Erp Implementation

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IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 56, NO. 4, NOVEMBER 2009

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An Investigation of Customization in ERP System Implementations Marcus A. Rothenberger and Mark Srite
Abstract—This research investigates why certain enterprise resource planning (ERP) system adopters have pursued high levels of software customization during implementation despite the generally accepted best-practice heuristic of limiting customization. Qualitative data from ERP adoption projects and consultants working with ERP implementations have been collected. This study empirically identifies customization drivers and explains their relationship to customization. The results suggest that high customization may occur because of: unnecessary redevelopment of functionality that is available in the ERP system standard, resistance to change based on cultural issues and low project acceptance, insufficient weight given to the implementation team’s recommendations, and the implementation team’s lack of opposition to customization requests. The results of this study also explain how these problems occur and why they lead to overcustomization. Index Terms—Case study, enterprise resource planning (ERP), qualitative study, success factors, system customization.

I. INTRODUCTION AND MOTIVATION

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NTERPRISE resource planning (ERP) implementations pose major challenges to organizations [1], as many of them fail in their early stages or substantially exceed the projected cost [2], [3]. A number of studies have investigated ERP implementation success factors [4]–[15]. Though results from these studies have been diverse, recurring themes have emerged, such as management support, project team performance, the implementation process, education and training, as well as change management and minimal ERP customization. This study investigates why many organizations fail to achieve minimal customization. In all ERP installations, some degree of system customization is required. Even though, packaged applications are designed to work in different organizations, or even in different industries, they often do not provide all the functionality needed in a specific business [16]. Nevertheless, customizations that involve extensive additions to the ERP system or modifications of ERP system code may compromise a project’s success, because too much customization increases costs and limits maintainability. In particular, upgrading highly customized projects is very labor-intensive because customizations must be re-

Manuscript received February 1, 2007; revised February 15, 2008, September 16, 2008, February 6, 2009, and May 20, 2009. Current version published October 21, 2009. Review of this manuscript was arranged by Department Editor R. Sabherwal. M. A. Rothenberger is with the Department of Management Information Systems, College of Business, University of Nevada, Las Vegas, Las Vegas, NV 89154-6034 USA (e-mail: marcus.rothenberger@unlv.edu). M. Srite is with the Management Information Systems Area, Sheldon B. Lubar School of Business, University of Wisconsin-Milwaukee, Milwaukee, WI 53201 USA (e-mail: msrite@uwm.edu). Digital Object Identifier 10.1109/TEM.2009.2028319

aligned to the upgraded system or even rewritten. Several prior studies [7], [8], [10], [13]–[15] stress the impact that the decision to customize has on ERP adoption success, as a successful adoption must align software and business processes to match one another. Considering the existing processes and keeping customization to a minimum are both important [14]. A comparative case study of two ERP implementations [10] showed that a lack of acceptance of ERP standard processes contributed to the failure of the project. Another study, which analyzed the responses of 86 organizations [15] confirmed the importance of minimal customization for ERP implementation success. It is crucial that the right decisions are made to smoothly integrate the system into the organization [17]. These decisions...
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