RSCP7004 Autumn 2018: Cloud ERP Customization Challenges Report

This report provides an in-depth analysis of the challenges associated with customizing Cloud ERP systems within the retail sector of Saudi Arabia. The study delves into the background of ERP systems, highlighting their importance in streamlining business processes, and identifies the specific difficulties faced by retailers in adapting these systems. The report examines the challenges of cloud-based ERP systems, including security, customization limitations, provider lock-in, and data ownership, with a particular focus on the customization issues. It also explores the research questions, objectives, and framework guiding the study, while also providing a literature review on the challenges faced by Cloud ERP systems in the Saudi Arabian retail sector, including SAP ERP. Furthermore, the report details the research methodology, covering research philosophy, approach, data collection, design, ethical considerations, and time/cost frames, to provide a robust understanding of the topic.

Running head: RESEARCH SKILLS AND CONSULTANCY PLANNING
Analysis on the customization challenges associated with Cloud ERP System in
Retail Sector at Saudi Arabia
[Name of the Student]
[Name of the University]
[Author note]

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Table of Contents
1. Introduction:..............................................................................................................3
1.1. Background:.......................................................................................................3
1.2. Aim of this study:...............................................................................................5
1.3. Research Significance........................................................................................5
1.4. Research Questions:...........................................................................................6
1.5. Research Objectives and Framework:................................................................6
2. Literature Review:.....................................................................................................6
2.1. Challenges faced by Cloud ERP system by the retail Sector of Saudi Arabia:..7
2.2. SAP ERP Software:............................................................................................9
2.3. Needs related to customization of the Cloud ERP system:..............................11
2.4. Critical success factors:....................................................................................13
3. Research methodology:...........................................................................................15
3.1. Research philosophy:.......................................................................................15
3.2. Research Approach:.........................................................................................15
3.3. Data collection method:....................................................................................16
3.4. Research design:...............................................................................................17
3.5. Time and cost Frame:.......................................................................................17
3.6. Ethical considerations:.....................................................................................18
References:........................................................................................................................20

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1. Introduction:
1.1. Background:
ERP or the Enterprise Resource Planning is considered to be one of the most effective
system which is associated with assisting the retail sectors in running of the business along with
allowing the power of having control over the overall business process by means of adaptation of
an organized way. It has been reported that most of the organization fails in executing the ERP
system because of lack of proper administration support and also due to proper selection of the
ERP vendors (AlBar and Hoque 2017). So it can be stated that the cloud based ERP system is
one of the recent technology which has been developed by the ERP vendors for the purpose of
monitoring the various organizational activities in various geographically distributed locations.
Besides the marketers existing within the retail sector is also associated with facing a lot of
challenges while using the traditional ERP system. Major issues and the challenges that are faced
by the ERP system includes the security issues, issues related to customization, issues because of
the provider lock-in, problems related to flexibility and the data ownership.
Amongst the various issues, the issues related to the customization is mainly faced by the
Cloud ERP systems. The reason behind this is that each of the enterprise is unique and the
company generally requires new software packages which is to be used for supporting the
various business process. The situation when the issues mainly arise is when the expectations of
the customers from the Cloud ERP system is related to fact that the Cloud ERP system is
working as per the needs of the customers and is also associated with providing a similar level of
customization upon the on-premise ERP solutions (Akhter 2017). This is considered to be a valid
concern which is related to the system and is associated with stating the fact that the Cloud based

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ERP system is providing less flexibility along with less customization than the traditional ERP
systems, In case when the ERP system is not associated with bringing any significant value then
it is expected that the end users should move towards the adaptation of the new processes so as to
run the business.
Two type of approaches are generally used by the ERP systems while they are being
implemented like the big bang along with the phased approach. In case of the big bang approach
the company is associated with saving time as well as money. However this this is the particular
approach which is likely to face huge challenges in the retail sector. The end users are generally
not capable of keeping the change with the new system. The lack in the data storage is associated
with the creation of a negative impact upon the development of resistance towards the system.
Followed by this is the phased approach which is associated with rolling out the business
functions at a time (Abunar and Zerban 2016). This particular approach is associated with
spending a time upon the data conversion and on the duration along with being associated with
phasing the legacy system which an organization is having. Due to the outdated architecture of
legacy of most of the enterprises it is associated with providing a structure to the retail sectors
which along with being inflexible is also rigid. Besides this the lack of flexibility is also
associated with preventing the usage of the legacy software with the current products which are
obtainable from the market and this in turn would be associated with adding of value to the
retailing business operations.
The literature review conducted upon the ERP is seen to be very rich and along with this
most of the literature is focused upon the on-premises ERP. The research conducted upon the
cloud ERP is very limited and besides the benefits provided by the cloud technology and the
cloud ERP is seen to be very frequent and is emphasized by the cloud providers. The major

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challenges which are associated with the New ERP deployment methods has been exposed fully
and discussed with respect to the retail sector based in Saudi Arabia (Bahssas, AlBar and Hoque
2015). This respective country is having a growing preference related to modern retail formats
like the hypermarkets, super markets and many more. It is essential to makes sure that the super
markets are meeting all the standards that are set up by the retail sector of the western countries.
1.2. Aim of this study:
The main aim of this research study includes providing of a brief understanding of the
challenges related to customization which are generally faced by the retail sector because of the
Cloud ERP system implementation. Besides this the study is also aimed at analyzing the key
reasons for not implementing the ERP system. This study is going to assist the researchers in
having a better understanding of the various situations related to the usage of the cloud based
ERP within the retail business sector. One of the major aim also includes meeting the objectives
of the research study along with briefly reviewing the research conducted upon the challenges
faced by the ERP.
1.3. Research Significance
The research is mainly associated with discussing about the challenges that are faced by
the cloud based ERP systems that are being used in the retail sector. However it is observed that
the aspects of each retail sector is different from the other and for this reason the challenges are
also seen to be varying in accordance to the retail sector. Some of the challenges mainly includes
the security related issues, issues related to customization, lock-in of the providers, flexibility,
and data ownership. This issues are in turn associated with having a huge impact upon the
selection of the appropriate type of cloud ERP system which are required by the various retail

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enterprises. Because of the impact upon the business there also exists a huge impact upon the
businesses which are conducted by means of the ERP system.
1.4. Research Questions:
 What are the major challenges faced during the customization of the Cloud Based ERP
systems?
 What are major critical success factors which are considered during the implementation of
the successful ERP system in the retail sector of Saudi Arabia?
 What are major impacts of the challenges upon the retail sector because of the selection of
the software ERP packages?
1.5. Research Objectives and Framework:
 To examine the various impact of the customization related challenges during the cloud ERP
system implementation upon the retail sector.
 To examine the Impact of the challenges upon the process of selecting the ERP packages on
the retail business
 To identify the process of implementation of the Cloud retail ERP system along with
identifying the key components for the retail marketers.
2. Literature Review:
This literature review section is associated with discussing about the major challenges
which are to be considered at the time of planning for the implementation of the ERP system in
the retail sector. This particular research study is supported by a case study of a large retail sector
of Saudi Arabia. The retail sector of Saudi Arabia is having an annual budget of around 300
million dollars and it also consists of employees who are seen to be working at different level of

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management (Alhammadi, Stanier and Eardley 2015). Needs related to the new technology has
increased at a drastic rate in Saudi Arabia and along with this the competitiveness existing
against the other retail organizations of the country has led to moving towards the usage of the
technology along with providing various online services so as to become a driver of more
investment in the field of Information Technology. This literature review section would be
consisting of the description of the major challenges which are faced by the retail sector of Saudi
Arabia.
2.1. Challenges faced by Cloud ERP system by the retail Sector of Saudi
Arabia:
In the year of 2003 the United Electronics Company of Saudi Arabia established eXtra
with an aim of providing its customers with electronic and home appliances. This particular
organization had been associated with the implementation of the ERP system with an aim of
connecting along with managing the different branches of the organization. This sector had been
associated with the adaptation of the new system and replaced the old existing system that was
used by them. According to Fakeeh, Qayyum and Albarakati (2014), this ERP system which is to
be used by the retail sector would be providing an information system solution which would be
associated with quick integration of the business operations. Followed by this other authors have
also analyzed this case study and have been associated with the identification of the major
challenges which the traditional spreadsheet based approach was facing while managing the
various customer support queries which was associated with becoming more and more
problematic. Besides this it was also seen that this is responsible for lack in providing of timely
response to the customers along with failing in meeting the SLAs and the incomplete case
visibility (HAJI SALUM and Rozan 2017). Besides this it is also seen that the sales person is

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having a less understanding of the issues faced by a customer at an individual or at the
company’s level.
Additionally the implementation of the ERP system is also associated with facing a lot of
challenges which mainly includes the online data unavailability, lack of manufacturing module
in the planning of the entire trade, need of combining the data offline, the different range of
products which are unmanageable and many more. The low level of awareness related to the
usage of the cloud based ERP system is considered to be one of the major challenge that is faced
by the vendor’s will providing the services (Parven and Maimani 2014). The retail sector of
Saudi Arabia is also associated with facing loss due to several crimes like the theft, and frauds
which acts as the incomplete problem that is faced by the retailers. The National Retail Security
Survey have been associated with stating the fact that the employee theft accounts for almost
45% of the losses along with the shoplifting which accounts for almost 35%. There also exists
managerial error and vendor frauds which is almost around accounts for 12% losses. Day by day
the number of retailers who are becoming victims of the prearranged crime is increasing where it
is seen the crime rings are getting their merchandise along with the gift cards which they sell
online. Some of the major losses is associated with including the cards, books, food items and
many more (Eid and Abbas 2017). The threats related to credit card fraud or theft or impact upon
the data of the customers is one of the major growing concern.
This particular literature review would be associated with discussing about two of the
approaches which are used by the retailer sector for the purpose of implementing the cloud ERP
system and this includes the Phase approach and the big band. Big band approach is generally
associated with putting forward the major challenges that are faced by an organization which
initially turns out to be putting forward the fact that the end users are not able keep up with the

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changes taking place in the new system (Shaikh, Rafiq and Iyer 2014). Besides this the lack of
data storage is associated with having a negative impact upon the development of resistance
towards the system. Followed by this is the phased approach which is associated with helping in
rolling out of the business function. A lot of time is spent by this approach upon the conversion
of the data as well as upon the duration and is associated with phasing the legacy system which
an organization is having.
There exists challenges which are faced by the organization United Electronics situated in
Saudi Arabia and this challenges are mainly related to the outdated architecture. Kraljic et al.
(2014) have argued on the fact that most of the existing legacy enterprise applications existing
within the retail sector is consisting of an outdated architecture which is seen to be very much
rigid. The rigidity in turn is associated with posing a major challenge to the business efficiency.
From this the organization was capable of finding out the fact that the legacy system which they
are having is very much costly to maintain. With passage of time the cost related to maintenance
kept on increasing and besides this the new system was not associated allowing the integration of
the new appliances. So the combination of the system is associated with making the systems to
face failure or crash. Besides the lack of scope and the enterprise wide approach towards the
problem solving process was also noted (Fadelelmoula 2018). The biggest challenge which
exists in the eXtra retail sectors included the limited scope related to customization. Besides this
the ERP software packages were also having a limited scope related to customization. This type
of customization existing within the ERP package is associated with involving a lot of changes in
the structure or the ERP software which is not to be allowed under the license agreement. This in
turn is associated with making the ERP system very much difficult to be used within the retail
sector.

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2.2. SAP ERP Software:
eXtra is associated with the usage of the software like the SAP so as to conduct the
enterprise resource planning along with managing the customer relationship and the management
of supply chain. SAP is associated with providing a retail ERP system like the SAP Retail
Merchandising System for the retail sectors existing in Saudi Arabia. However the usage of the
system is associated with facing a lack in getting the system which is compatible with this
system. Additionally the products of the company is suffering from the incompatibility issues
along with the similar products existing within the market. The product demand is highly
dependent upon the requirements related to hardware resources (James 2014). The issues related
to customization is generally overcome by making use of the Cloud ERP system so as to meet
the needs whenever they arise. This in turn is associated with providing the system with the best
business practice. This type of standardization is having its own benefits and is associated with
increasing the number of potential customers.
Due to the uniqueness of each enterprise the requirements of the software is associated with
supporting the business processes. Syamala Buragadda (2014), have been associated with
supporting this claims related to the customization of the business processes by the company
while trying to achieve the best performance. Any type of attempts made for rolling back from
this type of process would be resulting in loss of the competitive advantage. Zubair and Taha
Zamani (2014), also argued on the fact that the cloud us capable of impairing the ability that an
organization is having for different innovations. Enterprises are associated with tailoring of the
ERP systems due to the uniqueness related to the needs of innovation that the new products are
having. SAP solution is associated with helping the retailers in simplification of the business

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along with understanding the customer needs. The suppliers are also having efficient supply
chain networks so as to make sure the flexible supply chain is obtained at an optimum cost.
During the implementation of the cloud based ERP system the time as well as the
personal requirements are to be considered and it has been seen that eXtra have been associated
with hiring of the consultants so as to help them in the implementation of the systems. The
consultant has been expecting to bring the specialized skills and is aware of the company’s
requirement related to the accomplishment of the time consuming and the costly tasks needed for
the implementation of the system (Salleh et al. 2018). With the expectation that the external
consultant is going the ease the tasks related to implementation, a prior research has been
conducted which is associated with depicting the fact that the conflict of opinion with the
consultant is one of the major challenge that is faced by the organization. Besides this a research
on the case study is associated with indicating the fact that the ERP system is not associated with
providing of any kind of expected customers satisfaction during the implementing system like
the CRM or the Data warehousing.
Implementation of the ERP is considered to be one of the major complex task because of
the different functional roles that the different organizations are having. According to records it
has been seen that most of the cloud based ERP system projects are over budgeted and is
dependent upon different type of requirements and the operations of the business. Besides this
less consideration of the customer issues at an individual or the company level is also noticed in
many cases (Weng and Hung 2014). Certain challenges related to the unavailability of the online
data or due to lack of production components so as to formulate the plans for production, the
needs related to the combining of the data offline and products which are controllable are also
faced. Issues related to the customization of the Cloud ERP system is associated with putting