Understanding Customer-Vendor Power Relations as a Driver to a Successful Implementation of Enterprise Resource Planning in Tanzania Manufacturing Industry

Abstract

Enterprise resource planning (ERP) systems contribute much to supporting manufacturing operations. Upon implementation, the manufacturing firms rely on the interactions with ERP system vendors to support and maintain this complex system. This study assesses the influence of customer-vendor power relations that help in strengthening the long-term relationship while resolving conflict of interest based on ERP fit. The study employs the power transition framework (PTF) and strategic alignment model (SAM) to explain the key driving factors of ERP implementation success.  To this end, this paper develops and verifies a model in which customer-vendor power relations and ERP fit serve as the key driving factor and mediator of the manufacturer's ERP implementation success, respectively. A cross-section survey was conducted in manufacturing organizations in Tanzania, with a total of 217 questionnaires collected. The data collected were analyzed using PLS-SEM assisted by smartpls3.0. The results suggest that higher levels of customer-vendor power relations positively influence ERP fit and Implementation success; meanwhile, the higher levels of ERP fit positively influence implementation success. It was also found that ERP fit has a partial mediation effect on the relationship between the customer-vendor power relations and ERP implementation success positively. The study has a theoretical contribution by combining the SAM and PTF to explain the ERP implementation success in the collaborative networks where actors engage in a long-term relationship. However, the study was biased to include only ERP customers as key informants in the customer-vendor relationship.