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Definition and Analysis of Critical Success Factors for ERP Implementation Projects

 

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Abstract:

ERP is one the latest technologies that many organizations have undertaken. Typically, Enterprise Resource Planning (ERP) systems are software packages composed of several modules, such as human resources, sales, finance and production, providing cross-organizational integration of transaction-based data management throughout embedded business processes support. These software packages can be customized up to a certain limit to the specific needs of each organization. ERP was characterized as the most important development in the corporate use of technology in the 1990s. Unfortunately, many ERP projects have not been effective enough and hence have been unable to achieve all the results envisaged. As the cost of an ERP implementation project is very high, it is critical for an organization to make the project a success and start obtaining benefits out of it as fast as possible. But what is it that makes an ERP implementation project successful?

To address this issue we propose the use of a Critical Success Factors (CSF) approach to manage ERP implementation projects. After an extensive literature review on ERP research and ERP implementation project studies, we have studied and have proposed results along the following issues:

·       The identification and definition of a comprehensive list of CSF.

·       The relevance of CSF along the typical ERP implementation phases.

·       The definition of Key Performance Indicators (KPI) for CSF.

·       The analysis of CSF management in some organizational contexts.

 A theoretical framework was developed in order to aid the process of answering the implied research questions. In order to accomplish the research aims of this research, we have proposed an interpretive research approach and a “multimethod” research framework that combines various research methods, both quantitative and qualitative, with predominance of qualitative ones. Several results have already been produced out of our research project, with our chosen theoretical and research framework:

·       An annotated bibliography on ERP research.

·       A CSF unified model for ERP implementation projects.

·       A CSF relevance schema along the typical ERP implementation phases.

·       A new criticality indicator for Process Quality management (PQM) method.

·       A tentative set of KPI for some CSF and a systematic approach to develop the rest of KPI.

·       An ERP implementation model.

·       A CSF management analysis in two organizational contexts: a small and midsized enterprise and a public higher education institution.

With regard to the case studies conducted, the first was a pilot case study of an ERP implementation in a Portuguese small and midsized enterprise. The second one was an in-depth case study of an ERP implementation in a big Spanish public higher education institution. The different organizational contexts provided valuable insights in CSF management as well as implications from the emergence of patterns of communality between both case studies. The research results evidence that:

·       Most of the problems that arise in ERP implementation projects are associated with the activities identified as CSF in this research,

·       The main concerns are organizational rather than technological.

·       The management of CSF is influenced by the context and,

·       When managers have taken into account the CSF identified, some of project problems have been avoided or their impact significantly reduced in ERP implementation projects, and the organization is more likely to use more effectively the ERP system after its implementation.

·       A CSF approach is also helpful to avoid problems on the long term since most of the CSF identified are strategic.

 

It is hoped that future ERP research and ERP implementations can draw upon and learn from this thesis.

 

  ERP grounded theory model

Fig. 1. Research Diagram.

 

Some Results:

 

Strategic

Tactical

Organizational

- Sustained management support

- Effective organizational change management

- Good project scope management

- Adequate project team composition

- Comprehensive business process redesign

- Adequate project sponsor role

- Adequate project manager role

- User involvement and participation

- Trust between partners

- Dedicated staff and consultants

- Strong communication inwards and outwards

- Formalized project plan/schedule

- Adequate training program

- Preventive trouble shooting

- Appropriate usage of consultants

- Empowered decision-makers

 

Technological

- Adequate ERP implementation strategy

- Avoid ERP customization

- Adequate ERP version

- Adequate Infrastructure and interfaces

-Adequate legacy systems knowledge

- Formalized testing plan

- Adequate data migration process

 

Fig. 2. A Critical Success Factors Unified Model for ERP Implementations.

Fig. 3. Critical Success Factors Relevance Along SAP Implementation Phases(ICEIS 2001, AMCIS 2001, Esteves 2004).

Figure - Most relevant CSFs along ERP implementation phases.

Fig. 4 - ASAP Work Packages Criticality Analysis Along ASAP Phases (ICEIS 2002 conference paper).

Fig 5. Relationship between ERP project sponsor, project manager and ERP project success (ECIS 2002).

Fig. 6 - An ERP training monitoring and evaluation framework (ECITE 2002).

Fig. 7 - BPR concerns in the ERP context (AMCIS 2002).

Fig. 8 - A framework to evaluate and monitor training in ERP projects.

 

Date : 08/03/2014