logo

Critical Success Factors for Successful Implementation of Enterprise Resource Planning (ERP)

4 Pages1707 Words246 Views
   

Added on  2019-10-09

About This Document

This memo discusses the critical success factors (CSFs) for successful implementation of Enterprise Resource Planning (ERP) and how they apply during implementation of an ERP. The CSFs include clear goals and objectives, top management support, project champion, user education and training, selection of an appropriate ERP solution, suitability of software and hardware, intradepartmental communication, and change management. The memo also provides a brief on how to apply these CSFs to increase the likelihood of success in the implementation of ERP.

Critical Success Factors for Successful Implementation of Enterprise Resource Planning (ERP)

   Added on 2019-10-09

ShareRelated Documents
Enterprise Resource Planning (ERP) is set of software that allows planning and implementation of all the resources of an enterprise such that the smallest and the largest activities are in alignment with the goals of the organization. As per Ragowsky & Somers (2002), a properly selected and implemented ERP system can provide significant business advantages including reduction in inventory and raw material costs. Also, lead time, production time and productions costs can be reduced. We note that ERP implementation is a costly and time-consuming endeavor (Sumner, 2008). Ragowsky & Somers (2002) also claim that despite best intentions, ERP implementations often fail. The reasons for these include poor planning or poor management, change in business goals during the project and lack of business management support (Umble, Haft, & Umble, 2003). In this memo, we will detail criteria for success and howthey apply during implementation of an ERP.As per Somers & Nelson (2001), for analyzing and ensuring the success of an ERP implementation, we study Critical Success Factor (CSF). The CSFs are as follows:1.Clear Goals and Objectives: Something that the other top CSFs build upon is the clear goals and objectives. This is because without a clear objective, the enterprise is not clear what they want and without clear goals, there is no containment of scope and scope creepand thus the attendant delays and possibilities of failure become more of a possibility. Such a clear definition also aids in verifying success.2.Top Management Support: Many authors agree that top management support is the most important CSF for an ERP (Somers & Nelson, 2001) (Zhang, Lee, Zhang, & Banerjee, 2003). Since ERP is a highly integrated system, thus its success requires cooperation from all components of the business and only the top management can prove effective in aligning the complete organization with the goals, settling disputes and clearing any doubts. The top management provides the leadership and the resources, both of which areessential for ERP's success.3.Project Champion: An executive level official of the enterprise who understands the processes and functioning of the company in detail, with an interest in seeing the ERP implementation to success is essential for the successful implementation of an ERP, as per Somers & Nelson (2001). This allows the top management to have a single point-of-contact for the ERP implementation as well as that individual can effectively lead, facilitate and market the ERP to users.4.User Education and Training: This is also a criteria on which many authors agree (Somers & Nelson, 2001) (Zhang, Lee, Zhang, & Banerjee, 2003). As per Zhang, Lee, Zhang, & Banerjee (2003). education and training of the user in the newly implemented ERP system is essential to make the user who is supposed to be using the system to complete his day-to-day tasks is made answerable for ensuring that the system performs
Critical Success Factors for Successful Implementation of Enterprise Resource Planning (ERP)_1
to expectations. 5.Selection of an Appropriate ERP Solution: The selection of an ERP solution which fits the enterprise's information needs and processes is important. This selection dictates the budget, timeframes, goals and deliverables and Somers & Nelson (2001) argue that selecting an inappropriate ERP solution will end up committing the enterprise to a solution which does not fit the enterprise's strategic goal or business processes.6.Suitability of Software and Hardware: As per Somers & Nelson (2001), most enterprises prefer to buy off-the-shelf ERP systems as they understandably lack the in-house experience. However, not all ERP systems are built alike and each usually has some requisite software and hardware requirements and compatibilities. In addition, none meets the complete requirements of the enterprise out-of-the-box. Thus to minimize implementation difficulties and maximise chances of success, an analysis of requirementsto shortlist those matching the enterprise's structure most closely should be done.7.Intradepartmental Communication: Since ERP involves each component of business, thus its success depends upon strong coordination and sharing of goals across departments (Willcocks & Sykes, 2000). This follows from the CSF of top management support, as only the top management is capable of bringing the rank and file of the enterprise to toe the line.8.Change Management: ERP implementations by their very nature, uproot the existing wayof working and change from a comfortable routine is something the rank and file of any organisation detest. Thus, one CSF for ERP implementation is managing the change and guiding the staff take the resistance, confusion, redundancies and errors in stride (Somers & Nelson, 2001)Now, we will briefly discuss the application of these CSF to increase the likelihood of success inthe implementation of ERP:1.Clear Goals and Objectives: This involves defining in clear terms the objectives of the ERP implementation and the goals expected to be achieved. Care is to be taken that these align with the enterprise-wide policies. Then, regular evaluation is done to ensure progress is towards the stated goals and objectives only.2.Top Management Support: For ensuring top management support, even before the implementation begins, the top management has to decide if it really wants to go ahead with this project. If they decide so, then a Project Champion, an officer in the executive level is selected who is personally motivated to see this project to success and is deeply aware of the processes of the enterprise. Then, regular updates are maintained via the
Critical Success Factors for Successful Implementation of Enterprise Resource Planning (ERP)_2

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Enterprise Resource Planning System: Assignment
|3
|1231
|168