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ERP Implementation: A Compilation And Analysis Of Critical Success Factors Add in library

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Question:

Discuss the factors you have identified and explain why they are more reliable than the clichés in the original article?
 
 

Answer:

Introduction

ERP or Enterprise Resource Planning has become an essential part of corporate information technology. SME or small and medium size businesses are also now inclined to ERP implementation suitable for their business as ERP gives advantages in longer terms.

During past, businesses used to implement information systems for their different core business processes. With time, the business processes have become complex, more data have been generated from those processes and it has become harder to integrated the heterogeneous legacy systems. For enterprises, those legacy systems gradually failed to cope up with the changed circumstances of the business processes and technologies. As a natural choice, the businesses want to have an integrated information technology solution for their business processes.

ERP helped then to bridge the gap between what they had and what they wanted. With time ERP has become more sophisticated and more functional. Now it is available for any kind of business process. The vendors sell customizable ERP solutions.

However, as ERP is closely related to the business processes, it is needed to be implemented very carefully. A change into another will affect the other. There have been several examples from various industries that shows fatal failures during their attempt to ERP implementation and that led them to significant losses.

Studies have identified several critical success factors behind the implementation of ERP. However, there is no fixed list or solution. The main requirement is mapping the business process correctly to the ERP solution. (Harwood, 2003)

 

Critical Success Factors

Other than the shallow clichés found in the given case study, there are several other critical success factors or CSFs. Some of the important ones are given below,

1.  Strong control from top management

This is a first and foremost requirement of ERP projects. The top management should be very clear about the outcome of the project, the scope and objective of the project. They should also understand how well the business processes can be mapped to the implemented ERP solution. They should have backed up with all required knowledge about ERP implementation so that they can take decision about the project effectively. (Wong & Tein, 2003)

2. Customization

Customization is necessary if a business has chosen ERP solution from some vendor rather than in house solution. In industries, they are more interested in buying ERP solutions from vendors rather than building it in-house. Because solutions from vendors are cost effective. Now, there is a process of customizing an ERP solution according to the requirement of the business process. ERP is a modular system. The modules are highly coupled and cohesive by nature and that is why it offers an integrated business solution. Customization of the modules is very challenging. It may affect the inter-relationship among the modules and in that case the primary objective of ERP solution that is the integrated business solution will suffer. And it will become a factor behind the success or failure of the project. (Nah & Delgado., 2006)

 

3. Business process reengineering

 In another case of ERP implementation, the business processes are customized to fit into the ERP implementation. This is also risky process. Because business process reengineering can be another project along with the implementation. So, at a time there will be two crucial projects running in the organization and as these projects are closely related so, managing both simultaneously is very challenging. And this plays crucial role behind the success of both projects.

4. Communication

Communication for any task or within an organization is very important. There should be enough collaboration and communication across the organization and between the IT project management team and the management of the business. Clear communication clears up bubbles of confusion and other human behavioral factors. For a project like ERP, participation and collaboration among all parts of the business process and organization is very much needed. (Ram, et al., 2013)

Communication also helps in building healthy organizational culture that in turns can play positive role behind success of any project even the ERP project.

 

5. Change control

ERP implementation will bring certain changes in the working culture, business process etc. within an organization. The employees should be accustomed with it. They should not feel confused or afraid. A proper change control play a serious role in this context.

6. Employee Resistance

Employees are driving force behind an organization and its business process. A common fear around ERP implementation may raise up among employees that it may cut down employment and they may become job less. As a consequence, they protest or resist to the changes and the ERP implementation. This is a very natural feeling for them. It is the responsibility of the organization to communicate with them, letting them go through some effective change control management policies and clearing out their fears. (Finney & Corbett, 2007)

7. Participation of management and end users

ERP implementation projects need participation of the IT staffs, management and the end users who will use the systems. This helps in deciding the acceptability of the system and the validation for the same. Building or implementation an ERP solution is actually the start of the scenario rather than the completion. So, this is an important CSF.

8. Testing

Testing is important CSF because, generally vendors offer a prototype of the actual solution. Then depending on the business processes the prototype is customized. Thus it is needed to be tested thoroughly that whether the customization have done in the correct way or there are some issues.

 

9. Post implementation Phase

Employees generally start actually utilizing all functionalities of an ERP system after they are accustomed with the system and they are confident. This takes some more time after the implementation of the ERP and a mere training is not the end of this learning phase. When the employees start utilizing the system, bugs may start coming in. but in most of the cases, during that time no project management team is there and it make the ERP system and the business process suffer. Some cases, there are maintenance team but bugs may paralyze the whole ERP system and in that case it needs more than maintenance support. (Ram, et al., 2013)

Conclusion

These CSFs are more than the cliché factors as these covers up broader spectrum of CSFs and includes the cliché factors too.

 

References

Finney, S. & Corbett, M., 2007. ERP implementation: a compilation and analysis of critical success factors.. Business Process Management Journal, 13(3), pp. 329-347.

Harwood, S., 2003. ERP: The Implementation Cycle. s.l.:Butterworth-Heinemann.

Ifinedo, P., Rapp, B., Ifinedo, A. & Sundberg, K., 2010. Relationships among ERP post-implementation success constructs: An analysis at the organizational level. Computers in Human Behavior, p. 1136–1148.

Leon, A., 2008. Enterprise Resource Planning. s.l.:McGraw-Hill.

Nah, F.-H. & Delgado., S., 2006. Critical success factors for enterprise resource planning implementation and upgrade. Journal of Computer Information Systems, 46(5), p. 99.

Ram, J., Corkindale, D. & Wu, M.-L., 2013. Implementation critical success factors (CSFs) for ERP: Do they contribute to implementation success and post-implementation performance?.. International Journal of Production Economics, 144(1), pp. 157-174.

Wong, B. & Tein, D., 2003. Critical Success Factors for ERP Projects. Proceedings of the national conference of the Australian institute of project management..

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