Background of the Study
The most significant development of the millennium which has substantially influenced business operations globally is the emergence of the information age. Taking advantage of rapid technological progress and financial market development, a number of innovative products have been developed in recent years. As we live in a world that is driven by information and Information Technology (IT), IT is changing every aspect of human endeavour including business and organization. The business environment is equally changing dramatically, and in order to stay competitive in the market, organization must improve their business practices and procedures by upgrading their capability to generate and communicate accurate and timely information toward the realization of stated objectives (O’Bren, 2008).
A tidal wave of IT-enabled initiative known as Enterprise Resource Planning (ERP) systems has elevated the importance of investing strategically in IT (Ross and Beath 2002:51). An ERP system is a packaged software system that enables an organization to manage the use of resources (materials, human resources and finances) by providing a total, integrated solution to its information processing needs (Nah et al 2003:20). ERP system is a business management system that comprises integrated sets of comprehensive software which can be used, when successfully implemented to manage and integrate all the business functions within an organization (Shehab et al 2004:372). Though ERP systems evolved in the early 1990s from Manufacturing Resource Planning (MRP II) Systems but while MRP II which focused on manufacturing, ERP systems serve other businesses and services by integrating all data relating to production, materials, marketing, accounting, finance, human resources, etc. allowing organizations to price product/services, produce financial statements and manage human, materials and financial resources effectively. ERP system is now considered to be the price of entry for running a business; hence, many of the world’s leading organizations consider ERP system as essential IT infrastructure for surviving in today’s competitive and turbulent operating environment (Cook, 1996:12).
Despite the fact that the idea of commercial banking activities in Nigeria started in 1891 when the first foreign commercial bank known as the British Bank for West Africa (BBWA) which later metamorphosed to the present First Bank Nigeria Plc was established, informal ERP systems and other means of managing organizational resources had earlier be in place. Notable among them are material requirements planning (MRP), Manufacturing resource planning (MRP II). It was however, in the late 1990s that the formal ERP systems as a specific form of information technology were applied to commercial banking activities in Nigeria. Since its adoption, the application of ERP systems concept, techniques, policies and implementation strategies to banking services has become a subject of fundamental importance and concerns to all banks and indeed a prerequisite for local and global competitiveness.
The commercial banking industry in Nigeria has also witnessed tremendous changes (since its inception in 1891 till date) as a result of various government interventions through various reforms linked with effective management of resources and compliance with global best practices. The quest for survival, global relevance, maintenance of existing market share and sustainable development has made exploitation of the many advantages of information and communication technology (ICT) through the adoption of ERP systems imperative in the industry (Agboola and Salawu, 2008:1-15).
The global success of Enterprise Resource Planning (ERP) systems has not only attracted the interest of researchers from the IT discipline, but from all major disciplines in business research including management and accounting. The emergence of ERP systems has moved the topic “Computerized business information systems” increasingly from IT domain to the business domain; from systems design and programming to business configuration, process mapping and re-engineering. ERP impose their logic on organizations and force employee to think in terms of integrated processes and to change the way they do accounting, management, production planning and control. All these changes brought about by ERP systems made them very attractive research object of many business disciplines, and management is by nature the one from which we expect an answer to the question which ultimately counts in business: Are those systems worth the investment? (Wieder et al 2006:15).
Hossain et al (2002:232), observe that ERP systems affect organizations and are implemented mostly to enhance organizational effectiveness. The main purpose for deploying ERP systems is to improve control over organizational processes (Hanseth, et al 2001:35). ERP systems are information systems packages that are configurable and integrate information and information-based processes within and across functional areas in organization (Gattiker and Goodhue, 2004:438). ERP systems automate and structure an organization’s business process by furnishing reference models and process templates across the enterprise (Allen et al 2002:232). ERP systems are implementations of standard software modules for core business processes and are usually combined with specially tailored customization to provide competitive differentiation. The goal of ERP systems is to provide integration and functionality across multi-functional and frequently multi-national organizations. Implementing ERP system involves a change management initiative, which includes a review of processes across the organization, and entails more than just installing stand-alone pre-written software (Skok and Legge, 2001:194). The change management initiative almost certainly requires some form of business process re-engineering.