Critical Success Factors in ERP Implementations

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Transcript of Critical Success Factors in ERP Implementations

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    CRITICAL SUCCESS FACTORS FOR IMPLEMENTATION OF AN ENTERPRISE RESOURCE

    PLANNING SYSTEM

    PROJECT REPORT

    PREPARED BY STEPHEN COADY

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    TABLE OF CONTENTS LIST OF FIGURES..............................................................................................................................3 LIST OF TABLES ...............................................................................................................................3 Acknowledgements ..............................................................................................................................3 Executive summary..............................................................................................................................4

    Introduction ......................................................................................................................................4 Literature Review.............................................................................................................................4 Critical Success Factors in ERP Implementations ...........................................................................4 Evaluation of the Critical Success Factors in the Company at ERP System Pre-implementation Stage .................................................................................................................................................5 Implementation and other factors influencing successful implementation......................................7 Conclusions ......................................................................................................................................7 Recommendations ............................................................................................................................8

    Introduction ..........................................................................................................................................9 Overview of study organisation .......................................................................................................9 Enterprise Resource Planning Systems..........................................................................................10 Market Perspective - ERP Systems Usage, Implementation Success and Failure.........................13 Critical Success factors ..................................................................................................................14

    Literature Review...............................................................................................................................15 Critical Success Factors in ERP Implementations .............................................................................19

    Top Management Support..............................................................................................................21 Project team competence................................................................................................................22 Inter-departmental cooperation ......................................................................................................22 Clear goals and objectives..............................................................................................................22 Project Management.......................................................................................................................23 Inter-departmental communication ................................................................................................24 Management of expectations..........................................................................................................24 Project Champion...........................................................................................................................24 Ongoing vendor support.................................................................................................................24 Careful selection of appropriate package .......................................................................................24 Data analysis and conversion .........................................................................................................25 Dedicated Resources ......................................................................................................................25 Steering Committee........................................................................................................................25 User training and education............................................................................................................25 Education on a new business process.............................................................................................26 Business Process reengineering .....................................................................................................26 Minimal customisation...................................................................................................................26 Defining the architecture................................................................................................................27 Change Management......................................................................................................................27 Vendor / customer partnerships......................................................................................................27 Use of vendors development tools................................................................................................28 Use of consultants ..........................................................................................................................28

    Evaluation of the Critical Success Factors in the Company at ERP System Pre-implementation Stage ...................................................................................................................................................28

    Method ...........................................................................................................................................28 Results ............................................................................................................................................29 Discussion ......................................................................................................................................31 Conclusions of survey results.........................................................................................................35

    Implementation and other factors influencing successful implementation........................................35 Implementation...............................................................................................................................36 Multi site implementations.............................................................................................................36 Business Process Reengineering ....................................................................................................37

    Conclusions ........................................................................................................................................39

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    Recommendations ..............................................................................................................................40 References ..........................................................................................................................................42 Appendices .........................................................................................................................................44

    Appendix 1: Detailed results ..........................................................................................................45 Appendix 2: Responses to Question of Company Strategy in Implementing an ERP System......55 Appendix 3: Top CSFs by ERP Implementation Stage .................................................................60 Appendix 4: ERP Critical Success Factor Questionnaire ..............................................................61 Appendix 5: Implementation..........................................................................................................68

    LIST OF FIGURES

    Figure 1: ERP process vs Enterprise Systems....................................................................................10 Figure 2: Comparison of ERP vs MRP showing extent of ERP planning .........................................11 Figure 3: Typical ERP System...........................................................................................................12 Figure 4: ERP core process flows ......................................................................................................17 Figure 5: A suggested framework for managing change associated with ERP .................................19 Figure 6: Taxonomy for ERP critical factors .....................................................................................20 Figure 7: "The Proven Path" Implementation Program .....................................................................36

    LIST OF TABLES Table 1: Summary of Reviewed Articles on Critical Success Factors of ERP Implementation........21 Table 2: Critical Success Factors results and comparison to Somers and Nelson (2001) ..............30 Table 3: Detailed Critical Success Factors Results and comparison to primary CSF results .........32 Acknowledgements I would like to acknowledge the following contributions to the completion of this project.

    1. The company made the work related project possible.

    2. Many colleagues and managers of the Company, whose replies to the questionnaire provided opinions of a