Enterprise Resource Planning (Erp) System Implementation Life Cycle

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Priority of Key Success Factors (KSFS) on
Enterprise Resource Planning (ERP)
System Implementation Life Cycle

Zainal Arifin Hasibuan1
and Gede Rasben Dantes
2

1
Faculty of Computer Science, University of Indonesia, Depok, Jawa Barat, Indonesia
2
Department of Information Management, Ganesha University, Singaraja, Bali, Indonesia ______________________________________________________________________________________________________________

Abstract

This study presents the priority of key success factors (KSFs) on Enterprise Resource Planning (ERP) system implementation life cycle. There are twenty KSFs considered in this study. They were chosen from literature review. The KSFs are classified into five stages of ERP implementation life cycle; namely: project preparation, technology selection, project formulation, implementation/development and deployment. To address the study objectives, a survey questionnaire was considered the most appropriate research method. It was sent to 74 companies that have been implementing ERP system for at least one year. The respondents are staff at management level, IT staff and users involved in the development and use of the ERP system. The survey received 248 responses from 740 quesitionnaires that were sent to the companies. To find the priority of KSFs on ERP implementation life cycle, a quantitative analysis is applied to identify the weighting of KSFs toward ERP implementation success. The success of ERP implementation can be measured through five indicators; namely: system quality, information quality, service quality, tactical impact and strategical impact. Based on the weighting of KSFs on each stage of ERP implementation life cycle, it is found that the communication is most critical KSF on project preparation stage (ρ = 0.664). While the strong ERP product (package selection) is most critical KSF on technology selection stage (ρ = 0.554). The change management is most critical KSF on project formulation stage (ρ = 0.406), and on implementation/development stage, user training is the most critical KSF (ρ = 0.422). This study is expected to improve knowledge in ERP implementation, especially the role of KSF on each stage of ERP implementation life cycle.

Keywords: Priority of KSFs, ERP Implementation Success, ERP Implementation Life Cycle, Key Success Factors (KSFs)
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Introduction

Enterprise Resource Planning (ERP)
system is an integrated information system
that is used to support business processes
and resource management within an
organization. These systems integrate
between one business unit with other
business units. With the implementation of
this system in an organization to support
the company's operations, it is expected to
provide optimum benefit for the company.
This is especially needed by the various
industrial sectors in this era of
globalization. So, the company can compete
with competitors or even create a
competitive advantage. In addition, ERP
selection is also done with various strategic
reasons both tangible and intangible.

ERP software has grown rapidly the last 10
years. According to AMR Research, ERP
system sales increased dramatically in
2004 reached 23.6 billion dollars. Market
Journal of Enterprise Resource Planning Studies 2

growth rate remained stable in 2005, and
the end of 2009 the ERP software sales
reached 24.5 billion dollars (Hestermann,
Anderson & Pang, 2009). One of the largest
ERP companies is SAP AG (a German
Company). The company controls about
40% of the market and it is the third largest
software company in the world. Based on
data from SAP AG, about 80% of SAP’s sales
occur in Europe and the United States,
while the remaining 20% spread in Asia.

The main reason of the investment made
by...
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