Enterprise Resource Planning (ERP) is set of software that

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Enterprise Resource Planning (ERP) is set of software that allows planning and implementationof all the resources of an enterprise such that the smallest and the largest activities are inalignment with the goals of the organization. As per Ragowsky & Somers (2002), a properlyselected and implemented ERP system can provide significant business advantages includingreduction in inventory and raw material costs. Also, lead time, production time and productionscosts can be reduced. We note that ERP implementation is a costly and time-consumingendeavor (Sumner, 2008). Ragowsky & Somers (2002) also claim that despite best intentions,ERP implementations often fail. The reasons for these include poor planning or poormanagement, change in business goals during the project and lack of business managementsupport (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 ERPimplementation, 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 cleargoals and objectives. This is because without a clear objective, the enterprise is not clearwhat 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 mostimportant CSF for an ERP (Somers & Nelson, 2001) (Zhang, Lee, Zhang, & Banerjee,2003). Since ERP is a highly integrated system, thus its success requires cooperationfrom all components of the business and only the top management can prove effective inaligning the complete organization with the goals, settling disputes and clearing anydoubts. 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 theprocesses and functioning of the company in detail, with an interest in seeing the ERPimplementation to success is essential for the successful implementation of an ERP, asper 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 implementedERP system is essential to make the user who is supposed to be using the system tocomplete his day-to-day tasks is made answerable for ensuring that the system performs
to expectations.5.Selection of an Appropriate ERP Solution: The selection of an ERP solution which fitsthe enterprise's information needs and processes is important. This selection dictates thebudget, timeframes, goals and deliverables and Somers & Nelson (2001) argue thatselecting an inappropriate ERP solution will end up committing the enterprise to asolution which does not fit the enterprise's strategic goal or business processes.6.Suitability of Software and Hardware: As per Somers & Nelson (2001), most enterprisesprefer to buy off-the-shelf ERP systems as they understandably lack the in-houseexperience. However, not all ERP systems are built alike and each usually has somerequisite software and hardware requirements and compatibilities. In addition, nonemeets the complete requirements of the enterprise out-of-the-box. Thus to minimizeimplementation 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 acrossdepartments (Willcocks & Sykes, 2000). This follows from the CSF of top managementsupport, as only the top management is capable of bringing the rank and file of theenterprise 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 anyorganisation detest. Thus, one CSF for ERP implementation is managing the change andguiding 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 theERP implementation and the goals expected to be achieved. Care is to be taken that thesealign with the enterprise-wide policies. Then, regular evaluation is done to ensureprogress is towards the stated goals and objectives only.2.Top Management Support: For ensuring top management support, even before theimplementation begins, the top management has to decide if it really wants to go aheadwith this project. If they decide so, then a Project Champion, an officer in the executivelevel is selected who is personally motivated to see this project to success and is deeplyaware of the processes of the enterprise. Then, regular updates are maintained via the
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