Supply chain management systems benefits : the expectation-confirmation theory perspective

Organizations adopt a Supply Chain Management System (SCMS) expecting benefits to the organization and its functions. However, organizations are facing mounting challenges to realizing benefits through SCMS. Studies suggest a growing dissatisfaction among client organizations due to an increasing gap between expectations and realization of SCMS benefits. Further, reflecting the Enterprise System studies such as Seddon et al. (2010), SCMS benefits are also expected to flow to the organization throughout its lifecycle rather than being realized all at once. This research therefore proposes to derive a lifecycle-wide understanding of SCMS benefits and realization to derive a benefit expectation management framework to attain the full potential of an SCMS. The primary research question of this study is: How can client organizations better manage their benefit expectations of SCM systems? The specific research goals of the current study include: (1) to better understand the misalignment of received and expected benefits of SCM systems; (2) to identify the key factors influencing SCM system expectations and to develop a framework to manage SCMS benefits; (3) to explore how organizational satisfaction is influenced by the lack of SCMS benefit confirmation; and (4) to explore how to improve the realization of SCM system benefits. Expectation-Confirmation Theory (ECT) provides the theoretical underpinning for this study. ECT has been widely used in the consumer behavior literature to study customer satisfaction, post-purchase behavior and service marketing in general. Recently, ECT has been extended into Information Systems (IS) research focusing on individual user satisfaction and IS continuance. However, only a handful of studies have employed ECT to study organizational satisfaction on large-scale IS. The current study will enrich the research stream by extending ECT into organizational-level analysis and verifying the preliminary findings of relevant works by Staples et al. (2002), Nevo and Chan (2007) and Nevo and Wade (2007). Moreover, this study will go further trying to operationalize the constructs of ECT into the context of SCMS. The empirical findings of the study commence with a content analysis, through which 41 vendor reports and academic reports are analyzed yielding sixty expected benefits of SCMS. Then, the expected benefits are compared with the benefits realized at a case organization in the Fast Moving Consumer Goods industry sector that had implemented a SAP Supply Chain Management System seven years earlier. The study develops an SCMS Benefit Expectation Management (SCMS-BEM) Framework. The comparison of benefit expectations and confirmations highlights that, while certain benefits are realized earlier in the lifecycle, other benefits could take almost a decade to realize. Further analysis and discussion on how the developed SCMS-BEM Framework influences ECT when applied in SCMS was also conducted. It is recommended that when establishing their expectations of the SCMS, clients should remember that confirmation of these expectations will have a long lifecycle, as shown in the different time periods in the SCMS-BEM Framework. Moreover, the SCMS-BEM Framework will allow organizations to maintain high levels of satisfaction through careful mitigation and confirming expectations based on the lifecycle phase. In addition, the study reveals that different stakeholder groups have different expectations of the same SCMS. The perspective of multiple stakeholders has significant implications for the application of ECT in the SCMS context. When forming expectations of the SCMS, the collection of organizational benefits of SCMS should represent the perceptions of all stakeholder groups. The same mechanism should be employed in the measurements of received SCMS benefits. Moreover, for SCMS, there exists interdependence of the satisfaction among the various stakeholders. The satisfaction of decision-makers or the authorized staff is not only driven by their own expectation confirmation level, it is also influenced by the confirmation level of other stakeholders‘ expectations in the organization. Satisfaction from any one particular stakeholder group can not reflect the true satisfaction of the client organization. Furthermore, it is inferred from the SCMS-BEM Framework that organizations should place emphasis on the viewpoints of the operational and management staff when evaluating the benefits of SCMS in the short and middle term. At the same time, organizations should be placing more attention on the perspectives of strategic staff when evaluating the performance of the SCMS in the long term.