International Journal of Current Engineering and Technology
©2015 INPRESSCO®, All Rights Reserved
E-ISSN 2277 – 4106, P-ISSN 2347 – 5161
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Research Article
ERP Implementation Challenges & Critical Organizational Success
Factors
Rajeshwar Vayyavur†*
†Doctoral
Research Scholar at California Intercontinental University, California, USA
Accepted 31 July 2015, Available online 11 Aug 2015, Vol.5, No.4 (Aug 2015)
Abstract
The empirical research describes six key issues that affect the successful implementation of Enterprise Resource
Planning (ERP). These issues include unclear objectives, missions and vision, lack of management commitment, lack
of end user training, incompatible organization culture and inadequate management of knowledge. The other two
important issues include change management and business process reengineering. The involvement and commitment
of the executive forms the foundation of the success of the project. The control ensures objectives and goals of the
project are formulated and communicated effectively to all stakeholders. The top management plays a vital role in
reducing resistance and improving the adoption of technology. Failure to manage change is a major contributor of
ERP failure. ERP implementation should be considered as an organization-wide project that advantages from the
contribution of all stakeholders. The entire ERP lifecycle involve knowledge creation, storage, and sharing. Therefore,
lack of an effective knowledge management can devastate the implementation of ERP. Change management needs to
understand organization culture as the basis of behaviors and values among employees. The implementing team
needs to create a learning organization that is open to ideas and innovation. In addition, the entire ERP project
should be an organization-wide project that benefits from the positive contributions of all stakeholders.
Keywords: Enterprise Resource Planning, ERP, Implementation, Organizational, System Issues, Critical Success
Factors
1. Introduction
1 Enterprise
Resource Planning (ERP) is a software
solution that assimilates business functions and data
into a single system that is shared within the business.
ERP originated from the manufacturing and planning
systems, and it has expanded its scope to other backoffice functions including the management of human
resources, production planning and finance (Van
Nieuwenhuyse et al., 2011). In recent years, ERP has
integrated other business functions and extensions
such as supply chain management and customer
relationship to achieve strategic goals.
The key objective of integrating ERP is to improve
the operating efficiency of business by improving
business processes and decreasing operation costs
(Beheshti, 2006). ERPs allow the communication of
different business departments that have diverse
needs by sharing information in a single,
comprehensive system. Therefore, ERP facilitates
cooperation and interactions between all units and
*Corresponding author: Rajeshwar Vayyavur
processes of a business (Harrison, 2004). ERP plays a
critical role in standardizing processes and data within
business best practices. The business can streamline
the flow of data between different parts of the
organization by creating a one-transaction system.
According to Hitt et al. (2002), the standardization of
processes allows a greater level of interoperability that
was complex and costly to achieve with most standalone, custom-built systems. The standardization and
integration of processes coupled with effective data
flow, allows in organization to centralize its
administrative activities, improve its ability to deploy
new information systems and reduce the cost of
maintaining information systems (Siau, 2004).
These advantages and benefits of ERP have made
ERP the backbone of business intelligence for
businesses by giving managers an integrated view of all
the processes with the organization. ERP is designed to
acclimatize to new business demand with ease. A
significant number of organizations and businesses
have adopted ERP over the past decade, and revenue of
ERP market continues to expand more rapidly (Dover,
2012).
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Rajeshwar Vayyavur
ERP Implementation Challenges & Critical Organizational Success Factors
2. Literature Review & Discussion
2.1 Issues
Despite ERP increased growth from the late 1990s todate, there are several challenges that businesses and
organizations encounter when implementing ERP.
Numerous scholars have explored some of these
factors. Despite the capital intensive investments and
the potential benefits, not all ERP projects result into
the intended outcomes. The implementation of ERP is
often delayed and overrun the initial budget (Helo et
al., 2008). Research indicates that a large number of
ERP implementations have failed to achieve the
desired organization target. Most of these failures are
not caused by the ERP software but the complexity and
massive changes caused by ERP in an organization
(Maditinos et al., 2011). According to Helo et al. (2008),
the major impediments to successful ERP
implementations are not technologically related issues
such as compatibility, technological complexity, and
standardization, but most are organization and human
related issues including as resistance to change,
organizational culture and business processes. Huang
et al. (2004) presented the top ten risks that cause ERP
implementation failures. The table below shows the
ten risks.
(1)
(2)
(3)
(4)
(5)
Lack of management commitment
Insufficient training with users
Ineffective communication with users
Inadequate support from the executive
Lack of effective project management
methodology
(6) Conflicts between department users
(7) Attempt to build bridges to legacy application
(8) Composition of the implementing project team
members
(9) Failure to redesign business processes
(10) Misunderstanding of change requirements
The risk factors indicate the numerous organizational
factors such as organization fit, project management
and control, skill mix, software system design and
technology planning. Implementation of ERP causes
organizational change and requires the engagement of
senior and executive management from across the
organization that can resolve conflicts. The lack of
commitment of the senior management increases the
risk of ERP failure. Marco-Pallares et al. (2008) stated
that the changes in business processes can cause
resistance to adopting the ERP system. ERP integrates
and connects business functions within the business.
Therefore, it is vital that the management and
employees be committed and equips employees who
are using business functions influenced by the
implementation of ERP with clear and effective
communication channels. Failure of the implementing
team to train the end-user training increases risks
creates confusion and inaccuracy and decrease the
satisfaction and credibility of the ERP system. Users’
acceptance is a critical success factor for ERP system
implementation. About the organizational issues, the
implementation of ERP has an impact on several
aspects including the individual working behaviors and
organizational
processes.
The
successful
implementation requires that the intended level of
usage is achieved as system usage is a measure of its
acceptance by the end-users. Therefore Users’
acceptance is an essential success factor for the
implementation of ERP.
Dixit and Prakash (2011) highlighted some of the
issues affecting the implementation of ERP among
small and medium-sized companies. They identified
some of the challenges as lack of awareness amongst
SMEs and ERP vendors, perceptions among SME and
inadequate resources. Dixit and Prakash (2011) stated
that there is a low level of awareness among most
SMEs for ERP vendors and applications. They believe
that only large organizations should implement ERP.
They classify the major factors affecting the
implementation of ERP into four categories including
the top management, training, software design and
testing, and data collection. The core role of the top
management is to provide the necessary financial
support and adequate resources. IT literature indicates
that for information technology projects to succeed,
top management is vital. It is not different with the
implementation of ERP. ERP implementation involves
more than changing an organization’s software. )t
involves
repositioning
the organization and
transforming its business operations, processes and
practices. Due to the large impact on the competitive
advantage of the organization, top management should
consider the strategic effect of implementing an ERP
solution. This paper classifies these challenges and
factors into organizational factors and system factors.
2.2 Critical Organizational Success Factors
The implementation of ERPs is an organizational-wide
issue and as such is influenced by numerous
organizational factors. Sternad & Bobek (2012)
conducted a literature search to identify the critical
organizational factors that influence the success of ERP
implementation. The literature search identified
fourteen factors that were mentioned more than five
times in the past one decade. These factors form the
basis of the exploration of the organizational factors
for the implementation of ERP.
2.2.1
Clear Goals, Objectives, Scope & Planning
According to Aduri et al. (2003), clearly defined
business, and strategic objectives are the most critical
factors. Scholars agree that formulating clear vision
and mission and the right strategies to achieve goals
serves as a blueprint for the success of the project.
Objectives, goal, and mission, give the project team the
operational direction of the project. Akkermans and
Van Helden (2002) stated that clear objectives and
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ERP Implementation Challenges & Critical Organizational Success Factors
goals form a clear –cut critical success factors but also
can be problematic. According to Akkermans and Van
Helden (2002), it is often difficult to define these
objectives at onset of the project. In addition, having
consensus among managers about setting the
objectives and ways to monitor the objectives may lead
to a greater level of satisfaction. Clearly defined
objectives ensure the project is focused and are vital in
evaluating the success of the project.
2.2.2
User Training & Education
The implementation of ERP has far-reach impacts on
employees and their roles. Since ERP Influence
Corporation between departments and processes, data
integration ad structures, the role of users and their
duties change in several ways. First, the employees
should learn to cope with the new and complex system.
ERPs introduce a number of functionalities and have a
greater impact on business processes. The integration
of these functionalities and processes alters the role of
employees. As the processes, data and departments
integrate employees’ role and their everyday work
changes. The proceeding of business processes over a
logical and united database leads to increasing
dependencies between departments and individuals.
Considering the vastness of the impact of ERP on
employees, training becomes an integral success factor.
Inadequate user training and failure to understand
how ERP system works are responsible for many
problems ERP implementation and failures. The
implementation of ERP often fails due to lack of proper
training. Scholars and researchers consider user
training and education as an important factor of
successful ERP implementation. The key reason for
education and training program is to ensure the users
are comfortable with the system, and increase their
expertise and knowledge. ERP concepts, system
features, and hands on training are vital aspects of ERP
implementation. The training needs not only to cover
how to use the new system, but also the new processes
and understanding the integration of those processes
within the system. Lack of adequate training makes
users invent their processes and ways to use the part
of the system they can manipulate. Therefore, the full
benefits of ERP are not realizable unless the end users
have the necessary know-how to use the system. The
management should develop training strategies in
advance and update them continually. ERP training and
education refers to the process of offering management
and employing logic and overall concept of ERP
systems. The content of the training program should
focus on logic and concepts of ERP, features of ERP
system software and hands-on training. Continuous
training is critical to meet the changing needs of the
business and enhance employees’ skills. Although it
possible to change organizational hardware and
software easily, it may take months to adjust learning
curves with an organization. A major challenge in ERP
implementation is the selection of the adequate
training for the end-user and education. It is common
for executives and the top management to
underestimate the level of education and training due
to the associated cost. Dezdar & Ainin (2011) collected
empirical data from )raq’s companies implementing
ERP. The aim of the study was to examine
organizational factors that may influence ERP
implementation. They stated that ERP is a complex
system that needs adequate training and education to
enable end-users to use it effectively and efficiently. In
addition, end-user training and education enhances the
level of knowledge and proficiency, thus improving
individual performance and consecutively the
performance of the organization. According to Nah et
al. (2003), sufficient training has the potential to
improve the profitability of ERP systems while lack of
training acts as a major hindrance. The organization
can use the training and education programs to build
an attitude toward the system. It may also help ERP
users to adjust effectively to the organizational change
taking place within the organization. End-user training
increases the chances of ERP system use and success.
Somers and Nelson (2004) concluded that
implementing ERP without adequate training may have
drastic undesirable consequences. Schaffer and Scherer
(2000) stated that end users need to be trained how to
input data and information, and have to learn the new
processes behind the system. Dorobat and Nastase
(2012) compiled a list of critical success factors that
affect ERP implementation training phase. The list of
factors includes top management support, project
management, training curriculum, user training
commitment, personnel skills and competencies and
training budget. According to Dorobat and Nastase
(2012), ERP implementation requires enormous
training requirements that are expensive. The training
program can constitute 10% to 20% of the total ERP
implementation project (Dorobat & Nastase, 2012).
Therefore, the commitment of the top management
and executives is vital in sustaining the ERP training
program. Scholars agree on the importance of starting
a training program with detailed users training
requirement analysis. The aim of the analysis is to
understand the present level of knowledge, how to
deliver information, number of users to be trained and
the courses or content of the curriculum. On the onset
of the project, employees may require a large volume
of training and support to make them comfortable with
the ERP command language and a new business
processes. Employees and other trainees need to feel
the training is relevant to their current and future jobs.
Therefore, it is fundamental to inform employees
the essence and benefits of the training. The success of
the training program depends on its ability to deliver
training and knowledge at the individuals’ level. )n an
organization, ERP training needs to be delivered to the
managerial personnel, key end-users, general endusers and the trainers. Esteves et al. (2002)
underscores the importance of synchronizing ERP
training with the overall implementation of the project.
ERP training should be scheduled to minimize
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ERP Implementation Challenges & Critical Organizational Success Factors
problems from the time lag between the training and
the start of ERP. Training expenses are a major concern
in most ERP projects. Training expenses are high due a
number of factors. First, the users have to learn a new
set of business processes and not just how to interact
with the interface. Secondly, new employees require
extra training and support. Finally, the training costs
correlate with the level of competencies of employees.
Figure 1: A Simplified view of the ERP Training System
Framework
Training needs changes during the implementation
processes and is diversified. Therefore, using only one
training method may be ineffective.
2.2.3
Knowledge Management
Another issue closely related to user training is
knowledge management. Knowledge management
denotes a class of IT-based information system that is
developed in order to support knowledge creation,
storage and retrieval, transfer of information and
application of information. The role of knowledge
management in ERP implementation encompasses
methods for creating, organizing, storing and
transferring knowledge about the core processes of the
organization. Knowledge management and ERP are
synergistic solutions and are complementary to each
other. The use of knowledge management in the
implementation of ERP facilitates effective product and
services innovation thus increasing the potential of
ERP (Lekenes & Munkvold, 2006). Lekenes &
Munkvold (2006) stated that for organizations to
benefit from Knowledge Management related to ERP,
the different actors within the organization needs to
adopt different strategies depending on their role in
ERP implementation process. The actors need to
source knowledge efficiently. Mismatch between the
capacity to transfer and absorb knowledge makes it
difficult for ERP project to achieve the desired results.
Vandaie (2008) identified two critical areas of concern
regarding the management of knowledge during the
implementation of ERP. These areas of concern include
the management of tactic knowledge and process-
based nature of organization knowledge. ERP
implementation is knowledge-intensive, and the fact of
the entire project relies on knowledgeable employees
and effective management of knowledge during ERP
lifecycle. ERP offers centralized databases and
integrated business processes across organizational
functions that take the company to converge its
information. The convergence of information requires
the broader knowledge of organization’s processes
among the end users. The view of the employees
changes from task-focused to process-focused and as
such employees need to understand how their tasks fit
the overall process and their contribution to the
success of the process. A key implication of the
knowledge-based perspective of the organization is
that the significance of sharing information along the
process line increases. Knowledge sharing in ERP
exists along various lines of interactions among
employees, ERP team, external consultants and
management in different levels of engagement. There
are different lines of knowledge sharing within ERP
projects. The first line of knowledge sharing involves
knowledge sharing amongst ERP team members. ERP
team is in charge of implementing the project. In most
instances, the composition of this team comprises of
representatives
from
different
departments.
Representatives from the different departments come
with different form of knowledge that needs to be
shared for the successful planning and implementation
of ERP project. The second line of knowledge sharing
involves communication between the team members
and end users of the project. Sharing of knowledge at
this level entails informing the end users on the use of
the system and as such it is influenced by the ability of
the organization to manage change. Hence, it is critical
for the management to integrate this level of
information sharing within change management
initiatives. The third line of information and knowledge
sharing involves the implementing team and external
consultants or vendors of the system.
The question of whether knowledge management is
complementary
or
contradictory
to
ERP
implementation remains subject to debate. However,
several scholars including Vandaie (2008) and Leknes
& Munkvold (2006) believe that knowledge
management complements ERP.
The aim of implementing ERP is to increase an
organization’s efficiency by improving information
processing
ability.
The
systematization
and
centralization of processes enhances the capability of
the organization. On the other hand, the aim of
knowledge management is to mobilize knowledge
through
effective
and
organized
knowledge
repositories of knowledge and practices of creating and
sharing information. Therefore, most organizations use
knowledge management techniques throughout ERP
implementation. The availability of knowledge
management systems to provide accurate and timely
information helps an organization to adopt easily. The
various stages of ERP lifecycle require knowledge that
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ERP Implementation Challenges & Critical Organizational Success Factors
is hard to capture that cannot be organized using
informal knowledge management means. The major
concern of tactic enterprise system management is
because process knowledge is routinized to make
employees subconsciously perform the various tasks.
When employees are included in the ERP team, the
need to share knowledge and information surfaces.
2.2.4
Senior Management Commitment
According to Green, top management includes CEO and
all CEO’s subordinates who are responsible for
organizational policies. In most instances, the top
management is represented in the project by the
steering committee and the project sponsor. Esteves et
al. (2002) stated that sustained management support
relates with sustained management commitment at
the top and middle levels during ERP implementation
in terms of involvement and willingness to allocate
resources. Management support and commitment are
vital for accomplishing project goals and objectives and
aligning the strategic goals of the organization. Top
management support is essential throughout the
implementation of the project and the management
needs to be committed with its willingness and
involvement to allocate critical resources toward the
implementation phase. The executive have the overall
responsibility for accepting and approving ERP project
initiatives including funding prioritization. Therefore,
active participation by the top management is essential
to the adequate resourcing of ERP project, fast-tracking
decisions and promoting the acceptance of the project
within the organization. Another key aspect is the
recognition
from
the
executive
that
ERP
implementation requires the use of the best and
brightest employees for a considerable amount of time.
Therefore, the top management need to help identify
individuals required to implement the change and
organize them into an effective multidisciplinary team.
Top management commitment involves identifying the
project as a top priority. Some of the aspects of
commitment include doing what is necessary during
the implementation phase to make sure all processes
and steps are clear. Commitment is a pact that freely
assumed, visible and expected to be kept by all parties.
Dong (2000) identified two types of top management
commitment. They include a commitment to resources
and commitment to manage change. Commitment of
the top management to providing resources is critical
in facilitating the implementation process. The key
determinants of commitment include project
determinants, social and psychological determinants,
and structural determinants. Meyer and Allen (2002)
identified three types of commitments. The first type of
commitment is the affective commitment that refers to
the staff commitments to, identification with and
involvement in the project. The second form of
commitment is normative that reflects a sense of
obligation to continue membership with the
organization. The third form is continuance
commitment that entails awareness of the costs related
to leaving the organization.
Top management affects employees’ commitment
to ERP through effective internal communication about
the importance of ERP. The responsibilities of top
management in ERP include communicating the
company’s strategy to employees, demonstrating a
commitment, and identifying rational objectives for the
ERP project. Studies indicate that top management
support during the entire ERP project is essential, and
it is vital for a business to achieve objectives. Senior
level sponsorship, support, championship and
participation influence ERP success. ERP does not only
involve changes in hardware and software, but also
change in business processes.
2.2.5
Change Management
ERP systems change the way organizations do
business, and the way employees work. The job profile
of employees will automatically change. Some jobs will
no longer to necessary while new jobs may be created.
In addition, the way in which the organization
functions will change, the planning, forecasting and
decision-making capabilities will improve while
information integration and automation of processes
will occur. Managing these changes is complex and if
not done properly can lead to ERP failure. The key
challenge of ERP implementation is how an
organization manages the various elements of changes
in the organization to achieve the desired changes. ERP
imposes new logic on the organization, and this may
cause several cultural conflicts. Cultural changes are
the most sophisticated types of changes to identify and
manage because culture is complex to grasp. The
organizational culture reflects the implicit beliefs,
values and assumptions about the behaviors believed
to lead to success. During the implementation of ERP,
the prevailing culture may antagonize the desired
forms of control and organizational structures
essential for implementing optimal processes.
According to Sia et al. (2002), ERP may enforce
additional management power and control rather than
introduce organizational empowerment. Employees
may resist the internal power structures introduced by
the system. Therefore, ERP can be used as a change
agent or a means of advancing a specific political
purpose within the organization. A large number of
ERP fail to achieve the desired benefits, probably
because organizations underestimate the effort
involved in change management. Organizational
change is a concept used to ensure that a complex
change gets the right results, within the desired
timeframe and right costs. Resistance to change makes
up the greatest challenge facing ERP implementation.
The existing organizational structure and processes in
most organizations are not compatible with
information provided by ERP systems because every
ERP imposes its logic on an organization’s strategy and
culture. These numerous changes may affect
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significantly organizational structures, policies,
employees,
processes
and
cause
resistance,
redundancies, and confusion.
Meyer & Allen (1991) identified some of the factors
facilitating change management. These factors include
effective management of human resources, adaptive
and flexible structure, and familiarity with technology,
knowledge transfer, and stronger communication
skills. In terms of human resources, the successful
implementation of ERP relies on greater education and
training, positive motivation and attitudes, and
commitment toward innovation. The organizational
structure needs to be adaptive and flexible and should
facilitate strong communication mechanisms and
networks within the organization. The decision-making
process should be broad and strategic instead of
narrowly defined operational and technical goals. The
implementing team should ensure earlier involvement
of the operational workforce, top management support
and
commitment
and
cooperation
among
organizational units.
Ahmed et al. (2006) explored the impact of
resistance to change on the implementation of ERP,
and the role of change management can moderate the
implementation of ERP. They stated that six key
reasons responsible for resisting change. The first
reason is the nature of change. When employees are
not made aware of the nature of change, the level of
resistance is likely to be very high. The second reason
is that the change is prone to a number of
interpretations, and some employees may read
mischief from the organizational efforts to implement
ERP. The people affected by the change have additional
pressure on them to make it. In addition, employees
resist change when such change ignores the existing
institutions. According to Kim at al. (2005), conflict of
interest, inadequate human resources commitment,
failure to reengineer processes and lack of
organizational change management are the major
impediment. Resistance to change is a manifestation of
cultural values and strengths. Kim at al. (2005) stated
that managing resistance to change is similar to
changing organizational culture. Therefore, effective
change management initiatives are vital for the
implementation of ERP and business processes
reengineering. Without appropriate and effective
change management processes, organizations may be
unable to adapt to the new ERP and to maximize
performance gains. Many ERP failures may be due to
lack of focus on soft issues including business
processes and management of changes. Recognizing
the need for change is critical as stronger the need for
change, the more likelihood the top management and
stakeholders will support the change. Stratman and
Roth (2002) noted that the early involvement in the
planning, design and implementation, and extensive
top-down and cross-functional communication help in
creating enthusiasm for the implementation of ERP
among employees. Resistance to change may also be a
result of lack of skills or failure to understand the
changes. Al Nafjan & Almodmaj (2005) concluded that
ERP implementation is less about the technology or
system and more about the people. Resistance to
change may take numerous forms. Therefore, top
management should take the initiative to deal with the
problem proactively instead of reactively.
Dahl (2010) identified three key aspects important
for building organizational change management. First,
the organization needs to recognize the inseparability
of project management and change management.
Secondly, the organization needs to create change
management awareness and competence. Finally, the
organization should integrate activities to turn
employee competence into organizational change
management potential.
2.2.6
Organizational Culture
Successful implementation of ERP in most
organizations is affected by the organizational culture.
Organization culture causes approximately half of ERP
failures because managers underestimate the efforts
necessary to manage the wide range of changes
involved in the implementation of ERP effectively.
Zaglago et al. (2013) explored the impact of culture in
the implementation of ERP. According to the study, the
environment in which ERP systems are developed,
selected and implemented constitutes a cultural or
social context. The social context includes different
stakeholders, vendors, project team, and the users of
the system. Each of these parties involved in the
implementation process have different cultural values
and assumptions toward ERP implementation.
Organization culture is a pattern of shared
assumptions that the group learns as it evolve and
solve its external problems and internal integration.
The implementation of ERP often necessitates changes
in business processes and the culture of the
organization. Organization culture is fundamental
during the implementation process and the successful
adoption of ERP. Organization culture plays a critical
role in enforcing rules, values, processes and practices
with the organization at both individual and
organization level. Zaglago et al. (2013) stated that ERP
perspective is process-based rather than functionbased. Therefore, it may introduce disruptive
organizational changes. According to Nordheim (2009),
ERP imposes rigid workflow norms and practices upon
workplaces. It demands changes to organizational
culture. An open and creative culture recognizes
employees as the main source of ideas and their role in
the delivery of performance that results into a stable
environment that reinforces employees’ loyalty. On
contrary, unsupportive organization culture that does
not support organization learning and sharing of
information discourages employees from contributing
and discussing factors that may lead to the failure of
the program. The proximity of an organization toward
learning facilitates the process of change. An
organization culture that promotes learning
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ERP Implementation Challenges & Critical Organizational Success Factors
encourages
involvement
and
adaptation.
A
management team that accepts new concepts readily
and adapt to new tools as they become available is able
to drive implementation of new organization-wide
system more effectively, as opposed to management
team that prefers to maintain status quo.
2.2.7
Business Re-Engineering
Business process reengineering (BPR) is that basic and
fundamental rethinking and radical redesign of
business processes to attain dramatic improvements in
vital, contemporary initiatives of performance such as
cost, quality of services and speed of delivery. Business
reengineering involve overhaul of organizational
structures, management systems, job descriptions, skill
development, training and the use of ERP.
Implementation of BPR reengineering impacts every
aspect of an organization. A successful BPR can lead to
performance improvement, increase in profit,
reduction in costs and improved productivity of the
company. Numerous studies have investigated the
impact or effects of BPR on the success of ERP
implementation. Erkan (2009) investigated the effects
of BPR on ERP implementation and supply chain
performance. The study indicates the critical role of
BPR on the success of ERP implementation. ERP
systems review guideline
Enterprise resource
planning (erp) systems review ,
described BPR
and ERP as independent initiatives. However, these
initiatives are dependent can be implemented
concurrently.
Lack of alignment of ERP system and business
processes is a major issue in the implementation of
ERP. In order to reduce the risk associated with failure
to realign ERP systems and business processes, most
organizations reengineer their business. Rethinking
and radical redesign of business processes enables an
organization’s
operational
processes
to
be
systematically aligned with ERPs and allows an
organization to obtain better.
communicated effectively to all stakeholders. The top
management also plays a vital role in ensuring the
project has the necessary resources.
Organizations
needs to perceive ERP implementation as more than
just the integration of software’s and hardware and
view it’s a change process that affects employees and
other stakeholders. The success of ERP largely relies on
effective change management.
Effective change
management is vital in reducing resistance and
improving the adoption of technology. Failure to
manage change is a major contributor of ERP failure.
The top management and the implementing team need
to initiative change management initiatives using
various change manager theories. They can improve
motivation and innovation within the organization
through various motivation theories.
Change
management needs to understand organization culture
as the basis of behaviors and values among employees.
The implementing team need to create a learning
organization that is open to ideas and innovation.
Implementing ERP alter complete an organization
culture and without a smooth and effective transition,
the organization risk failing to reap the maximum
benefits of ERP. ERP implementation goes hand-inhand with business process reengineering. Business
process reengineering ensures the new ERP fits into
the new model of business processes. An organization
should ensure that its processes and ERP are
complementary and support the organization achieves
competitive advantage. ERP facilitates the integration
and convergence of information within an
organization.
The entire ERP lifecycle involve
knowledge creation, storage and sharing. Therefore,
lack of an effective knowledge management can
devastate the implementation of ERP.
The
implementing team should create communication
channels to facilitate sharing of information and
knowledge. Finally, ERP implementation should be
considered as an organization-wide project that
benefits from the contribution of all stakeholders.
References
Conclusions
ERP provides an effective strategy to gain competitive
advantage. As organizations worldwide continue to
implement ERP, there is a great need to identify the
key issues that affect the success of ERP projects.
Evidence from empirical research indicates the
significance of organizational factors as facilitators or
hindrances to ERP implementation. Some of the
identified issues include the composition of a
representative and knowledgeable implementation
team. The team should include members from across
the organization including the top management. The
inclusion of inter-department members facilitates
knowledge sharing and reduces the rate of resistance
from end users. The involvement and commitment of
the top management forms the foundation of the
success of the project. The management ensures
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