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Assessing risk in ERP projects: identify and prioritize the factors Shi-Ming Huang I-Chu Chang Shing-Han Li and Ming-Tong Lin Industrial Management & Data Systems Volume 104 Number 8 2004 pp. 681688 q Emerald Group Publishing Limited ISSN 0263-5577 DOI 10.1108/0263557041056 1672 www.emeraldinsight.co m/0263-5577.htm

Definitie
But an ERP project is composed of software projects and business processes. The ERP system consists of tightly linked interdependencies of business processes, software systems, and process reengineering (Wright and Wright, 2001; Xu et al., 2002), that presents unique risk factors formed with software systems and its wide applications.

Parte importanta din articol

Software development problems have been a major issue until now. Unfortunately, it appears that software development efforts still suffer from age-old difculties of cost overruns, project delays, and unmet user needs (Wiegers, 1998). A wellknown article by McFarlan (1981) on software risk management was published, one decade ago, with development failure examples just like the ones listed above. He stated that failure to assess individual project risk and to adapt management methods accordingly was a major source of the software problem. Even though McFarlans views have been well received by practitioners and researchers, little research has been done to advance our knowledge of software development risks. Alter (1979) identied eight risk factors: nonexistent or unwilling users, multiple users or implementers, turnover among all parties, inability to specify purpose or usage, inability to cushion impact on others, loss or lack of support, lack of experience, and technical or costeffectiveness problems. Boehm (1991) recommended the use of approximate methods, and proposed a prioritized checklist of ten software risk items: personnel shortfalls, unrealistic schedules and budgets, developing the wrong software functions, developing the wrong user interface, gold plating, continuing stream of requirement changes, shortfalls in externally furnished components, shortfalls in externally performed tasks, real-time performance shortfalls, and straining computer science capabilities. Zmud (1980) states the factors that inuence the outcome of software development project: technological complexity, degree of novelty or structure of the application, technological change, and project size. Davis (1982) identies four sources of project uncertainty: the task to be supported, the application to be developed, the users, and the analysts. Ewusi (1997) suggests that several sources of uncertainty be taken into account in the management of software development projects: complexity, lack of structure, instability of project objectives, newness of the technology, users, IS management, upper management, and project size. Barki et al. (1993) reveals a high degree of resemblance between what some authors have labeled risk factors and what others have called uncertainty factors. In these given similarities, the lists of uncertainty and risk factors identied in the IS literature were examined in order to group factors with shared meanings. ERP projects are unique in that they require the intense collaboration of groups of stakeholders, namely; IS staff, end users and management. Hence ERP projects are organization-oriented activities, and therefore subject to all the vagaries of group dynamics, interactions, coordination, andcommunication. Due to the aforementioned reason, Sumner (2000) held an investigation to a better understanding of the major risk factors associated with enterprise-wide/ERP projects. Wright and Wright (2001) also investigated the risk factors of ERP projects due to ERP systems, which inherently present unique risks associated with its tightly linked interdependencies of business process, relational database, and process reengineering. Sumner (2000) used case studies to describe the experiences of several companies which had implemented enterprise-wide information management systems using SAP, Peoplesoft, and Oracle. Wright and Wright (2001) held a semistructured interview with experienced participants. They found that Insufcient training and re-skilling, Insufcient internal expertise, Lack of analysts with the knowledge of business and technology, Failure to mix internal and external expertise effectively, unable to comply with the standard which ERP software supports, and lack of integration between enterprise-wide systems could be ERP risk factors. Based on previous research, the ERP risk factors are listed in the Table I. Category Risk factors in IS Risk factors unique in ERP Organization t Organizational environment (resource Failure to support cross-organization insufciency and extent of changes) (Barki design Wright and Wright, 2001 et al., 1993) Skill mix Lack of technical expertise (Ewusi, 1997) Insufcient training and re-skilling (Wright Lack of application knowledge (Barki et al., and Wright, 2001) 1993; Ewusi, 1997) Lack of analysts with business and Inappropriate stafng and personnel technology knowledge (Sumner, 2000) shortfalls (Boehm, 1989; Keil and Failure to integrate internal and external Montealegre, 2000) expertise effectively (Sumner, 2000) Project management and Lack of agreement on project goals (Ewusi, control 1997) Lack of senior management involvement (Ewusi, 1997; Keil and Montealegre, 2000) Lack of effective project management methodology

(Keil and Montealegre, 2000; Ewusi, 1997) Software system design Unclear/Misunderstanding changes in requirements (Rainer et al., 1991; Boehm, 1989; Keil and Montealegre, 2000) Lack of an effective methodology, poor estimation and failure to perform the activities needed(Rainer et al., 1991; Keil and Montealegre, 2000) User involvement and training Lack of user commitment and ineffective communications with users (Rainer et al., 1991; Keil and Montealegre, 2000) Conicts between user departments (Keil and Montealegre, 2000 Technology planning Capability of current enterprise technical infrastructure (Ewusi, 1997) Technology newness,(Rainer et al., 1991; Boehm, 1989; Barki et al., 1993) Technology complexity (Barki et al., 1993) The risk hierarchy of ERP project

Unable to comply with the standard which ERP software supports (Wright and Wright, 2001; Sumner, 2000) Lack of integration between enterprisewide systems (Sumner, 2000; Wright and Wright, 2001) Insufcient training of end-user (Sumner, 2000; Wright and Wright, 2001)

Attempting to link legacy applications (Sumner, 2000; Wright and Wright, 2001)

CRITICAL SUCCESS FACTORS FOR

ERP systems are software packages that enable companies to integrate

User involvement and training, project management and control are the facets concerning the sample. These two facets occupy almost 50 percent of the total factor. Within the user involvement and training risk category ineffective communications with users, failure to get user support, and insufcient training of end-user are the major causes of ERP project failure (Table V). The other major risk category for project achievement is project management and control. Lack of senior manager commitment to project and lack of efcient project management methodology are the major reasons of project failure in this category. Conventionally, risk analysis is performed at the overall project level. Among the synthesized of 28 risk factors, we summarized the top ten risk factors that affect the ERP projects more than others (Table VI). To implement ERP in the enterprise needs business process reengineering and may change the enterprise environment. It needs a lot of effort to ease the fear of users, and to eliminate the resistance of users. Previous research indicated that user training is a key requirement for ERP implementation. Pertaining to the insufcient training of end-user, Davenport (1998) suggested that ERP systems can empower users by equipping them with real-time data, and Rao (2000) observed that ERP was associated with greater job exibility by expanding individual awareness, creativity, and innovation. Robey et al. (2002) gured that the above advantage should be on the premise of training. Before the user could use an ERP system efciently, they need to learn the business processes that were revised followingsystem implementation. They suggested that rms addressed the need for users to learn new system by providing formal training for users and by taking an incremental approach to system implementation. The training should contain operation skills of new system, procedural training, revised business process and management change. The user training should not only focus on software procedure but also management change and the concepts of process-orientation (Schmidt et al., 2001). The implementation of ERP contains various changes, which may cause conicts of different departments. Without the intervention of senior management, no one will compromise the rearrangement of ERP. Ewusi (1997) stated that the failure of senior management to request and enforce regularly scheduled management review meetings to monitor progress on a project is a major cause of failure. Umble and Umble (2002) suggested that if the top management is not strongly committed to the system, does not foresee and plan for the profound changes necessitated by ERP, or does not actively participate in the implementation, the implementation is at high risk of failure. The implementation of ERP must be viewed as a transformation in the way the company does business. Besides the supports from top management, excellent project management techniques are also required (Umble and Umble, 2002). They indicated that implementation teams should take a disciplines approach to project management, including a clear denition of objectives, development of a work plan, and establishment of resource requirement plan. Most of all, appropriate project evaluation measures must be included during ERP implementation. The policy of compensation, award, assist, responsibility, and replacement of incapable staff should be preserved and monitored until nal completion. Umble and Umble (2002) indicated that some of the biggest ERP system implementation failures occur because the new softwares capabilities and needs are mismatched with the organizations business process and procedures. The mismatch between ERP systems, existing structure, and business process of organization will generate widespread chaos. Robey et al. (2002) suggested that the core team and consultants could aid in solving this kind of problems. In most rms a core team assumed responsibility for conguring the system, it served as forces promoting new knowledge against the knowledge barriers of the existing organization memory. With the method of stafng core team with experienced business and technology managers could provide needed business and technical expertise. Due to the integrated nature of ERP, data entered into a system may be used throughout the organization. If the inaccurate data is entered into the common database, erroneous data may have a negative domino effect throughout the enterprise. The domino effect will cause the ERP lose credibility and will encourage people to ignore the new system and continue to run the company under the old system (Umble and Umble, 2002). Seven categories of critical success factors were identified from the ERP literature: (1) business plan and vision; (2) change management; (3) communication; (4) ERP team composition, skills and compensation; (5) management support and championship; (6) project management;

ENTERPRISE RESOURCE PLANNING IMPLEMENTATION AND UPGRADE Nah, Fiona Fui-Hoon; Delgado, Santiago. The Journal of Computer Information Systems 46. 5 (2006): 99-113.

their business processes and all the information relevant to their organization. With ERP systems, firms are able to manage all their resources (i.e., physical or intangible assets, finances, human resources, production, etc.) more effectively. The ERP system not only aids in standardizing business processes across an enterprise but also helps management increase their visibility of the business by providing real-time financial and production information.

(7) system analysis, selection and technical implementation. We conducted a case study of two organizations that had implemented and upgraded ERP systems. Companies have expressed multiple reasons to implement ERP (20). Some companies chose to perform an ERP implementation because of their need to integrate disparate systems throughout the enterprise. ERP systems enable companies to consolidate the disparate data sources into one database and radically increase the ability to create reports from data originating in multiple departments across the enterprise. A second reason why companies implemented ERP systems was due to the Year 2000 (Y2K.) bug. Some companies owned nonY2K compliant software and decided to switch to ERP instead of moving their old system to the next version because of the functionality provided by ERP. The wave of ERP implementation reached a high point at the turn of the century. Now, several years later, many of these companies are faced with issues of maintenance and upgrade. For example, their implementation may lack the functionality provided by higher versions of the product or vendors may no longer support their version of the product. In consequence, ERP customers need to periodically upgrade their system. Research on ERP upgrade is of the utmost importance because of its impact on companies around the world that are undergoing this major step or process in ERP maintenance. This impact can be significant because upgrade is an iterative process that is recurring throughout the life of an ERP implementation. Business Plan and Vision It is very important to have a clear vision, goal, and business plan for an ERP project. A business case should be established for both ERP implementation and upgrade (6). A business plan is very critical (26) and should specify benefits, resources, costs, risks and a timeline (38). The project also needs a clear vision to guide the ERP implementation (5, 12). The vision and mission of the project must also specify measurable goals and targets (2, 13). The goals and benefits of the project must be clear and well understood (30, 35). A justification for the investment in an ERP system should also be made based on the change in work processes to align with the future direction of the business (8). Hence, the project should lead to alignment of the business strategy with IT strategy. Change Management Recognizing the need for change in order to stay competitive is very important (8). A culture of shared values and a strong corporate identity is critical to facilitate change, and an enterprise wide structure and culture change should be managed (8, 26). Shared values should emphasize functional, product, market segment, or task focused perpectives (3). Formal education and training should be provided so users can gain an understanding of how the system works and how it will impact their work (2, 3, 4, 13, 30, 35). Even though training tends to be one of the areas to be cut in the case of budget overruns, it is critical to the success of the implementation project as well as the quality of decisions that will be taken based on the system (3, 19). User involvement and feedback in the design of the system is also important (2, 13). In order to effectively solve user problems and manage organizational change, a support organization (i.e., help desk, on-line user manuals) should be in place (38). The IT workforce should be trained on the new system and processes (3, 36). The company's commitment to change will be expressed by its perseverance and determination in solving implementation problems (30). During the implementation of an ERP system, constant business process reengineering should take place in order to take advantage of the new system (2, 38). Business process reengineering will also help companies reduce the amount of customization needed in the implementation (4, 13, 19, 30), thus increasing the likelihood of system success. However, redesign of business processes can increase the complexity, risks and costs of the project (35). Communication Expectations and goals must be communicated effectively among stakeholders and throughout all levels of the organization (2, 8, 13, 26, 30, 35, 38). It is very important for stakeholders to understand the capabilities and limitations of the ERP system. ERP systems may fail to meet expectations due to "overselling" the software (35). Communication should be complete and open to guarantee honesty. Any feedback offered by users must be seen as being received and acted on (8). The communication plan should include the rationale for the ERP implementation, details of the business process management change, demonstration of the software, change management strategies, contact points, scope and project progress (2, 36). ERP Team Composition, Skills and Compensation An ERP project includes all functional areas of an enterprise. The effort and cooperation of technical and business experts as well as endusers is necessary for the success of an ERP implementation. Therefore, involving people with both business and technical knowledge into the project is essential for success (2, 3, 4, 30, 35, 36). The involvement of the implementor, vendors and consultants is also critical (10, 11). The best people in the organization should make part of the implementation team in order to foster innovation and creativity that are important for success (4, 5, 8, 26, 30, 32, 38). It is important that the functional team members in the organization be involved in the project on a full time basis (30). These team members must be empowered to make quick decisions (30) and performance should be tied to compensation (8).The project team should be balanced, cross-functional, and have representatives of the internal staff as well as consultants

(10, 13, 30, 35, 36). The sharing of information, especially from vendors and consultants, is very important and requires partnership trust (9, 10, 25, 35). Creating incentives and risksharing agreements will help the achievement of common goals (38). Project Management Effective project management is critical to the success of ERP implementation. Not only should responsibility for the project be clearly assigned (26), the scope of the ERP implementation project also needs to be clearly defined and controlled (3, 13, 26, 30, 35). Any changes in the original project should be evaluated based on their business benefits and, if possible, implemented at a later time (36, 38). Furthermore, changes to the scope of the project must be assessed based on the additional time and cost it would entail (36). The milestones and delivery dates of the project must be realistic and clearly stated (2, 3, 13, 19,30). Due to the large number of parties involved in an ERP implementation, it is critical to coordinate project activities across all affected parties (8). Internal integration tools are essential to coordinate activities involving the project team while external integration tools are necessary to facilitate collaboration with external stakeholders and to assure that user and process requirements are being integrated into the system (3). In order for an ERP implementation project to he a success, timeliness must be enforced and progress must be tracked by monitoring milestones and targets (2, 19, 26, 35, 36). The success of the project can be gauged by completion dates, costs, quality, and system performance. Top Management Support and Championship Top management support is a necessary condition for ERP implementation success (27). It is critical to have support and approval from top management for an ERP implementation (2, 3, 4, 5, 19, 30, 35, 36). The ERP project must be clearly and explicitly designated as top priority by top management (30, 38). In addition, the top management must be willing to allocate valuable resources to the implementation project (13, 30, 35). These resources include time, money and personnel necessary for the ERP implementation. The importance of a project champion in an ERP implementation is greater than in other IS implementations because the project relies heavily on organizational support perseverance (36). The commitment of the project champion is critical to drive consensus and to oversee the entire implementation project (26). The project champion should be an advocate for the project (30) and must continually manage resistance and change (19). The project champion must be a high level official in the organization to facilitate goal setting and legitimizing change. Having a high ranking official as the champion for the project can facilitate monitoring due to the individual's knowledge of the business and his/her ability to acquire resources in the organization (8, 35). System Analysis, Selection and Technical Implementation For an ERP implementation to be successful, the complexities of existing business legacy systems must be successfully managed (2, 13, 15). Customization of the ERP system should be avoided as much as possible (3, 19, 16, 26, 30, 36). Customizing an ERP system has been associated with an increase in IT costs, a longer implementation time, and the inability to benefit from the vendor's software maintenance and upgrades. To justify customizing the system, a strong business case on the loss of competitive advantage should be developed (35). The overall architecture of the system must be configured before the deployment. Defining the architecture before the implementation prevents reconfiguration at later stages (38). Rigorous and sophisticated testing is very important for the success of the implementation (2, 26). In order to achieve the full benefits of an ERP system, integration of data from previously used systems and with the company's other systems is critical (35). To ease the integration process, organizations may develop their own middleware (4) or employ Enterprise Application Integration (EAI) which uses special middleware that serves as a bridge between different applications for system integration (15). Implementation methodologies and development tools provided by the vendor should be used as much as possible (31, 35). These tools and methodologies usually lead to a reduction of costs and implementation time and increase the amount of knowledge transferred to the client. The use of appropriate tools and methods for modeling, development and implementation (19, 28) is essential. It is critical to have effective troubleshooting if there are errors with the system (13). One of the first and most important steps in an ERP implementation is the selection of an ERP package (3, 37). The organizational fit of ERP is essential (14, 23, 34) to minimize customization. The ERP package selected must meet the information and functional needs of the organization, and must support the organization's business processes (33, 35). In order to have a comprehensive view of the enterprise's requirements for an ERP system, it is important for all functional areas to he involved in the selection of the package. It is also critical that test scenarios represent as many departments and cover current and future processes (2). The architecture that will run the ERP application also constitutes an important choice. Some key considerations are whether the system will be centralized or decentralized and how compatible it will be with existing systems (35). A fundamental requirement for a successful ERP implementation is the availability and accuracy of the system's data. Problems with data can lead to serious delays in the project. Before any data is even converted, the organization must decide what information will be loaded onto the system. This can be very difficult if one understands that the data can come from a number of disparate data sources in countless different formats (3, 35). The data conversion can be even more difficult if the company does not understand what information it wants to include into the system, and what it wants to leave out (35).

Of the seven categories of critical success factors, 'ERP Team Composition, Skills and Compensation' is found to be the most important overall for both implementation and upgrade. Throughout the interviews, the participants in both organizations emphasized the importance of the team responsible for both the implementation and the upgrade. During the initial implementation, both companies tried to have "the best and the brightest...the people you can't afford to lose," as the CIO of Public Power Company described it, in the project team. Another factor that was evident for both organizations was the importance they put on empowering the project team. It is very important for the success of both the implementation and upgrade projects that the project members are trusted to take hard decisions and not have to constantly ask for approval from their managers. The importance that was given to this factor was demonstrated in State University when top management sent everyone in the project team a letter explicitly describing their commitment to empowering the ERP team during the implementation. The amount of involvement of the team members and the incentives to complete the project decreased from the original implementation to upgrade. In one of the two organizations, the team members were offered to be eligible for overtime during the original implementation. Before the start of the project, none of the team members were eligible. This bonus was not offered during the upgrade. Furthermore, in the same organization, even though the participants were involved full time in the original implementation, they were only involved part time in the upgrade project. The importance of the ERP team also changed throughout the project. This category of critical success factors was shown to be critical during the project phase. In the end, it is the project team who is implementing the system. If the group's skills and knowledge are not sufficient, the project can be compromised. In the original implementation, Top Management Support and Championship' was critically important. Due to the amount of change to business processes and the way information is acquired, stored, accessed and analyzed, it is very important for top management to show its support in order to facilitate change. Support can be demonstrated in a number of ways such as publicly communicating support and allocating necessary resources for the project. In the case of both organizations, top management showed their support in both ways. Championship is very important in the original implementation as well. Both organizations had a project champion who sold the project throughout the organization and was the "cheerleader" or motivator of the project team. One of the best examples of the importance of senior management support is demonstrated in the case of one of the organizations where a senior manager did not support the ERP implementation. Due to his negative opinion toward the project, the managers working in his/her department began to share his/her disdain and communicated it to other employees. On the other hand, in the departments where senior management did support the implementation, managers and other employees shared their enthusiasm. 'Top Management Support and Championship' was not as important during the upgrade project. One of the module owners said that even though they did have top management support for the upgrade, it wasn't as necessary because the new system would not affect users to the extent that the original implementation did. It was necessary to gain the support of management in order to attain the necessary resources, but due to the relatively smaller amount of resources necessary for this project, the highest levels of management didn't have to get involved. Furthermore, the project team didn't emphasize the importance of the project champion during the upgrade. In the interviews, the participants either stated that championship wasn't as important or indicated a lower level of agreement on who was the project champion than in the original implementation. Top management support is one of the few critical success factors that is most important during the Chartering phase of the project and decreases in importance as the project progresses. Its importance in the first phase of the project is due to the need for the allocation of resources that occurs at the beginning of the project. If there is no support for the project from top management at the beginning of the project, the ERP system might not be implemented at all. This occurs both in the implementation and the upgrade of the ERP system. 'Communication' is very important in both the implementation and upgrade. Both organizations took steps to facilitate and encourage communication between the project team members and stakeholders in the organizations. In the case of State University, the project team was relocated to an office with no cubicle subdivisions that one of the module owners called the "bullpen" because it forced them to come into contact with the team members. Each person had only a desk to facilitate the communication and "overhearing" what are the issues with other parts of the system. For Public Power Company, their way of facilitating communication was to move the project team to a rented building in order to create a new work environment. Because the people implementing the system were collocated for the duration of the project, many of them expressed the feeling of being part of a team. Communication with stakeholders outside of the project was also very important. Expectations for the project and the project's progress were communicated using a number of channels including posters and the intranet. During the implementation, future users knew that an EPR system was being implemented and when to expect different milestones. During the upgrade, the communication between project team members continued being very important. Although conscious steps were not taken to facilitate communication, channels had already been defined to facilitate this communication. In the case of State University, the project team of the original implementation became responsible for the system once it was implemented. Therefore, they were collocated to facilitate communication among the team members. In the case of Public Power Company, the team members already knew each other and had experience working together. This contact facilitated communication.

It is interesting to note that the importance of communication from the Project to the Shakedown phase is different between the implementation and upgrade lifecycles. In the case of ERP implementation, communication grows in importance from the Project to the Shakedown phase since multiple stakeholders (such as users, consultants and vendors) play a key part in fine-tuning the system. Staffing may also increase to deal with temporary inefficiencies while users receive further training or retraining. The implementation team works closely with users during the Shakedown phase to fix bugs and to deal with problems that arise in stabilizing the system. On the other hand, the importance of communication decreases from the Project to the Shakedown phase of the ERP upgrade lifecycle since the system is largely stabilized after the initial implementation. After the Project phase of the ERP upgrade lifecycle, users would have been trained on the upgraded system and the implementation team would have completed the configuration and testing of the upgraded system. Unless major problems arise with the rollout of the upgraded system, communication with stakeholders would decrease. Since most upgrades are purely technical and involved only minor changes to user interfaces and business processes, communication with stakeholders decreases from the Project to the Shakedown phase. 'Change Management' is shown to be very important throughout the implementation and upgrade. In order to determine the' type and amount of change an organization is undertaking, one could look at the effects of business process reengineering (BPR) in the organization. In the case of Public Power Company, the organization took a decision at the beginning of the project to change their business processes in order to match those of the ERP system and take advantage of the best practices it offers. "We wanted to remain as close to vanilla as possible," said the CIO. On the other hand. State University changed some of its business processes but maintained some if its own and therefore had to customize its implementation. Another large part of change management is training. In both organizations, training for endusers was done by members of the project team. Team members would go to training in their particular modules of expertise and come back to the organization to teach the other employees in their area. Training for IT personnel was slightly different because all employees in the systems administration (Basis) and programming (ABAP) had to go to classes. Along with training, making sure a user support organization was available for the users proved to be critical during the project. User support usually followed a number of tiers in both organizations. If users had a problem, they would contact the first level of support. If the problem was not solved, it would be sent to a higher level of support, probably one of the module owners. If the problem was not fixed, the vendor would be contacted and the problem would be solved. During the upgrade, change management remained a very important factor and training was just as important as the original implementation. In both organizations, the rollout of this service was facilitated due to the existing infrastructure. In the case of State University, classrooms had already been established solely for ERP system training and were leveraged during the upgrade. For Public Power Company, many of the manuals for the systems had already been written and only had to be updated to reflect the upgraded functionality. There was very little BPR due to the technical nature of the upgrade in both organizations. The importance of change management follows a similar pattern across the four phases of EPR implementation and upgrade. It proves to be most important during the Project and Shakedown phases. During the Project phase, it is important because future end-users need to be informed about the changes that will come with the system. During the Shakedown phase, it is critical to have training for any users who did not know how to use the system and a support organization to deal with any problems that may arise. In the Chartering and Onward &Upward phases, change management is not as critical. The tasks in the Chartering phase center around planning and there is very few execution. During the Onward &Upward phase, changes are minimal and users are already very knowledgeable and comfortable with the system. 'Project Management' was very important during both the original implementation and the upgrade. Before the implementation or upgrade project even began, both organizations defined the scope of their projects very precisely. It was very important for everyone in the teams to have a clear idea of what was the goal for the project. Furthermore, it wasn't sufficient for the scope to be well defined; any requests to expand the project scope had to be evaluated very critically. Both organizations defined "scope creep" as the problem arising from increasing the scope of the project. Proposed changes in the project, in particular those related to an increase in the functionality of the system, were common because of the large amount of functionality provided by ERP. Even though ERP software includes a large amount of functionality, both organizations only used a subset. Therefore, if people in the project learned about additional functionality that could be incorporated, they might lobby to add functionality to the project. In both organizations, this decision to include additional functionality was made as a team taking into account its effect on all pieces of the system. Due to the complexity of the implementation and upgrade projects, it was very critical for the project team to define and enforce clear and reasonable milestones. One organization was not very rigorous at defining or enforcing its milestones during the upgrade project. This problem led to increased cost of the project in order to complete it on time. Furthermore, some tasks, such as training, had to be performed in less time because other, more critical, tasks to the operation of the system had been delayed significantly. This increased the risks to the project. Another factor of project management that is critical throughout the implementation and upgrade is the coordination of project activities across all affected parties. Due to the high degree of integration between all the modules in an ERP system, it was critical for any decision or

Critical factors for successful implementation of enterprise systems Fiona Fui-Hoon Nah and Janet Lee-Shang Lau and Jinghua Kuang Business Process Management Journal, Vol. 7 No. 3, 2001, pp. 285-296. # MCB University Press, 1463-7154

change to be done taking into account its effect on the whole system. State University facilitated the coordination of project activities by locating its entire project team in the same office to facilitate communication. Public Power Company sent the project members to a different building to facilitate their communication as well. In the case of the upgrade projects, not as many steps were taken to coordinate activities, although every week, or two weeks, both project teams would meet to discuss issues affecting different modules. The importance of project management is the greatest during the Project phase of both the implementation and the upgrade project. It is during this phase that tasks necessary to operate the system take place, and the greatest amount of management and coordination is necessary. 'System Analysis, Selection and Implementation' is most important during the Project phase of both the implementation and the upgrade of the ERP systems in both organizations. This category is most important during the Project phase because it deals with the technical aspects of implementing or upgrading the system. For example, the amount of customization must be kept to a minimum in order to facilitate the implementation of the system, and further upgrades. State University did some customization while Public Power Company did none. The lack of customization benefited Public Power Company by facilitating the installation of "hot Packs" which assume that the system is a "plain vanilla" installation. Furthermore, the upgrade was facilitated because no custom application had to be tested with the new version and no interfaces had to be created. The configuration of the ERP modules was most important during the implementation but not as much during the upgrade. During the implementation, the configuration task was very challenging because it involved learning the software and all its functionality. In comparison, during the upgrade, a large amount of the configuration was passed over to the new system seamlessly, reducing the amount of work that had to be done. This was particularly the case for Public Power Company which implemented the system in "plain vanilla" form. Finally, 'Business Plan and Vision' is found to be critical during the chartering phase of both the implementation and upgrade projects. Most of the participants agreed that having a clear business plan and vision for the project was critical for its success. Both of the companies' systems were not Year 2000 compliant so it made sense to implement a more integrated system such as ERP. Both organizations then upgraded the ERP system because support for the system was going to be discontinued and as a secondary motivation, to take advantage of new functionality. Having a clear business plan is critical during the chartering phase of both projects because it is with these clear goals that an argument can be made for an implementation or upgrade of the ERP system. ERP is a very expensive endeavor, so unless its benefits can be justified, the necessary resources might not be acquired. In conclusion, the importance of the seven categories of critical success factors across the four phases of the ERP lifecycle is very similar for both the implementation and upgrade projects. 'ERP Team Composition, Skills and Compensation,' 'Project Management,' and 'System Analysis, Selection and Technical Implementation' are most important during the Project phase. 'Business Plan and Vision' and 'Top Management Support and Championship' are critical during the Chartering phase while 'Communication' and 'Change Management' are very important during the Project and Shakedown phases. Hence, at the beginning of an ERP implementation or upgrade project, 'Business Plan and Vision' and 'Top Management Support and Championship' should be the focus. As the project progresses, the focus shifts toward the rest of the factors. 'Change Management' and 'Communication' continue to be very important even after the system has been rolled out. Among all the factors, 'ERP Team Composition, Skills and Compensation' play the most critical role in both ERP implementation and upgrade projects. Businesses today face a stark reality: anticipate, respond, and react to the growing demands of the marketplace, or perish. In a fiercely competitive environment, business strategy not only determines success, it governs business survival. Now, more than ever, effective business strategy centers on aggressive, efficient use of information technology. An enterprise resource planning (ERP) system is a packaged business software system that enables a company to manage the efficient and effective use of resources (materials, human resources, finance, etc.) by providing a total, integrated solution for the organization's information-processing needs. It supports a process-oriented view of the business as well as business processes standardized across the enterprise. Among the most important attributes of ERP are its abilities to: .automate and integrate an organization's business processes; share common data and practices across the entire enterprise; and produce and access information in a real-time environment Critical factors of ERP implementation success This section discusses the 11 factors that are critical to ERP implementation success. ERP teamwork and composition As shown in Figure 1, ERP teamwork and composition is important throughout the ERP life cycle. The ERP team should consist of the best people in the organization (Buckhout et al., 1999; Bingi et al., 1999; Rosario, 2000; Wee, 2000). Building a cross-functional team is also critical. The team should have a mix of consultants and internal staff so the internal staff can develop the necessary technical skills for design and implementation (Sumner, 1999). Both business and technical knowledge are essential for success (Bingi et al., 1999; Sumner, 1999). The ERP project should be their top and only priority and their workload should be manageable (Wee, 2000). Team members need to be assigned

full time to the implementation (Wee, 2000). As far as possible, the team should be co-located together at an assigned location to facilitate working together (Wee, 2000). The team should be given compensation and incentives for successfully implementing the system on time and within the assigned budget (Wee, 2000). The team should be familiar with the business functions and products so they know what needs to be done to support major business processes (Rosario, 2000). The sharing of information within the company, particularly between the implementation partners, and between partnering companies is vital and requires partnership trust (Stefanou, 1999). Partnerships should be managed with regularly scheduled meetings. Incentives and risk-sharing agreements will aid in working together to achieve a similar goal (Wee, 2000). Top management support Top management support is needed throughout the implementation. The project must receive approval from top management (Bingi, 1999; Buckhout, 1999; Sumner, 1999) and align with strategic business goals (Sumner, 1999). This can be achieved by tying management bonuses to project success (Wee, 2000). Top management needs to publicly and explicitly identify the project as a top priority (Wee, 2000). Senior management must be committed with its own involvement and willingness to allocate valuable resources to the implementation effort (Holland et al., 1999). This involves providing the needed people for the implementation and giving appropriate amount of time to get the job done (Roberts and Barrar, 1992). Managers should legitimize new goals and objectives. A shared vision of the organization and the role of the new system and structures should be communicated to employees. New organizational structures, roles and responsibilities should be established and approved. Policies should be set by top management to establish new systems in the company. In times of conflict, managers should mediate between parties (Roberts and Barrar, 1992). Business plan and vision Additionally, a clear business plan and vision to steer the direction of the project is needed throughout the ERP life cycle (Buckhout et al., 1999). A business plan that outlines proposed strategic and tangible benefits, resources, costs, risks and timeline is critical (Wee, 2000). This will help keep focus on business benefits. There should be a clear business model of how the organization should operate behind the implementation effort (Holland et al., 1999). There should be a justification for the investment based on a problem and the change tied directly to the direction of the company (Falkowski et al., 1998). Project mission should be related to business needs and should be clearly stated (Roberts and Barrar, 1992). Goals and benefits should be identified and tracked (Holland et al., 1999). The business plan would make work easier and impact on work (Rosario, 2000). Effective communication Effective communication is critical to ERP implementation (Falkowski et al., 1998). Expectations at every level need to be communicated. Management of communication, education and expectations are critical throughout the organization (Wee, 2000). User input should be managed in acquiring their requirements, comments, reactions and approval (Rosario, 2000). Communication includes the formal promotion of project teams and the advertisement of project progress to the rest of the organization (Holland et al., 1999). Middle managers need to communicate its importance (Wee, 2000). Employees should be told in advance the scope, objectives, activities and updates, and admit change will occur (Sumner, 1999). Project management Good project management is essential. An individual or group of people should be given responsibility to drive success in project management (Rosario, 2000). First, scope should be established (Rosario, 2000; Holland et al., 1999) and controlled (Rosario, 2000). The scope must be clearly defined and be limited. This includes the amount of the systems implemented, involvement of business units, and amount of business process reengineering needed. Any proposed changes should be evaluated against business benefits and, as far as possible, implemented at a later phase (Sumner, 1999; Wee, 2000). Additionally, scope expansion requests need to be assessed in terms of the additional time and cost of proposed changes (Sumner, 1999). Then the project must be formally defined in terms of its milestones (Holland et al., 1999). The critical paths of the project should be determined. Timeliness of project and the forcing of timely decisions should be managed (Rosario, 2000). Deadlines should be met to help stay within the schedule and budget and to maintain credibility (Wee, 2000). Project management should be disciplined with coordinated training and active human resource department involvement (Falkowski et al., 1998). Additionally, there should be planning of well-defined tasks and accurate estimation of required effort. The escalation of issues and conflicts should be managed (Rosario, 2000). Delivering early measures of success is important (Wee, 2000). Rapid, successive and contained deliverables are critical. A focus on results and constant tracking of schedules and budgets against targets are also important (Wee, 2000). Project champion Project sponsor commitment is critical to drive consensus and to oversee the entire life cycle of implementation (Rosario, 2000). Someone should be placed in charge and the project leader should ``champion'' the project throughout the organization (Sumner, 1999). There should be a high level executive sponsor who has the power to set goals and legitimize change (Falkowski et al., 1998). Sumner (1999) states that a

business leader should be in charge so there is a business perspective. Transformational leadership is critical to success as well. The leader must continually strive to resolve conflicts and manage resistance. Appropriate business and legacy systems Appropriate business and legacy systems are important in the initial chartering phase of the project. According to Roberts and Barrar (1992), a stable and successful business setting is essential. Business and IT systems involving existing business processes, organization structure, culture, and information technology affect success. It determines the IT and organizational change required for success (Holland et al., 1999). Roberts and Barrar also argue that success in other business areas is necessary for successful MRPII implementations. Change management program and culture Change management is important, starting at the project phase and continuing throughout the entire life cycle. Enterprise wide culture and structure change should be managed (Falkowski et al., 1998), which include people, organization and culture change (Rosario, 2000). A culture with shared values and common aims is conducive to success. Organizations should have a strong corporate identity that is open to change. An emphasis on quality, a strong computing ability, and a strong willingness to accept new technology would aid in implementation efforts. Management should also have a strong commitment to use the system for achieving business aims (Roberts and Barrar, 1992). Users must be trained, and concerns must be addressed through regular communication, working with change agents, leveraging corporate culture and identifying job aids for different users (Rosario, 2000). As part of the change management efforts, users should be involved in design and implementation of business processes and the ERP system, and formal education and training should be provided to help them do so (Bingi et al., 1999; Holland et al., 1999). Education should be a priority from the beginning of the project, and money and time should be spent on various forms of education and training (Roberts and Barrar, 1992). Training, reskilling and professional development of the IT workforce is critical. User training should be emphasized, with heavy investment in training and reskilling of developers in software design and methodology (Sumner, 1999). Employees need training to understand how the system will change business processes. There should be extra training and on-site support for staff as well as managers during implementation. A support organization (e.g. help desk, online user manual) is also critical to meet users' needs after installation (Wee, 2000). Business process reengineering (BPR) and minimum customization Another important factor that begins at the project phase is BPR and minimum customization. It is inevitable that business processes are molded to fit the new system (Bingi et al., 1999). Aligning the business process to the software implementation is critical (Holland et al., 1999; Sumner, 1999). Organizations should be willing to change the business to fit the software with minimal customization (Holland et al., 1999; Roberts and Barrar, 1992). Software should not be modified, as far as possible (Sumner, 1999). Modifications should be avoided to reduce errors and to take advantage of newer versions and releases (Rosario, 2000). Process modeling tools help aid customizing business processes without changing software code (Holland et al., 1999). Broad reengineering should begin before choosing a system. In conjunction with configuration, a large amount of reengineering should take place iteratively to take advantage of improvements from the new system. Then when the system is in use reengineering should be carried out with new ideas (Wee, 2000). Quality of business process review and redesign is important (Rosario, 2000). In choosing the package, vendor support and the number of previous implementers should be taken into account (Roberts and Barrar, 1992). Software development, testing and troubleshooting Software development, testing and troubleshooting is essential, beginning in the project phase. The overall ERP architecture should be established before deployment, taking into account the most important requirements of the implementation. This prevents reconfiguration at every stage of implementation (Wee, 2000). There is a choice to be made on the level of functionality and approach to link the system to legacy systems. In addition, to best meet business needs, companies may integrate other specialized software products with the ERP suite. Interfaces for commercial software applications or legacy systems may need to be developed in-house if they are not available in the market (Bingi et al., 1999). Troubleshooting errors is critical (Holland et al., 1999). The organization implementing ERP should work well with vendors and consultants to resolve software problems. Quick response, patience, perseverance, problem solving and firefighting capabilities are important (Rosario, 2000). Vigorous and sophisticated software testing eases implementation (Rosario, 2000). Scheer and Habermann (2000) indicate that modeling methods, architecture and tools are critical. Requirements definition can be created and system requirements definition can be documented. There should be a plan for migrating and cleaning up data (Rosario, 2000). Proper tools and techniques and skill to use those tools will aid in ERP success (Rosario, 2000). Monitoring and evaluation of performance Finally, monitoring and evaluation come into play at the shakedown phase. Milestones and targets are important to keep track of progress. Achievements should be measured against project goals. The progress of the project should be monitored actively through set milestones and targets. Two criteria may be used (Roberts and Barrar, 1992). Project

Challenges in enterprise resource planning implementation: state-ofthe-art A. Momoh, R. Roy and E. Shehab Business Process Management Journal Vol. 16 No. 4, 2010 pp. 537-565 Emerald Group Publishing Limited 1463-7154 DOI 10.1108/1463715101106 5919

In the last decade, there has been a lot of clamour over enterprise resource planning (ERP). ERP is a software solution integrating the various functional spheres in an organisation a link through the entire supply chain, aimed at best industry and management practices for providing the right product at the right place, at the right time, at least cost (Rao, 2000a, b). ERP software is the backbone of many big enterprises in the world today (Alshawi et al., 2004). These commercial packages promise the seamless integration of all the information owing through a company nancial and accounting information, human resource information, supply chain information and customer information (Davenport, 1998; Hallikainen et al., 2006; Holland et al., 1999). One of the most important aspects of modern ERP systems lies in the integration that would be implicit in the design of the software and allows a considerable amount of integration between different elements of the business (Rao, 2000a, b). Hence, ERP systems have become one of todays largest IT investments (Chung and Snyder, 2000).

management based criteria should be used to measure against completion dates, costs and quality. Then operational criteria should be used to measure against the production system. Monitoring and feedback include the exchange of information between the project team members and analysis of user feedback (Holland et al., 1999). There should be an early proof of success to manage skepticism (Rosario, 2000). Reporting should be emphasized with custom report development, report generator use and user training in reporting applications (Sumner, 1999). Management needs information on the effect of ERP on business performance. Reports or processes for assessing data need to be designed. These reports should be produced based on established metrics. It must include effective measurable project goals that meet business needs and are reasonable. Additionally, performance should be tied to compensation (Falkowski et al., 1998). Additionally, they have recently been introduced to the nance, education, insurance, retail and telecommunications sectors. Hence, the number of organizations going in for ERP systems is growing rapidly (Rao, 2000a, b). Enterprise systems appear to be a dream come true (Davenport, 1998). They should be looked upon as an asset, not as expenditure (Rao, 2000a, b). Themistocleus et al. (2001) outline some of the benets of ERP: solutions to the problems of legacy systems; reduced development risk; increased global competitiveness; and business efciency. Rao (2000a, b) states that the tangible benets that accrue due to ERP include: reduction of lead time by 60, 99 per cent on-time shipments, increased business, increase of inventory turns to over 30 per cent, cycle time cut to 80 per cent and work in progress reduced to 70 per cent. Other potential benets include: abundant information about customer wants and needs, breakthrough reductions in working capital, better customer satisfaction and the ability to view and manage the extended enterprise of suppliers, alliances and customers as an integrated whole (Muscatello et al., 2003). Many companies began installing ERP systems in order to eliminate patchwork of their legacy systems and improve the interactions and communications with their customers and suppliers (Kogetsidis et al., 2008). From a business standpoint, the benets that a properly selected and implemented ERP system can offer an organization include time and cost reduction in business processes, faster transaction processing, improvement of operational performance, nancial management and customer service, web-based interfaces and more effective communication (Kogetsidis et al., 2008). 4. Critical failure factors The ERP industry has not been performing as originally expected (Tarn et al., 2002). ERP implementations are notorious for taking a longer time and costing more money than is projected (Davenport, 1998; Reda, 1998; Jacob and Wagner, 1999; Mabert et al., 2000; Ehie and Madsen, 2005). Hence, in the last decade, organisations have struggled to implement ERP effectively, despite all of the benets it offers. This is not because ERP solutions are poorly designed, but because there is inadequate understanding of the way that an ERP solution should be implemented. To this effect, companies have ended up exceeding their planned implementation budgets, and time to implement. Consequently, a large number of companies have cancelled their projects completely. Rao (2000a, b) estimates that 96.4 per cent of ERP implementations fail, whereas Themistocleus and Irani (2001) reports that 70 per cent of ERP implementations do not achieve their estimated benets. Table I is an illustration of the research conducted on each critical failure factor discussed in Sections 4.1-4.7. It further illustrates the number of citations for each critical failure factor. An indication of the size of the enterprise to which each failure factor applies, is also provided. It has been concluded from Table I that a lack of change management, excessive customisation, dilemma of internal integration, poor understanding of business implications and requirements and poor DQ have received the most attention from researchers. The challenges illustrated in this table apply mostly to large organisations. Figure 3 shows the percentage of each failure factor in relation to all the critical factors. There are 52 citations in total. Out of all the failure factors, 17 per cent apply to a lack of change management. This is the most popular citation. Excessive customisation, dilemma of internal integration, poor understanding of business implications and requirements and poor DQ, each make up 13 per cent of the failure factors. Lack of top management support constitutes 10 per cent of the failures cited. Hidden costs and misalignment of IT with the business each make up 6 per cent of the discussed challenges. And limited training constitutes 8 per cent of the critical failure factors. 4.1 Excessive customisation ERP systems are complex, and implementing a system can be a difcult, time-consuming and expensive project for a company (Shehab et al., 2004; Hallikainen et al., 2009). Acomplex system decreases usefulness, which also makes users reluctant to work (Chung et al., 2008).

Wheatley (2000) estimates that the average ERP implementation takes 23 months. The target is to do the implementation within six months (Arindam and Bhattacharya, 2009). Some implementations have even exceeded three years. Chung and Snyder (2000) estimate that ERP adoption times typically take from a few months for rms accepting all default settings, to years for rms attempting to make major modications. During this long implementation period, software and user specication change and the technicians who are implementing the package must constantly adapt and make adjustments in order to accommodate these changes (Mendel, 1999; Ehie and Madsen, 2005). However, care must be taken particularly when modifying the system, as if a company alters an ERP package, it can impede the internal integration of ERP modules (Themistocleus and Irani, 2001; Shehab et al., 2004; McAdam and Galloway, 2005; Chung and Snyder 2000). Aloini et al. (2007) emphasise that often, packaged software is incompatible with the organisations needs and business processes. The consequence is either software modication, which is expensive and costs heavily in maintenance, or restructuring of the organisations business processes to t the software (Aloini et al., 2007). Verma (2007) suggests that completing any additional work which is out of scope, is known as scope creep and this may lead to a lot of customisation, which may in turn, lead to project failure. Aloini et al. (2007) stress that if not adequately planned, personalisation and adaptation of tools may cause trouble. Shehab et al. (2004), Davenport (1998) and Sumner (1999) also stress that organisations face numerous problems when customising ERP packages. Laukkanen et al. (2007) caution that ERP system implementations may last several years in large companies, particularly if the system is heavily customised. They conducted surveys on 44 organisations of various sizes in order to investigate the relationship of enterprise size to the objectives and constraints of ERP adoption. Kogetsidis et al. (2008) advise that an implementation approach issue that must be considered is the level of customisation that will be applied on an ERP solution, as customising the software will avoid the BPR that might result in best practices. It is more benecial to t business processes to the ERP package rather than try to customise the package (Sumner, 1999). However, Helo (2008) argues that from a technical point of view, the key choice in ERP implementation is to nd an optimal strategy to balance between customisation of the ERP system versus changing the organisational procedure within the company. 4.2 Dilemma of internal integration ERP implementations are challenging due to cross-module integration, data standardisation, adoption of the underlying business model, compressed implementation schedule and the involvement of a large number of stakeholders (Soh et al., 2000). Elbertsen et al. (2006) advise that the strength of ERP systems lies in integrating modules by coupling them, but this strength can be considered its weakness; the close coupling of modules means less responsiveness to the local requirements in particular functional areas. Bytheir very ownnature, enterprise systemsimpose their ownlogic on a companys strategy, organisation and culture (Davenport, 1998). Themistocleus and Irani (2001) emphasizes that the non-exible nature of ERP solutions forces organisations to t the package and abandon their way of doing business. This problemaffects companies and in some cases, has led organisations like FoxMayer drugs, to bankruptcy (Davenport, 1998; Muscatello et al., 2003). Furthermore, to highlight the fact that ERP solutions constitute cross-module integration, Ndede-Amadi (2004) argues that one key to a successful process redesign effort in an ERP implementation is to examine end-to-end processes, which are vital to the success of a company. End-to-end process design enables the strengthening of process integration. Davenport (1998) discusses the fact that ERP solutions are modular and in light of integration, the greater the modules selected, the greater the integration benets, but also, the greater the costs, risks and changes involved. Aloini et al. (2007) caution that the number of implementation modules increases project complexity. Although, internal integration can pose problems, when distorted, Ash and Burn (2003) in a global study of ERP implementation, found that an added complexity is the integration of ERP environments with non-ERP environments, which has complex management implications. Youngberg et al. (2009) reveal that for businesses, the ever-expanding amount of information that has to be managed leads to an increase in system integration and complexity. Koh et al. (2006) understudied the ERP adoption in six Greek manufacturing companies, and explored the effects of uncertainty on the performance of these systems and the methods used to cope with uncertainty. In the case study conducted by Koh et al. (2006), they discuss ERP Integration in the Literature Review section of their article. However, their focus is on intra-enterprise integration with other functions and inter-enterprise integration in a supply chain. These are the areas of integration that are most commonly discussed in ERP research. Laukkanen et al. (2007) also discuss these types of integration in their paper. The concept and importance of ERP internal (or module) integration is sparsely discussed. It is essential to educate practitioners on the impact of intra-enterprise integration with other functions, and module integration on one another. Owing to the fact that ERP modules have been dened based on best practice business processes, which are coherently linked to each other, it is imperative that implementing organizations business processes are correctly mapped to the ERP processes. Implementing these processes incorrectly may lead to very poor integration between the modules in the system. This challenge will in turn, affect the daily operations of the business. Furthermore, it would be useful if practitioners understood the kinds of operational challenges that they may be faced with should their system lack proper module integration. Additionally, Koh et al. (2006) have not discussed the impact of customization on module integration.

4.3 Poor understanding of ERP business implications and requirements A number of companies that implement ERP do not realise the full benets that the solution offers because most organisations are not organised in the correct fashion to achieve the benets (Yusuf et al., 2004; Ehie and Madsen, 2005). Langenwalter (2000) stipulates that many companies that attempt to implement ERP solutions run into difculty because the organisation is not ready for integration and the various departments within it have their own agendas and objectives that conict with each other. The critical challenge in ERP implementation has been to rst identify the gaps between the ERP generic functionality and the specic organisational requirements (Soh et al., 2000). According to Davenport (1998), even though some of the causes of ERP failures lie with technical challenges, these are not the main reason enterprise systems fail. Hestresses that the biggest challenges are business problems in the sense that companies fail to reconcile the technological imperatives of the enterprise systemwith the business needs of the enterprise. One of the biggest sins in the implementation of an ERP system is not to understand the true signicance of what you have taken on and, therefore, not commit the right resources to the project (Kogetsidis et al., 2008). Kogetsidis et al. (2008) reached this conclusion by conducting a case study on a large Cypriot retail company, where the CSFs of their SAP implementation were examined. Thus, if a company rushes to install an enterprise system without rst understanding the business implications, the dream of integration can quickly turn into a nightmare (Davenport, 1998). 4.4 Lack of change management In a case study on a large manufacturing organisation carried out by McAdam and Galloway (2005), they observed that a lack of change management was one of the major causes of implementation failures. The manufacturing company, known as GUDV NI, is multinational and employs 10,000 employees across Ireland, UK, Europe and the USA. They implemented SAP. The essence of the case study was to explore the organizational issues involved in implementing an ERP solution as the main approach to change management. Two change management failings that became apparent early on and were rectied during the ERP project were the lack of communication with the employees, and an apparent failure to recognise the impact and complexity that such a change project would have on the entire business (McAdam and Galloway, 2005). Hence, it is essential to manage successful ERP implementations as a programof wide-ranging organisational change initiatives rather than as a software installation effort (Yusuf et al., 2004). This approach involves intertwining technology, task, people, structure and culture. Consequently, the implementation process is transparent and enables the easy identication, avoidance and mitigation of risks. Additionally, as all the relevant areas are addressed as part of the implementation, resistance to change is reduced and in some cases, eliminated. Thus, organisational resistance to change is identied as a CSF (Hong and Kim, 2002), and cultural readiness for an ERP implementation must be carefully planned (McAdam and Galloway, 2005). Aloini et al. (2007) advise that to underestimate the effort involved in change management may result in project failure. Moreover, conict arising due to the differing needs of stakeholders must be addressed as and when it arises, rather than in a summative manner. The congruence between ERP systems and organisational culture is the prerequisite to successful ERP implementation (Hong and Kim, 2002; Markus and Tanis, 2000). There are several common problems associated with ERP implementation (Al-Mashari, 2003; Kamhawi, 2008). Among these is the resistance to change. Factors relating to top management support, assignment of best people to implementation teams, and strong involvement of people from the eld are important in reducing the resistance to changes involved in ERP implementation (Cissna, 1998). Another problem is related to unplanned cost associated with new requirements emerging after the freezing stage. A third problem is poor training of end-users, who, when the system is up and running, do not know how to use it and maintain it continually. Koh et al. (2006) illustrates this fact amongst other premises by conducting a case study on six manufacturing organisations of all sizes. They report that human factors constituted a major problem, particularly for small- and medium-sized companies. Their ndings highlighted the fact that many employees were not trained to use the systems and many were unfamiliar with computers. Consequently, a number of issues arose, such as erroneous data input, poor use of the systems, increasing costs of training services offered by the vendors, employee resistance to integration of the ERP system into the business process and the need to hire information technology personnel. Implementation requires extensive employee training (Arindam and Bhattacharya, 2009). Although an extensive training and education is considered as a CSF by most authors, Worley et al. (2005) state that the appropriation of the system postimplementation does not only depend on training; it also requires to dene how the information system and the actor will be mutually adapted to the other, not only at the level of the position of a person within the company, but also with reference to his knowledge and competencies. In this context, an unsatisfactory operation of the system may cause irreversible drifts like demotivation, partial use of the system or the introduction of local information systems (e.g. Excel sheets) in order to mitigate the supposed deciencies of the ERP system (Worley et al., 2005). Worley et al. (2005) arrived at this inference through a university case study. Peoplesoft was implemented at the university. The essence of the case study was to illustrate how ERP is optimised by adapting business processes to human actors by explicitly

taking into account, the role, competence and knowledge of human resources. 4.5 Poor data quality The integrity of the data used to operate and make decisions about a business affects the relative efciency of operations and quality of decisions made; protecting data integrity is a challenging task (Vosburg and Kumar, 2001). One of the issues in information management is getting the right information to the right person at the right time and in a usable form (Youngberg et al., 2009). Information research has demonstrated that inaccurate and incomplete data may severely affect the competitive success of an organisation (Hongjiang et al., 2002). Poor quality information can have signicant social and business impacts (Strong et al.,1997).Hongjianget al. (2002) discuss DQ problems. They advise that in order to ensure DQ in implementing ERP, it is important to understand the underlying factors that inuence DQ and the underlying problems with old systems need to be investigated. Hongjiang et al. (2002) conducted a case study in two large Australian organisations in both the transport and mining industries, where they applied the framework, which they developed for the understanding of DQ issues in implementing ERP. Data mists arise from incompatibilities between organizational requirements and ERP package in terms of data format; resolving these mists is cumbersome, since this requires changing the structure and relationship of the table objects, which are viewed as prohibitive core changes to the ERP packages (Soh et al., 2000). Poor DQ at the operational level increases operational cost because time and other resources are spent detecting and correcting errors (Park and Kusiak, 2005). Alshawi et al. (2004) argue that data accuracy is an issue in the sense that if the data that goes into a system is not accurate or immediately accessible, the whole system becomes suspect. Tsamantanis and Kojetsidis (2006) conducted a case study on two medium sized manufacturing companies in Greece in order to examine how both companies introduced ERP in their effort to increase competitive advantage and market share. They concluded from their ndings that in order to function properly, an ERP system has increased demand for information input. Additionally, since ERP integrates different functions of the company and uses data fromseveral departments, delays in the systemby one department have a direct impact on the operations of the others. To be truly competitive in todays information era, the business should be able to operate continuously, maintain data availability all the time, and be agile in accessing available data (Bajgoric and Moon, 2009). 4.6 Misalignment of IT with the business Ho et al. (2004) argue that systemimplementation is a challenging management issue and is no less important than system research and development. They further emphasise that owing to the rapidly changing business environment, ERP implementation is seldom a simple matter of realising a plan; instead, it is often a dynamic process of mutual adaptation between IT and the surrounding environment. Given the slim possibility of achieving a perfect match between technology and organisation, misalignment can occur which can be rectied through technological measures, organisational measures or a combination of both. A case study was conducted by Ho et al. (2004) to examine three dimensions of alignment between organisation and ERP systems, by employing a technology adaptation perspective and case research methodology. They adopt the Leonard-Barton model as a research framework. This framework addresses critical issues according to the dimension into which they fall. There are three dimensions in this framework; technology, delivery system and performance criteria. The technology dimension issues are; adequacy for specication, users maturity for the application of new technology, and evaluation and integration for legacy system. As regards the delivery system, its issues are: role of the MIS department in organisation, process adaptation, harmonious implementation, system establishment, project management, employee education and training, external partner support and internal staff involvement. Finally, the issue for performance criteria is performance evaluation. Ho et al. (2004) advise that during implementation, all three dimensions inuence each other. A successful implementation will benet from the application of all three dimensions, and not a single one. To this effect, and based on the results of their case study surveys, they develop an adaptation framework for ERP implementations as shown in Figure 4.

4.7 Hidden costs in ERP implementations Yusuf et al. (2004) report that an ERP system has problems of uncertainty in acquisition and hidden costs in implementation. Tarn et al. (2002) argue that cost is a critical part of an ERP implementation for both large and small businesses alike. They further emphasise that companies that install ERP solutions may underestimate cost that is hidden. An ERP systemhas an average total cost of ownership of $15 million but rewards the business with an average negative net present value of $1.5 million (Wheatley, 2000). The following types of common hidden cost may increase implementation cost dramatically (Slater, 1998; Soh et al.,2000): training is the most underrated hidden cost the cost to train an entire staff on a new system is enormous and often taken for granted; integration and implementation are often overlooked; the cost of data conversion is hidden companies often do not recognise the cost associated with transferring data from the old system to the new package; included in this cost is the need to modify the data to t into the new system and the need to hire professionals can send this type of cost higher certain date; high-consulting cost becomes inevitable as a consequence of many companies not budgeting consulting fees properly; and a cost often overlooked is the notion that the project will end on a certain date. 4.8 Organisational, management and technical challenges McAdam and Galloway (2005) report that key organisational issues were teamwork, change management, top management support, plan and vision, business process management and development, project management, monitoring and review, effective communication, software development and testing, the role of the project champion and appropriate business and IT legacy systems. The results of their study indicate that the complex organisational change issues must be comprehensively addressed. These issues cannot be resolved solely with technical solutions. To support these results, Huang et al. (2003, 2004) suggest that in addition to developing the technical aspects of ERP, more effort is required in understanding the more complex organisational issues involved. There are several reasons why a continued growth of ERP projects is to be expected (Stensrud, 2001): The ERP vendors are continuously expanding the capabilities of their packages by adding functionality for new business functions such as sales force automation, supply-chain, order management, data warehousing, maintenancerepair-and-overhaul, etc. The ERP vendors are transitioning to Web-based applications. This may lead to faster ow of information in the logistics chain, and therefore, many ERP customers will require these Web-based ERP systems. The emergence of e-commerce will also increase the demand for Web-based ERP systems. The share of ERP systems in certain geographical markets such as the former Eastern Bloc, Asia and South America is not widespread. ERP packages touch many aspects of a companys internal and external operations. Consequently, successful deployment and use of ERP systems are critical to organizational performance and survival (Markus et al., 2000b). Potential benets include drastic declines in inventory, breakthrough reductions in working capital, abundant information about customer wants and needs, along with the ability to view and manage

Enterprise resource planning An integrative review E.M. Shehab, M.W. Sharp, L. Supramaniam and T.A. Spedding www.emeraldinsight.co m/1463-7154.htm Business Process Management Journal Vol. 10 No. 4, 2004

Enterprise resource planning (ERP) system is a business management system that comprises integrated sets of comprehensive software, which can be used, when successfully implemented, to manage and integrate all the business functions within an organisation. These sets usually include a set of mature business applications and tools for nancial and cost accounting, sales and

pp. 359-386 Emerald Group Publishing Limited 1463-7154 DOI 10.1108/1463715041054 8056

distribution, materials management, human resource, production planning and computer integrated manufacturing, supply chain, and customer information (Boykin, 2001; Chen, 2001; Yen et al., 2002). Thespackages have the ability to facilitate the ow of information between all supply chain processes (internal and external) in an organisation (AlMashari and Zairi, 2000a). Furthermore, an ERP system can be used as a tool to help improve the performanclevel of a supply chain network by helping to reduce cycle times (Gardiner et al., 2002). However, it has traditionally been applied in capital-intensive industries such amanufacturing, construction, aerospace and defence. Recently, ERP systems have been expanded beyond manufacturing and introduced to the nance, health care, hotel chains, education, insurance, retail and telecommunications sectors.

the extended enterprise of suppliers, alliances and customers as an integrated whole (Chen, 2001). In the manufacturing sector, ERP implementation has reduced inventories anywhere from 15 to 35 per cent (Gupta, 2000). Among the most important attributes of ERP (Nah et al., 2001; Soh et al., 2000) are its abilities to: automate and integrate business processes across organizational functions and locations; enable implementation of all variations of best business practices with a view towards enhancing productivity; share common data and practices across the entire enterprise in order to reduce errors; and produce and access information in a real-time environment to facilitate rapid and better decisions and cost reductions. 4.1 Drawbacks of the ERP systems Although ERP systems have certain advantages such as low operating cost and improving customer service, they have some disadvantages due to the tight integration of application modules and data. Huge storage needs, networking requirements and training overheads are frequently mentioned ERP problems. However, the scale of business process re-engineering (BPR) and customisation tasks involved in the software implementation process are the major reasons for ERP dissatisfaction. Baan, PeopleSoft, as well as SAP calculate that customers spend between three and seven times more money on ERP implementation and associated services compared to the purchase of the software license (Scheer and Habermann, 2000). This means that ERP projects are large, costly and difcult and that they require large investment in capital and staff and management time (Adam and Odoherty, 2000). Yen et al. (2002) identied the following disadvantages of ERP: its high cost prevents small businesses from setting up an ERP system, the privacy concern within an ERP system and lack of trained people may affect ERPs efciency. Implementation of an ERP project is painful, and customisation is costly and time-consuming. The various shortcomings of the ERP systems such as functionality and technicality are shown in Figure 3. Some of these shortcomings have been discussed by OConnor and Dodd (2000). The different types of ERP system mists (the gaps between the functionality offered by the package and that required by the adopting organisation), based on Asian organisations, have been presented by Soh et al. (2000). The observed mists were clustered into three broad categories: data, process and output, in line with a traditional software application perspective. Data mists arise from incompatibilities between organizational requirements and the ERP package in terms of data format, or the relationships among entities as represented in the underlying data model. Functional mists arise from incompatibilities between organizational requirements and ERP packages in terms of the processing procedures required. Output mists arise from incompatibilities between organizational requirements and the ERP package in terms of the presentation format and the information content of the output. Their ndings suggest that the mist issue may be worse in Asia because the business models underlying most ERP packages reect European or US industry practices. ERP systems are complex, and implementing one can be a difcult, time-consuming and expensive project for a company. For instance, the ERP adoption time, typically, takes from a few months for rms accepting all default settings, to years for rms needing to make major modications. It costs tens of millions of dollars for a medium sized company and $300-500 million for large international corporations (Mabert et al., 2001). Along with obvious costs of an ERP implementation, there are also some possible hidden costs that may include losing some very intelligent employees after the initial implementation is done, continual implementation and training, waiting for return on investment (ROI) and post-ERP depression (Coffey et al., 2000). Moreover, even with signicant investments in time and money, there is no guarantee of the outcome (Mabert et al., 2001). Although most ERP systems have business practice processes in their repository, not all of them are necessarily best in class applications for a specic rm. The rm still needs to select those applications available from software vendors for its specic requirements, and integrate both applications and ERP system into the rms IT backbone. Because ERP has made it easy to integrate other competing best in class applications, most rms either face the high cost of modifying the ERP modules to meet their requirements or simply do not install the applications. Indicative of the problems, some retailers were reported to face difculties, when they implement ERP applications that were developed with manufacturers in mind (Chung and Snyder, 2000). One of the aims of implementing ERP systems is to uphold the highest quality standards of the business process. However, when the business condition has been changed, the system may not guarantee that the process embedded in ERP is still best. Hence, for example, a multi-agent system for adaptive inventory control in an ERP system maintenance has been proposed by Kwon and Lee (2001). Themistocleous et al. (2001) proposed a model to identify, analyse and present the problems of ERP systems, as well as to examine new approaches to application integration (AI). They claimed that ERP systems amplied the need for integration, as existing systems have to be incorporated with ERP applications. AI securely incorporates functionality from disparate applications and leads to the development of new strategic business solutions for enterprises. The results of the research conrm AI as a new means of system integration that adds value by placing business logic in the applications network, thus creating a more dynamic information system infrastructure. Additionally, organisations face many problems when customizing ERP packages. Thus, customisation problems did not allow companies to make serious changes on the ERP package.

IT and business managers also argue that ERP suites tend only to have one best in class application. For instance, PeopleSoft is linked with a good human resources module and Oracle with nancials. Furthermore, organisations may be left waiting for the next upgrade from their ERP software vendor when they require further functionality. Conclusion and implications for future research ERP systems are sets of integrated applications that can provide a total solution to an organisations information system needs by addressing a large proportion of business functions including nancial, accounting, human resources, supply chain and customer information. They support a process-oriented view of the business as well as business processes standardised across the enterprise. Recently, these packages are implemented on client/server architectures that are more exible and scalable than mainframe systems. Many papers have been written on this topic. In this paper, a comprehensive review of the recent research work in ERP systems has been presented. In addition, it has been observed that from the year 2000 till date an increasing number of papers about ERP packages has been published. The Business Process Management Journal, Journal of Information Technology and the Communications of the ACM were the journals where majority of the papers on this subject were published. Most ERP systems still lack the more advanced product costing techniques, such as activity-based costing (ABC), life-cycle costing and target costing. Also, they lack the capabilities of the advanced techniques for dealing with uncertainties such as fuzzy logic. Furthermore, state-of-the-art techniques such as neural networks and genetic algorithm should also implement in the existing ERP systems. Further research effort is required to incorporate these new techniques in ERP systems. In most countries, SMEs are the backbone of the economy. While in the past many SMEs were acting on local markets, today Web-based technologies and community networks are changing the basis of competition. More and more SMEs are now exposed to the forces of global competition. From this point of view, it is crucial that SMEs continuously improve their competitiveness to assert themselves in the market. Therefore, SMEs are moving towards ERP packages. Although in recent years most ERP system suppliers have increased their focus on SMEs, current ERP systems are still expensive. As the nancial resources of SMEs are clearly limited, they cannot afford them. There is a need to provide micro ERPs, i.e. near ERP capabilities built into a product and sold at an affordable price, including implementation. Research effort is required to provide an ERP system that has the exible assurance capabilities to evolve with the dynamic changes of a company. Currently, there are two approaches for the implementation of ERP systems namely moulding the business process to match the ERP software or vice versa. Each technique has drawbacks as discussed in Section 6.1. Further research is necessary to develop a new technique for adopting the ERP system to overcome the shortcomings of the current approaches. The new implementation model should take the SMEs into consideration. Future trends in ERP, including developments such as Web-based procurement applications and outsourcing of ERP applications, have been suggested by Al-Mashari (2003) and Gupta (2000). ERP software still requires many resources and efforts to integrate all of the major business functions in the initiating rm. Some of the topics will be on the impact of ERP on organizational alignment, organizational learning, infrastructure, mass customisation, competitive advantage and organizational structure. A customer relation management (CRM) module should be included in the ERP packages. Since most ERP vendors are moving towards Internet Web-based applications to full the e-commerce era, the development of security issues needs to be addressed. We hope that this paper reinforces the ongoing research, provides a broad view of the current status in ERP systems research, and offers potential directions for the development of the ERP systems. Single vendor-based enterprise resource planning (ERP) systems dominate the IT landscape but have proved problematic for some organisations. ERP systems are generally implemented to overcome the maintenance difficulties associated with custom developments as they offer a clean slate through a common data set and suite of integrated applications (Holland and Light, 1999a; Davenport, 1998; Appleton, 1997). If, however, organisations implement an ERP system but change the implicit business model, by modifying source code, this recreates the legacy problems and disregards the advantages of a standard package-based IT strategy. Standard packages, for example, can increase development speed, reduce development staff requirement, and offer a constant state-of-the-art IT capability through upgrades (Price Waterhouse, 1996). While these benefits are debatable, radically changing standard software will: increase development time; increase staff requirement during and after implementation; reduce capability to take upgrades; counteract the standardisation and system integrity that was originally required. BoB and the emergent strategy of different applications and platforms being used throughout an organisation are different. BoB is a stated strategy; the aim is for enterprise integration and a process orientation. In contrast, the emergent strategy is often technically and

ERP and best of breed: a comparative analysis Ben Light Information Systems Institute, University of Salford, Salford, UK Christopher P. Holland Manchester Business School, Manchester, UK, and Karl Wills Independent IT Consultant, Hampton, UK

Business Process Management Journal, Vol. 7 No. 3, 2001, pp. 216-224. # MCB University Press, 1463-7154

organisationally fragmented, leading to the reinforcement of functional silos. BoB is based on the integration of standard software from a variety of vendors.

ERP implementation factors A comparison of managerial and end-user perspectives Kwasi AmoakoGyampah Business Process Management Journal Vol. 10 No. 2, 2004 pp. 171-183 q Emerald Group Publishing Limited 1463-7154 DOI

Single vendor ERP and BoB-based enterprise system strategies represent a range of implementation challenges. Both approaches are undoubtedly complex due to their scale, scope and BPR requirement. ERP requires a clean slate approach, whereas BoB offers the chance for organisations to recognize existing ways of work and make trade offs with stakeholders. This is an important distinction as the BPR associated with BoB can facilitate implementation and the management of complexity. Another important difference is that ERP systems do not offer the same levels of flexibility, and potentially, the responsiveness associated with BoB. However, the trade off is likely to be concerned with the future maintenance requirements. BoB approaches have the potential to require higher degrees of maintenance due to the complex connections made between different components, whereas maintenance of components, and connections between components, of single vendor ERP systems is largely outsourced to the vendor. This paper highlights an alternative approach to enterprise IT infrastructure development. The differences between BoB and single vendor ERP approaches have been discussed and the issues organisations need to consider when deciding on a strategy have been shown to centre on the complexity of implementation, required levels of business process alignment and maintenance. Further research in this area is essential due to the criticality of enterprise systems to organisations and also the limitations of what can be presented here. The implications of various strategies on systems development approaches, the IT function and competitive advantage are excellent starting points. Specically, we wish to understand if differences exist between end-users and management level employees on why the ERP system was being implemented and the technologys benets; if differences exist on the extent of personal relevance of the ERP system; differences on the perceptions on the effectiveness of the training that was provided; differences on the effectiveness of the communication mechanisms used; and to see if differences exist in other critical success factors for the implementation. An ERP system is a software system that aims to provide an integrated application environment with a fast and seamless access to single uniformed information throughout the entire organization (Al-Mashiri, 2001). The specic ERP system studied is SAP R/3. SAP R/3, a product of the German software company SAP AG., is the most dominant of the ERP systems currently in the market and has been implemented by companies such as Dow Chemical, Du Pont, Eastman, Hoechst, and Monsanto (Al-Mashari, 2001). The software has the ability to integrate data from several different core functions of an organization such as nance, human resources, logistics, and manufacturing. Why perceptions might differ Differences have been known to exist in the perceptions and attitudes of different organizational members toward innovations and innovation related activities. In fact, with regard to human resource (HR) innovations, it has been observed that hierarchical levels are better predictors of acceptance of HR innovations than other variables such as gender or marital status (Kossek, 1989). Several stakeholders are involved during ERP implementation. These include top management, project managers, team leaders, trainers, end-users, consultants and vendors. The stakeholders might have their own interests and wield different amounts of power. These interests and power can be used to inuence the

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outcomes of the implementation process (Markus and Keil, 1994). Thus, in order to understand the implementation process completely we need to understand how different stakeholders perceive the importance of different implementation success factors. Dong (2001) argues that lack of shared IT vision, shared understanding between senior business ofcers and senior IT ofcers about an innovation and its contributions to organizational competitive advantage contribute to implementation difculties (Dong, 2001). We wish to extend the above argument by proposing that lack of a shared understanding on the project benets, the roles of different stakeholders, critical success factors, and even the use of various communication mechanisms between managers, on the one hand, and other employees, on the other hand, can contribute to implementation difculties. For example, if managers believe that training is the most important critical success factor while end-users believe that their level of involvement is more important, there is lack of congruence and this might contribute to implementation difculties because implementation efforts might be directed inappropriately. In addition, effective ERP implementation requires putting in place appropriate managerial interventions as part of the implementation. For example, we consider the institution of training programs and communication mechanisms to facilitate understanding of the technology as part of managerial interventions. Managers design interventions, and usually the appropriateness of these interventions will most often be based on the perceptions of managers. For example, managers, because they are part of project team leadership, might think that an appropriate means of communicating about the project will be the minutes of project team meetings that are disseminated to employees. On the other hand, employees not being part of project teams might consider minutes of team meetings as being inadequate and might desire more effective communication mechanisms. Thus, understanding the differences in perceptions (if any) will be important to designing appropriate interventions that might lead to effective ERP implementation. This is important considering the tremendous amount of money and other organizational resources that are spent on BPR and change management practices that are carried out as part of the ERP implementation effort. For example, studies have shown that, for every dollar spent on ERP software, 3-10 dollars might be required for the training of users (Cooke and Peterson, 1997). Study variables Several factors have been identied as being important to the successful implementation of ERP systems. Among these are a strong business justication for the project (Laughlin, 1999); top management support (Bingi et al., 1999; Dong, 2001; Holland and Light, 1999; Wee, 2000); training of employees (Aladwani, 2001; Bingi et al., 1999; Schaaf, 1999); project communication (Nah et al., 2001); properly dened roles for all employees including chief information ofcers and functional managers (Willcocks and Stykes, 2000); user involvement and strong teams (Amoako-Gyampah, 1999; Holland and Light, 1999; Sarker and Lee, 2000); and the mediation efforts of consultants (Westrup and Knight, 2000). A comprehensive review of the literature on ERP implementation and other related issues can be found in Esteves and Pastor (2001). Based on the above, as well as the literature on technology acceptance, we identied seven variables as being of interest in our comparison of user-manager and end-user perspectives. They are: 1. the argument for changing the technology; 2. the perceived personal relevance of the technology; 3. the perceived ease of use; 4. satisfaction with the technology; 5. project communications; 6. training; 7. and shared beliefs about the benets of the technology. Argument for change We measured argument for changing the technology by asking questions on whether the respondents perceived the ERP technology as being world-class; that it would enhance the ability of the company to handle new business opportunities; allow various functional units in the organization to work better with each other; and whether it would facilitate better customer service compared to the legacy system it was replacing. The argument for change measure can be thought of as representing the business justication for the technology. Table II indicates that the difference in perceptions between managers and end-users on the argument for changing the technology was highly signicant. A closer examination of the responses showed that the biggest differences in perceptions occurred with regard to whether the technology was world-class and whether the ERP system would facilitate better customer service. There was less disagreement on the ERP systems ability to allow the company to handle new business opportunities and also the ability of

the technology to enable functional units to work closer together. ERP systems are transaction systems meant to provide companies with a seamless integration of data for organizations and it appears that this benet is likely to be understood by company employees regardless of their position within the organization. What is less understood, at least in the minds of the end-users, is the world-class nature of the technology that was selected. A knowledge gap thus exists between usermanagers and end-users. A possible explanation for this gap might be the allegiance that end-users have toward the legacy systems that ERP systems are meant to replace. Because they have been using these systems for quite a while, they are perhaps intimately familiar with the technology and it would take a great deal more convincing them that any replacement technology would necessarily be superior. Ease of use Managers, more so than end-users, perceived that the technology would be easy to use. User-managers, compared to end-users, felt more condent about their abilities to get the ERP system to do what they wanted. They also felt that learning to use the system would be easy, compared to the end-users. The differences between the two groups were highly signicant. Understanding the perceptions of ease of use is benecial because it is thought to lead to users perception of the usefulness of the technology and to the development of favorable attitudes that lead to eventual acceptance and usage of the technology (Davis et al., 1989). ERP systems are designed to provide one common source of data. They are designed as integrated information systems that eliminate multiple sources of data, eliminate multiple data entries and provide more accurate and timely data. The data integration means that an incorrect entry by, say a customer service employee, can have simultaneous organization-wide implications. This can be a source of anxiety for end-users and not recognizing these anxieties could lead to implementation problems. Additionally, ERP systems are designed to replace legacy systems. The users of these legacy systems typically have vested interests, valuable experience and know-how in those systems. Replacing legacy systems means that people have to relearn new skills and their reluctance to do so might lead them to perceive the ERP system as being difcult to use. In other words, the more familiar an individual is with the legacy system the less likely the person will perceive the ERP system as being easy to use. This phenomenon is more likely to be observed among end-users than user-managers. In fact, in interviews with personnel as part of an exploratory study, a common comment was with SAP, every employee becomes a new employee. The above reasons provide explanations for the differences in the perceptions between usermanagers and end-users and thus, by recognizing the differences and reasons, managers can tailor intervention mechanisms to address those issues. Personal relevance of technology Personal relevance dealt with perceptions on the extent to which employees felt the ERP system will be useful in their job, increase their productivity on the job, and the extent to which the system will be responsive to their changing job demands. Again, the user-managers were more positive about the ERP system being personally relevant than the end-users. The biggest difference was with regard to productivity. The end-users were less certain about the ability of the system to increase their productivity on the job although they perceived it as being useful as a whole. It is understandable that the users will be concerned about their ability to do things quickly using the new system and hence assurances by senior level employees that productivity measures might not be focused on, at least initially, following implementation may help to alleviate the concerns of these users. In other words, although users might have been trained on the system or its prototype, some learning is still expected to occur and thus assurances that they are not going to be held to the same productivity standards during this learning period will help alleviate concerns. Another factor that might be contributing to end-users concerns about the productivity levels is the expected mandatory usage of the ERP system. Whereas usage of the legacy system was voluntary, usage of the ERP system is expected to be mandatory and this naturally raises concerns and anxieties for the users. When users were asked how much time they expected to spend on the ERP system, about 53 percent of the respondents expected to spend over 80 percent of their work time using the new system. Comparatively, only 24 percent of the respondents were spending over 80 percent of their work time using the legacy system. Thus, about twice as many people expected to spend a greater portion of their time using the ERP system. At the same time, mandatory usage might not account for all the increase in the amount of time users expected to spend on the system. It could be possible that the users expect to spend more time on the system because they did not feel condent about the training received and thus, expect to spend time guring out how to use the system to carry out their job functions. We discuss concerns about training in greater detail later in this paper. Satisfaction with the technology Measures of user information satisfaction have been based on an information systems ability to provide integrated, accurate, timely, and

reliable information and whether a new system is expected to be better than the one it is replacing. Of the different items that were used to assess satisfaction with the system, the biggest gap in perceptions was with regard to whether the ERP system would be better than the legacy system it was replacing. Also, end-users were not as enthusiastic about the ERP systems ability to provide accurate, reliable and timely information as the user-managers. It is possible that user-managers, either because of their participation as project team members or because of their interactions with consultants, vendors, senior management, etc., are likely to have had more exposure to the technology than end-users. Under such a scenario they will have a better understanding of the technology and its capabilities and thus, expect the ERP system to be better than the legacy system. End-users, on the other hand, might not be seeing the forest from the trees because they are more concerned about the systems ability to facilitate their daily jobs rather than say the systems ability to provide integrated data. Training Respondents trained on the system or its prototype were asked to assess their perception of the training program. Overall, both users and usermanagers did not think the training was adequate, as evidenced by the relatively high average scores of 3.51 and 4.05 respectively for usermanagers and end-users. Readers may recall that the scales were such that higher scores represented less positive responses. Although the difference in perceptions might not be large practically (it was the smallest difference among all the other factors studied), it was statistically signicant. Some of the largest differences between end-users and user-managers were with regard to the length and detail of the training, and the condence that the users got after going through the training program. In other words, end-users felt less condent about their ability to use the system after going through the program than user-managers did. There was less disagreement on the knowledge level or helpfulness of the trainers and the increase in their level of understanding after the training program. The completeness, length and detail, timing, and even who to train is an ongoing concern for companies implementing an ERP system (Slater, 1998). To begin with, training represents a high component of the implementation budget. Training users for a longer period might be costprohibitive. Training users too early might lead to forgetfulness. Other implementation activities might hinder an organizations ability to wait till just before implementation to train users. In fact, the number of users that might need to be trained makes this extremely difcult. At the same time it is important that both user-managers and end-users have a common understanding of the purpose of the training, the training mechanisms, the length and the detail of training that is provided as part of the implementation process. Before user-managers can design an appropriate training program they need to understand how their perceptions about what is being proposed differ from the perceptions of endusers. Training during technology implementation is important because of the potential of training to inuence user attitudes, behavior, performance and acceptance of the technology (Galletta et al., 1995). As indicated earlier, training has been identied as one of the important critical success factors for ERP implementation success. Thus, if gaps exist in the perceptions of end-users and user-managers on the adequacy of the training, managers have to become aware of these differences and take measures to address these differences so that favorable attitudes that lead to the acceptance of technology can be developed. Communication ERP systems are very expensive and, therefore, the decision to adopt these technologies is very likely to come from senior managers. Once managers make that decision they have to use communication to explain and justify their actions. Presenting the business justication for the ERP system is usually not difcult. What is important is how that justication is translated to lower level employees so that they feel motivated to go along with the implementation and not resist the changes that will occur, hence the need for greater communication than perhaps occurs in other project environments. Since the outcome of this communication, the ability to inuence behavior, is dependent on factors such as the frequency and accuracy of information, it is expected that perceptions about the usefulness of the technology will also be dependent on the amount and perceived quality of communication that is provided. Additionally, communication is one of the key enablers for process change (Lewis and Seibold, 1993). The implementation of an ERP system requires a lot of process changes. Effective communication will lead to the development of trust and exchange of information needed for those process changes and ultimately the acceptance of the technology. Finally, there are several unknowns in an ERP implementation environment and improved communication can lead to more acceptance of these unknowns and the reduction of needless anxiety (Al-Mashiri and Zairi, 2000). As part of project communications the company instituted roadshows and demonstrations, and also began the publication of a newsletter, all aimed at keeping various stakeholders informed about the project. Thus, respondents to the questionnaire were asked to state agreement or disagreement on the effectiveness of these communication mechanisms. Our results show that a perception about the frequency and effectiveness of the communication was one of the areas where large differences existed between the user-managers and end-users. End-users

did not think that the communication aimed at explaining the benets of the technology, the use of roadshows to demonstrate aspects of the conversion process and newsletters to inform them about the projects progress and changes were as effective (compared to the perceptions of user-managers). Shared beliefs ERP systems, by their very nature, cut across functional boundaries and are organization-wide information systems. These types of systems are deliberately designed to provide a unied view of the pulse of the organization from a business perspective. Hence, their implementation inevitably requires the inclusion of users across the organization and across various levels. It is clear that to achieve implementation success a sense of mutual trust and commitment must develop between participants so that free exchange of beliefs and opinions are possible. It is this shared sense of beliefs regarding IS project benets that allows organizational participants to nd common grounds and a shared sense of purpose about the project. Shared beliefs refer to a belief about the overall impact of the system on the organization with regard to its benets. This type of belief differs from individual beliefs that relate to the performance of the individual and how a particular system would enhance his or her job performance. In contrast, the belief in the benets of the ERP system is a belief shared with peers and managers regarding the benets of the ERP system. We assessed the perceptions about shared beliefs by asking questions on the extent to which respondents believed in the benets of the ERP system; the extent to which they thought their management team believed in the benets of the system; and the extent to which they thought their peers believed in the benets of the system. The difference in the perception of shared beliefs for the user-managers and end-users was signicant, as shown in Table II. The extent to which user-managers thought the entire organization (themselves, their superiors and others) believed in the benets of the system was higher than the extent to which end-users thought the organization believed in the benets of the technology. If organizational members have a shared sense of understanding of why a technology is being implemented it is likely to foster trust, cooperation and the development of a common sense of purpose that can lead to implementation success. Thus, it is important for managers to be aware if different members of the organization have different perceptions on the shared beliefs about the benets of the technology and to develop mechanisms such as communication to minimize those gaps. Conclusion This study has compared the perceptions of user-managers and end-users on different ERP implementation success factors and has conrmed that signicant differences do exist in the perceptions of these groups. For practicing managers, understanding differences in perceptions is important so that they can develop appropriate intervention mechanisms that can lead to successful technology implementation. Based on the implementation of an SAP R/3 system, the results of this study show that different groups of organizational members have different perceptions of the benets associated with an innovation and also have different perceptions of the effectiveness of implementation activities that are instituted as part of the implementation process. In particular, user-managers had more favorable perceptions on the benets of the technology, the effectiveness of communication mechanisms and their level of satisfaction with the technology than end-users. Also differences exist on the perceived effectiveness of the training provided as part of the implementation effort, personal satisfaction with the technology and the perceived ease of use of the technology. It is possible that higher-level personnel in an organization might have a greater understanding of why a specic technology is being implemented. Because of their closeness to the decision-making process they might buy in to the innovation faster than end-users. They might also have more condence in the effectiveness and adequacy of implementation techniques such as training and communication because of their closeness to these implementation activities. Moreover, it is possible that the perceptions of managers on the effectiveness of these mechanisms might be inuenced by their (managers) roles in designing those interventions and thus, perceptions of the effectiveness of those interventions might be clouded. Thus, if large and signicant gaps exist in the perceptions of user-managers and end-users then it is important that these should be recognized by the management and appropriate steps should be taken to mitigate these differences, otherwise, they might lead to implementation failures (Al-Mashiri and Zairi, 2000). This research has some important implications for practitioners. First, we draw attention to the fact that in the implementation of an ERP system knowledge gaps might exist on the usefulness of the technology, the organization-wide benets it might provide, and how difcult it might be to use the technology. While implementation activities such as training and communication might be useful in bridging the gaps and building consensus so as to achieve implementation success, it is important that large gaps in perceptions on the effectiveness of these activities do not occur, otherwise their potential impact might be diminished. Second, by identifying where differences might exist and the possible reasons for those differences we are condent that it will help managers devise appropriate interventions that minimize end-user anxieties, foster greater cooperation, build trust and consensus so as to accomplish the technology implementation goals. As with any research there are some limitations in our study. For example, we did not look at the timing of training and its impact on the

ERP implementation through critical success factors management Olivier Francoise INEUM Consulting, Paris, France, and Mario Bourgault and Robert Pellerin Department of Mathematics and Industrial Engineering, Ecole Polytechnique, Montreal, Canada Business Process Management Journal Vol. 15 No. 3, 2009 pp. 371-394 Emerald Group Publishing Limited 1463-7154 DOI 10.1108/1463715091096 0620

perception of training effectiveness. Also, in addition to the broad roles as users or user-managers it will be worthwhile to look at how role specicity affects perceptions of intervention mechanisms such as training and communication. Future research should also explore the incorporation of some of the factors examined in this research into either existing theoretical or new theoretical models on technology implementation and acceptance. For example, communication has the potential to inuence perceptions about the usefulness of technology, ease of use, effectiveness of training and user acceptance and user satisfaction. Therefore, researchers might examine how communication might be integrated into the technology acceptance model (Davis et al., 1989) and then empirically examine such an extended model in an ERP implementation environment. For a number of years, enterprise Project teamwork and composition resource planning (ERP) systems The composition of the project team aroused a good deal of interest, given that this is the factor for which the professionals suggested the have been acknowledged to be the most new actions. At the head of the team, the project manager must have adequate authority and become involved as soon as possible, as technological solution that is best must the companys management. If additional compensation is not possible, the actors must be freed up from their other duties as much as adapted to meet businesses needs possible. It is indispensable to recruit from different sectors of the company in order to create a multidisciplinary team. for efciency and effectiveness The study found that the actions contributing to the composition and work of the implementation team factor were as follows: when it comes to information Get management directly involved in supporting the team and transferring authority and responsibility. management. Make up a multidisciplinary team, selecting representative elements from all of the companys departments. These software packages are known Ensure that the team leader possesses authority that is recognized throughout the company. for their ability to integrate all of a Free up members from constraints unrelated to the project (for example, obligations related to their usual positions). companys information needs Integrate experienced consultants. within a single computer system Set up a simple, central communication system (calendar, tasks, decisions, etc.). (Koch et al., 1999; Ehie and Select members who are inuential in the organization. Madsen, 2005); in return, this gives Encourage members to get involved and learn during the project. management a better overview of Organize documents efciently on the companys computer system. all of the companys operating and Formally document all members roles, authorities, responsibilities and competencies. managing activities. Ensure that the team has adequate decision-making power. Set up a clear personnel policy regarding changes. Organizational culture and change management Change management, which must start as soon as possible, needs to get under way by obtaining the support of mid-level managers (who are too often neglected) and opinion leaders. Although this factor is deemed critical for a successful go-live, paradoxically it does not require a full-time manager, but it does demand a major human effort and strong management involvement. The actions supporting the organizational culture and change management factor are: Formally obtain support from opinion leaders. Ensure that executives accept the new system. Right from the outset of the project, assess the organizations capacity to accept change. Ensure that the training provided for the whole organization is complete. Identify the risks and dene mitigation plans. Formally evaluate the scope of the change in order to control its impacts and risks. Circulate information on the benets and changes that an ERP system will produce. Manage expectations concerning the systems functionalities. Do not start the transition prematurely, before the whole organization is ready. Begin efforts to reduce resistance to change at the very start of the implementation. Consolidate employees motivation throughout the project (regular information sessions, for example). Set up conference room pilots during the project: meetings during which the people affected by the project can learn about the new system. Specically, train the project leader to handle change management problems. Top management support

As an indispensable condition for the project launch, involvement by management should rst identify the ofcers concerned, and then communicate the desired level of involvement. These people must then be trained regarding the project processes and issues. Next, it is important to ensure that initial intentions are adequately expressed in daily operations. For example, it is advisable to get management involved in the decision-making process when necessary. At the end of the study, the actions presented for the top management support factor are: Inform selected members of top management of the details of the processes to be undertaken and the projects impacts on the organization. Identify the top management members concerned by the project. Make the managers of each business sector accountable for the success of the project to ensure that they will be motivated and will support it. Set up a management committee. Plan for monthly or twice-monthly meetings with management. Get top management directly involved in choosing the type of involvement. Get top management directly involved in the project follow-up activities. Stimulate managements interest in the new system. Have top management intervene from time to time in the ongoing decision-making process. Ensure that initial intentions of support are adequately reected by actions during the project.

Business plan and long-term vision The companys business plan and long-term vision will make it possible to link the ERP project to organizational strategy, and determine the goals to be met and their feasibility. Although no departmental targets should be set, the project must remain a priority and should not become mired in conicts over resources or capital. The ERP must be correctly positioned and it is important to be aware that the decisions made will have consequences over the long-term. The actions supporting the business plan and long-term vision factor are: Identify and formally communicate the link between the ERP and the companys strategy. Identify the goals of the ERP implementation and assess its nancial, technical, and organizational feasibility. Re-evaluate the achievement of goals throughout the project. Achieve consensus in advance from the whole management team regarding the goals of the implementation. Dene the ERP implementation as the organizations most important project. Make executives accountable for the achievement of organizational goals. Business process reengineering (BPR) and customization BPR continues to be a controversial eld, as some people consider it to be indispensable while others feel it is undesirable. Although the creation of a dedicated team cannot be a majority-rule decision, the formalization of the extent of reengineering and the minimum customization of the system are critical. BPR activities must be recorded in the plan. The target processes designed must be validated by management. In addition, it must be remembered that if their performance is to be measured, the existing system must be audited rst. The actions related to the BPR and code modication factor are: Formally identify the limits of reengineering and customization of the application before starting the conguration activities. Opt for minimal customization of the application. Validate the new processes with management. Record specic reengineering activities in the project plan. Effective communication Communication is a key factor in any project. Depending on the organization, it may take different forms. Nevertheless, it must always start with the creation of a communication plan, which formalizes direct and regular exchanges. The language used must be easy for everyone to understand. Conicts can become a major drag on the project and must be correctly managed, both formally and informally. Further to the study, the actions that favor effective communication are: At the start of the project, create a communication plan.

Use language that members of all departments can understand. Make the team formally aware, right from the start, of the need for open and ongoing communication. Set up a formal and informal conict and resistance resolution process. Centralize information for a common understanding of decisions.

Project management There is no question that effective project management must start with the denition of the requirements for the project leader position. His or her rst task must then be to dene the perimeter of the project, and to monitor it attentively as the project advances. Risk management plays an essential role, which may or may not be reected in an in-depth study, depending on the corporate culture. Project management is based on the following actions: Continuously monitor the project to make sure that it does not overow the dened scope. Formally dene the scope of the implementation as soon as the project starts. Dene the requirements for the project manager position. Formally evaluate the project managers competencies before the project is launched. Obtain managements agreement with any change in project scope. Ensure that material, human and nancial resources will be available. Assign a full-time project manager. Conrm the project scope with the manager (schedule, risks, resources, etc.). Set up a system for managing and monitoring critical factors identied during the initial planning. Set up a formal risk management process. Software development, testing, and troubleshooting Paradoxically, the most important point related to software development is the creation of a competent technical support team that is able to react quickly after the go-live. This point is essential inasmuch as it is often untenable to continue testing as long as errors remain. Of course, one must also ensure that the development team possesses the appropriate knowledge, and the related activities must be detailed in the project plan. The list of actions on which the software development and testing factor is based are: Set up a competent technical support team before the go-live. Be able to react quickly to any problems after the go-live. Integrate development activities into the work plan. Set up a development team that has the necessary knowledge of ERP systems. Dene a development and testing plan. Carry out specic activities to follow up on development activities. At the start of the project, formally identify all the development requirements regarding the other project areas. Document all custom developments. Carry out all testing activities with future users. Do real load tests on all the modules installed, using real data. Dene and document use proles. Perform technical tests, particularly on peripherals. Predene the test sets to be validated before the development or integration of a third-party product. Use a development and test methodology. Monitoring and evaluation of performance In order to be able to pilot the project, one must put indicators in place that will allow for adequate visibility. In that sense, it is essential to dene a monitoring plan from the outset. Each objective must be reected in one or more indicators that are updated regularly and are associated with an adequate correction of disparities. Such an approach must be supported by the use of monitoring tools that everyone can use. These processes will facilitate communication with management and allow true transparency.

Further to this study, the actions to be performed in relation to the performance monitoring and assessment factor are: . Be transparent with top management. Dene a monitoring plan at the start of the project, specifying the monitoring methodology, reports, modications and validation, among other things. Establish performance review and gap correction processes. For each objective, dene an indicator that will make it possible to measure progress. Put in place tools and quick updating practices for the register of tasks to be performed. Favor project monitoring tools that all participants can understand. Project champion The champion plays a key role in the project. Ideally there should be only one champion, who may be accompanied by one or more other sponsors in very large jobsites. This person must obligatorily be a member of top management, which will allow him or her to give the project appropriate support. The project champion factor is based on the following actions: Involve the champion(s) in conict resolution. Appoint a champion(s). Ensure that the champion(s) is a (are) member(s) of top management. Ensure that the champion(s) is available. Formally dene the champions (or champions) level of authority. Involve the champion(s) in every stage of the project. Train the champion(s) beforehand on the impacts and objectives of the implementation. Ensure that the champion(s) will promote the project throughout the organization.

Organizational structure The audit of the organization structure should play a more important role, especially in the earliest days of the implementation, but this phase is often neglected. Managers tend to consider that an ERP must be capable of adapting to any structure. However, it will denitely be necessary for the main projects stakeholders to initiate a thorough reection about the changes the system may require and/or bring about from an organizational perspective. The only action to be retained for the organizational structure factor is: ensure that the structural constraints of the implementation and the businesss strategic organizational plan are aligned. End-user involvement Many ways in which end-users should become involved were proposed, as each respondent had specic suggestions. It should be recalled that one preliminary action is crucial: a training plan must be dened, bearing in mind the users know-how, their needs, technology, etc. Beyond training, it is important to get users involved during the development of the system and to make use of their knowledge in areas where the team lacks expertise. It is necessary to be transparent with them concerning the real contributions the system will make. Finally, training must start at a time that will enable it to end when the project goes live; snowballing training provided by key users is appropriate in this case. At the end of the study, the actions supporting the end-user involvement factor are: Dene a training plan that takes account of users knowledge and their needs, the technology to be implemented, the trainers experience, the chosen strategy, etc. Dispense training in two steps: overview early on in the project and detailed as the go-live approaches. Identify ways of getting users involved during the development of the system Collect and integrate users requirements. Ensure that users are properly involved in processes where the project team does not possess all the necessary expertise. Ensure that trainers or the training team have a good knowledge of the software and operations. Carry out formal information activities for users concerning the contributions the new system will make. Plan training so that it will end before the application is launched, apart from small upgrading sessions.

Set up activities so that users will be involved in BPR. Choose the most experienced trainers available.

Enterprise Resource Planning (ERP) Implementations: Theory and Practice Muscatello, Joseph R; Chen, Injazz J. International Journal of Enterprise Information Systems 4. 1 (Jan-Mar 2008): 63-77.

Knowledge management The last factor, knowledge management, will nd a place for itself in a climate that favors the exchange of information within the team and the company. As many people as possible should be trained by the consultants so the company can become autonomous in using the software package. At the end of the study, the knowledge management factor is characterized by the following actions: Create a climate propitious to the exchange of information within the project team. Have as many people as possible trained on the new system by the consultants in order to gain sufcient autonomy. Promote interpersonal exchanges throughout the organization. Dene a support program with the consulting rm. Collect as much of the organizations undocumented knowledge as possible (especially from the workers). ERP systems offer tremendous opportunities to more consistently provide information to organizations in a standardized, centralized, and cost efficient manner (Olson, Chae, &Sheu, 2005). Many industry reports extol the virtues of ERP and its multiple benefits for those firms that can successfully implement these systems. One of the primary objectives for installing ERP is the ability to integrate business processes (Brakely, 1999; Davenport, 1998, 2000). ERP has also been found to be effective in reducing inventory costs, improving efficiency, and increasing profitability (Appleton, 1997; Brakely, 1999). In addition, ERP has been credited with reducing manufacturing lead times (Goodpasture, 1995; Davenport &Brooks, 2004). Other potential benefits of ERP include drastic declines in inventory, breakthrough reductions in working capital, abundant information about customer wants and needs, and the ability to view and manage the extended enterprise of suppliers, alliances, and customers as an integrated whole (Muscatello, Small, &Chen, 2003). Implementation of an ERP does not come without significant technical and managerial challenges, huge financial investments, and a great deal of organizational change. Operational problems at Hershey Foods, Whirlpool, FoxMeyer Drugs, and more recently Hewlett Packard, have been blamed on poor implementations of ERP solutions (BecerraFerandez et al., 2005). ERP also has the reputation of being notoriously over-sold and underdelivered (Millman, 2004). Cliffe (1999) even reported that 65% of executives believed that ERP could be harmful to their organizations. THEORETICAL CONSTRUCTS This section identifies key factors of ERP implementations based on a critical review of both scholarly and managerial literature. These constructs include strategic initiatives, executive commitment, human resources, project management, information technology, business process, training, project support and communications, and software selection and support. The constructs developed by the authors are very similar to the ones developed by Stratman and Roth (2002), further validating the research effort undertaken here. Strategic Initiatives Successful integration of the internal functions of the business does not necessarily guarantee business success. End-to-end processes that transfer information from module to module will not in themselves improve cost effectiveness and efficiency. The ability to use the information to drive the business is the key to successful integration. Performance measurements must be developed to measure the impact of the ERP system on the business. It has been suggested that an ERP system that is not strategically tied into the supply chain will lack the ability to provide the type of business intelligence that is needed to grow the business (Hickes &Stecke, 1995; Koch, 1999; Carr, 1999; Melnyk &Stewart, 2002; Davenport &Brooks, 2004). Therefore, it is essential that firms must have strategic goals in place before undertaking an ERP implementation (Motwani et al., 2002). Executive Commitment Top management is often advised to look beyond the technical aspects of the project to the organizational requirements for a successful implementation. It is consistently identified as the most important success factor in ERP system implementations (Bancroft, Seip, &Sprengel, 1998; Davenport 1998; Sumner, 1999; Bingi, Sharma, &Godla, 1999; Welti, 1999; Gupta, 2000; Rao, 2000). It can be inferred from the literature that executives and managers believe that ERP systems help their company achieve greater business benefits. However, they are

mystified as to how to design, implement, and manage an ERP project. When it comes to ERP projects, Fortune 500 companies are beginning to sound like children in the back seat of a car on a long drive-"Are we there yet? Are we done yet? No! We're not there and we are not done. And we may never be done" (Koch, 1999). Any executive planning the implementation of an ERP system needs to make some savvy decisions, from identifying what business needs the ERP system must meet to preparing for postimplementation maintenance and user support (Musson, 1998). Many executives are having a hard time understanding that ERP implementation is not simply a package installation. It is a long journey of fine-tuning, upgrading, and continual learning, not a sprint. Therefore, it may lead to a sense of frustration and anger at the system and in some cases total abandonment. Unlike any other software project, an ERP system does not merely change employees' computer screens the way previous generations of software did; it changes the way they do their jobs and how the company does business. Top management, therefore, must fully understand the degree of the changes and supports needed for the new project and be comfortable with the fact that the decisions their planners make will have a profound impact on the entire supply chain (Chen, 2001). Human Resources The most recurring theme in management literature concerning the failure of ERP systems is the inability of firms to take into account the new organizational, interdepartmental, and personnel aspects of work organizations. Unintended consequences include the emotional fallout when employees are suddenly given much greater responsibilities. Managers sometimes neglect to assess not only the skill development needed by employees but also the organizational changes required of them (Appleton, 1997). Small firms often lack financial resources and may be forced to adopt, at best, a piecemeal approach to integrating the typically expensive ERP systems into their facilities (Ferman, 1999). This can be very difficult for employees as the project seems to be 'never ending.' It is also felt that the low information technology (IT) staff levels in smaller enterprises are inadequate for the rigorous and extensive IT training and development requirements of an ERP project (Hill, 1997). In many cases of ERP implementations, consultants are required to help meet the projects' needs (Muscatello et al., 2003). Project Management A project team must be flexible and deal with the problems as they arise in the implementation process. Anyone who revisits the charter documents of a large-scale ERP project will see that the ultimate product is almost always shaped by unanticipated and late breaking circumstances. It is a fact of business life that important things come up later rather than earlier in complex new projects (Cliffe, 1999). However, these interruptions should not encourage "scope creep," when processes or functions are added after the project has begun. As mentioned, unanticipated circumstances are the norm; however, wholesale changes such as adding an additional process, module, or department after the project has been scoped and started may lead to a "never ending" project. To prevent scope problems, firms need to make sure a project charter or mission statement exists. It is paramount to nail down the project requirements and have them documented and signed by the senior management and users. Furthermore, it is essential for firms to clearly define change control procedures and hold everyone to them. Tight change control procedures may end up causing tension between the project team and those who do not get the changes they want. Ultimately, though, the project will not be successful if the project team is trying to hit a constantly moving target (Trepper, 1999). A survey by the Meta Group found that it takes an average of 31 months before an ERP system will show benefits (Muscatello, 1999). There is no magic in implementing ERP systems, but, when they are carefully conceived and executed, ERP systems can radically changed the way companies do business. In many companies, it would now be unthinkable to manage financials, customer relationships, and supply chains without ERP (Oliver, 1999). Information Technology Deloitte Consulting (2000) reports that the second largest ERP implementation challenge related to people issues is internal staff adequacy. If a firm's existing technology will run the new ERP system, then the technology training may be an upgrade of the skill set. If a wholesale change is required, such as moving from an IBM mainframe to a Sun Microsystem, then an in-depth hardware and software training program must be implemented. In fact, some firms have selected their ERP systems based on their current technology and business process, and research has showed this approach to be a mistake since it is very limiting (Anderson, 2000). Because some firms may not be willing to change current technology, they may consequently report a lower significance on technology training for ERP implementation. Firms who account for business processes first and technology fit second reflect IT training positively (Davenport, 2000). Managers cannot minimize the importance of technology training regardless if it is an upgrade of current software and hardware or a complete technology change. An upgrade of current software usually includes new file structures, report writers, functional modules, and

other changes. An upgrade of current hardware usually involves a re-installation of the operating system or at least installing the operating system changes, new functionality, and new modules. If a complete technology change (hardware and/or software) is required, then a much larger commitment must be undertaken to insure that the proper employees can manage the technology after going live. In either case, managers must be proactive in securing the technology training to insure that their technical employees can run the ERP system effectively. The consequences of not having enough technical training can be catastrophic and lead to outright failure of the ERP system (Evangelista, 1998; Hill, 1997). Business Process As suggested by Hammer and Champy (1993), reengineering of business process activities focuses the firm on identifying and improving the efficiency of critical operations, on restructuring important non-value-adding operations, and on eliminating inefficient processes. Reengineering should be undertaken to insure that the strategic objectives mentioned earlier are feasible. The reengineering effort should create a uniform response from all aspects of the business. When goals are common, improvement becomes a shared task (Hill, 2000). Using reengineering techniques to develop a homogeneous vision depicting the company's processes after the ERP implementation, a firm is more likely to minimize uncertainty and achieve success. Researchers have found a strong correlation between the attention paid to business process improvement and the likelihood of ERP success (Muscatello et al., 2003; Motwani et al., 2002; Carton &Adams 2003; Millman, 2004; Olson et al., 2005). Training ERP skills have been in acute shortage because of the high demand for people with good understanding of business and ERP systems. This and the radical process changes brought about by ERP implementation have made providing sufficient and timely training to project persons and users a critical requirement in ERP implementation (Davenport, 2000). Assessing the needs for training usually uncovers several training and skills deficiencies. Rectification of training deficiencies can be accomplished in three ways: reassignment, outsourcing or replacement of staff, hiring of new personnel with substantial knowledge in ERP systems, or training of managers and key employees. In most cases, a firm implementing ERP engages in two types of training: fundamental ERP systems education and technical training in the usage of the ERP software (Evangelista, 1998; Muscatello, 2002; Yusuf, 2004; Sarkis &Sundarraj, 2003). In international cases, language and cultural barriers can be a technical hindrance that requires additional training (AlMashari, 2000). Project Support and Communications ERP applications lock the operating principles and processes of the adopting organization into software systems. If organizations fail to reconcile the technological imperatives of the enterprise systems with their business needs, the logic of the system may conflict with the logic of business processes (Davenport, 1998). Needless to say, managers have found ERP implementation projects the most difficult systems development projects (Kumar et al., 2003). Thus, upfront and ongoing communication to all employees affected by the new ERP system is a must. Olsen et al. (2005) found that it is necessary to inform organizational employees of how the system can help them do their jobs better. They also found that all retained employees are going to find their jobs changed. People are naturally resistant to change and it is very difficult to implement a system within an organization without some cooperation. Effective communication and ongoing support has also been noted by several researchers (e.g., Motwani et al., 2002; Muscatello et al., 2003; Sarkis &Sundarraj, 2003). Software Selection and Support ERP systems are software packages generically designed, keeping the industry-wide needs and best practices in mind (Kumar et al., 2003). One of the major challenges an adopting organization faces is that software does not fit all their requirements (Davenport, 1998). A systematic "needs assessment" therefore must be commissioned to determine the specific ERP modules, subsystems, and hardware that are required to achieve the desired level of systems integration. Where there is a lack of internal knowledge of ERP systems and their operating requirements (either at the corporate or division level), management should solicit the help of knowledgeable outside consultants for the assessment (Chen, 2001; Davenport, 2000; Booker, 1999). Firms that analyze their software "fit" and individual module needs can enhance the likelihood of a successful ERP implementation (Yusuf, Gunasekaran, &Althorpe, 2004). CONCLUSION Enterprise resource planning systems have experienced a phenomenal growth over the past decade. While some firms declared their ERP

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Factors affecting ERP system implementation effectiveness Dimitrios Maditinos Dimitrios Chatzoudes Charalampos Tsairidis Journal of Enterprise Information Management Vol. 25 No. 1, 2012 pp. 60-78 q Emerald Group Publishing Limited 1741-0398 DOI 10.1108/1741039121119 2161

implementation success, many others reported negative results. With these developments, there has been a significant amount of research that seeks to identify the success factors associated with the implementation of ERP systems. Most of these authors, however, have based their research on a small number of case studies. This study, therefore, aimed to understand the critical constructs of ERP implementation using a large scale survey. A cross sectional mail survey of business executives with ERP implementation experience was used to capture the degree of adoption of these concepts. Basic statistical methodology was used on this empirical data to examine the adaptation of the various concepts. Although this analysis was based on simple statistical methods, it provides a clear picture of the beliefs of current ERP implementation. These constructs can also help guide future research for academics and practitioners in the ERP environment. In summary, the results show that the implementation of ERP systems has grown from the belief that it was a simple information system implementation of new software into a realization that it is a strategic and tactical revolution which requires a total commitment from all involved. This is in stark contrast to studies as recent as 5 years ago, which concluded that firms believed that the ERP software would automatically drive the strategic and tactical changes. Firms now realize that business process changes and project management are strongly linked to the success of the ERP implementation. Moreover, they are as important as software and hardware knowledge. Another new finding is that firms now strongly believe that the use of outside consultants to supplement internal staff is an acceptable and desirable practice. This is likely a result of the documented cases of ERP implementation failure where firms failed to take stock of their internal competencies and shortcomings. Taken together, these results suggest that firms are realizing that ERP implementations are a long journey and that results may not be readily apparent until well into the future. This research has provided insight into the current practice of ERP implementations. It has paved a solid foundation on which to build future research in this area. Nevertheless, it is realized that this effort cannot completely explain all of the issues surrounding an ERP implementation. Additional insights may be revealed through longitudinal studies and by building empirical models. ERP system acquisition and implementation generally enhance productivity and working quality, since the system offers standardization and simplication in multiple, complicated operational procedures across the company (Nah et al., 2001). Moreover, information can easily be transferred, shared and exchanged among users who are working at different business divisions (Amoako-Gyampah, 2007; Kemp and Low, 2008). In general, the literature has identied the following potential benets of ERP system implementation (Al-Mashari et al., 2003; Amoako-Gyampah, 2007; Chang, 2004; King, 2005; Scott and Kaindl, 2000; Umble et al., 2003): improved coordination across functional departments; increased efciency in doing business; reduced operating costs (lower inventory control cost, lower production costs, lower marketing costs, lower help desk support costs); facilitation of day-to-day management; rapid access to information for decision making and managerial control; and support of strategic planning (through the planning of available resources).

Conclusions The present study has proposed a conceptual framework that investigates the main factors leading in the effective implementation of an ERP system. To the best of our knowledge, it is the rst empirical evidence that demonstrates the relationship between human inputs, variables that are connected with the ERP implementation process and the nal outcome of this process. The examination of the conceptual framework was made with the use of a newly developed structured questionnaire and the results offer interesting implications to ERP adopting companies. The presentation of the conclusions follows a structured path, so as to enhance their clarity and avoid any possible misinterpretation. 5.1. Consultant support The study empirically shows that the support of external consultants is crucial for the effective implementation of ERP systems. The assistance provided by external consultants is essential, even more important than that provided by top managers. The contribution of the consultants involvement and support in the implementation process has also been veried in the studies of Wang and Chen (2006), Chang (2004) and Finney and Corbett (2007). Since consultant support is a factor with such a signicant inuence on ERP system effective implementation, companies should focus on hiring the right consultant group for the specic business environment. Efforts towards consultant selection should not be viewed as a time wasting procedure, since the experience of consultants in similar business contexts, the commitment towards achieving mutual goals and the shared mentality of the two contactors are of crucial importance for successful implementation. Consultants should not only acquire technical skills, but should also have a broad understanding of the individual business practices and a genuine commitment towards resolving every-day issues considering ERP system implementation. It would be advisable for adopting

companies to make a contractual connection between the fees paid to the consultant team and the improvement in certain areas of business activity. In general, the consultant group should be viewed as a valuable ally in the ERP implementation process: consultants need the support and the acceptance of the company personnel in order to be able to fully integrate their valuable expertise and make a substantial difference in the implementation of ERPs. If system users adopt a negative attitude towards working together with a professional team of consultants, the implementation procedure will surely produce poor results. 5.2 Knowledge transfer The present survey has statistically indicated that knowledge transfer is a signicant factor for ERP system success. On the same vain, the study of Wang et al. (2007) has produced the same results. On the other hand, no signicant relationship was found between communication effectiveness, conict resolution and ERP system effective implementation. Wang and Chen (2006), also found no relationship between communication effectiveness and ERP system success, but established a relationship between conict resolution and ERP system success. Apparently, the incorporation of knowledge concerning technical aspects of ERP systems is more important than effective handling of communication, as well as conict resolution among organizational members of Greek companies. From the above, it is apparent that ERP adopting companies should build the necessary structures in order to facilitate the procedure of knowledge transfer. System users not only need to be taught the newly implemented ERP technology, but they, furthermore, need to learn more about their new organizational responsibilities. Moreover, they should actively try to acquire maximum results from the use of the ERP system, since passive attitude is not a path that leads to successful ERP implementation. In order to do so, the adopting company should, rstly, understand that with the use of an ERP system every employee is being continuously trained. Therefore, companies should provide opportunities for employees to enhance their skills by providing training opportunities on a continuous basis, in order to meet the changing and complex needs of the business environment (Bingi et al., 1999). Moreover, the adopting company should make sure that the knowledge transfer procedure is not short or inconclusive, since the literature recognizes the limited consultation period as a factor that undermines possible positive effects (Nah et al., 2001). Furthermore, since it is difcult for consultants to pass the knowledge to computer illiterate employees, the adopting company should organize computer seminars prior to the implementation of the new ERP system. Finally, the adopting company should appoint its most prominent employees (from all functional business areas) to follow the implementation procedure step by step, so as to be able to play the role of the internal consultant after the withdrawal of the professionals. 5.3 Top management support According to the statistical analysis, the role of top management support seems to be of less important that the one provided by users, since top managers assist only in the resolution of conicts (a factor that has no relationship with ERP system effective implementation), while user support inuences both communication effectiveness and, more importantly, knowledge transfer (a factor tha is related with ERP system effective implementation). These ndings are in line with the corresponding ones in the studies of Wang and Chen (2006) and Wang et al. (2007). On a practical level, the above imply that a company needs to ensure user support in order to be led into a successful ERP implementation. This can be achieved by allowing future users to: report their views on the necessity of the implementation; contribute to the specications of the system; participate in the implementation process; and collect various rewards upon successful use of the implemented ERP system. Without the active participation and the overall acceptance of its users, every ERP system, no matter how expensive and elegant, is destined to produce less positive results that the ones anticipated, or even fail miserably. 5.4 Overall conclusions In general, the present study argues that consultant support and knowledge transfer are the two key factors for ERP system success. The consultants may improve the performance of ERP systems directly, through their experience and technical expertise and indirectly through the effective transfer and sharing of ERP system knowledge among various inter-organizational members. In other words, the transfer of knowledge from the consultants may raise the level of user know-how, then users subsequently should be able to successfully maintain and further modify the ERP system without consultant engagement. Therefore, practical efforts in hiring the right consultants are essential, especially since the consulting fees are quite signicant. Moreover,

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Success and failure factors of adopting SAP in ERP system implementation Vidyaranya B. Gargeya and Cydnee Brady Business Process Management Journal Vol. 11 No. 5, 2005 pp. 501-516 q Emerald Group Publishing Limited 1463-7154 DOI 10.1108/1463715051061 9858

ERP adopting companies should improve their knowledge management capabilities in order to successfully facilitate the transfer of knowledge from consultants. In order to pursue a successful ERP implementation and gain sustainable competitive advantage, companies need to develop their internal knowledge capabilities before implementing an ERP system. The building of these capabilities will ensure that the knowledge offered by consultants is properly disseminated throughout the organization. Organizational practices, culture, and structure should be reinforced to address this necessity (Nonaka and Takeuchi, 1995). Enterprise-wide resource planning Enterprise resource planning systems (ERP) system software packages An effective business strategy centers on an aggressive, efcient use of information technology; for this reason the ERP systems have are highly integrated, complex emerged as the core of successful information management, and the enterprise backbone of the organization (Nash, 2000a, b). A successful systems for businesses, and ERP system will streamline processes within a company and improve its overall effectiveness, while providing a means to externally enhance thousands of businesses are running competitive performance, increase responsiveness to customers, and support strategic initiatives (Sandoe et al., 2001). The benets of ERP them successfully worldwide systems, once the pains of implementation are over, appeal to companies. (Koch, 1996). Even companies There are many factors to be considered in making the decision of whether to implement an SAP system or not. The technical aspect is not such as Hershey, JoAnn stores, the only factor that needs to be considered; unfortunately many companies have not seen this until it was too late. Whirlpool and Samsonite that have The nancial commitment is substantial; therefore, chief executive ofcers and senior executive teams must be deeply involved. Simply put, suffered through classic disasters, ERP is not intended for every business. When considering the decision to invest in an ERP system, a business case must be developed to acknowledge the software packages provide an understanding of ERP, and to formally assess the benets that the company as an individual entity apart from its competitors are able to handle the job. The can expect to achieve. The analysis must consider not only the obvious cost/benet analysis, but also the non-nancial factors. Non-nancial systems are capable of functioning benets include information visibility and exibility (Sandoe et al., 2001). A more complete listing of tangible and intangible benets is as advertised; however, companies provided in Table I. ERP implementation costs are incurred in three areas: software, hardware, and personnel. The personnel (or the human run into costly and sometimes fatal resources) cost is by far the largest and most expensive, but at the same time has been the area given the least amount of consideration. The difculties with the implementation software and hardware costs are often easily quantiable; however, the human cost is not (Davenport, 2000). and subsequent maintenance of Nah et al. (2001), based on a study of earlier papers (most of which were normative/prescriptive in nature), identied 11 factors that were these packages. critical to ERP implementation success. The 11 factors noted by them are (1) ERP teamwork and composition; Koch, C. (1996), Flipping the (2) change management program and culture; switch, CIO, Vol. 9 No. 17. (3) top management support; (4) business plan and vision; (5) business process re-engineering and minimum customization; (6) effective communication; (7) project management; (8) software development, testing, and troubleshooting; (9) monitoring and evaluation of performance; (10) project champion; and (11) appropriate business and information technology legacy systems.

Umble and Umble (2001) expressed their views on 14 success factors (denition of business goals, establishment an executive management

planning committee, thinking of implementation as research and development, use of cross-functional teams, stocking implementation teams with the best and smartest workers, alignment of everyones interest by giving mid-level management hands-on responsibility, constant communication with teams and end users, excellent project management, choice of partners, extensive education and training, management with data, measurement of the right things, establishment of aggressive achievable schedules, and no fear for change) and nine failure factors (top management failure, poor project management, lack of education and training, people do not want new system to succeed, unrealistic expectations about implementation, inaccurate data, attempt to automate existing redundant or non-value-added processes, mismatch between the business and ERP system selected, and technical difculties can lead to implementation) in ERP implementation. It appears that the work of Umble and Umble (2001), though normative/prescriptive for failure and success of ERP implementations, is not based on a systematic analysis of ERP implementations in different organizations. Conclusions Six factors were identied for success and failure of SAP implementations in this paper. It has been noted that the primary factors (working with SAP functionality and maintained scope, and project team/management support/consultants) for successful implementation of SAP are different from the primary factors (inadequate internal readiness and training, and inappropriate planning and budgeting) that contribute to failure of SAP implementation. Hence, it can be noted that the factors that contribute to the success of SAP implementation are not necessarily the same as the factors that contribute to failure. This points out that management should be focusing on one set of factors of avoid failure and another set of factors to ensure success. The main regret in ERP implementations seems to be that there was not enough time and attention devoted to the internal readiness factor and their changes during the implementation process (Davenport, 2000). This is true for all companies that have had implemented an ERP system, whether it is SAP or any other vendor. Management support and commitment is a primary strategy necessary to create the environment necessary for a successful introduction of the changes brought about by an ERP system (Aladwani, 2001). As noted, worker resistance and readiness for change were the primary reasons for implementation failure. It is absolutely imperative for companies to be responsive to their internal customers while they are creating systems that will help them deal more efciently with external customers. Implementing an ERP system is one of the most challenging projects any company, regardless of size, can undertake. Success does not come easily, and those who implement only for an immediate return on investment are in for a rude and expensive awakening. It is clear that most companies implement ERP systems just to stay competitive. The process has to be part of the business objective, and it has to be clear that a successful go-live is not the brass ring. This fateful date, set early on in project planning, cannot be viewed as the end goal or even the end of the project, but rather only a milestone along road to the true goal realizing the benets (Davenport, 2000). The current research does have its limitations. The data analyzed is from secondary sources published in the press (in the form of books and articles). Secondary reporting (as opposed to self-reporting) could increase objectivity; however, the weakness is that not all the factors might have been reported. The articles/books studied might have reported status of the ERP system (in the form of SAP) implementation at a particular point in time. The organizations that may not have successfully implemented SAP may have been successful at a later point in time with appropriate modications in their respective implementation strategies. Hence, it is necessary that longitudinal studies (over a longer period of time) at each of the organizations should be undertaken. While this research project was limited in scope, it became apparent through analyzing the literature that factors leading to success or failure are complex and do not occur alone. They are actually intertwined with one another, and at many times, are hard to separate or isolate. Rather than list the ways to approach a project, and individualize each point, it would be more feasible for a company to understand that it takes the whole system to complete an implementation through diligent research. While one or two criteria were recognized more frequently in this paper, a complete and thorough examination must be indelibly considered prior to undertaking the task of implementing an ERP system. Many benets have been mentioned by researchers and practitioners. ERP systems can potentially allow a company to manage its business better with potential benets of improved process ow, better data analysis, higher quality data for decision making, reduced inventories, improved coordination throughout the supply chain, and better customer service (Gattiker and Goodhue, 2005). ERP is arguably the single biggest information technology (IT) investment an organization can make (Teltumbde, 2000). Mabert et al. (2001) put the total implementation cost at tens of millions of dollars for a medium-sized company and US$300-500 million for large international corporations. In spite of the many benets, the adoption of ERP has not been without problem. A Standish Group report on ERP implementation projects reveals that these projects were, on average, 178 percent over budget, took 2.5 times as long as intended and delivered only 30 percent of the promised benet (Zhang et al., 2005). Given the high-expenses and low-success rate, causes of these problems or failures need to be

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Successful enterprise resource planning implementation: taxonomy of critical factors Shahin Dezdar and Ainin Sulaiman Industrial Management & Data

An enterprise resource planning (ERP) system is typically dened as a packaged business software system that facilitates a corporation to manage the efcient and effective use of resources (materials, human resources, nance, etc.) by providing a total integrated solution for the

Systems Vol. 109 No. 8, 2009 pp. 1037-1052 q Emerald Group Publishing Limited 0263-5577 DOI 10.1108/0263557091099 1283

organizations informationprocessing requests, through a process-oriented view consistent across the company (Nah et al., 2001). Nah, F.H., Lau, L.S. and Kuang, J. (2001), Critical factors for successful implementation of enterprise systems, Business Process Management Journal, Vol. 3 No. 7, pp. 285-96.

understood and solutions leading to success need to be found (Calisir and Calisir, 2004).

By analyzing all the CFSs mentioned in the literature during the last ten years (1999-2008), a taxonomy of CSFs for ERP implementation is formulated. Kerimoglu et al. (2008) presented a model of three common categorization of an ERP project, consisted of technology, organization, and user. This study included these categorisation as well as two other categories, i.e. External Expertise and ERP Project, Further analysis was made and the categories were found to be representing two different environments, i.e. ERP adopting organization and ERP system. We then re-categorised the ve different categories to enhance the model. We then classied Organization, ERP Project, and ERP User under the ERP adopting organization environment and ERP Technology, and External Expertise as ERP system (Figure 1). Also, since we were to classify the critical factors for success of ERP implementation projects, we linked all these 17 CSFs to ERP project success. Different measures have been employed by prior researchers for dening ERP project success. We adopted the model of Markus et al. (2000), which was recently used by Kamhawi (2007), for this taxonomy. Markus et al. (2000) distinguished between two types or dimensions of success for ERP systems implementation: project success metrics (in terms of meeting the project due dates, budgets, and scope and performance expected) and business value metrics (in terms of business improvements such as inventory reduction, cycle times reduction, time to market reduction, etc.). Earlier taxonomies have provided dissimilar classications of CSFs. Holland and Light (1999) categorized ERP implementation CSFs into strategic and tactical. Esteves and Pastor (2000) classied CSFs into organizational and technological. Some of prior researchers categorized CSFs based on the ERP project life cycle (Al-Mashari et al., 2003; Somers and Nelson, 2004). Therefore, it was needed to consolidate previous taxonomies and present a holistic and comprehensive picture of CSFs for the ERP implementation projects. This study categorized the ERP implementation CSFs into ve main factors of an ERP implementation projects, i.e. ERP software, ERP expertise, ERP user, ERP project, and ERP adopting organization Because this kind of classication gives a chance to stakeholders (chief executive ofcer, chief information ofcer, vendor, etc.) of ERP implementation project to highlight the area in which problem may occur and evaluate ERP implementation success from ve collective points of view.

Conclusion Identifying factors leading to success or failure of ERP systems is of increasing importance (Haines and Goodhue, 2003). From a practical point of view, understanding the determinants of ERP implementation will be of benet to both adopting companies and software vendors. Decision makers will be able to formulate better strategies to enhance ERP implementation, while vendors will build ERP products that satisfy their customers, and, therefore, they can make more prot. In this study, we reviewed the recent works, investigating CSFs in the ERP implementation projects. The different studies were analyzed from a CSF point of view to highlight critical factors and their importance for ERP projects success. Using comprehensive data collection, article reading, content analysis of constructs, frequency analysis of CSFs, and comparative analysis with prior researches, we classied all CSFs mentioned in literature in 17 broad categories and nally developed taxonomy of CSFs for ERP implementation. Among the possible uses for the proposed taxonomy are the following. Researchers in the literature review stage can use the taxonomy to nd out other associated concepts for each CSF. For example, a researcher may want to examine prior studies on the concept Data analysis and conversion, but this particular researcher may not know that very related concepts have appeared under the titles of Data migration, Data acquisition, Data t, Data management, and so on. In addition, practitioners may use the taxonomy to recognize the areas that may have to be considered in order to successfully implement the ERP system. Furthermore, journal editors and reviewers may use the taxonomy to make sure that submitting authors have been comprehensive in their approach. Finally, case study research on the taxonomy itself could be conducted by researchers in different countries to obtain a deep understanding of each of the categories and their characteristics within changeable organizational contexts. There are some critical ndings from the in-depth study of prior researches. It is important to point out that ERP systems are different from other IT systems (Davenport, 2000) because ERP implementation includes technological, operational, managerial, strategic, and organizational related components (Markus and Tanis, 2000). ERP systems differ from traditional systems in many ways, such as scale, scope, complexity, organizational changes, project costs, and need for business process re-engineering (Somers and Nelson, 2001). Therefore, an ERP implementation project is not merely a computer project. It is strategic and must be approached as such. It should be noted that ERP systems are integrated applications with an impact on the entire organization. The literature in ERP implementation has a heavy emphasis on companies in the developed countries from Europe and North America. Little work has been done on companies in developing countries. Research shows that ERP technology faces additional challenges and increasing dependencies in developing countries (Al-Mashari et al., 2006). Al-Mashari and Zairi (2000) believe that many problems that have led to

failure of IT adoption have occurred when trying to adopt Western-developed IT applications in organizations in developing regions. It seems that some CSFs have a different priority in different countries. While in our frequency analysis (Table II), organizational culture ranked in the middle, it might be a very high critical factor when adopting an ERP in a developing country. In future, other researchers could consider this important point to develop a taxonomy based on the CSFs relating to ERP projects in developing countries. Furthermore, the aforementioned subject in the previous paragraph is signicant about small and medium-sized enterprises (SMEs). According to Pairat and Jungthirapanich (2005), the ERP vendors are now trying to extend their market to companies in developing countries, SMEs. Dawson and Owens (2008) believe that, those conducting research on SMEs might compile a different set of CSFs to those conducting research on large originations. Therefore, it will also be valuable to prepare a taxonomy based on the CSFs relating to ERP projects in SMEs. The taxonomy generated in this article is just the beginning. A next step for researchers in the eld might be to collect supplementary data to expand this taxonomy. This study was conducted considering some limitations. Future research can be carried out based on expanding the time period constraint from the last ten years to last 20 years. In such case, some prior form of ERP, like MRPII could be included in the search items. In addition, further databases, journals and conference proceedings could be utilized to enlarge the number of articles in the data-collection phase. Finally, research on the taxonomy itself could be conducted by other researchers to obtain a deep understanding of each of the categories and their characteristics. An empirical study could be carried out in the future in order to validate the 17 broad categories of the CSFs, considering that some of the CSFs in a category might be related with other categories.