Critical Success Factors in ERP Implementation

Abstract

ERP systems link together an organization’s strategy, structure, and business processes with the IT system. The different way of handling the process of ERP implementation brings about many success and failure stories. By doing research on 1) what are the critical success factors in the implementation of ERP 2) why are these factors critical 3) what is the criticality degree of each factor 4) how important are these factors for customers, consultants, and vendors, the report aims to to identify the critical success factors in ERP implementation and understand the criticality degree of each factor from the perspectives of three parties (companies, consultants & vendors). The research is proceeded with combined methods of qualitative and quantitative. The qualitative method for the interviews was chosen in order to get the information in depth. A semi-structured interview helps to provide some basic questions as guideline. Furthermore, the quantitative approach contributes to manipulating the data for a more comprehensive analysis of empirical findings. This report states 11 CSFs (Critical Success Factors) from three points of view: strategic, tactical, and cultural. They are: Top management support and ERP strategy, Business Process Reengineering, Project team & change management, Retain the experienced employee, Consultant and vendor support, Monitoring and evaluation of performance, Problems anticipation (troubleshooting, bugs, etc.), Organizational culture, Effective communication, and Cultural diversity. By testing the perceived CSFs in six respondents (VSM Group, Scania, Sogeti, SYSteam, Oracle, and SAP), this report puts the 11 factors into three overall ranks (most critical, medium critical, and less critical), gains 3 other new critical factors (testing, business model, and client’s resources), and clarifies the diverse opinions about CSFs from customers/companies, consultants, and vendors. The most critical factors are Top management support, BPR, Project team & change management, and Effective communication. The medium critical factors go to ERP strategy, Consultant and vendor support, and Organizational culture. And the remaining 4 factors belong to less critical category. For the differences, their agreement comes into the 4 most critical factors. In monitoring and evaluation of performance they agree on its less criticality. All customers, consultants and vendors have quite different opinions about the remaining 6 factors. Reviewing the research questions, this report has fulfilled the main objectives and purpose. With better understanding of the comprehensive identification of CSFs and criticality rank of each factor, management will be able to judge and allocate essential resources that are required to bring ERP implementation into success.

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