An Analysis of the Key Success Factors in ERP Systems Implementation

This report delves into the critical success factors (CSFs) essential for the successful implementation of Enterprise Resource Planning (ERP) systems. It emphasizes that ERP implementation is a complex, resource-intensive process, and failure can be costly. The report outlines eight key success criteria: clearly defined goals and objectives, top management support, selecting the right ERP package, assigning the right individuals to the project, effective change management, team coordination, thorough testing, and comprehensive training. Each factor is elaborated with practical applications and supporting references, highlighting the importance of aligning objectives with business needs, securing executive-level commitment, choosing the appropriate ERP solution, assembling skilled teams, managing organizational changes, fostering communication, conducting rigorous testing, and providing adequate user training. The report underscores the necessity of considering these factors to maximize the benefits of ERP systems, such as improved efficiency, reduced costs, and enhanced customer satisfaction.

Enterprise resource planning system is one great solution for organizations who want to improve
their efficiency, reduce costs, improve customer satisfaction and shareholder value, and increase
product quality. ERP systems implementation is a very complex, expensive, and need great
amount of time and resources. Failure in implementation can negatively impact organizations
and imposes lots of money and resources. In order to implement an enterprise resource planning
system successfully, some key success criteria should be considered. “CSFs are those areas and
activities which should be primarily focused on in order to achieve the most satisfying results of
the ERP systems implementation” (Amid, Moalagh, & Ravasan, 2012). In this memo some of
the important success criteria of ERP system’s implementation are briefly explained.
Success Criteria for Implementation of ERP Systems:
1. Clear goals and objectives: Before implementing ERP systems, the goals and objective should
be clearly defined. This factor is important because the team needs to know what are they
looking for and what goals and objectives should be met after ERP systems implementation.
2. Top management support: Executives are the ones who approve and allocate the budget for
ERP systems implementation. They are the sponsors for this project and getting support from
them is very important.
3. ERP package selection: Among all available ERP packages, selecting the right one for the
organization is essential.
4. Assigning right individuals to the project: Assigning right people for the project is another
success criteria for the ERP implementation. Each individual should have enough knowledge and
skills for the task that he or she is responsible for.
5. Change management: The goal of ERP system implementation is to change the existing
architecture from the baseline architecture to target architecture. This change must be managed
otherwise it puts negative impacts on the organization.
6. Team coordination: Team coordination and communication is one important success criteria
for implementation of ERP systems. The communication channel should be open among team
members and also among different teams that are involved in ERP systems implementation.
7. Testing: Testing the ERP systems prior to going live is another factor for successfully
implementing an ERP systems. All the bugs and problems should be fixed before going live.
8. Training: The user of ERP system should receive enough training to use the new systems. This
training helps them to adopt the new ERP systems.
Application of Criteria:
1. Objectives and goals. The objectives and goals of ERP systems implementation should be
defined clearly before the implementation. The goals must be aligned with the organization’s

business needs. Tracking these objectives during and after the implementation is necessary to
ensure that they are still aligned with the business needs.
2. Top management support: The top management support is a very important factor. This
support should be before, during, and after the ERP implementation. Since executive level input
is critical when analyzing and rethinking existing business processes, the implementation project
should have an executive management planning committee that is committed to enterprise
integration, understands ERP, fully supports the costs, demands payback, and champions the
project. (Umble &Haft, 2002).
3. ERP package selection: Today there are many ERP packages available to businesses,
companies, and organizations. Selecting the proper package before ERP systems implementation
is critical. This selection must be based on the business needs and objectives, business’s
processes, and organization’s size and culture.
4. Assigning right individuals to the project: For an ERP implementation to be successful the
right individuals must get involved in the process from the beginning. There are many people
involved in ERP systems implementation. For this project these people should have sufficient
knowledge and skills in IT and/or business. In each phase of the system development life cycle,
skilled people should be presented.
5. Change management: In order to implement an ERP system, managing the change is an
important factor. Employees from different departments, IT-employees, middle and top
management, project members, and external consultants should be in the change management
team. This team is responsible to measure the whole environment, develop and implement the
change strategy (AL-NAFJAN & AL-MUDIMIGH, 2011).
6. Team coordination: One of the success criteria for implementation ERP systems is team
coordination and team work. Using a mix of consultants and internal staff to work together in the
project team would enable internal staff members to grow the necessary technical skills for ERP
system design and implementation (Sumner, 1999). Training is a great option to improve
teamwork and also coordination with other teams.
7. Testing: After systems implementation and just before going live, it is necessary to test the
systems and fix all the issues and problems. Enough time must be spent during the testing phase
to discover all the bugs. Also the system should be tested to ensure all the expected deliverables
are achievable at this time. Testing is done in the testing phase of the system development life
cycle. Rushing to the finish line will never be a good idea because going back and repair patches
to fix the problems is difficult, time consuming, and more costly (Razi & Tarn, 2003).
8. Training: The last success criteria for implementation of ERP systems is training. All the ERP
system’s user should get enough and proper training to carry out daily operation prior to going
live. ERP systems user can understand and adopt the new system only by training and it can
happen during the implementation phase of system development life cycle.

References:
AL-NAFJAN, A. N., & AL-MUDIMIGH, A. S. (2011). THE IMPACT OF CHANGE
MANAGEMENT IN ERP SYSTEM: A CASE STUDY OF MADAR. Journal of Theoretical &
Applied Information Technology, 23(2), 91-97.
Amid, A., Moalagh, M., & Ravasan, A. Z. (2012). Identification and classification of ERP
critical failure factors in Iranian industries. Information Systems, 37, 227–237.
Sumner, M. (1999). Critical success factors in enterprise wide information management systems
projects. Proceeding of the Americas Conference on Information Systems (AMCIS), 232-4.
Razi, M. A. & Tarn, J. M. (2003). ERP system solutions for small companies: readiness &
selection. Journal of Small Business Strategy, 14(1), 71-85.
Umble, E., Haft, R., & Umble, M. (2002). Enterprise resource planning: Implementation
procedures and critical success factors. Retrieved September 15, 2016.