The Effects of Switching Costs on User Resistance to Enterprise Systems Implementation

• Published in: IEEE transactions on engineering management Vol. 58; no. 3; pp. 471 - 482
• Main Author: Kim, Hee-Woong
• Format: Journal Article
• Language: English
• Published: New York IEEE 01.08.2011; The Institute of Electrical and Electronics Engineers, Inc. (IEEE)
• Subjects: Bias; Classification; Context; Costs; Decision making; Enterprise system (ES) implementation; equity implementation model (EIM); Failure rates; Handwriting; Inertia; Information systems; Investments; Project management; Psychology; Resistance; status quo bias; Studies; Switches; Switching; switching costs; Technology adoption; Transition costs; Uncertainty; User behavior; user resistance
• ISSN: 0018-9391; 1558-0040
• DOI: 10.1109/TEM.2010.2089630

It is estimated that up to 70% of the large-scale information systems [i.e., enterprise systems (ESs)] implementation projects conducted to date have failed. User resistance to ESs implementation is consistently identified as a critical reason for this high failure rate. While previous research, primarily through case studies, has explored several reasons for user resistance, the results of status quo bias research suggest that switching costs are the main reason. This study classifies switching cost subtypes based on status quo bias research, develops a theoretical model based on the equity implementation model, and examines the effects of switching costs on user resistance through a survey of employees at a manufacturing company that was in the process of implementing a new ES. The results of this survey indicate that uncertainty costs and sunk costs directly increase user resistance, while transition costs and loss costs indirectly increase user resistance by reducing the perceived value of switching. The results of this study advance the theoretical understanding of ESs implementation and user resistance to change. These findings also offer suggestions to organizations for managing user resistance and may help reduce the failure rates of ESs implementation projects due to user resistance.