Critical Success Factors in Erp System Implementation

...

ERP Strategy. ERP implementation strategy is the process of determining which ERP package should be purchased for the organization and the customization and implementation time necessary to install it (Denic, Nebojsa, Vujovic, & Spasic, 2016). When choosing an ERP system, a system requiring minimal customization is considered part of the ERP strategy critical success factor (Denic, Nebojsa, Vujovic, & Spasic, 2016). In addition, choosing an ERP package that best fits the organizational processes with little modification is also part of this critical success factor (Denic, Nebojsa, Vujovic, & Spasic, 2016). ERP systems come with a pre-defined

model that often do not work for all customers (Denic, Nebojsa, Vujovic, & Spasic, 2016). Because of this, customization is an option but excessive customization often creates a complex system that is difficult to support and upgrade (Denic, Nebojsa, Vujovic, & Spasic, 2016). Therefore, organizations must weigh the options and decide which route they will take when implementing their ERP system.

Business Process Reengineering (BPR). Business Process Reengineering is considered another important critical success factor of ERP system implementation. Business Process Reengineering is put together at the beginning of the project phase and is related to the fit between the ERP software and the business processes of the organization (Zouine, 2015). Because ERP implementations focus on software configuration, organization often need to change their business processes in order to fit software design (Zouine, 2015). Heavy modification of the software often leads to reduced functionality and the possibility of errors, so it is important that organizations align their business processes with the software whenever possible in order to simplify the process (Zouine, 2015).

Project team and change management. A competent project team is crucial to the success of ERP system implementation. In order to be good, a project team must consist of a good team composition, an appropriate and diverse skill set, and an effective change management system (Esteves, 2014). In order to create a good team composition, organizations should choose individual for the team that have experience. If the organization lacks individuals with experience, organizations should supplement the teams with consultants who can work with the individuals in order to complete the project (Esteves, 2014). The individuals selected for the project teams should be experts in the company’s processes and knowledgeable about the best

practices in the industry. Choosing individuals such as these will ensure that they project team has a diverse skill set. In addition, there should be a strong emphasis on change management. Because business processes are reengineered, employees often fear for their jobs or attempt to reject the changes being made (Esteves, 2014). To combat this, users should be involved in the process from the beginning so that they can take part in project selection (Esteves, 2014). By doing this, and maintaining a formal communication throughout the ERP system implementation, organizations can gain employee buy-in and the transition a little smoother (Esteves, 2014).

Retention of experienced personnel. The greatest challenge noted by organizations was the critical success factor involving the retention of experienced personnel. Finding and retaining personnel with the appropriate ERP skills is often difficult for organizations due to the high demand for individuals with an understanding of ERP systems (Amoroso, 2015). In addition to finding and recruiting experienced personnel, recruiting and retaining qualified ERP consultants is also critical to the success of the implementation (Amoroso, 2015). Currently, there are more employees with ERP experience that there were five years ago, but ERP skills are still considered an important vale add so retaining experienced personnel must be taken into consideration (Amoroso, 2015). Locating and retaining the right people is often a major challenge during an ERP system implementation because the projects require multiple skill sets including technical, functional, and interpersonal skills (Amoroso, 2015).

Consultant and vendor support. Because organizations routinely seek assistance from external experts, consultant and vendor support is an important critical success factor for ERP system implementation. Often, the lack of experience in organizations creates a need for

consultant and vendor support because ERP system implementation requires a broad range of skills in additional to technical implementation knowledge (Hong & Kim, 2002). A close working relationship between consultants and the organizational project team can lead to valuable knowledge transfer for both parties (Hong & Kim, 2002). Consultants can provide valuable training that will develop the skills of the organizational employees (Hong & Kim, 2002).

Monitoring and performance evaluation. Because of the complexity of ERP systems and the built-in checks and balances of the systems, a critical success factor for ERP system implementation involves process monitoring and performance evaluation (Bingi, Godla, & Sharma, 1999). By appointing someone at the executive level with extensive knowledge of the organizations processes and procedures, an organization can ensure the monitoring of the ERP system implementation progress (Hong & Kim, 2002). Project achievements should be measured against the project goals which should be both measurable and achievable (Hong & Kim, 2002). Through continuous evaluation, project achievement can be monitored and progress can be proven which will keep the organization motivated to complete the project.

Troubleshooting. The anticipation of problems is a critical success factor because problems can occur during testing that require troubleshooting. By quickly responding to problems with problem solving techniques and perseverance and vigorously testing the software, organizations can eliminate potential problems (Hong & Kim, 2002).

Organizational Culture. Organizational culture has been identified as a critical success factor because cultures with shared values and common goals emphasize quality and often accept new technology (Laudon & Laudon, 1998). Organizations should work to maintain a corporate

identity that is open to change (Laudon & Laudon, 1998). Because it is a strategic solution, ERP systems change the way individuals in an organization work. By having an innovative and open organizational culture, an organization can facilitate user participation throughout the ERP system implementation process (Laudon & Laudon, 1998).

Effective Communication. Effective