ERP implementation project is not simply running a software application out of a box as itrequires a highly complex implementation process. It has its own unique methodology ofimplementation and follow up. It requires time and other valuable resources before, during and postimplementation phases.
The complexity of ERP implementation is also depending on the type andsize of the organization. The technique and approach of ERP implementation for small organizationwith few functional departments is different from a big and multinational company with variousdepartments and operational units. The methodology applied for a private organization may bedifferent from government/public organizations.The various factors that have been identified to contribute to the success or failure of an ERPimplementation in different type and size of organizations are:1. Strategic or factors at the planning phase factors2. Tactical or implementation phase factors and3. Operational factorsStrategic Factors – are the most important factors right at the outset of the project.
These factorsspecify the need for a project mission, for top management support and for a project scheduleoutlining individual actions steps for project implementation.The following are the strategic factors:Project management:Perhaps the single most decisive element of ERP success or failure is the knowledge, skills, abilities,and experience of the project manager. Project manager is the one who is coordinating, schedulingand monitoring the predefined activities to ensure that the stated objectives of the projects areachieved. An ERP project manager must understand both the business and the technology. An ERPproject manager must understand the impact of the ERP implementation on the business, and workwith business managers to ensure a smooth transition from the "as is" to the "to be" businessoperating environment. For this a project manager is one who is flexible, disciplined, quick learner, agood decision maker, experienced in ERP implementation, business experience, political clout, goodcommunication and can motivate project participants.
Top Management Support:In most of the ERP implementations, the full support and cooperation of top management is verycritical. It is the commitment of this group that can create a favourable environment for theimplementation of ERP systems and attaining of desired results. Mainly the top management’s closefollow up, participation and assignment of all the required resources is very crucial in the success ofERP project. Top management needs to publicly and explicitly identify the project as a top priority.
Project champion:The other CSFs in ERP implementation is the assignment of an individual as a project champion withdeep knowledge and sound experience in the operation of the organization, leadership andeffectively communicating the benefits of ERP with end users as well as the project team members.Clear goals and objectives:Due to the complex and highly integrated nature of the application, most researchers suggestoutlining and communication of clear goals and objectives as a key factor for the success of an ERPproject. In the first place, putting clear goals and objectives that can guide the ongoing ERPimplementation is very important. There must be clear understanding among stakeholders why ERPis implemented, the goals, objectives, expectations, and deliverables.Business plan and Vision:Before the actual implementation of an ERP Project, it is important to have a clear vision, goal andbusiness plan. Successful ERP implementation requires a complete project plan/schedule, closemonitoring and controlling of 24 time and costs. With this, a clear vision and goal of the project willhelp the project team to focus on key issues to be targeted and define the success and failurecriteria.Tactical Factors – are those key issues that must be considered during the implementation phase ofthe project including continues top management support, decision making process, business processreengineering, inter agency communication, team composition, change management, vendorsupport and user involvement in the project and their motivation.
Team Composition:An ERP implementation team is comprised of technical and functional IT consultants, topmanagement, business experts, ERP vendor, end users, management consultants and hardwarevendors. The size and composition of this team in an ERP implementation project is a critical factorfor the success of the project. Active participation and commitment of team members is animportant factor to the project success. Good coordination and communication between projectimplementation partners are essential. The coordination of ERP project participants is a criticalfactor to achieve process efficiency.User involvement and motivation:User involvement refers to the psychological readiness of the user to be involved in the initialdefinition of the ERP system needs and participation at the implementation phases.
It helps todefine system functional and design requirements which guarantee the delivery of the system thatwill meet user needs and expectations. User participating starting need assessment through thetransition to production will help them better understand the project's consequences and contributeto the success of the project.Business Process Reengineering (BPR):Regardless of size or type of system, no universal ERP system that is suitable for all types oforganizations. During ERP implementation an organization always challenged whether it has tomodify or replace some of its business processes. BPR forces the company to redefine and designwork flows to fit the new ERP system.
Success in ERP implementation can be obtained by modifyingsome of the existing business processes and adopting the new according to the logic proposed bythe system so that the application customization can be minimized.