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Impact of Change Management Initiatives in reducing Resistance to Change-


ERP Implementation in SNGPL

Thesis · September 2018

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Impact of Change Management Initiatives in reducing

Resistance to Change- ERP Implementation in SNGPL

Submitted by: Sarah Ali

Roll No. MS TQM-15-35

MS-TQM

Session: 2015-2017 Fall

Supervisor: Dr. Muhammad Usman Awan

Institute of Quality and Technology Management

Quaid-e-Azam Campus, University of the Punjab

Lahore - Pakistan
Table of Contents

DECLARATION ....................................................................................................i

Certificate of Approval ......................................................................................... ii

DEDICATED TO ................................................................................................. iii

ACKNOWLEDGEMENTS .................................................................................iv

ABBREVIATIONS ...............................................................................................vi

List of Figures .................................................................................................... viii

List of Tables .......................................................................................................... x

List of Appendices............................................................................................... xii

Abstract .............................................................................................................. xiii

Chapter 1- Introduction ........................................................................................ 1

1.1 Sui Northern Gas Pipelines Ltd. (SNGPL) ................................................... 1

Successful ERP Implementation at SNGPL ........................................................ 2

1.1.1 Oracle Financials (AP, FA, GL) ................................................................... 3

1.1.2 Inventory (Oracle Supply Chain-SCM) ..................................................... 3

1.1.3 Purchasing (Oracle Supply Chain-SCM) ................................................... 3

1.1.4 HR (Oracle HRMS) ...................................................................................... 4


1.1.5 Payroll (Oracle HRMS)................................................................................ 4

1.1.6 Enterprise Asset Management (Oracle eAM) ............................................ 4

Resistance in ERP Implementation at SNGPL ................................................... 4

Change Management Initiatives at SNGPL ........................................................ 5

Problem Statement ................................................................................................ 7

Research Objectives .............................................................................................. 8

Significance of the Study ....................................................................................... 8

Thesis Structure ..................................................................................................... 8

Chapter 2- TQM, ERP, Impact of Change Management in reducing Resistance

........................................................................................................................................... 11

2.1 Total Quality Management (TQM) .............................................................. 11

2.2 Enterprise Resource Planning (ERP) .......................................................... 12

2.3 ERP and TQM ............................................................................................... 13

2.4 ERP Implementation-Critical Success Factors ........................................... 17

2.4.1 Model-1 ........................................................................................................ 17

2.4.2 Model-2 ........................................................................................................ 18

2.5 Enterprise systems implementation in Public Sector (Pakistan) .............. 21


2.6 ERP Implementation Dimensions and Change Management Initiatives . 22

2.6.1 Resistance towards ERP Implementation ................................................ 23

2.6.2 Successful Implementation ........................................................................ 26

2.6.3 Change Management Initiatives ............................................................... 29

2.7 Research Hypotheses ..................................................................................... 34

Secondary Hypotheses......................................................................................... 35

2.8 Conceptual framework – diagrammatic presentation ............................... 36

Chapter 3- Research Methodology..................................................................... 39

3.1 Research Strategy and Sampling Method ................................................... 39

3.2 Questionnaire Development and Data Collection....................................... 39

3.2.1 Phase 1: Development of Indigenous Scale for impact of change

management initiatives in reducing resistance to change-ERP implementation in

SNGPL .............................................................................................................................. 40

3.2.3 Phase 2: Main study ................................................................................... 42

3.2.3.1 Measures ................................................................................................... 42

3.3 Procedure........................................................................................................ 43

Chapter 4- Data Processing and Analysis.......................................................... 45

Section 4.1: Preliminary Analysis...................................................................... 45


4.1.1 Demographical Analysis: ........................................................................... 45

4.1.2 Descriptive Statistics: ................................................................................. 51

Section 4.2: Authenticity of data and questions ................................................ 52

4.2.1 Reliability Analysis of data: ....................................................................... 52

4.2.2 Validity Analysis.......................................................................................... 53

4.2.3 KMO and Bartlett’s Test: .......................................................................... 57

4.2.4 Correlation Analysis: .................................................................................. 58

Section 4.3: Testing Hypothesis .......................................................................... 61

4.3.1 Regression Analysis (Moderation Analysis-AMOS) - Proposed Model for

Main Hypotheses ............................................................................................................. 61

4.3.2 Regression Analysis (Moderation Analysis-AMOS) – Secondary

Hypotheses........................................................................................................................ 66

Section 4.4 Summary of Results ......................................................................... 76

Section 4.5: Findings ........................................................................................... 79

Chapter 5- Conclusion......................................................................................... 83

5.1 Conclusion ...................................................................................................... 83

5.2 Implications .................................................................................................... 84

5.2.1 Practical Implications ................................................................................ 84


5.2.2 Theoretical Implications ............................................................................ 85

5.3 Limitations ..................................................................................................... 85

5.4 Future Directions ........................................................................................... 85

References............................................................................................................. 86

APPENDIX-A ...................................................................................................... 93

APPENDIX-B ...................................................................................................... 99

APPENDIX-C .................................................................................................... 100


ABBREVIATIONS

Enterprise Resource Planning


ERP
Sui Northern Gas Pipelines Ltd
SNGPL
User Acceptance Testing
UAT
Sui Northern Gas Training Institute
SNGTI
Total Quality Management
TQM
Business Process Reengineering
BPR
Critical Success Factor
CSF
Business Excellence
BE
Achievement of Implementation Objectives
AEI
User Acceptance
UA
Information System
IS
Change Management Initiatives
CHM
Resistance towards ERP Implementation
RS
User Involvement
UI
Creating Awareness Among Users
CA
Return on Investment
ROI
Training
TA
Motivation
MT
Oil & Gas Regulatory Authority
OGDCL
National Database and Registration Authority
NADRA
Pakistan Telecommunication Ltd.
PTCL
Higher Education Commission
HEC
Statistical Package for the Social Sciences
SPSS
analysis of a moment structures
AMOS
Comparative Fit Index
CFI
Goodness of Fit Index
GFI
Adjusted Goodness of Fit Index
AGFI
Normed Fit Index
NFI
Root Mean Square Error of Approximation
RMSEA
Tucker Lewis Indices
TLI
Abstract

The aim of the study was to discover the impact of change management initiatives

in reducing resistance to towards ERP implementation in SNGPL. An indigenous scale

was developed for the purpose. Respondents were selected through convenience sampling.

The study was conducted with all users of ERP at SNGPL (143 responses received and

after cleansing 141 were selected). The factor analysis of dependent, independent and

moderator variables has been carried out. Cronbach Alpha of the scale is 0.87. Moderation

analysis through AMOS 20 was conducted. It is found out that resistance towards ERP

implementation has inverse relationship with achievement of implementation objectives as

well as user acceptance. While it is also revealed that the inverse relation between

resistance towards ERP implementation and achievement of implementation objectives as

well as user acceptance is minimized when change management initiatives are higher. The

analysis carried out on each dimension of change management one by one and it was

divulged that each domain of change management minimizes the inverse relationship of

resistance and successful implementation.

Keywords: Information Technology, ERP (Enterprise Resource Planning), Change Management,

Resistance to change, SNGPL


Chapter 5- Conclusion

5.1 Conclusion

Enterprise applications like ERP provide strong support to organizational

performance. The rapid growth of technology has forced the organizations to adapt the

latest state of the art automated solutions for performing business operations in smooth,

fast and accurate manner. In a country like Pakistan where literacy rate is low, the

resistance towards computerized based enterprise application is a common thing. This all

depends on managing to implement the change by adapting good measures. The study was

conducted on analyzing the moderating effect of change management in reducing

resistance to ERP implementation and attaining successful implementation by having user

acceptance and achievement of implementation objectives. A public sector organization-

SNGPL was taken as case study. The study has followed the model of (Ahmed et al.

(2006)) and proposed a slight change in the model for investigating the moderating role of

change management initiatives on successful implementation of ERP and also in reducing

resistance towards ERP implementation. In SNGPL, for successful implementation of ERP,

the management devised a change management plans comprised of creating user

awareness (Communication), user involvement (User Participation), user training

(Capacity Building) and motivational (Employee Motivation) measures.

 First objective of the study was to find out the effect of resistance on ERP

implementation at SNGPL. Primary Hypotheses H1 and H2 stated that

resistance has an inverse relationship with user acceptance and achievement of

implementation objectives. Both hypotheses are accepted and hence fulfill the

first objective of the study.


 Second objective of the study was to investigate the effect of management

initiatives in user acceptance of ERP system and achievement of ERP

implementation objectives. Primary Hypotheses H3 and H4 stated that inverse

relationship of resistance and user acceptance as well as achievement of

implementation objectives is lesser when change management initiatives are

higher. Both hypotheses are accepted. The secondary hypotheses (H5, H6, H7

and H8) stated the inverse relationship of resistance and user acceptance is

minimized by implementing the change management initiatives including

creation of awareness, user involvement, user training and motivation

respectively. All 4 hypotheses are accepted. The secondary hypotheses (H9,

H10, H11 and H12) stated the inverse relationship of resistance and

achievement of implementation objectives is minimized by implementing the

change management initiatives including creation of awareness, user

involvement, user training and motivation respectively. All 4 hypotheses are

accepted. Thus, the second objective of the study is also fulfilled.

The study showed that the change management initiatives taken by management at

SNGPL played a key role in reducing the resistance towards ERP implementation and lead

to successful implementation that is achieved through user acceptance and accomplished

the implementation objectives.

5.2 Implications

5.2.1 Practical Implications

The research will be helpful for SNGPL to take better decisions regarding process

automations and huge investments in automated solutions for business processes. The

research is specifically conducted for SNGPL but can be helpful for any organization
specifically public sector organizations that is either planning to implement enterprise

applications or in process of automation. The change management model of SNGPL can

be adapted by other organizations as well.

5.2.2 Theoretical Implications

The model presented in the research will be helpful for identifying the impact of

change management initiatives in reducing resistance to change towards ERP

implementation for other organizations.

5.3 Limitations

Following are the limitations of the research:

 There is no prior research on the topic with reference to SNGPL. Due to no

previous study on SNGPL against the topic, it took more time to identify

dimensions, develop a scale and collect the data.

 All users’ participation is not possible due to time constraint. As well as the

online questionnaires do not bind respondent to respond, it’s on their will. So

sample size is a bit limited.

 The research is limited to one organization as it is thesis based research.

5.4 Future Directions

Following ideas can be used in future:

 The role of post implementation support in smooth execution of enterprise

application in the organization is a major dimension which is still needed to be

explored.

 The same study can be carried out against multiple public sector organizations

in Pakistan by making a comparative study.


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