by Michael Doheny for KCP Dynamics
Leadership is the use of power and influence for the purpose of attaining a goal while maximizing the utility and satisfaction of followers. Enterprise Resource Planning (ERP) Systems are a set of business software modules gathered together to enable a business to manage and execute their daily activities.
Virtual teams are groups of geographically dispersed members ‘glued’ together by technology for the purposes of achieving single or multiple tasks. The following literature review will explore each of these topics and endeavor to illustrate use complexities and dependencies of leadership theory in virtual teams and the implementation of global ERP systems.
Enterprise Resource Planning
Enterprise Resource Planning (ERP) systems are a set of boxed business software modules which enables an organization to administer and perform their operation efficiently and effectively. During the 1950’s Material Resource Planning (MRP) and subsequently MRP II (Materials Resource Planning) systems were being developed by manufacturers to calculate and control materials and resources for their business. During the 1970’s these systems added functionality to include complete business processing from General Ledger to Purchasing and Sales to Distribution. The concept of a complete enterprise wide software package has come to be known as ERP.
Implementing ERP systems is complex. Global ERP implementations take that complexity and multiply it exponentially. Literature supports the notion that for implementations to succeed, support from upper level management is crucial. Organizations planning to or in the process of implementing an ERP system are obligated to dedicate key employees to the project team. In many instances this requires the valued employee to essentially acquire another full time position within the company.
The composition of the leadership team should include a focused project team supported by executive sponsors and champions and maintained by competent project managers.
Project team composition is critical. The team should be a mix of employees and consultants in order for the internal staff to develop the skills required for design and implementation. Yeh and Chou (2005) studied functional and positional diversity of team members in ERP implementations. Functional diversity being members from a cross section of functional areas within the organization: manufacturing, accounting, IT, etc. and positional diversity defined as titles and hierarchal position. They concluded that team learning and task and relational conflict resolution were benefited with positional diversity.
Project Sponsors and Champions
The commitment of the executive sponsor is essential for the success of an ERP implementation. The project leader should act as a champion for the project and the executive sponsor must have the power to set goals and legitimatize change. Summer also states the leader should be selected from the business side to maintain the business perspective. Transformational leadership is vital and the leader has to persistently work to resolve conflicts and manage resistance.
Good project management is a must for any ERP implementation. The project Manager (PM) should maintain the scope of the project and inform leadership in a timely manner if there is an expansion of requirements (scope creep) which might affect the project. The project manager is the de facto leader of the project and as such their core functions are to manage, lead, and coach their followers. The project manager is required to be able to handle technical, business, and change management. The PM must also be given power and authority to direct all phases of the project.
Transformational leadership is a style of leadership where the leader transforms and inspires followers to perform beyond expectations while transcending their self-interest for the benefit of the organization.
There are four dimensions of transformational leadership. These dimensions were derived from interviews in which individuals were asked to describe leaders that caused them to perform beyond expectation.
Idealized Influence – where transformational leaders act as charismatics role models.
Inspirational Motivation – inspirational motivation refers to the leader’s ability to inspire confidence, motivation and a sense of purpose in his followers. This property of transformational leadership is frequently used with idealized influence.
Intellectual Stimulation – this transformational leadership values creativity and autonomy among the leader’s followers.
Individualized Consideration – Each follower or group member has particular needs and desires. The individualized consideration element of transformational leadership recognizes these needs.
Transformational leaders are those who are able to have profound and extraordinary effect on their follows by the force of their personal abilities. The close connection between transformational leaders and followers is based more on trust than contractual agreements. Leadership is consistently found to be the most important factor culminating in implementation success.
With advances in technology and the globalization of the workforce, virtual teams are becoming more common. Avolio, Kahai, & Dodge, 2001 evaluated current literature to come to an understanding of what constitutes e-leadership in an organization. In their article they choose the term e-Leadership as a means to incorporate the new emerging context for examining leadership in virtual teams. The authors define e-Leadership as a social influence process mediated by Advanced Information Technology (AIT). The authors build their examination of e-Leadership on the socio-technical systems approach in which success is decided by how well social and technical schemas align with each other and the external situations. Avolio, et al. examines.
Successful Leadership Styles for ERP
Thite (2000) explores and identifies successful leadership styles of IT project managers. Their findings indicate five essential leadership characteristics in addition to Bass and Avolio’s transformational leader model:
- Organizational Catalyst – acting as a facilitator between members and management
- Intellectual Stimulation – encourage members to think outside the box
- Charisma – as associated with transformational leadership
- Contingent Reward – making sure rewards are delivered for performance achievements
- Active Monitoring of Exceptions – monitoring performance for exceptions. While a trait of transactional leadership is an added facet to successful transformational leader qualities.
There is no single leadership style suited for all ERP implementations. There are many factors and internal and external variables.
Stay tuned for Part II of this series to learn more about virtual teams, building trust and relationships, and empowering followers.