Critical Factors for Successful Erp Implementation

Topics: Enterprise resource planning, Management, Case study Pages: 38 (9856 words) Published: May 7, 2007
Critical factors for successful ERP implementation:
Exploratory findings from four case studies
Jaideep Motwani a,*, Ram Subramanian a, Pradeep Gopalakrishna b a Seidman School of Business, Grand Valley State University, Department of Management, 401 West Fulton, Grand Rapids, MI 49504, USA
b Department of Marketing and International Business, Lubin School of Business, Pace University, New York, NY 10038, USA Received 29 March 2004; received in revised form 14 December 2004; accepted 13 February 2005 Available online 21 July 2005

Abstract
As more and more organizations move from functional to process-based IT infrastructure, ERP systems are becoming one of today's most widespread IT solutions. However, not all firms have been successful in their ERP implementations. Using a case study methodology grounded in business process change theory, this research tries to understand the factors that lead to the success or failure of ERP projects. The results from our comparative case study of 4 firms that implemented an ERP system suggest that a cautious, evolutionary, bureaucratic implementation process backed with careful change management, network relationships, and cultural readiness have a positive impact on several ERP implementations. Understanding such effects will enable managers to be more proactive and better prepared for ERP implementation. Managerial implications of the findings and future research directions are discussed.

# 2005 Elsevier B.V. All rights reserved.
Keywords: Case studies; Critical factors; ERP; Implementation 1. Introduction
The myriad challenges faced today by global
businesses are expected to grow in intensity and
complexity as we go further into this century. Expanded
global competition has become the norm rather than
the exception, with an unprecedented number and
variety of products available to satisfy consumer needs
and desires. In particular,many firms have implemented
company-wide systems called Enterprise Resource
Planning (ERP) systems, which are designed to
integrate and optimize various business processes such
as order entry and production planning across the entire
firm [1]. According to Davenport [2], the business
world's embrace of enterprise systems may in fact be
the most important development in the corporate use of
information technology in the 1990s.
When used appropriately, ERP software integrates
information used by the accounting, manufacturing,
distribution, and human resources departments into a
www.elsevier.com/locate/compind
Computers in Industry 56 (2005) 529–544
* Corresponding author. Tel.: +1 616 331 7467.
E-mail addresses: motwanij@gvsu.edu (J. Motwani),
subramar@gvsu.edu (R. Subramanian).
0166-3615/$ – see front matter # 2005 Elsevier B.V. All rights reserved. doi:10.1016/j.compind.2005.02.005
seamless computing system. A successful ERP can be
the backbone of business intelligence for an organization,
giving management a unified view of its
processes [3]. Unfortunately, ERPs have a reputation
for costing a lot of money and providing meager
results, because the people who are expected to use the
application do not know what it is or how it works.
When ERP software fails, it is usually because the
company did not dedicate enough time or money to
training and managing culture-change issues. ‘‘Faulty
technology is often blamed, but eight out of nine times,
ERP problems are performance related,'' says Pat
Begley, senior vice president of educational services at
SAP, an ERP software company in Newtown Square,
Pennsylvania [4].
Given the large financial commitment that an ERP
project requires and the potential benefits it can offer if
successfully implemented, it is important to understand
what is needed to ensure a successful ERP
implementation. There are two major objectives of
this study. First, using a methodology grounded in
business process change theory, this research reports
on a comparative case study of 4 U.S....

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