ENTREPRISE RESOURCE PLANNING (ERP) SYSTEM IMPLEMENTATION AND [629310]

ALLIED JOURNALS
ENTREPRISE RESOURCE PLANNING (ERP) SYSTEM IMPLEMENTATION AND
INNOVATIONS: CHALLENGES AND OPPORTUNITIES
–Manuscript Draft–

Manuscript Number: Allied Journals-18-1361
Full Title: ENTREPRISE RESOURCE PLANNING (ERP) SYSTEM IMPLEMENTATION AND
INNOVATIONS: CHALLENGES AND OPPORTUNITIES
Short Title:
Article Type: Research Paper
Section/Category: Academy of Entrepreneurship Journal
Keywords: Innovation, sustainability, Enterprise Resource Management (ERP), challenge, Sage
ERP, entrepreneurship, growth, opportunity, long-term
Abstract: This articles discusses innovations happening in a field of Enterprise Resource
Management (ERP) system implementation. In the current modern societies, any ERP
solutions need to be innovation-oriented in order to adapt to the continuous
environmental change and to achieve long-term growth and profitability. Whether the
innovation is incremental, breakthrough or radical, relevant business process
reengineering should constitute the foundation of such initiative. ERP application such
as SAGE software are fully integrated system that follow global compliance while
allowing mobile access, remote access, portal personalisation, multi-legislation,
scalability and new updated modules to always fulfil customer satisfaction. Despite
challenges such as inappropriate supportive infrastructure, shadow IT, big data
management, web security and lack of innovative culture among others, upgrading
from traditional system to the ERP system remains an efficient source of innovation
and entrepreneurship to drive economy growth and sustainability.
Powered by Editorial Manager® and ProduXion Manager® from Aries Systems Corporation

1
ENTREPRISE RESOURCE PLANNING (ERP) SYSTEM IMPLEMENTATION AND
INNOVATION S: CHALLENGES AND OPPORTUNITIES

1Genevieve BAKAM FOTSO

2E. I EDOUN
3C.Mbohwa
University of Johannesburg
South Africa
[anonimizat]

Manuscript
Click here to download Manuscript Article Paper for
submission in a Journal.docx

2
Abstract
This articles discusses innovations happening in a field of Enterprise Resource
Management (ERP) system implementation. In the current modern societies, any ERP
solutions need to be innovation -oriented in order to adapt to the continuous environmental
chan ge and to achieve long -term growth and profitability . Whether the innovation is
incremental, breakthrough or radical, relevant business process reengineering should
constitute the foundation of such initiative. ERP application such as SAGE software are
fully integrated system that follow global compliance while allowing mobile access, remote
access, portal personalisation, multi -legislation, scalability and new updated modules to
always fulfil customer satisfaction. Despite challenges such as inappropriate supportive
infrastructure, shadow IT, big data management, web security and lack of innovative
culture among others, upgrading from traditional system to the ERP system remains an
efficient source of innovation and entrepreneurship to drive economy growth and
sustainability.

Keywords : Innovation , sustainability, Enterprise Resource Management (ERP),
challenge , Sage ERP, entrepreneurship, growth, opportunity , long -term.

3
1. Introduction

Managing globalisation impact lead s to innovation approach. Innovation can be
defined as an implementation of creative ideas within an organisation. For any
organisation, innovation is im portant for the success of the stakeholders. Innovation
then becomes a good opportunity that can easily promote revenue growth . Based on
the customer’s needs, companies work on innovation for market positioning and for
profitability performance. From industrial manufacturing industry to banking industry
through information and technology (IT) sector, innov ation has been proven as th e
driver of transformation, adaptation and sustainability. Innovation sustains business
through long -term strategies and productivity.
Nowadays, many organisations innovate by opting for ERP system implementation in
order to have all business functional u nits integrated altogether in one and unique
system. Although, ERP solutions implementation are challenging in cost, complexities
and dependencies, it remains an innovation source for companies that want to prosper
and build long -term growth . ERP system im plementation has become a source of
innovation over the las decades because it is an efficient system that follows a global
compliance As an IT tool, it continues to promote entrepreneurial performance and
defining new business procedures. A successful ERP implementation requires
innovative and organisational characteristics as well as environmental characteristics
(Juan, 2003).
In a dynamic society the phenomenon of entrepreneurship is a vehicle of economic
development through innovation. Even though innovation in an organisation is
motivated by competitiveness and productivity, creative entrepreneurship is the m ost
powerful tool to promote long-term economy development . Companies use Innovation
and entrepreneurship approach to develop and transform existing resources to
optimise profitability (Andersson and Tollison, 1980 ).

2. Background

Having a great vision and create new things are not enough to meet innovations
requirements. Continuous improvement on innovation remains the challenge t hat
companies need to overcome in order to resist to the environmental change.
Innovations are also determined by the innovation process align with. Therefore,
executives and project team need to ensure that implementation of innovation meet
all relevant s teps of the innovation processes.
Organisation s are always willing to adjust their business activities according to the
modern society exigencies and thus develop innovative approach. Regarding the
current unpredictable environment, company should setup lo ng-term planning that
match the higher level of uncertainty in the global market. But, observations show that
top management don’t always develop efficient strategy around innovation leadership

4
to adapt to the ch ange and stay ahead of the competition . Entrepreneurs don’t always
have creative thinking to develop vison and new ideas aligned to the environmental
change. In addition, entrepreneurs don’t foreseen challenges and risks and possess
less marketing facilities to support their innovations (Kanchan a, divya and Beegom,
2013). Despite the high rate of technology growth, some software can only be access
from the local area using specific devices. Such limits don’t match with the current
modern society where people are fully connected from all corners o f the world.
Furthermore, many IT systems rely on add -ons software integration to support their
core business activity. This approach is not cost effective for the company going
already through heavy implementation costs. Moreover, add -ons requires contin uous
license update. Straight communication between the main software and add -ons
require s dependencies, additional functional technology and maintenance costs that
are irrelevant for the business.

3. Literature Review

Many researches have been conducted on the field of innovation and
entrepreneurship for small firms as well as big companies. The y all pointed the
confusion link between two concepts as well as the correlation between them .
ERP implementation
Compared to traditional management systems wher e software were standing alone
without any correlation between them, ERP system offer s a complete package of
management software with full integration. Upgrading existing s ystem to the ERP
system has become a competitive and innovative strategy for many organisations
around the world . ERP solutions contains a package of software putting altogether to
perform operational and financial transactions efficiently. On the entrepreneurship
side, ERP solutions are chosen by other companies base d on imitation instead of them
following new business process requirements. Though ERP systems have standard s
setups , reengineering of existing business process sometimes requires more
customisations in order to meet business requirements and for different iation purposes
among competitors. Th erefore, system upgrading and business process
reengin eering are functional part of the innovation. According to Juan (2003), a
successful ERP implementation should include innovation characteristics that
comprise techn ical compatibility, perceived complexities and business process
reengineering (Scott and Vessey, 2000) .
Although innovation represents a powerful tool for company growth, it happens that
not meeting system implementation requirements before and during imp lementation
causes failure and lost. Any ERP system implementation should be aligned with
critical factors that lea d to a successful system upgrade . Complete d and qualified
project management team, appropriate management monitoring as well as convenient
project governance should be driving customer through computerisation of his system .

5
ERP market penetration continuously increase in developed as well as developing
countries despite government regulations and lower level of internet infrastructure as
sated by Huang and Palvia (2001). They pointed out that low IT maturity, lack of
business process reengineering mostly observed in developing countries compromise
the adoption of ERP systems (Suraj and Rawani, 2016) .
Innovation and entrepreneurship
Relationship between innovation and entrepreneurship has been discussed in many
research papers. For some authors the two concept s are c omplementary
(Schumpeter, 1934 ) because entrepreneurs use innovation as a business tool to
operate.
Types of
Innovation Change Profitability Competitors
Incremental Medium
changes Maintaining margins Easily imitable
Breakthrough Substantial
changes Increase revenue and
margins Greater competitive
advantage
Radical Drastic
changes Explosive revenue
growth Considerable
competitive
advantage

Source : https://www.pwcaccelerator.com/
Each type of innovation can be done on processes, products or services and in overall
management structure as pointed out by Okpara (2007) and Littunen (2000) using
creativity thinking as building blocks. Innovation is also about opening new markets
and new supply chain . Besides the above, they distinguished organisational and
marketing innovation as well as administrative innovation. Considering the anatomy o f
an enterprise system, innovation leadership should include managers and
stakeholders, customers and suppliers as well as employees.
Pwcaccelerator (2017) pointed out three types of entrepreneurship namely innovator,
entrepreneurship spirit enables people to guess and create things out of nowhere
based on their skills and the ability to analyse and transform any situation in a growth
opportunities. It is all about developing new ideas and bring them to reality using
innovative approach. An entrepreneur is always ahead of the new technologies and
market changes in order to predict and initiate new tactics as weapons to face the new
environment without any negative impact on his business. This suggests continuous
update of the strategy and leadership to always meet predefined achievement.
Entrepreneurial activities are important for any type of innovation in a sense that
whether the innovation is managerial or Schumpeterian , entrepreneurial activities
include introduction o f new products and services as well as processes reengineering
(Baumol, 1990). Besides developing innovation skills, organisations need to belong to
innovation pioneers leaders in their sector to avoid marginalisation. Decision makers
should choose between an innovative leadership and a leadership for innovation as
innovation leadership approach to meet the organisation goal as published by
Pwcaccelerator (2017).

6
In order to be aligned to the environmental change, shumpeter (1947) introduced the
concept of adaptive and creative response to market dynamics to be respectively
applied to both adaptive and innovation strategy. Besides innovation , some companies
go for acquisitions and mergers (Cornelissen and Clarke, 2010) to reach revenue
growth by choosing inn ovative strategy compared to adaptive innovation. Unlike
increase on margins and market positioning, Innovative strategy is more risky due to
a higher level on uncertainty than adaptive strategy where company choose to imitate
a strategy that is known as s uccessful. According to Berente (2005 ), companies that
follow the innovative strategy tend to explore more business opportunities and manage
risk compared to adaptive strategy that prefer to stick on exploiting existing or old
possibilities. According to Pwcaccelerator (2017) , innovation is the foundation of the
four levels of revenue growth namely innovation, digitation, customer impact and
globalisation.

Best Practices in Innovation and entrepreneurship
According to Aldrich and Martinez (2001), entrep reneurial activities involve imitation
compared to innovation that means new inputs and processes. Knowledge constitute
the building block s of Innovation and entrepreneurship. In an ERP solution
management field, it appears that ERP systems are conceived t o fit big and multi –
national companies whereas small and medium structure also seek for system
upgrade. Qader and Rahimi (2011) proposed a conceptual framework for ERP
package to suit small business and enhance their innovative and entrepreneurial
performa nce. Big data requires perpetual technological progress through big
applications such as Sage software to visualize big data (Wang et al., 2015). Software
defined networking has been developed as a solution for security and privacy of big
data compared to firewall s and demilitarized zones (Rossi and Hirama, 2015 ) but
related infrastructure don’t always support the package.

4. Research Findings
4.1 Opportunities
It easily appears that significant innovation practices in terms of strategies and process
implementation lead to the long -term revenue growth for many corporates .
The current unstable economic tendency dominated by drastic changes and heavy
costs forces companies to continuously adjust their innovat ion approach for better
management performances and sustainability . Innovation on SAGE ERP system
offers the below benefits : Innovation DigitationCustomer
ImpactGlobalisation

7

Source : www.sagex3.com
Figure 1 : SAGE ERP system Innovations
Mobile Access : Sage ERP system can now be accessible through mobile device such
as android , smartphone and tablets devices
Remote Access : Sage ERP system is web -based allowing access to the system from
anywhere around the world.
Portal Personalisation: Sage System offe rs HTML5 interface allowing users to
personalise their own window connectivity.
Project Management: Regarding the volume of projects executed in business, Sage
created an additional module for project management to build up a fully integrated
solution.
Multi-legislation : Sage system allows to manage multi -legislation, multi -currency and
therefore reduces complexity of managing international business. Functional units
around the world work in the same open system with access to real time information.
Integr ated solution : Sage system is a package of multiple software aligned to each
business area put altogether to satisfy customer needs in one go.
Scalability : Sage ERP system is a common instance solution conceived to fit any
business activity. The system fl exibility allows easy customisation to suit any specific
increase on size and system functionalities .
There is a significant correlation between innovation and company growth. Defining
innovation process for a new product or service as well as new project enable to avoid
informal transformation of the company. Innovation process implementation need to
well-structured and officially exposed to all stakeholders. Business model need s to be
designed in line with the innovation process. Managers should have strong knowledge
in business management and business processes t o always think business in a
creative manner and drive results. Leadership for Innovation enables to explore SAGE ERP
System
InnovationsMobile AccessRemote AccessPortal
PersonnalisationProject
Management
Multi -Legislation
Integrated
Solution
Scalability

8
multiple opportunities and improve productivity. Innovation th en leads to viability and
long-term sustainability . ERP c onsulting companies mostly applied leadership for
innovation as an innovation leadership approach. ERP system is designed so that
every user can develop more inputs to suit his business requirements. Leaders in IT
companies involve all consultants in the process of thinking and developing additional
functions in the system to solve customer’s concerns. Such innovation leadership
tendency give advantage to the IT companies to meet customer satisfactio n and to
stay ahead among competitors.

4.2 Challenges
Although it is necessary for any organisation to be innovation -oriented, many
challenges as presented below causes implementation failure:
 No existing business processes in the company as starting point
 Resistance to change from the company as well as from his customers
 Lack of innovative culture
 Complex economic rules from the government
 Shadow IT
 Inappropriate Supportive infrastructure
 Big data management and w eb security
Even though innovation leadership involves all stakeholders in the company, illegal
practices of IT test known as shadow IT by the employees somehow become a threat
for the business (S ilic, Silic and Oblakovic, 2016 ). Managers should encourage IT
users to share their discovery with the company and thus contribute to the product
innovation in the firms. Besides the above, many companies struggle in following best
practices in the innovation field as presented in the figure 2 below.

Source : Author’s Compilation
Figur e2: Best practices in ERP Innovation Best
Practices
in ERP
InnovationLeadership
innovation
Thinking
Buiness
Innovative
Supportive
infrastructureRisk
managementDynamic
strategy

9
Innovation leadership : Whether innovative leadership or leadership for innovation, a
leadership based on innovation approach is appropriate for any company that want to
survive to the continuous environmental change .
Thinking : Innovation goes in hand with knowledge and thinking. Leaders should
develop innovative thinking instead of only business thinking. Innovative thinking allow
companies to stay alive in the uncertain environment by developing new ideas and
opportuni ties upfront compared to business thinking that is adaptive and
unpredictable.
Supportive infrastructure : Innovation brings new ideas that require specific
conditions to be implemented in the exiting environment. Regarding the higher level
of technology upgrade every year, successful innovation should meet t he ongoing
level of IT solutions . Therefore, innovation will require supportive infrastructure such
as internet access, web -based services, cloud communication, big data management
as well as IT infra structure.
Risk management : Innovation and entrepreneurship need to consider management
of risks due to uncertainty and environmental change as well as people resistance .
Dynamic strategy : Innovation strategy needs to be agile, easily a daptable in order to
adapt in different circumstances.

5. Conclusion and Recommendations

5.1 Conclusion
For any organisation, ability to remain sustainable over time depends on his
engagement in developing new entrepreneurial activities through innovation. Thus
Innovation and en trepreneurship are the vehicle of economy growth. Organisation
should develop an innovation -oriented management in line with IT development and
government’ regulations . Surviving in the current volatile world requires a business
solution that is faster, si mpler, flexible and agile enough to adapt in any condition
(Sage, 2017). Through innovation, Sage ERP system complies with global needs,
accelerates business growth by providing significant agile management solutions
aligned with agile business processes. SAGE ERP continuously offers innovations
possibilities such as fully integrated system, mobile access, remote access, portal
personalisation, multi -legislation, and scalability besides manageable challenges such as
inappropriate supportive infrastructure a nd lack of innovation culture.
5.2 Recommendations
The above conclusion are tentative to the subject to be discussed. Other factors apart
of the above -mentioned such as innovation on project management field need to be
taken into account in future research. The authors would like to explore in detail
innovation on other ERP system such as SAP solutions. There might be more
research on case study from a typical ERP consulting company.

6. References

10
Aldrich, H. and Martinez, M. (2001). ‘Many are called, but few are chosen: An
evolutionary perspective for the study of entrepreneurship’, Entrepreneurship: Theory
and Practice , 25, pp.41-57.
Anderson, G. and Tollison, R. (1980). ’Adam Smith’s Analysis of Joint –‐Stock
Companies ’, Journal of Political Economy , 90, pp.1237 –1257.
Baumol, W. (1990). ‘Entrepreneurship: Productive, Unproductive and Destructive’,
Journal of Political Economy , 98, pp. 893–‐921
Berente, N. 2005). ERP and Innovation in Schumpeterian Market Dynamics.
Cornelissen, J. P. and Clarke, J. S. (2010). ‘Imagining and rationalizing opportunities:
inductive reasoning and the creation and justification of new ventures’ . Academy of
Management Review , 35, pp.539–57.
https://www.pwca ccelerator.com/ . Breakthrough -innovation -and-growth. Accessed on the
12th of March 2017
Huang, Z. and Palvia, P. (2001). ERP implementation issues in advanced and
developing countries. Business Process Management Journal , 7(3), pp.276-284
Juan. F. (2003). Examining the role of innovation diffusion factors on the
implementation success of enterprise resource planning systems. International
Journal of Accounting Information Systems , 4(3), pp. 205 -225
Kanchana, R., S., Divya, J., V. and Beegom, A., A. (2013). Challenges faced by new
entrepreneurs. International Journal of current Research and Review , 1(3), pp. 71-78
Littunen, H. (2000), “Entrepreneurship and the characteristics of the entrepreneurial
personality”, International Journal of Entrepreneurial Behaviour & Research , Vol. 6 No.
6, pp. 295 -309.
Okpara, F., O. (2007). The value of creativity and innova tion in entrepreneurship.
Journal of Asia Entrepreneurship and Sustainability , 111(2)
Qader, v., D. and Rahimi, G. (2011). Design a Conceptual ERP model for Small and
Medium Enterprises of Iran. Interdisciplinary Journal of Contemporary Research in
Busines s, 3(5).
Rossi, R. and Hir ama, K. (2015). Characterizing Big Data Management. Issues in
Informing Science and Information Technology , 12, pp.165 -180.
Schumpeter, J.A. (1934). The Theory of Economic Development, Harvard University
Press, Cambridge, MA.
Schumpeter, Joseph A. (1947) The Creative Response in Economic History, Journal
of Economic History , 1947 p. 149 – 159; reprinted in Clemence, Richard; (2004) Joseph
A. Schumpeter: Essays on Entrepreneurs, Innovations, Business Cycles and the
Evolution of C apitalism, Transaction Publishers, Seventh Printing 2004, p.221 -231.
Scott, J. E., and Vessey, I. (2000). Implementing enterprise resource planning
systems: The role of learning from failure. Information Systems Frontiers, 2(2),
pp. 213-232.
Silic, M., Sil ic, D. and Oblakovic, G. (2016). Influence of Shadow IT on Innovation in
Organizations. Complex Systems Informatics and Modeling Quarterly, 8, pp.68 -80.

11
Suraj, K., M. and Rawani, A., M. (2016). ERP system implementation issues and
challenges in developing countries. ARPN Journal of Engineerin and Appled Sciences ,
11(12), pp. 7989 -7996
Wang, L., Wanf, G. and Alenxander, C., A. (2015). Big Data and Visualization:
Methods, Challenges and Technology Progress . Digital Technologies , 1(1), pp. 33 -38
www.sagex3.com/ . Sage x3 functionalities. Accessed on the 12th of March 2017