Evaluating ERP Systems Failure

This article discusses the factors contributing to ERP system failure, including interaction and correspondence failure, poor project management skills, poor communication strategies, poor quality business process re-engineering, and lack of user training. It also provides recommendations to avoid ERP system failure, such as outsourcing skilled personnel and providing user training. The article concludes with a cross-case comparison of ERP system failures.

Evaluating ERP Systems Failure
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Contents
Introduction...............................................................................................................................................1
Task 1: Identifying Failure Types............................................................................................................1
Interaction Failure.................................................................................................................................1
Correspondence failure.........................................................................................................................1
Task 2: Identify Critical Failure Factors.................................................................................................2
Ineffective project management skills..................................................................................................2
Poor communication strategies.............................................................................................................2
Poor Quality Business Process Re-engineering (BPR)........................................................................3
User Training.........................................................................................................................................3
Task 3: Cross-Case Comparison..............................................................................................................3
Task 4: Recommendations........................................................................................................................4
Conclusion..................................................................................................................................................4
References..................................................................................................................................................5

Introduction
Several factors have been noted to contribute greatly to failure of information system
implementation. These failure are overlooked in most of the cases and this makes them to be
very devastating when they occur. ERP implementation is not an exception because it is quite
obvious that many ERP have actually failed at the final stages of deployment. There are several
factors that can be attributed to system development and implementation (Hawari & Heeks,
2010). System failure can be categorized into modules such as interface, functional and non-
functional as well as failure to meet requirement analysis and specifications provided during
initial stages of software development life cycle. To make ERP implementation successful,
organizations should make sure all customer requirements are captured. System requirements
analysis and specification is one of the important stages that helps project manager to avoid
system failure by making sure all system requirements are captured. According to Ghosh (2012),
implementation tools and technology that facilitates successful ERP development are areas of
concern that should be factored. There are varying factors that have been noted to contribute to
ERP failures. These factors are predominant in some cases than others such that, some prominent
factors in developed countries are different when compared to developing countries. ERP
implementation failure would be evaluated in regard to its types, failure contributing factors and
the applicable solutions. Important to note is that, project failure results to project creep and
increase in implementation costs or total waste of time and resources if it fails completely (Molla
& Loukis, 2005).
Task 1: Identifying Failure Types
Interaction Failure
Interaction concept is the capability of the system to offer suitable, appealing and
reusable interface (Saqib, Arif, Rehman, Arshad & Ullah, 2012). System development team
should factor out how interaction between users and the system would take place. Small
Business Enterprises (SME) have been found to be prone to ERP failure because project
management team did not consider required aspects when designing interface. System interface
is very important because it determines the ease at which users would be able to enter as well as
retrieve data. Designing system interface should follow design principles. These design
principles are; usability which states that ERP interface should facilitate its initial functionality.
Reusability is the next principle which focuses on the need to make use of the system for several
functions without need to change the design structure. Additionally, ease of use and simplicity is
one of the important factors that have attributed to failure of many great systems (Maditinos,
Chatzoudes & Tsairidis, 2011). ERP interface should be simple without use of complicated
features. To have successful ERP implementation, system development team should consider
and enforce all these principles in order to come up with quality interface. If ERP fails to meet
either of the recommended design interaction principles, the system is said to have failed and
cannot be adopted for production (Kronbichler, Ostermann & Staudinger, 2010). Therefore,
interface design turns to be one of the prominent aspect that should be taken with desirable
weight if SME are to benefit from successful actualization of ERP’s. In this case, color should be
attractive, clear and visible texts and appropriate images.
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Correspondence failure
Design of every system is usually required to meet some set objectives. Once
development team does not achieve customer’s requirements and specifications, it is obvious that
customer would decline to adopt it for production purpose. In developing countries, most of the
ERP’s have failed because they did not meet customer’s expectations (Hawari & Heeks, 2010).
Development team fails to achieve the set goals because during requirement analysis and
specification stage, customer’s needs were not captured appropriately (Saeed et al., 2017).
Requirements analysis and specifications cannot be captured if customer does not present ERP
requirements accurately. The next reason that makes development team fail to achieve project set
goals is the lack of ERP development skills and experiences. System development is a project
and inadequate skills in system development as well as project management have been one of the
greatest challenges in development of ERP systems. To minimize ERP or any other system
correspondence failure, it is important for system developers to be certain with all requirements
from the start. Similarly, project team leader should mobilize resourceful and experienced
programmers, system testers and analysts. Finally, to avoid system failure, it is important to
deliver ERP in modules. This can only be achieved by applying suitable development
methodology such as waterfall model (Bar, Basili, Jedaibi & Chaudhry, 2013). In this case,
suitable development methodology should allow for modular software development. Modular
approach allows developers to test and correct some defects once detected during development
of specific module.
Task 2: Identify Critical Failure Factors
Ineffective project management skills
System development is a process that should be run and managed by skilled project
managers. Failure to have the right development team and project manager may result to
unsuccessful system development and implementation. If ERP project leader does not have
required project management skills, there are high chances of project failure. IT projects have
proved to be complex and lack of skilled personnel to manage them have resulted to total
collapse (Hustad & Olsen, 2014). In project management, skills and experience are the most
important factors that cannot be underscored at all cost. In this regard, before an ERP
development project can be started, project leader in collaboration with other stakeholders should
agree on timeline required to deliver the solution. Next, the amount of capital should be
evaluated from the start of the project with possible alternatives to lower implementation costs.
Additionally, to manage the cost of implementation, project leader should be able to plan for the
number of personnel required to sustain project (Cyrus, Aloini & Karimzadeh, 2018). Team
work is another skills that a project leader should have in order to be able to engage several
stakeholders. ERP project undertaking involves number of people such as developers, system
analysts, testers, users and organizational executive. To make all these project components work
smoothly, project management skills are quite essential (Aldammas & Al-Mudimigh, 2011).
Therefore, most of the ERP implementation in developing world have failed as a result of poor
IT project management skills.
Poor communication strategies
Communication is an important aspect in system development and implementation.
Without clear communication strategies, it would be very challenging to implement ERP system
successfully. In order to make project implementation successful, it is important for an
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organization to establish appropriate communication channels (Garg, 2010). ERP
implementation requires project management skills and collaboration tools such as GitHub
which makes development process very easy. With suitable tools, developers can work on
similar project from anywhere. With such important tools, ERP developers are able to view all
the updates made as well as get notifications when updates are made on project. On the same
note, organizational executive require suitable communication tools such as mails, Gmail
hangouts and GoToMeeting in order to be able to share and express project management skills
that would make its actualization successful. If project management does not adopt desirable
collaboration tools, it would be very challenging to pass messages on time and in appropriate
manner. At some instances, it would be important for both development and management team
to check on the progress of the project actualization. This makes it possible for developers and
management to discuss on possible improvements that can be made as well as give a chance to
customer to ascertain project is on the right track. Abu-Shanab, Abu-Shehab & Khairallah (2015)
argues that in developing countries, project team and project leaders have not been considering
the importance of communication during ERP implementation. This have contributed to most of
the ERP system implementation failure which resulting to waste of resources.
Poor Quality Business Process Re-engineering (BPR)
Business Process Re-engineering (BPR) involves business process analysis, coming up
with new workflows and processes with an organization with main aim of streamlining business
operations. To come up with appropriate business processes and workflows, new decisions and
radical redesigning of business operations would be of great importance (Hustad & Olsen, 2014).
With ERP system development and actualization, Small Business Enterprises (SME) many be
faced by ineffective business process re-engineering which in turn result to ERP failure. Since
ERP adoption would require new infrastructural implementation, most of the businesses are not
aware neither are they ready for such business requirements. BPR problem is usually caused by
project leaders and other relevant consultants failing to conduct business mapping processes.
Mapping business processes helps system developers and organizational management compare
prospective software functionalities and operational business requirements (Aldammas & Al-
Mudimigh, 2011). Most of SME trying to adopt ERP systems into their daily operations have
failed because they have not been conducting software functionalities and business process
match. Therefore, with clear defined business process, organizations SME’s and organizations
from developing countries should be able to design new work flows with disrupting normal
operations.
User Training
Most of the organizations have been adopting ERP systems without providing required
skills to its employees. Since use of ERP system has been advancing with time from
management to entire organization operational tool, conducting appropriate and effective
training has been a great challenge (Abu-Shanab, Abu-Shehab & Khairallah, 2015). Important to
note is that ERP user training helps organization employees have operational competency which
builds positive impression. If organizations are ready to adopt ERP systems, training of users
should be given highest priority in order to have qualified staff to run it effectively. User training
has been a great challenge to many developing countries as well as SME due to financial
constraints. Organizations that fail to train users forget such training would be used as a
competitive advantage. A good example can be deduced from service industry. Experienced user
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training would make service delivery faster and efficient (Hustad & Olsen, 2014). Quality
service delivery offer subject organization a competitive advantage compared to others. In this
regard, ERP system training cannot be underscored as it one of the success factors once
development and implementation has been completed.
Task 3: Cross-Case Comparison
From the two case studies, it has been observed that some of the ERP system failure are
common while at some instances they are diverse. Some of the common failure factors in both
case studies are; financial constraints which tends to limit required operational procedures
(Hawari & Heeks, 2010). Both SME and organizations from developing countries are not willing
to use resources in ERP implementation but they expect to reap maximum benefits. This makes
implementation of the ERP system quite difficult resulting to failure at any stage. Similarly, user
training is one of the ERP failure which is common in all scenarios as most organizations have
not been considering it as one of the success factors. Further, in both scenarios, planning before
actualization of ERP has been emphasized as it helps organization evaluate prospective software
functionalities and business operational work flows and processes in advance. Besides, lack of
quality project management skills has been observed to be a unique factor contributing to ERP
implementation failure in developing countries (Al-Dhafari & Li, 2014). It is obvious that
developing countries lack effective project management skills and experience. As a result, it has
been very difficult to implement big IT projects such as ERP. Finally, from both cases, ERP
failure classification remains the same.
Task 4: Recommendations
ERP system failure can be avoided by taking appropriate actions during implementation
stage. In the case of the developing countries where IT project management skills are inadequate,
outsourcing of qualified personnel would be of great important. With skilled and experienced
project leader, there are higher chances of having a successful ERP project actualization. It is
through outsourcing of personnel that organizations would be able to implement ERP
successfully. Similarly, organization would be able to get required training from experienced
ERP experts and project leaders (Aldammas & Al-Mudimigh, 2011). Once implementation has
been done and required skills impacted on local personnel, organizations from developing
countries would be able to sustain themselves on similar needs. On the same note, for SME from
developed countries where ERP implementation is still a problem due to lack of operational
skills, user training would be the solution. It is advisable for an organization to train all
employees on the use of the new technology in order to facilitate smooth adoption of ERP. User
training improves morale and operational competency which in turn offers subject organization
competitive advantage in the market. User training would help organization avoid ERP failure
after deployment has been done (Ghosh, 2012).
Conclusion
The number of Enterprise Resource Planning (ERP) implementation failure has been on
rise over years from both developing and SME in developed countries. ERP failure can be
attributed to many factors depending on the nature of the organization. System actualization
failure is a disastrous occurrence in an organization because it means waste of resources and time
by the firm. In this regard, it is very important for organizations to understand causes of ERP
failure and possible measures that can be taken to avoid such occurrences. Some of these failures
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can be avoided at early stages but project managers and relevant stakeholders try to oversee
them. Later, organizational ERP implementation turns futile because of mistakes which could
have been eliminated with minimal costs. When implementing ERP, organizational management,
project team and project leader should understand factors that can hinder their implementation.
Important aspect to note in any project management is proper planning which is the only basis of
a successful project actualization. Planning helps all stakeholders to identify required timeline,
resources as well as available skills and experiences to actualize projects implementation. It has
been noted that large organizations have enough resources to fund ERP implementation. This
means it is quite rare to have projects fail due to lack of enough resources because planning is
usually done adequately.
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