The Importance of Change Management after ERP Implementation: An Information Capability Perspective

When firms implement enterprise resource planning, they need to redesign their business processes to make information flow smooth within organizations. ERP thus results in changes in processes and responsibilities. Firms cannot realize expected returns from ERP investments unless these changes are effectively managed after ERP systems are put into operation. This research proposes a conceptual framework to highlight the importance of the change management after firms implement ERP systems. Our research model is empirically tested using data collected from over 170 firms that had used ERP systems for more than one year. Our analysis reveals that the eventual success of ERP systems depends on effective change management after ERP implementation, supporting the existence of the valley of despair.