Determining the ERP package‐selecting criteria

Abstract

Purpose To determine what criteria are used in enterprise resource planning (ERP) selection process and what criteria are the most important for firms. Design/methodology/approach Through an extensive literature review, 15 selection criteria for the ERP selection process were identified and two were added after initial interviews. A questionnaire including these criteria was formed to secure data from companies. A single informant method was used for each company. To measure the importance of various critical factors a five‐point Likert scale was used in the questionnaire. Findings Fit with parent/allied organisation systems is identified as the most important selection criterion. Cross‐module integration, compatibility between other systems, and references of the vendor are identified important factors respectively. Statistically significant differences were also determined between companies using MRP/MRPII versus those using own or no program for “better fit with organisational structure” and “fit with parent/allied organisational systems” criteria. Research limitations/implications The effect of each selection criterion on ERP implementations failure rates is still to be investigated. Practical implications Useful information about selection criteria on ERP systems for both vendors and firms planning to use these systems. Originality/value Two new selection criteria were proposed for the ERP system selection process and some important differences between the criteria used by firms from developed countries and developing countries are determined.

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