An Evaluation of Enterprise Resource Planning

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Int J Adv Manuf Technol (2008) 39:168–181 DOI 10.1007/s00170-007-1189-3


Evaluating the performance of an ERP system based on the knowledge of ERP implementation objectives Chun-Chin Wei

Received: 4 September 2006 / Accepted: 25 July 2007 / Published online: 9 September 2007 # Springer-Verlag London Limited 2007

Abstract Success is often defined as a favorable or satisfactory result or outcome. Since the objectives of an Enterprise Resource Planning (ERP) implementation project reveal exactly the states of an ERP system, which managers wish to realize, the knowledge of these objectives can indicate how outcomes of an ERP system execution must be measured in the ERP success analysis. This paper proposes a comprehensive framework for assessing the performance of an adopted ERP system. Based on the knowledge of ERP implementation objectives, the framework can systematically identify the appropriate ERP performance indicators, construct the performance indicator structure, and set up consistent evaluation standards for facilitating the complex ERP performance evaluation process. A real-world example demonstrates the feasibility of the proposed framework. Keywords Enterprise Resource Planning system . Performance assessment . Information system . Decision-making

business processes integration to automate the flow of material, information, and financial resources among all functions within an organization using a common database [1]. A comprehensive ERP implementation project involves selecting an ERP software system and a cooperative vendor, managing business processes change (BPC), implementing the system, and examining the practicality of the adopted ERP system [2]. Many companies devote their attention to selecting and implementing an ERP system, but they ignore evaluating the effectiveness of the adopted ERP system. Unfortunately, information managers are often swamped by the diverse requirements of users, instead of evaluating the advantages and drawbacks of the ERP system and further improving its performance. However, given the considerable financial and labor investment and potential risks and benefits, the importance of a pertinent ERP system performance evaluation cannot be overemphasized. The key reasons why a company should assess the performance of their ERP system are presented below. 1. ERP systems are more complicated than any traditional information system (IS). Installing an ERP system requires large investments of money, time, and energy. 2. All business processes of an organization are involved in ERP systems. The adopted ERP system will influence all business operations, even strategies, in the future. 3. ERP systems are built on generic business rules and procedures. Implementing an ERP system requires customizing and tailoring the work processes based on the business practices of the company. Many current business processes may be reengineered and changed. 4. A successful ERP system cannot only meet the requirements of current business functions, but also needs to satisfy the future requirements. Continuous upgrade and maintenance are very important.

1 Introduction Due to intense market competition and the progress of information technology (IT), many companies have implemented Enterprise Resource Planning (ERP) systems to enhance their competitiveness. An ERP system is a complex enterprise information system (EIS) based on the C.-C. Wei (*) Department of Industrial Engineering and Management, Ching Yun University, Chung Li 320 Taiwan, Republic of China e-mail:

Int J Adv Manuf Technol (2008) 39:168–181


Additionally, after implementation of the ERP system, managers need to ensure that the adopted system supports the competitive environment and fit the essential system characteristics. Furthermore, managers would also like to understand which parts of their ERP system need improvement and to determine the direction for the system to take....
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