Supply Chain Management and ERP

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ERP Implementation

There is an immediate need for any company to assess whether an ERP implementation will be successful or not and if a specific ERP system will justify the costs that have to be poured into the project along with the risks that will be taken; indeed, the decision to invest in an ERP system can make or break an organisation (Ehie & Madsen, 2005; Mandal & Gunasekaran, 2003). In addition to that, the importance of the human factor while implementing an ERP system is not to be underestimated (Legare, 2002). Legare (2002) found that individual-, group-, and organisational characteristics could influence the success of ERP implementation; individual characteristics being knowledge, cognitive abilities and motivation, group characteristics goals, roles, norms, diversity and problem solving, and organisational characteristics strategy, resources, rewards, culture and structure. There are many reasons that could result in an ERP implementations’ failure. Kumar and Gupta (2012) outline nine reasons; changes, coordination issues, budget issues, customization issue, lack of experience, unfriendly user interface, poor ERP selection and absence of consultant. Umble & Umble (2001) also considered poor top management involvement, poor project management, lack of education and training, people not wanting a new system to succeed, unrealistic expectations about the implementation project, inaccurate data and mismatch between the business and ERP system selected to be reasons of failure.

ERP Implementation Stages

The process of choosing to utilise, carrying out and following up an ERP system implementation is a complex endeavour. This segment will explain the different stages of an ERP implementation to build a general understanding of the process’ complexity, motivating why the need for exploring the critical success factors is important. Motiwalla and Thompson (2012) provide a clear framework for a traditional implementation strategy of an ERP system. The authors divide the implementation into five stages. In the first stage called the scope and commitment stage, necessary requirements are gathered, and what gaps that are to be filled with the ERP system is figured out. During this stage, analysing and comparing the current business practices with the new is vital in order to avoid significant system modifications after the implementation takes place. After this, the vendor is selected based on the needs of the company, together with factors such as total cost of ownership, consulting and training services and customer service and help desk support. These criteria, together with the budgetary restrictions, help the company narrow down the selection of vendors to the one with the best fit.
During the next stage, called the analysis and design stage, the number and what kind of modules that are to be used is decided. A company can either choose to take a vanilla approach, in which the ERP software package is selected “as is” without any major modifications, or a chocolate approach in which the package is customised to the very needs of the company. The chocolate approach might, because of the customization to user requirements, increase the implementation risk and the investment. During this stage, a change management plan is formed and plans for data conversions, system conversion and training are created.
The third stage is called the acquisition and development stage. This is when the license for the production version of the software is purchased, and the production version of the system is built. The tasks formed to fill the gaps identified in the first stage are carried out. The technical team installs the software and the change management team works with the system users; changing business processes and training on the sandbox version of the software.
Stage four is called the implementation stage. This is the most crucial of the stages since the new ERP system goes live for the first time; often there are mishaps that have to be tended to which costs time and money if not dealt with swiftly. There are four basic conversion approaches used when going live; the phased, the pilot, the parallel and the big bang. The phased approach is a tentative movement from the existing ERP system to the new. This approach can be time-consuming, but it is also the least disruptive to the company. The pilot approach involves implementing a smaller version of the final system prior releasing the full version. This approach is used in order to ensure that the final system is appropriate. The parallel approach is the costliest of the four because the new ERP system is implemented and used while the existing system is still online. This approach is best used when the company is not sure that the implementation will be successful. The final approach, the big bang, is the approach with the highest risk but it is the most straightforward and clean. In this approach, the company simply shuts the existing ERP system down and powers up the new one. This is, of course, risky, but it is also the least costly since there is no duplication of information.

1. Introduction 
1.1 Background
1.2 Problem Statement
1.3 Purpose of the paper
1.4 Scope and Delimitation
1.5 Outline of the Thesis
2. Frame of Reference 
2.1 Supply Chain Management and ERP .
2.2 Literature Reviews
2.3 CSFs in ERP Implementation
3. The Research Design 
3.1 Methodology .
3.2 Method
3.3 Data Collection .
3.4 Data Analysis
4. Results and Analysis .
4.1 The Success of Previous Implementations
4.2 Results and Analysis of Hypotheses
4.3 The Key CSFs
5. Conclusion
5.1 Summary
5.2 Purpose and Research Question
6. Discussion 
6.1 Contributions
6.2 Limitations
6.3 Future research
7. Reference 

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Critical Success Factors in ERP Implementation