides are non-profit. If BPR is performed as a result of ERP, it seems that cost reduction will be achieved.

Here is a further look into what a core business process is: A core business process is one that gives value to the customers or stakeholders of the company. These are the most important processes within the organisation and are the ones that will set a company above their competitors if done well. In order to figure out what processes are core, one may ask the following questions.
1) Does the process make valued contributions to the customer? Does it improve customer service, increase response-time, decrease customers' costs?
2) Is it important for the production/operation of the company?
3) Can it be used for other businesses?

If the answer is yes to one of these questions, then the process under consideration can be considered core (McHugh et al. 1995). The UN may consider any process involving cash flow to be core as that is a huge component to many of the services they provide. Furthermore, any documentation of information from one department to another is probably considered core as this organisation relies on data-sharing for its decision-making capabilities. Therefore, it seems that these types of processes will be affected by ERP implementation and will most likely be reengineered.

The three most basic strategies that increase a business' success are lowering prices, offering more value in products, or focusing on less diversity in commodities and specialising in a certain area (Berrington & Oblich, 1995). This suggests that BPR would be structured around these strategies when reorganising core business processes. If the UN is restructuring using BPR, they are likely to focus on a combination of strategies. As already mentioned, the cost of operations is a huge factor for the United Nations to consider as they provide aid to many countries without expecting any favours in return. This implies they would focus on reduction of costs. However, the main reason they are an organisation is to provide services to those in need. That would suggest they would reorganise their business processes around the strategy of offering more value in their services. In implementing BPR, organisations are asked to choose five or six of the processes that are central to the operation of the company and focus on those to see the ways in which they can make them more efficient (McHugh et al. 1995). Concentrating on making sure core processes are completed to the best of the company's ability only ensures the organisation will do better. In the case of the UN, focusing on data-sharing and managing cash flow suggests an increase in the organisation's efficiency as those components are vital to their operation. These changes would suggest benefits for both the cost-reduction strategy as well as providing better service to "customers."

2.3 Enterprise Resource Planning (ERP) and Organisational Culture

Organisational culture is a set of core beliefs, values, and behaviours shared by all members of one company, thereby affecting the productivity of the business. It is often described as "a pattern of shared assumptions produced and manipulated by top management" (Schein, 1992 cited in Boersma & Kingma, 2005, p. 131). Organisational culture is influenced through many aspects, including leadership, personal characteristics, interactions of members, as well as tradition. Culture has visible signs and hidden insinuations. Visible signs include behaviour while the hidden insinuations entail morals and beliefs (Rousseau, 1990 cited in Cooper, 1994). The culture of an organisation is even displayed in the way certain processes are done as well as the outcomes of these processes, which will be examined at the UNDP in Kosovo. Because ERP systems involve most departments in a company, they change many business processes and thereby affect the more deep-seated organisational culture of a corporation.

Companies that focus on incorporating their cultures into organisational efforts are said to have an edge in accordance with their productivity. Organisations can focus on culture and work with the people to shape new values, morals and work ethics. If employees are happy to be working for the organisation, they will be more apt to want to work, implying there will be an increase in productivity (Farbrother & Marc, 2003). Enterprise resource planning can lead to changes in organisational culture i.e., ERP is implemented in order to increase productivity by changing current business processes (Deal & Kennedy, 1982 cited in Cooper, 1994). These changes are maximal and cannot be simply brushed aside. When a company implements ERP, if the organisational culture is ready for the changes it will bring, the employees can work with the system to increase productivity. Consequently, the culture within the business must be one that can be made amenable for change (Nah et al. 2001 cited in Corbett & Finney, 2007). There is the belief that positive and supportive attitudes of those embarking on implementation of ERP will actually bring about a successful transition (Chatterjee et al. 2002 cited in Law & Ngai, 2007). However, if the culture has not been made ready for change or the employees are unwilling to change, the system will be less likely to succeed. A system cannot work if there are no users.

"System implementation represents a threat to users' perceptions of control over their work and a period of transition during which users must cope with differences between old and new work systems," (Bobek & Sternad, 2002, p. 285). The social setting of a company and its technology most definitely shape each other; they are hardly independent of one another (Boersma & Kingma, 2005). A mistake companies frequently make is to presume that people can change their habits easily when in actuality such changes are considerably taxing for many people. These companies underestimate the effect ERP implementation will have on their employees. Many employees panic when nothing looks the way it used to, nothing works the way it used to, and they can no longer go through their workday with the previously earned sense of familiarity and assurance (Koch, 2007 cited in Revia, 2007). One study showed that it took over two years for users of the new system to forget the process problems they found initially and to gain new knowledge of the system (Seddon & Shang, 2003 cited in Revia, 2007). A Chief Information Officer from Nestle sums up this concept very well—she says, "'No major software implementation is really about the software. It's about change management…You are changing the way people work…You are challenging their principles, their beliefs and the way they have done things for many, many years" (Boersma & Kingma, 2005, p. 123).

It seems the best way to ensure that employees are on board with proposed changes is to make them aware of these changes. It is important for them to feel that they are included in the decision to create new values and procedures for the company. Otherwise, they will be clinging to the old culture and ways of doing things. The change will be stressful and forced rather than welcomed with ease. They should feel that the change is happening because of them rather than happening to them. The most senior level of management initiates enterprise resource planning, but its success depends on its acceptance by the company's ordinary workers (Obolensky, 1996). Cultures can be manipulated by those in management (Handy, 1985 cited in Cooper, 1994). Change can be intimidating and needs to be managed well. Therefore, the conclusion is drawn that managers need to make sure each and every employee is doing their part. This literature suggests that leaders are the most important players in any change scenario. Employees won't decide to change their behaviours without instruction or coaching. They need a clear direction by committed leaders. Implementation of ERP systems has better transition results when higher management takes the initiative of mediating between technology and business requirements and resolving the differences of opinion among its stakeholders (Davenport, 1998, cited in Law & Ngai, 2007). This case study will examine whether or not leadership demonstrated these qualities at the UNDP in Kosovo.

2.4 Business Process Reengineering (BPR) and Organisational Change

As with enterprise resource planning, the implementation of business process reengineering inevitably brings about changes in an organisation. Hammer and Champy "see a new culture as the outcome of BPR," which will ultimately lead to changes in features of an organisation (Cooper, 1994, p. 34). Processes will be performed in completely different ways as a result of BPR, which directly influences the way the culture reacts daily. Nick Obolensky, the author of Business Process Reengineering: Tools and Techniques for Achieving Effective Change, says that "business reengineering is not an event, but a journey. BPR is as much about moving an organisation to achieve effective continual change as it is about reengineering processes and changing structures and culture" (1996, p. ). It's easy for organisational culture to be at a standstill and that seems to imply that employees are not striving to do any better than they already are. They are stuck in a routine and do not welcome change. It appears that there is a correlation between organisational culture, organisational change and the productivity of an organisation.

The point of business process reengineering is to seek radical change. An organisation takes on BPR to change the operation of their company in its entirety. The areas within an organisation that need to be changed in order for BPR to work are organisational culture, structure, and the style in which management adopts (Johansson et al. 1993). Management style appears to play a large role in shaping the structure of the organisation as well as the culture. As previously mentioned, leaders of an organisation are important to developing organisational culture. Employees learn from example, so if the leaders do not demonstrate the values they wish to see in the organisation, these new values may not be effective. "The success of your organisation's quality initiative depends upon your ability to communicate the need for change throughout the organisation" (Arcaro, 1997, p. ). Furthermore, if the management would like to see benefits from the new systems, they should demonstrate efficiency with the new implementation. Leaders should work with their employees to create a team atmosphere where everyone feels that their individual work contributes to the whole and is appreciated.

"Business re-engineering is what an organisation undertakes to change its internal processes and controls from a traditional vertical, functional hierarchy to a horizontal, cross-functional, team-based, flat structure which focuses on the process of delighting customers" (Obolensky, 1996, p. 15). When BPR is complete, the organisation will look completely new. Rather than stressing individual work, daily processes will be done in teams, and the focus will be on the goals of the group, which can be done with the help of leaders and workshops focusing on teamwork. "The performance of teams has been consistently shown to be better than individuals on almost any task, no matter how dedicated or talented the individual involved. Hierarchal, bureaucratic organisations leave people feeling powerless," (Johansson et al. 1993, p. 197).

In order to successfully implement BPR, the UN will need to put forth excess effort. A key part to assuring the success of BPR is to make sure that everyone involved in such a change is kept up to date on the progress and made aware of changes before they occur. Everyone needs to have the same quality and quantity of information (Hales & Savoie, 1994), because it is possible for even one person to negatively affect the transformations (Chustas & Morin, 1994). This can be achieved through culture change programmes, project teams, workshops, facilitators, training seminars, and change programme newssheets (Obolensky, 1996). Leaders of the organisation are the key actors in making or breaking the implementation. The leaders need to have the correct attitudes and make sure everyone is doing their part as well as accepting the change (Grover et al. 1998).

CHAPTER III

3.0 Methodology

3.1 Introduction

What follows here is an adumbration of the methodology used in the present study, why, particularly, certain methods were selected, and how these methods may lead to certain limitations in the application of the suggested thesis.

The research will make use of a combination of in-depth interviews, collection of documents, as well as observational data subjected to empirical evaluation and analysis. The justification for such a methodological approach, which is known as 'triangulation' (White, 2002), is to ensure that factual evidence is methodologically retrieved to a high level of accuracy and objectivity. Triangulation increases the validity of a study and gives it a more well-rounded view (Jankowicz, 2005).

This study is based on exploratory research. It helps to develop concepts more clearly, establish priorities, develop operational definitions, and improve the final research design. This study was done with the help of quantitative and qualitative tools of analysis. Along with first hand information, this study also yields results from secondary resources in order to better understand the discoveries made through research.

3.2 Sources of data

3.2.1 Primary Data

Primary data has been collected through participatory observation, by conducting in-depth interviews with key personnel from the ERP implementation team of United Nations Development Program, as well as by distributing questionnaires to each department and divisions that are impacted by the implementation of the new resource management system. The data collected through this method is sufficient enough in itself to make projections in this study.

3.2.2 Secondary Data

The documentary research focuses on examining an extensive literature review used within the United Nations' reports and other sources external to the UN system. Articles have been retrieved from periodicals and academic journals dealing with current issues in ERP and BPR. The internet, library databases, and textbooks related to ERP and research methodology have been a major secondary source for the observation of expert opinions. A key source of secondary data is a collection of internal documents retrieved from within the United Nations itself.

3.3 Data Collection Method

3.3.1 Quantitative Data collection

The purpose of quantitative data collection is to produce sufficient data to analyse and produce graphs, tables, and other numerical conclusions. This collection method is beneficial for producing clear and simple statistics and results. It is a very detailed method that can give generalisations related to the study as a result of the analysis. It is used to quantify the extent of understanding in any issue (Kumar, 2005). It attempts to avoid subjectivity as it is an objective form of research. It is sought out to achieve complex and authentic results and is often used when researching cause and effect relationships.

To perform the quantitative data collection in this study, a questionnaire was used. It consisted of nine pages and twenty-five questions; some questions led to a series of questioning. It was given out to pre-selected participants who had information relevant to the ERP implementation from various departments in the UNDP at Pristine, Republic of Kosovo. Another term to refer to this selection is judgment sampling. Judgment sampling is appropriate when one wishes to select a particular group for screening purposes in order to pick members that seem to be best suited in answering the research question. In other words, these members are chosen based on the likelihood that they will provide sufficient insight into the specific study and increase the understanding of the subject (Bryman & Bell, 2007). This form of sampling is said to be useful for case studies with fewer participants (Neuman, 2000), which is relevant to this study as only thirty participants were surveyed. For this study, participants were interviewed using questionnaires divided in their areas of specialisation: finance, HR, procurement and administration.

A more detailed description of the questionnaire is as follows. It was divided into four major sections. The first section asked the participants background information to provide a little more information on individual respondents in order to determine whether or not they were knowledgeable in their department, according to the number of years having worked with the organisation etc. The second section inquired as to whether or not the ERP implementation was successful and/or strategic. The third segment evaluated BPR in relation to the ERP implementation, and the last part touched upon organisational culture and how the ERP implementation may have changed it. Some of the questions required precise answers in the respondents' own words, such as the background information. However, the majority of the questionnaire was structured using the Likert survey system, also known as the "summated rating scale" (Kumar, 2005, p. 145). This was chosen due to its simplicity in determining the attitudes of participants regarding the specific issue (ibid). Using this system, participants were asked to answer questions by checking the corresponding option they felt was best. In this case, they either chose strongly agree, agree, neutral, disagree, or strongly disagree. Other questions were related to this system but have different options ranging from unsatisfied to satisfied, and negligible to excellent. The reader is advised to please refer to Appendix A for the questionnaire.

3.3.2 Qualitative Data collection

Qualitative research is very practical when the researcher wants to report what has been observed in written word, and it relies on detailed and thorough explanations of such information. In this study, qualitative data collection was used in order to provide a deeper understanding of ERP and BPR implementation within the United Nations without manipulating the respondents to answer in any particular way. This type of data is rich in providing deep insight into any topic as "the only knowledge that human beings acquire is from sensory experiences," (Bernard, 1994 cited in Kumar, 2005, p. 17). It is an unstructured form of information gathering, which provides opportunities in which to experience new information that may not have been known prior to such an experiment. In this study, qualitative research was used in the form of participatory observation and one-on-one interviews

In this case study, the researcher adopted a participant observation-based method in order to investigate the relationship between ERP, BPR, organisational change, and cultural change in the organisation. A period of six months was spent by the researcher, an employee of the organisation, documenting and participating at the research site during ERP implementation preparation. Data collection was accomplished through workshops and brainstorming sessions. Additionally, informal conversations, discussions, and meetings also added to the quality of data collected. This allowed the researcher to build a picture of the organisation using a joint construction of descriptive accounts of the situation and provided excellent access and openness in terms of rapport and information. Field notes of daily observations were taken as well as recording of events. This provided a deep understanding of the social and organisational context of the study. This data was used primarily for the purpose of understanding the inner workings of the organisation in relation to ERP and the effects it had on the UNDP in Kosovo specifically.

The other portion of qualitative data collection was the unstructured interviews. Unstructured interviews are aimed towards understanding the respondents' perspectives of the specific situation or experience at hand and allow the researcher to assess whether or not the participant is in fact knowledgeable in the specific field (Kumar, 2005). This is where the respondents will put their experience into their own words. Participants in the interviews were carefully selected; they were selected because they were employees of the United Nations who were involved in the actual ERP implementation. Most of the key personnel interviewed were mid-level managers while some were high-level managers. This was done in direct correlation to what Sanders (2000) refers to as sampling technique. This technique allows the reduction of data that is not directly related to the study by interviewing only those that are affected or have specific knowledge in relation to the study.

Participants were chosen from a variety of different departments in order to provide a more holistic view of the implementation of ERP and BPR in the United Nations. Each interview was directly related to how the individual was affected by the ERP implementation as each participant was involved in a different way. The participants were the head of information technology, the human resources manager, the head of finance, the head of procurement, and the head of administrative and support services. The interviews of each participant were between thirty and sixty minutes each and were carried out in a one-on-one discussion between respondents and the researcher. The interviews started off with general questions related to each issue. After these general questions, more focused questions were asked directly relating to the ERP systems chosen by that organisation and why this exact implementation was chosen. After this, open-ended questions were asked in order to obtain a holistic view about the implementation and to determine the interpreted success or failure of such an implementation. In addition, to keep consistency with qualitative data collection, the interviews were very flexible which allowed the researcher to formulate questions that may have occurred during the interview rather than needing to stick to a strict regime of pre-determined questions (Kumar, 2005). However, interviews slightly varied because respondents were encouraged to elaborate on topics in which they felt important.

3.4 Plan of Data Analysis

The data analysis in any study is a constant repetitious process where every detail of information is entered as it is found. The data collection and analysis have been helpful in assisting each other. For example, after finding certain results in the data analysis it may have slightly changed the way in which the data collection was conducted. It was also helpful to obtain secondary data to assist in the understanding of results discovered first-hand.

3.4.1 Analysis of Quantitative Research

Analysing data collected through quantitative data collection is long and tedious. It requires a systematic analysis of looking at the answers from each questionnaire and calculating the responses. It was possible to calculate percentages and statistics after totalling the number of responses in each category and comparing the numbers to each other. For example, how many people believed the ERP implementation was successful in UNDP Pristine, Republic of Kosovo. In doing this, it enables the formulation of tables, graphs, pie charts, and calculation of percentages that clearly show the results. The analysis of the quantitative data collection will help to better understand the qualitative data collection and vice versa. Thus the future success of ERP and BPR systems within the United Nations, the performance of the organisation, and the effect of its business process transformation, as well as business culture, can be determined.

3.4.2 Analysis of Qualitative Research

Analysing qualitative data collected during this study is more challenging than interpreting that of quantitative data. This is because there is not an exact way in which to analyse opinions or experiences of those involved. It is not as simple as making a chart or graph and seeing the results. Instead, one must carefully look at all data collected to determine certain patterns or themes (Kumar, 2005). Through this analysis, goals and objectives of the participants can be determined. The results can then be analysed in relation to those from the quantitative analysis to further the profundity of understanding. Combining the two methods of research, it is easier to see if expectations were met and what the overall importance, whether positive or negative, of ERP implementation is in reference to the United Nations. The training, workshops, interviews, brain-storming sessions and discussions developed a multi-directional understanding of ERP implementation and its effects on the United Nations. Additionally, these observations were best for understanding organisational culture and the changes made by ERP and BPR. The analysis of this data is continual and reflective. Using these observations in line with secondary data, quantitative and qualitative data collection, tremendously increased the understanding of ERP implementation within the United Nations.

3.5 Limitation of the Study

No research is without flaws or limitations including this study. This section will highlight the key limitations in this study. First of all, secondary sources may pose problems in the fact that certain magazines and newspapers can print articles from authors who have personal bias. Also, the researcher is not an expert at observations or interviews and may make mistakes during these processes, nor is the researcher an expert at creating questionnaires; this may be reflected in the amount of relevant data collected. Because all information is vital, any misinterpretation of the data collected will have an effect on the study.

There are even limitations presented by the forms of data collection. For example, observational data collection poses a few issues. According to Kumar (2005), there is the chance to become biased as an observer; the observations from one person to another may differ and therefore do not necessarily reflect the entire situation. Finally, there is the chance that the observer may lack the ability to fully record all information being observed and again contribute to not fully reflecting the entire situation.

Interviews also present limitations for the study. The presentation of data is only as good as the researcher in his ability to understand, record, and convey information discovered during the interview. Again, bias may be introduced in this case either from the researcher in the way that he poses the question, or from the respondent in the way he chooses to answer each question. In this study, open-ended questions were used during the interviews to attempt to eliminate bias from the researcher. However, this can create bias from the respondent (Kumar, 2005).

Using a questionnaire poses limitations. If a respondent does not understand a question posed on the questionnaire, they may answer the question in a way that does not reflect their actual opinion on the matter. In addition, respondents may consult others regarding certain questions, and that would lead to inaccurate results for that question (Kumar, 2005). Even the system used to form the questionnaire may present limitations. The Likert system was used to measure attitudes regarding the ERP implementation at the UNDP in Pristine, Kosovo, but according to Kumar (2005, p. 146), it doesn't "measure attitude per se," but rather it helps in comparing the attitudes of one respondent to another.

Due to the fact that the number of available respondents was limited, the results cannot be generalised on a large scale. Having a smaller number of respondents due to the fact that this study is very unique and specific (all personnel interviewed were important to the organisation and implementation itself), effects the results found because these members are all related in some way; they may have common answers or input. This study was restricted to the United Nations' Development Program office in Pristine only; therefore, it cannot be assumed that the results necessarily reflect the implementation in other United Nations' offices. However, despite the limitations of this study, maximum care was exercised in order to gather discerning, scientific data that can be used by others in making conclusions regarding ERP and BPR implementation.

3.6 Ethical Consideration

Some of the information collected in this case study is highly confidential and can lead to a participant losing their job if the information leaked out as it involves new implements to the organisation. As a result, all confidential data is treated carefully to avoid any harm to the respondents. Respondents to the survey were made aware that information shared with this study would remain confidential and only be used in this study. The purpose of this study was revealed to participants prior to them submitting to this process. If any participant did not want to answer any question, they were aware that it was perfectly acceptable. No contributor was forced to take part in this study. Every effort was made to ensure the participants' comfort. They chose the location they best preferred to complete the interview or questionnaire.

CHAPTER IV

4.0 Research Findings

The following chapter presents the data found during the present paper's research on ERP, BPR, and organisational culture at the United Nations' Development Program office in Pristine, Republic of Kosovo. The first section shows the results from the quantitative data collection in various tables and graphs. After the findings are presented, an interpretation of the quantitative data is posited. Following that there is a presentation of the qualitative data collected during in-depth interviews. Both the quantitative data interpretation and the qualitative data reports will help in further analysing the effects ERP has on organisations, and more specifically, the United Nations.

4.1 Results of Quantitative Data and its Interpretation

4.1.1 ERP Implementation factors

Table 4.1.1 The level at which each participant believed strategic advantages were reached in six categories.

Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

Lower operating costs

2

3

9

16

0

30

Better Collaboration

9

1

15

5

0

30

Greater Flexibility

9

1

16

4

0

30

Increased efficiency

15

2

9

4

0

30

Reduced cycle time

12

2

13

3

0

30

Improved Communication

4

8

0

18

0

30

Table 4.1.2 - The Improvement of performance in procurement.

Negligible

Inferior

Average

Good

Excellent

Productivity

0%

0%

47%

43%

10%

Employee Satisfaction

0%

0%

53%

37%

10%

Cost Reduction

0%

7%

57%

36%

0%

Defects Reduction

7%

7%

33%

46%

7%

Acquisition of Knowledge and skills

0%

0%

47%

43%

10%

Elapsed time

7%

7%

33%

46%

7%

Table 4.1.3 - The improvement of performance in finance and accounts.

Negligible

Inferior

Average

Good

Excellent

Productivity

0%

0%

43%

23%

34%

Employee Satisfaction

0%

7%

33%

27%

33%

Cost Reduction

0%

2%

19%

40%

39%

Defects Reduction

0%

0%

23%

34%

43%

Acquisition of Knowledge and skills

0%

0%

47%

43%

10%

Elapsed time

0%

3%

47%

17%

33%

Table 4.1.4 - The improvement of performance in administrative coordination and support services.

Negligible

Inferior

Average

Good

Excellent

Productivity

0%

0%

47%

43%

10%

Employee Satisfaction

0%

0%

53%

37%

10%

Cost Reduction

0%

7%

57%

36%

0%

Defects Reduction

7%

7%

33%

46%

0%

Acquisition of Knowledge and skills

0%

0%

47%

43%

10%

Elapsed time

0%

3%

47%

17%

33%

Table 4.1.5 - The improvement of performance in human resource management.

Negligible

Inferior

Average

Good

Excellent

Productivity

30%

7%

20%

40%

3%

Employee Satisfaction

30%

17%

37%

13%

3%

Cost Reduction

30%

14%

43%

13%

0%

Defects Reduction

30%

20%

33%

17%

0%

Acquisition of Knowledge and skills

23%

7%

32%

28%

10%

Elapsed time

20%

3%

47%

15%

15%

Table 4.1.6 - The improvement of performance in technology management.

Negligible

Inferior

Average

Good

Excellent

Productivity

0%

27%

37%

33%

3%

Employee Satisfaction

7%

26%

33%

27%

7%

Cost Reduction

7%

26%

47%

17%

3%

Defects Reduction

0%

27%

43%

17%

13%

Acquisition of Knowledge and skills

0%

26%

47%

17%

10%

Elapsed time

3%

20%

47%

15%

15%

Table 4.1.7 - The most common barriers to the successful implementation of BPR and ERP in the United Nations.

Type of Responce

No. of Response

Problems in recognising “key” processes

6%

Lack of IT and knowledge

9%

Lack of motivation or education

4%

Lack of employee support

6%

Lack of vision or strategic plan

3%

“Traditional” organisational structure

7%

Problems in cooperation between middle-level management

6%

Lack of resources - human, financial

7%

No BPR project leader

9%

Poor communication between project team members and other employees

11%

Lack of coordination between corporate business plan and IT development

11%

Long period required for BPR design and implementation

6%

Lack of benchmarking

3%

Inadequate IT infrastructure

4%

Lack of top-management support

3%

Lack of BPR tools

4%

4.1.3 Organisational Culture

Table 4.1.8 - The changes in specific attributes of organisational culture for the United Nations after ERP implementation.

Less Important

No Change

More Important

Participation, open discussion

27%

37%

36%

Empowerment of employees to act

33%

33%

34%

Assessing employee concerns and ideas

33%

47%

20%

Human relations, teamwork and cohesion

27%

43%

30%

Flexibility, decentralisation

26%

47%

27%

Expansion, growth and development

23%

47%

30%

Innovation and change

27%

37%

36%

Creative problem solving process

33%

33%

34%

Control, centralisation

33%

47%

20%

Reutilisation, formalization and structure

27%

43%

30%

Stability, continuity, order

26%

47%

27%

Predictable performance outcomes

23%

47%

30%

Task focus, accomplishment, goal achievement

27%

37%

36%

Direction, objective setting, goal clarity

33%

33%

34%

Efficiency, productivity, profitability

33%

47%

20%

Outcome excellence, quality

27%

43%

30%

Table 4.1.9 - Organisational changes that occurred as a result of ERP and BPR implementation.

Negligible

Inferior

Average

Some
Extent

Great Extent

The number of people employed.

3%

20%

47%

15%

15%

The competence of new people employed.

0%

27%

37%

33%

3%

Reengineered processes into single or few steps.

7%

26%

33%

27%

7%

Acquisition of multiple skills or competence by employees.

7%

26%

47%

17%

3%

New type of management style.

0%

27%

43%

17%

13%

New procedures, rules and regulations.

0%

26%

47%

17%

10%

New organisational shared values and beliefs.

3%

20%

47%

15%

15%

New type of organisation structure

0%

27%

37%

33%

3%

4.1.4 Interpretation of Quantitative Data

From the quantitative data results, it can be seen that all participants felt that the legacy system was important to replace as indicated in Figure 4.1.1. After the replacement of the legacy system with an ERP package, the majority of participants were satisfied with the results. Those who did not indicate they were satisfied were neutral to the transformation; refer to Figure 4.1.2.

Participants specify that the implementation of ERP has helped significantly with reduced cycle time and increased efficiency. Most participants agree that the new ERP system has helped moderately with providing greater flexibility and better collaboration in the organisation. However, more participants disagreed that ERP helped lower costs and improve communication in their specific organisation. Table 4.1.1 shows the way each participant responded. Moreover, participants strongly agree that the new ERP system provides accurate information and the reports needed for the organisation (Figure 4.1.4); however, Figure 4.1.3 show that most participants find that the ERP software is not being used to its full extent.

Quantitative data collection revealed that BPR was performed as a result of ERP; Figure 4.1.6 shows the breakdown of this, and Figure 4.1.7 shows that BPR benefitted from the ERP implementation. Figure 4.1.8 indicates that little customisations were performed on the ERP package selected.

More improvements after ERP implementation were in procurement, finance and accounts, administrative coordination and support services, human resources management and technology management. This can be seen in Tables 4.1.2 through 4.1.6. To be more specific, in procurement, participants mostly felt there was an average improvement. However, in defects reduction and elapsed time, they felt there was good improvement. In finance and accounts, again participants felt the improvements were average in most fields, but they felt there was good improvement in cost reduction and defects reduction. Administrative coordination and support services are much the same with mostly average improvement in all areas but a good improvement in defects reduction. The human resource management is the only area where participants had a negative feeling as regards improvement overall, including employee satisfaction, cost-reduction and defects-reduction. However, there was still an overall good response in relation to the productivity and mostly average responses otherwise. Technology management still shows average improvement in most areas, but in relation to productivity, the most chosen answer was "good." Participants also feel that ERP has led to a better organisation image overall as seen in Figure 4.1.14. Table 4.1.7 is a great source in which to see the most common barriers to a successful implementation of ERP or BPR. Here it is seen that the two most common barriers would be poor communication between the project team members and other employees, and a lack of coordination between the corporate business plan and IT development. Closely followed barriers were a lack of IT and knowledge, and having no BPR project leader.

Finally, quantitative data collection helped to show the effect of ERP implementation on business processes and organisational culture. Figure 4.1.16 shows that most participants strongly agreed that the implementation of ERP has influenced the management style and organisational culture. Conversely, Figure 4.1.17 indicates that employees perceived management style and organisational culture to have influenced the ERP implementation as well. In relation, Figure 4.1.5 shows that participants felt the leaders of the organisation were supportive and stayed with the project throughout implementation. In Table 4.1.8, the change in importance of specific attributes to the organisation was reported. Here the majority of employees responded that there was no change in most areas. However, there were a few areas where there was a marginal difference indicating that certain attributes were more important; these include empowerment of employees to act, creative problem-solving processes, and direction/goal clarity.

In Table 4.1.9 it is clearly seen which organisational changes occurred as a result of ERP implementation and to what extent. The two areas in which there was most change were "the competence of new people employed" and the "new type of organisation structure."

4.2 Results and Analysis of Qualitative Data

As previously stated, the nature of the qualitative interviews was based on the respondents' responsibilities in relation to ERP implementation. In this section, some useful feedback and relevant information from each person interviewed will be presented. Information will also be provided to better understand how ERP has changed certain functions as well as the impact ERP has had on the business processes and business culture of the organisation. Observations that were made during the time the researcher spent in the organisation will not be directly reported in this section as they are too numerous to report. Furthermore, these observations were meant to be a tool in which to elevate the understanding during the rest of the case study. Observations proved to be useful in grasping what was being discussed in the interviews.

4.2.1 - Head of Information Technology

In the researcher's discussion with the head of information technology at the UNDP in Kosovo (responsible in the technical delivery in terms of ERP implementation in the organisation), it was revealed that the level of technical delivery and the overall business process changes in the technology department were improved: The head of IT explained that Atlas is the Partner agencies' ERP System, which is currently a suite of PeopleSoft (Oracle) Applications. This suite comprises: Finance/SCM; HCM; Enterprise Portal & CRM applications. Atlas, a content management system for ERP, went live across all partner agencies' HQs and in around 130 country offices.

The head of IT also said that to facilitate a better and streamlined access to Atlas (PeopleSoft), along with reduced cycle time, the Atlas Security Team has designed and developed ARGUS (Atlas (PeopleSoft) Role Generation and User-provisioning System), which is scalable and robust, thereby bringing a new dynamic to the business processes of systems management and systems security. ARGUS is a custom-developed system across all Atlas applications that provides a decentralised model of user access management to Atlas based on pre-defined procedures, standards, and processes. ARGUS has the following objectives: faster turnaround time for security access tasks (from days to minutes), simplified user-driven interface that enables staff to manage access changes without a total reliance on the Help Desk or Security Team, improved information for business unit managers about which of their users have access to what functionalities in Atlas, provision of audit trails that document each account from initial creation to closure, reducing the risk of abuse or fraud, and reduction in manual intensity as regards supporting security operations. This system provides country offices with the ability to analyse and report on the user profiles, integrate the command and control of the user provisioning through a single user interface, down-streaming the access control with fast-tracking of the process to make changes/modifications/ additions.

In general, the head of information technology felt that the implementation of ERP brought improvements to standardisation and efficiency on the organisation as a whole.

4.2.2 - Human Resources Manager

What was clear from this interview was that there are several aspects of human resources management, its business processes and overall organisational culture, that have been influenced by the implementation of the ERP.

The human resources manager reported that the UNDP hires significant staff under service contracts (SC) and special service agreement (SSA) contracts; especially local staff. These contracts depend mostly on extra-budgetary resources and were set in place to relieve some pressures that came with the high growth rate of the organisation, which directly relates to the increase of employees needed in the organisation. Under the legacy system, these staff members had to undergo the same hiring process as those with fixed term contracts. They had the same recruitment, evaluation, and salary. Leave entitlements were also extended to some SC holders in order to promote a fairer work environment.

However, during the ERP implementation period, there were a few challenges. One issue was the handling of SC holders under the new ERP procurement component and how they would be associated with the payroll module specifically. It was decided that SC holders would not be listed on the payroll as employees but would be treated the same way a vendor would as service contractors. Human resources no longer had anything to do with these contract holders as procurement was now responsible for them entirely.

The head of human resources at the UNDP was curious how this would affect the organisational culture. The treatment of SC holders under procurement would have a significant impact on employee motivation and morale given that they may not feel a sense of belonging to the organisation they work for. Furthermore, centralisation of payroll payments at HQ and elimination of mid-month payments caused lots of confusion and complaints from the employees. The implemented centralisation of batch payroll processing did not consider time-zone differences or national holiday differences. In addition, the elimination of mid-month payments directly impacted some employees' finances, as many have mortgage loans and other financial commitments that have already been negotiated in view of the previous legacy system practice of having mid-month payments.

However, despite these problems, the human resources department has benefitted from the ERP implementation. Most areas have increased in terms of productivity and efficiency.

4.2.3 - Head of Finance

Through the researcher's interview with the head of finance, involvement in discussion with the ERP Atlas implementation group, and personal observation, some of the major changes in the key business processes became evident.

The head of finance gave a run-down of many changes at the UNDP. He explained that receivables were created to account for amounts due from others regarding services rendered, loans and advances. The receivables in the legacy system used to involve numerous systems making it nearly impossible to access the total amount of money the UNDP was owed.

Upon implementation of the ERP Accounts Receivable module, it is now possible to see all money that is owed to the UNDP. This knowledge is critical for many operations of the UNDP. The new module allows for better management of receivables by producing reports and follow-ups within the system. It also enables the treasury to know its global cash position at any time, which is required in making strategic decisions regarding the use of these funds throughout the world. The head of finance explained that with the legacy system, the inter-office voucher (IOV) was used to report payments made by any agency concerning the UN. This process was extremely time-consuming as it was not automated. However, the new ERP system is current and provides up-to-date information at all times, which has eliminated the IOV. Payments made to any UN agency are posted to the central database, which has allowed the integration and consolidation of all business data efficiently.

The head of finance elaborated on further benefits of ERP. He said that the ERP PeopleSoft General Ledger summarises and displays account balances in the new chart of accounts - a building block of the new financial modules. The new chart of accounts will facilitate the maintenance of all financial activities and record them as needed. The use of this new application ensures uniformity, reliability and the precision of financial data, as well as overall standardisation among all UN agencies. It involves financial BBPs and provides flexibility to transform as times change. In addition, it allows integration of all financial processes.

4.2.4. - The Head of Procurement

In the researcher's interview with the head of procurement, it was revealed that the major business process changes and impacts on the organisational cultural were due to the streamlining of the procurement system and payment system processes. Below is an overview of key points discussed by the head of procurement. The head of procurement discussed some complicated processes in his department. With the legacy system, certifying officers were required to evaluate information in ordering documents, receiving documents and invoices. They also had to validate whether the documents were approved by officials. Furthermore, they were required to check all invoices carefully before sending them out. With the high volume of documents and strict requirements, it was hardly possible to examine all invoices. The legacy system had too many manual checks, which took up valuable staff time.

However, the new ERP system facilitates the streamlining of these processes, including the acquirement of goods and services. Necessary routine processes are now automated including the confirmation of receipts and the comparison of invoices. Employees who are designated to approve purchase orders and vouchers can now do so online, which eliminates the time it would take to manually do the processes -- photocopying, stapling, and filing necessary paperwork has been reduced.

The head of procurement elaborated on a few concerns the new ERP system produces. He wonders who will be responsible for managing the high level users of the system. There is more risk with giving senior managers the ability to complete transactions without consulting anyone else. Atlas allows full authority for senior managers to create and approve payment vouchers as well as maintain vendors (e.g., change bank accounts). Obviously this power is liable to misuse.

4.2.5 - The Head of Administrative and Support Services

What was clear from the interview with the head of administration and support services was that there are several aspects of the administration and management, its business processes, and overall organisational culture that have been affected by ERP implementation.

The head of administrative and support services says that the Atlas (PeopleSoft) ERP system has been in use by all results-based administration country offices and Headquarters. The initial problems related to accessing the system -- such as connectivity and system stability -- have been largely resolved, and there have been no major problems in these areas since then. The staff have been trained in functional uses of the system in several regional workshops, the last of which occurred for finance and procurement tracks.

Total delivery in results-based administration has increased sharply and most transactions have been properly recorded in Atlas, which provides the widespread, everyday use of the system. New monitoring tools -- such as Executive Snapshot, Data Quality Dashboards, and Donor Reporting -- rely heavily on the amount and quality of data available in the system; thus it is imperative to continue the efforts to ensure full and accurate information-recording in Atlas (PeopleSoft). The head of administrative and support services assures that emphasis has been given on continuous training -- breaking the barriers between program and operation units, enhancing their communication/business process integration, strengthening the internal control framework and financial controls, introducing fully results-based management, and strengthening management oversight.

CHAPTER V

5.0 Discussion and Analysis of Research Findings

This section will analyse data collected in all forms throughout this study. It will answer the questions posed in the introduction by using support from the literature review combined with the research findings. Analyses will be made based on collective information that has been discovered throughout this case study. The main point of this research is to show the effect of enterprise resource planning as regards the business process transformation and improvement in the United Nations. Three subsidiary questions are also answered:

  • How will ERP make the organisation better in the future?
  • What will be the effect on the business culture in terms of productivity?
  • How does the organisation perceive the benefit of ERP on the standardisation of business processes?

5.1 The Future Benefits of ERP

As discussed in the literature review, ERP systems allow the unification of all departments into a single system (Pang, 2001), which is forecasted to increase cost-reduction, information accuracy (Siriginidi, 2000 cited in Al-Fawaz, Al-Salti, and Eldabi, 2008), and access to real-time information (Koch, 2003, cited in Corbett & Finney, 2007). The qualitative data collection of this case study reveals that the unification of all systems has been achieved at the UNDP in Kosovo. It also shows that there is increased information accuracy due to the linking of the departments. This was shown with specific examples from each interviewer. For example, there was the report that many processes are now streamlined with the new system. This implies that most information can be found in one system, and that the data discovered will be accurate and current as it displays the most recent updates at the moment they happen from all departments combined. One reason that data is accurate is that the same information does not need to be entered twice, which minimizes human error. For example, personal data for each employee used to be entered in all departments, but now it is only recorded by one department, and each other department has access to this information. This eliminates spelling discrepancies among other minor errors.

As previously mentioned in the literature review, the implementation of ERP should reduce costs to the organisation; however, participants did not see cost-reduction as being successful in all areas of this case study. For example, in Table 4.1.1, the majority of employees claim it was not achieved, and the same goes for Table 4.1.5 for cost-reduction in human resources. However, Tables 4.1.2-4.1.4 and Table 4.1.6 show that cost-reduction was achieved. The researcher claims the negative results are due of the amount of time elapsed between the ERP implementation and the case study; the preliminary costs of such an implementation are extremely high, and therefore there cannot be many cost-savings initially. It is believed that cost-reduction will be achieved in the long-term in all areas of the UN, and it should be a starting point for further studies.

The case study of the UNDP at Pristine, Republic of Kosovo, reveals that ERP is perceived to increase efficiency and reduce cycle time (Table 4.1.1). This supports the findings from Hales and Savoie (1994) as well as Shin and Knapp (2001 cited in Wang, 2006). ERP also improves asset, finance, administration, human resources, and technology management (Tables 4.1.2-4.1.6). More specifically, these improvements are seen in productivity, employee satisfaction, defects reduction, and elapsed time. Hales and Savoie (1994) reported each of these benefits as a result of ERP implementation except employee satisfaction was not specifically mentioned by these authors. The literature reveals that employee attitude is more of a pre-requisite to successful implementation. Studies show that employees should have positive attitudes towards the new system before it is implemented to avoid failure. Therefore, the fact that satisfaction was increased does not mean it was necessarily due to ERP itself but rather could be a result of culture change programmes executed prior to ERP, which attempt to bring employees together through teamwork.

The head of administration reports that the new monitoring tools are in full effect; they rely on accurate information put in the system from various departments. It is accurate to say that the statement Siriginidi (2000 cited in Al-Fawaz et al. 2008) made about ERP bringing improved resources management, information accuracy and decision-making capability, is supported by qualitative data collected. Having monitoring tools within the system greatly increases information accuracy because these tools can aid in the recognition of mistakes that are due to human error. Furthermore, the knowledge that the system is mostly accurate will aid in the confidence of making decisions as employees will be assured their decisions are based on correct information even if there was an initial human error such as a typo.

During the literature review, it was reported that ERP implementation implies increased flexibility (Siriginidi, 2000 cited in Al-Fawaz et al. 2008). It was also suggested that maybe cost-reduction and flexibility were linked. However, Table 4.1.1 showed increased flexibility as a result of the ERP implementation at the UNDP in Kosovo. Yet, operating cost-reduction was not fully achieved. Therefore, the conclusion is drawn that flexibility does not necessarily reflect cost benefits. This report of flexibility may be due to the increased decision-making capabilities and knowledge of important information that is up-to-date and accurate. The organisation is now more flexible with deciding what to do and how.

5.2 The Effect of ERP on Business Culture in Terms of Productivity

As Schein (1992) reported, business culture affects the productivity of an organisation (Boersma & Kingma, 2005), and ERP is often implemented with the goal of increasing productivity (Deal & Kennedy, 1982 cited in Cooper, 1994). The effects on the business culture in terms of productivity in this case study are seen as positive overall (Tables 4.1.2-4.1.6) due to the fact that there was productivity improvement in asset, finance, procurement, information technology, and administration management. This was expected as many sources discovered during the literature review reported this phenomenon. The reported benefits from the UNDP also imply increased productivity; for example, the head of IT reported that with the implementation of ERP there is a simpler interface that allows staff to access changes at any time, and there is a reduction of manual intense security operations. Having better access to information and improved efficiency will only lead to more productive efforts from the staff as they will no longer have to spend their time on monotonous tasks; they are now able to focus their attentions and efforts to more high-priority situations and yield more results from their major departments such as peacekeeping. The culture is now centred on the major tasks rather than small office duties. A specific example of a time-consuming task that has been eliminated is the inter-office voucher. Instead of employees being required to print out all receipts and manually bring them to various departments, any department may now access these receipts via the new system. This has also eliminated unnecessary duplication and photocopying -- the IMIS system was not good at reducing paperwork, which was learned in the examination of the literature (Rowe & Davis, 1996).

Despite the successes, there were some areas where the productivity of the business culture was not increased. From the quantitative data collection it is seen that participants were unsatisfied with the changes in the human resources department (Table 4.1.5). The interview with the head of human resources showed that the treatment of service contract holders as vendors rather than employees of the UNDP and the elimination of mid-month payroll may be the reason that participants were unhappy with human resources' reform. The claim cannot be made that this is exactly why employees were dissatisfied with this department as they were not directly asked to provide a reason. No service contract holders were interviewed - yet they were the employees most affected by the system changes in relation to HR -- however, these contract holders work as if they are employees directly employed by the UN suggesting that they may be co-workers and/or friends with participants in this case study influencing the responses of the participants. There is often a sense of camaraderie amongst co-workers which may imply defending anyone who is being treated unfairly.

The question was posited during the literature review as to whether or not the UNDP in Kosovo would successfully relay their goals to all the employees of the organisation. According to many researchers, having an organisational culture that accepts change before the implementation of ERP or BPR is vital to the success of implementation (Johansson et al. 1993). It seems that successfully communicating the goals of the organisation to all the employees implies that these employees will be more apt to change because they will be aware of the reasoning behind the change as well as the way in which they are expected to contribute. As Arcaro (1997, p. ) reported, "the success of your organisation's quality initiative depends upon your ability to communicate the need for change throughout the organisation." Communication to employees and successful organisational change seem to have been accomplished at the UNDP in Kosovo. Figure 4.1.17 shows that the leadership of the UNDP in Kosovo encouraged the transition into ERP systems, and that may largely have impacted the employees in being acceptant of the change. In addition, employees reported that management was supporting of the implementation and stayed with the project for the entire duration (Figure 4.1.5). This encouragement by management may have influenced the reported employee satisfaction rate after implementation.

However, Table 4.1.8 shows that employees reported no change overall in most areas of organisational culture. This may directly tie into the fact that the organisational culture was changed prior to implementation through culture change programmes, which was done to ensure the successful implementation. Therefore, these areas may have improved with the help of the full implementation process, but they were not recognised by employees as having transitioned due to the implementation itself. From this case study, it is shown that there was an attempt to change the organisational culture prior to implementation through workshops and ERP awareness programs made obvious through observational data collection. However, culture is hard to measure as it is more of a social science rather than a natural science. Without direct reports from employees indicating that there was change, it cannot be assumed that there was, even though there are indications in various areas that it had been.

5.3 The Perception of Benefits of ERP on the Standardisation of Business Processes

What was discovered during the literature review (Juszczy & Seebacher, 2002) was that ERP often causes BPR to take effect. This was supported by the results in the quantitative data collection (Figure 4.2.6). With BPR, business processes are standardised and done routinely through a computer system, eliminating human error (Wang, 2006). It was forecasted during the literature review that if BPR was implemented then cost-reduction would be achieved. However, as already discussed, this benefit is not entirely supported in the case of the UNDP in Kosovo. Nonetheless, BPR decreases the amount of time spent to do processes and especially focuses on those that are vital to the business. The interviews with the head of finance, procurement, and administration gave evidence to support these predictions, which will be discussed in more detail below.

As predicted, the reorganisation of business processes focused on cash-flow. The head of finance pointed out the new system ensures uniformity, reliability and the precision of financial data as well as overall standardisation among all UN agencies. The implementation has led to streamlining payment processes; Shin and Knapp (2001) reported streamlining as a result of ERP implementation (Wang, 2006). The head of finance further accounted to the full decentralisation of income applications for contributions collected locally, which has lead to treasury being able to know cash positions globally at any time. This has greatly helped with the efficiency of strategic decisions involving cash. As mentioned before, cash-flow is very much a part of strategic operations at the UN. Since they are a non-profit organisation that offers aid to various countries in need, they are reliant upon their cash position. Having the ability to know the cash position at any agency will greatly decrease the amount of time in organising certain operations by requiring less time to complete processes. These reorganisations imply that the UNDP focused on managing costs as well as providing more value in their services with their BPR implementation.

The head of finance also claimed the new model conforms to finance best practices; based on the information from SAP (2007 cited in Revia, 2007), this helps the department improve from the help of previous experience of other finance departments. This implies that the processes are now standardised to finance departments in other organisations. Of course when a process is standardised it suggests that it is automated with a computer system, which eliminates various opportunities for human error since the computer is doing most of the work and often only requires input information.

The head of procurement pointed out that the procurement and payment processes are now streamlined to automate many processes, which have greatly benefitted the organisation in terms of minimizing human error and eliminating needless paperwork. This was expected based on reports from Shin and Knapp (2001cited in Wang, 2006). These results indicate reduced cycle-time due to the streamlining of many processes. These benefits further contribute to the increased decision-making capabilities of the UN by allowing easy access to information concerning these processes and easy data sharing among different departments and agencies of the United Nations. It also supports the prediction that the UNDP would reorganise documentation processes.

The head of administration reveals that best practices, and the most relevant aspects of the department, were adopted as standard practices within the enhanced results-based management (RBM) platform, again a benefit as reported by SAP (2007 cited in Revia, 2007). The platform integrates and organises all current RBM tools for development, management and UN coordination results under a single web address. It is now much simpler to complete critical tasks as they are built into the system. Furthermore, it seems that the opportunities to increase in efficiency are multiplied due to these features. Management can be coordinated and effective in their style as well as communication.

5.4 The effect of ERP in regards to BPR and Improvement in the UN

From the implementation of ERP at the UNDP in Kosovo, certain results can be expected for other UN agencies and departments. These include increased operational effectiveness and timeliness, improved accountability, adoption of international best practices and standards, enhanced treasury operations, and process improvements. These benefits are suggested based on the literature and data collections referenced previously. The implementation at the UNDP demonstrated efficiency benefits such as the elimination of reconciliation tasks, reduced paperwork and enhanced staff productivity. More specifically the organisation has avoided duplicate data entry, reduced human error, and allowed the staff to be fully equipped enabling them to be more efficient and timely -- avoiding costly delays. Data collected from all sources referenced above has shown these business process transformations to be accurate.

As mentioned in the literature review, implementing ERP in global organisations is more difficult and costly than those that have only one site. However, the benefits are that much more (Johansson et al. 1993). With all the information gathered during this case study, the researcher is confident in forecasting the impact and benefits of the ERP implementation on the UN as a whole. The researcher believes that the global system that will be implemented in the United Nations will be timely in capturing accurate and core resource data from the Global Secretariat at all duty stations, including peace operations and other field missions; it will also support decision-making by linking programmes and operations with the resources allocated and showing what has been utilised. It will reduce the average time required for administrative processes by streamlining and integrating business procedures, making them simpler while using greater automation, which will increase organisational efficiency. The UN will have an entirely new system that will help achieve their global business plans: "The goal of implementing an ERP system is to build an integrated global information system that fully supports the needs of the United Nations and that is based on streamlined processes and best practices," (Report of the Secretary-General, 2008). The current legacy systems in the UN agencies are not integrated and lack information sharing capabilities. All departments are not unified in one computer system making data-sharing between departments and agencies an unnecessarily long process, wasting time and money.

In order to achieve these benefits, the researcher believes there are some prerequisites. One such example reflects what was reported by Murray and Coffin (2001 cited in Al-Fawaz et al. 2008): Customisations should be kept to a minimum and a proper care must be exercised when selecting the appropriate ERP package which is suitable for the business processes of the organisation. This conclusion is based on the recommendation from the literature review and Figure 4.1.8, which indicates that minimum customisations were made in the case of the UNDP. This finding supports the previous statement; however, it does not make clear whether it's possible to make more customisations and still be successful. The researcher recommends that if other UN agencies would like to make more than minimal changes to the ERP package that they study their business processes and the best practices that the ERP package has to offer in more depth beforehand.

Perhaps the most important requirement for successful implementation is that of focusing on culture prior to execution. Management should convey a clear direction to employees and encourage teamwork while instilling in the employees a desire to change to the new ways. Management should display the attitudes they wish to see in their employees and demonstrate efficiency with the new system. These were suggestions made in the literature and were proven to be helpful at the UDNP in Kosovo, shown in the data collection.

CHAPTER VI

6.0 Conclusion

The purpose of this case study was to evaluate the effect of ERP in regards to the business process transformation and overall improvement in the United Nations. This case study yielded results which showed the future benefits of ERP in the United Nations; the overall impact has been empirically evaluated by analysing the different responses which were received during the course of the research.

The first conclusion that can be drawn from this case study is that the implementation of ERP brings about many changes. Most of these changes are beneficial for the organisation and have supported the reports from professionals of ERP; some changes that have not been seen to be beneficial in the beginning are forecasted to become beneficial in the long run (i.e. cost-reduction). The overall analysis of the responses found that the ERP package has helped the organisation improve performance. The findings show that ERP has reduced cycle time, minimized human error, increased flexibility and productivity, provided unification of all process into one system, standardised business processes, and allowed the streamlining of many major processes.

Another conclusion that can be made from this case study is the effect of ERP in relation to organisational culture. The ERP implementation will have an impact on the organisational culture of the UN; the literature suggests that if the organisational culture is not ready and anticipating the change implementation brings, ERP will most likely fail. The correlation found from primary sources supports these statements. Quantitative data showed that the organisational culture was prepared for the change with the help of management, and the implementation was successful overall. The analysis was made that this success was made possible with culture change programmes and awareness to the initiative.

The case study of the UNDP has allowed a prediction to be made regarding the UN. Most of the respondents that have participated in the research agree to the fact that the implementation of ERP in the organisation has provided more systematic work processes. The researcher believes that ERP will benefit the United Nations in many ways. Not only will it be more productive and efficient, but the UN will be able to accomplish their proposed goals such as decreasing administration processes, linking all departments and increasing operational efficiency. ERP provides strategic advantages, especially for global organisations. ERP will allow the UN to perform their peacekeeping and humanitarian operations in a more timely and efficient manner. Thus, efforts put into strategic operations at the UN will not be wasted on time-consuming tedious tasks, but will allow for concentration on the organisation's primary concerns and goals.

CHAPTER VII

7.0 Recommendation

Based on the case study at the UNDP in Kosovo, the researcher recommends that effort be instilled in the organisational culture of other agencies of the United Nations in order to assure the culture is ready for the changes ERP brings. This case study found results that suggest cultures that are made ready for the implementation are more likely to have a successful implementation while secondary sources report most failures of ERP implementation occur due to the lack of acceptance from the employees.

The researcher recommends that in-house experts and consultants should work together to achieve the maximum benefit of BPR and ERP system implementation. This is because most of the business processes that develop are out of unique circumstances; many also provide distinctive business and political advantages. These are processes where intricate knowledge is required that only in-house employees can provide; none of these processes can be provided by a standard software package. However, one needs to be open enough to allow changes in business processes to attempt to save millions in custom development. Over-development of custom processes can create a system that cannot be supported by the original software manufacturer, as well as software upgrades that require as many resources as the original implementation. One must look at the individual software packages and examine how perhaps smaller changes in business processes could lead to major savings in time and the cost of development. Therefore, the researcher highly recommends that customisation of the ERP system should be kept to a minimum, otherwise the effect of best practices will not be achieved and the system will be very close to the legacy system.

The researcher recommends that a replication of this study should be done to confirm the validity and reliability of these results before it can be generalized to the United Nations as a whole. Due to the short time elapsed from the ERP implementation and the study performed, additional details could not be included in this study such as customer satisfaction, cost reduction, and vendor support. An interesting further study could be a longitudinal study of other United Nations' agencies that have implemented an ERP system.

CHAPTER VIII

8.0 Reflection

Reflecting on this case study, it is the opinion of the investigator that the research was conducted professionally and encountered no major issues overall. Furthermore, the researcher was fortunate enough to hold a position within the United Nations at the start of the project, which provided him access to the relevant people and information needed easily. This helped shape a well-grounded study that was relevant and current.

In hindsight, it seems that the methodologies used for this case study were the best option. Using triangulation helped to get a broad view of the topics of ERP and BPR. Secondary sources helped shape the questionnaire that was provided for quantitative data collection, which was very useful in analyzing the effects of ERP on the UNDP and the probable impact in other UN agencies. Qualitative interviews allowed a deeper understanding of the complex changes that occurred in each department, while observing and being part of discussions with the implementation team provided valued insight into the effects of ERP on organisational culture. Having multiple methodologies tremendously increased the accuracy and validity of the study.

In being the Finance Systems Administrator, the researcher was very much biased towards the existing system having used it for years and having acquired full knowledge of it, despite being aware of the existing inadequacies. The need for an objective view during the study is vital for a comprehensive approach in discerning appropriate information and to present an objective opinion that may give insight into such an application for future users. Therefore, the researcher has attempted to keep any bias out of such research but does not disregard the possibility that it exists in some form.

With the completion of this study, the researcher has gained a series of skills that can be further applied to his role of Finance Systems Administrator at the United Nations. These skills include self-discipline, time-management, data analysis, the ability to complete a goal despite the challenges that may present themselves, and the ability to integrate a series of tasks in order to provide a reliable study. Furthermore, the researcher developed a more systematic way of approaching his profession and has learned a great deal about ERP.

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