Identifying and Prioritize ERP Risks Implementation Using FMEA and Heuristic AHP in SNOWA Corporation
Subject Areas : Industrial ManagementSomaieh Alavi 1 , Hadi Eklili 2
1 - Department of industrial Engineering, Faculty of Engineering, Shahid Ashrafi Isfahani University, Isfahan
2 - SNOWA Corporation, Isfahan, Iran
Keywords: Analytic Hierarchy Process (AHP), Risk, Failure mode and effective analysis (FMEA), Enterprise Resource Planning (ERP), Balanced scorecard (BSC),
Abstract :
ERP projects are one of the information technology projects that encounter with high failure rates. Thus, it is required for the risk assessment of the enterprise resource planning implementation to be performed before the project starts. In addition to assessing the risk of ERP establishment, the purpose of the present study is to compare the risk ratings in both pre-establishment and establishment phases. Moreover, the heuristic AHP method considered during the establishment phase combined with FMEA provides more accurate results. Thus, the ERP implementation risks were first identified in this study and classified according to four categories of balanced score card (BSC). The results of the analysis show that the financial risk had the highest risk in the pre- establishment phase and the risk related to the process was first in the establishment phase......ERP projects are one of the information technology projects that encounter with high failure rates. Thus, it is required for the risk assessment of the enterprise resource planning implementation to be performed before the project starts
References:
Aloini, D., R. Dulmin and V. Mininno. (2012). Risk assessment in ERP projects. Information Systems, 37(3): 183-199.
Alomari, I. A. and A. Mohd. (2020). ERP business process attributes and management control to create competitive advantage. IUG Journal of Economics and Business, 28(1): 1-23.
Amid, A., M. Moalagh and A. Z. Ravasan. (2010). Identification and classification of ERP critical failure factors in Iranian industries. Journal of Information systems, 37(3): 227-237.
Barth, C. and S. Koch. (2019). Critical success factors in ERP upgrade projects. Industrial Management & Data Systems, 119(3): 656-675.
Başhan, V., H. Demirel and M. Gul. (2020). An FMEA-based TOPSIS approach under single valued neutrosophic sets for maritime risk evaluation: the case of ship navigation safety. Soft Computing:1-16.
Baykasoglu, A. (2017). Comprehensive fuzzy FMEA model: a case study of ERP implementation risks. Springer Journal, 20: 795-826.
Bharathi, V., R. Raman and D. Pramod. (2014). A FPN based risk assessment model for ERP implementation in small and medium enterprises. Middle-East Journal of Scientific Research, 19(6):747-759.
Bhattacharjee, P., V. Dey and U. Mandal. (2020). Risk assessment by failure mode and effects analysis (FMEA) using an interval number based logistic regression model. Safety Science, 132:104967.
Chen, S.-X., J.-Q. Wang And T.-L. Wang. (2019). Cloud-Based ERP System Selection Based On Extended Probabilistic Linguistic Multimoora Method And Choquet Integral Operator. Computational And Applied Mathematics, 38(2):88
Dewi, R. S. (2019). Maturity Level Assessment for ERP Systems Investment Using Val IT Framework. Procedia Computer Science,161:250-257.
Elgohary, E. (2019). The Role of ERP Capabilities in Achieving Competitive Advantage: An Empirical Study on Dakahlia Governorate Companies, Egypt. The Electronic Journal of Information Systems in Developing Countries, 85(4):12085.
Elragal, A. and M. Haddara. (2013). The impact of ERP partnership formation regulations on the failure of ERP implementations. Procedia Technology, 9(0): 527-535.
Ganesh, L. and A. Mehta (2010). Critical Success Factors for Successful Enterprise Resource Planning Implementation at Indian SMEs. International Journal of Business, Management and Social Sciences,1(1):65-78.
Ghani, U., N. Signal, I. Niazi and D. Taylor (2020). ERP based measures of cognitive workload: A Review. Neuroscience & Biobehavioral Reviews, 118:18-26.
Ghani, U., N. Signal, I. K. Niazi and D. Taylor. (2020). A novel approach to validate the efficacy of single task ERP paradigms to measure cognitive workload. International Journal of Psychophysiology, 158:9-15.
Haung, S. M., I. C. Chang, S. H. Li and M. T. Lin. (2004). Assessing risk in ERP project: identify and prioritize factors. Industrial Management and data System, 108(8): 681-688.
Heredia-Calzado, M. and A. Duréndez. (2019). The influence of knowledge management and professionalization on the use of ERP systems and its effect on the competitive advantages of SMEs. Enterprise Information Systems, 13(9): 1245-1274.
Iskanius, p. (2009). The ERP Project Risk Assessment: A case study. Proceedings of the World Congress on Engineering, 1, London, U.K.
Kohansal, M. A. (2019). Lessons From Failure Erp Implementations. Norsk konferanse for organisasjoners bruk at IT.
Kumar, R. L. (2002). Managing risks in IT projects: an options perspective. Information & Management, 40:63-74.
Lopez, C. and J. L. Salmeron. (2014). Modeling maintenance projects risk effects on ERP performance. Journal of Computer Stundards & Interfaces, 36:545-553.
Madapusi, A. and D. D'Souza. (2012). The influence of ERP system implementation on the operational performance of an organization. Internationa Jornal of Information Management, 32(1):24-34.
Mannini, P. and E. P. V. Prado. (2019). Tools for risk analysis in ERP implementation projects influenced by seasonal uncertainties. iSys-Revista Brasileira de Sistemas de Informação, 11(4): 91-116.
Matende, S. and P. Ogao. (2013). Enterprise resource planning (ERP) system implementation: a case for user participation. Procedia Technology, 9: 518-526.
Ngai, E. W., C. C. Law and F. K. Wat. (2008). Examining the critical success factors in the adoption of enterprise resource planning. Computers in industry, 59(6):548-564.
Ocker, R. and S. Mudambi. (2003). Assessing the Readiness of Firms for CRM: A Literature Review and Research Model. 36th Annual Hawaii International Conference on System Sciences, 2003.
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Pabst, B., A. Casas and R. Chinta. (2016). Empirical Lessons from Failure of ERP Systems in Small and Medium Businesses. Southern Business & Economic Journal, 39(1):22-50.
Parhizkar, M. and M. Comuzzi (2017). Impact analysis of ERP post-implementation modifications: Design, tool support and evaluation. Computers in Industry, 84:25-38.
Prasetyo, S. J., M. Lubis, R. W. Witjaksono and A. H. Azizah. (2019). Critical Failure Factors in Enterprise Resource Planning (ERP) Implementation: Case Study of PT. Toyota Astra Motor Indonesia. Fourth International Conference on Informatics and Computing (ICIC), IEEE.
Qin, J., Y. Xi and W. Pedrycz. (2020). Failure mode and effects analysis (FMEA) for risk assessment based on interval type- fuzzy evidential reasoning method. Applied Soft Computing, 89:106134.
Rotchanakitumnuai, S. (2017). Measuring ERP Implementation Success with a Balanced Scorecard. Americas Conference on Information Systems, 23.
Sanyal, L. (2017). Green Human Resource Management: Policies and Practices. African International Journal of Research in Management, 9(5):43-55.
Sherer, S. and S. Alter (2004). Information Systems Risks and Risk Factors: Are They Mostly About Information Systems? AIS Journals, 14.
Somers, T. M. and K. G. Nelson. (2004). A taxonomy of players and activities across the ERP project life cycle. Information & Management, 41(3):257-278. Strong, D., O. Volkoff and M. Elmes (2001). ERP Systems, Task Structure, and Workarounds in Organizations. Americas Conference on Information Systems Proceeding.
Taghipour, M., M. Shabrang, M. Habibi and N. Shamami. (2020). Assessment and Analysis of Risk Associated with the Implementation of Enterprise Resource Planning (ERP) Project Using FMEA Technique. Management, 3(1):29-46.
Tarn, J. M., D. C. Yen and M. Beaumont. (2002). Exploring the rationales for ERP and SCM integration. Industrial Management & Data Systems, 102(1):26-34.
Umble, E. J., R. R. Haft and M. M. Umble. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146:241-257.
Valanarasu, R. and A. Christy. (2018). Risk assessment and management in enterprise resource planning by advanced system engineering theory. International Journal of Business Intelligence and Data Mining, 13(3):3-14.
Wanas, G. (2018). FMEA Approach for Decreasing ERP Implementation Failure using Critical Failure Factors. International Journal of Computer Applications, 179(49):42-51.
Wang, W. and Y. Wu. (2019). A Tale of Two Systems: ERP in China–Failure and Success. Handbook of Research on the Evolution of IT and the Rise of E-Society, IGI Global, 162-178.
Wang, Y., Q. Yang, B. Zhu, S. Ye, X. Tian and F. Krueger. (2020). High levels of psychopathic traits increase the risk of transferring reactive aggression to innocent people after provocation: Evidence from an ERP study. Biological Psychology, 153:107891.
Wang, C., L. Xu, X. Liu and X. Qin. (2005). ERP research, development and implementation in China: an overview. International Journal of Production Research,43(18):3915-3932.
Wu, J. (2007). Critical success factors for ERP system implementation. Research and practical issues of enterprise information systems II, Springer:739-745.
Yadav, S. K. and D. Joseph. (2020). Prioritising critical failure factors for the adoption of ERP system using TOPSIS method. International Journal of Operational Research,39(2):145-159.
Yan, X., G. Yu and P. Ji. (2019). ERP investment and implementation between China and US: difference and enlightenment. Information Technology and Management, 20(4):175-185.
Zare Ravasan, A. and T. Mansouri. (2016). A dynamic ERP critical failure factors modelling with FCM throughout project lifecycle phases. Production Planning & Control, 27(2):65-82.
Zhan, Y., X. Xiao, Q. Tan and Y. Zhong. (2020). Influence of self-relevance on moral decision-making under reputational loss risk: An ERP study. Chinese Science Bulletin, 65(19):1996-2009.
Zhang, Z., M. K. Lee, P. Huang, L. Zhang and X. Huang. (2005). A framework of ERP systems implementation success in China: An empirical study. International Journal of Production Economics,98(1):56-80.
Zioga, I., R. Hassan and C. D. B. Luft. (2019). Success, but not failure feedback guides learning during neurofeedback: An ERP study. NeuroImage, 200:26-37.
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Alomari, I. A. and A. Mohd. (2020). ERP business process attributes and management control to create competitive advantage. IUG Journal of Economics and Business, 28(1): 1-23.
Amid, A., M. Moalagh and A. Z. Ravasan. (2010). Identification and classification of ERP critical failure factors in Iranian industries. Journal of Information systems, 37(3): 227-237.
Barth, C. and S. Koch. (2019). Critical success factors in ERP upgrade projects. Industrial Management & Data Systems, 119(3): 656-675.
Başhan, V., H. Demirel and M. Gul. (2020). An FMEA-based TOPSIS approach under single valued neutrosophic sets for maritime risk evaluation: the case of ship navigation safety. Soft Computing:1-16.
Baykasoglu, A. (2017). Comprehensive fuzzy FMEA model: a case study of ERP implementation risks. Springer Journal, 20: 795-826.
Bharathi, V., R. Raman and D. Pramod. (2014). A FPN based risk assessment model for ERP implementation in small and medium enterprises. Middle-East Journal of Scientific Research, 19(6):747-759.
Bhattacharjee, P., V. Dey and U. Mandal. (2020). Risk assessment by failure mode and effects analysis (FMEA) using an interval number based logistic regression model. Safety Science, 132:104967.
Chen, S.-X., J.-Q. Wang And T.-L. Wang. (2019). Cloud-Based ERP System Selection Based On Extended Probabilistic Linguistic Multimoora Method And Choquet Integral Operator. Computational And Applied Mathematics, 38(2):88
Dewi, R. S. (2019). Maturity Level Assessment for ERP Systems Investment Using Val IT Framework. Procedia Computer Science,161:250-257.
Elgohary, E. (2019). The Role of ERP Capabilities in Achieving Competitive Advantage: An Empirical Study on Dakahlia Governorate Companies, Egypt. The Electronic Journal of Information Systems in Developing Countries, 85(4):12085.
Elragal, A. and M. Haddara. (2013). The impact of ERP partnership formation regulations on the failure of ERP implementations. Procedia Technology, 9(0): 527-535.
Ganesh, L. and A. Mehta (2010). Critical Success Factors for Successful Enterprise Resource Planning Implementation at Indian SMEs. International Journal of Business, Management and Social Sciences,1(1):65-78.
Ghani, U., N. Signal, I. Niazi and D. Taylor (2020). ERP based measures of cognitive workload: A Review. Neuroscience & Biobehavioral Reviews, 118:18-26.
Ghani, U., N. Signal, I. K. Niazi and D. Taylor. (2020). A novel approach to validate the efficacy of single task ERP paradigms to measure cognitive workload. International Journal of Psychophysiology, 158:9-15.
Haung, S. M., I. C. Chang, S. H. Li and M. T. Lin. (2004). Assessing risk in ERP project: identify and prioritize factors. Industrial Management and data System, 108(8): 681-688.
Heredia-Calzado, M. and A. Duréndez. (2019). The influence of knowledge management and professionalization on the use of ERP systems and its effect on the competitive advantages of SMEs. Enterprise Information Systems, 13(9): 1245-1274.
Iskanius, p. (2009). The ERP Project Risk Assessment: A case study. Proceedings of the World Congress on Engineering, 1, London, U.K.
Kohansal, M. A. (2019). Lessons From Failure Erp Implementations. Norsk konferanse for organisasjoners bruk at IT.
Kumar, R. L. (2002). Managing risks in IT projects: an options perspective. Information & Management, 40:63-74.
Lopez, C. and J. L. Salmeron. (2014). Modeling maintenance projects risk effects on ERP performance. Journal of Computer Stundards & Interfaces, 36:545-553.
Madapusi, A. and D. D'Souza. (2012). The influence of ERP system implementation on the operational performance of an organization. Internationa Jornal of Information Management, 32(1):24-34.
Mannini, P. and E. P. V. Prado. (2019). Tools for risk analysis in ERP implementation projects influenced by seasonal uncertainties. iSys-Revista Brasileira de Sistemas de Informação, 11(4): 91-116.
Matende, S. and P. Ogao. (2013). Enterprise resource planning (ERP) system implementation: a case for user participation. Procedia Technology, 9: 518-526.
Ngai, E. W., C. C. Law and F. K. Wat. (2008). Examining the critical success factors in the adoption of enterprise resource planning. Computers in industry, 59(6):548-564.
Ocker, R. and S. Mudambi. (2003). Assessing the Readiness of Firms for CRM: A Literature Review and Research Model. 36th Annual Hawaii International Conference on System Sciences, 2003.
Oribe, N., Y. Hirano, E. del Re, R. I. Mesholam Gately, K. A. Woodberry, T. Ueno, S. Kanba, T. Onitsuka, M. E. Shenton and K. M. Spencer. (2020). Longitudinal Evaluation of Visual p300 Amplitude in Clinical High Risk Subjects: An ERP Study. Psychiatry and Clinical Neurosciences, First published.
Pabst, B., A. Casas and R. Chinta. (2016). Empirical Lessons from Failure of ERP Systems in Small and Medium Businesses. Southern Business & Economic Journal, 39(1):22-50.
Parhizkar, M. and M. Comuzzi (2017). Impact analysis of ERP post-implementation modifications: Design, tool support and evaluation. Computers in Industry, 84:25-38.
Prasetyo, S. J., M. Lubis, R. W. Witjaksono and A. H. Azizah. (2019). Critical Failure Factors in Enterprise Resource Planning (ERP) Implementation: Case Study of PT. Toyota Astra Motor Indonesia. Fourth International Conference on Informatics and Computing (ICIC), IEEE.
Qin, J., Y. Xi and W. Pedrycz. (2020). Failure mode and effects analysis (FMEA) for risk assessment based on interval type- fuzzy evidential reasoning method. Applied Soft Computing, 89:106134.
Rotchanakitumnuai, S. (2017). Measuring ERP Implementation Success with a Balanced Scorecard. Americas Conference on Information Systems, 23.
Sanyal, L. (2017). Green Human Resource Management: Policies and Practices. African International Journal of Research in Management, 9(5):43-55.
Sherer, S. and S. Alter (2004). Information Systems Risks and Risk Factors: Are They Mostly About Information Systems? AIS Journals, 14.
Somers, T. M. and K. G. Nelson. (2004). A taxonomy of players and activities across the ERP project life cycle. Information & Management, 41(3):257-278. Strong, D., O. Volkoff and M. Elmes (2001). ERP Systems, Task Structure, and Workarounds in Organizations. Americas Conference on Information Systems Proceeding.
Taghipour, M., M. Shabrang, M. Habibi and N. Shamami. (2020). Assessment and Analysis of Risk Associated with the Implementation of Enterprise Resource Planning (ERP) Project Using FMEA Technique. Management, 3(1):29-46.
Tarn, J. M., D. C. Yen and M. Beaumont. (2002). Exploring the rationales for ERP and SCM integration. Industrial Management & Data Systems, 102(1):26-34.
Umble, E. J., R. R. Haft and M. M. Umble. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146:241-257.
Valanarasu, R. and A. Christy. (2018). Risk assessment and management in enterprise resource planning by advanced system engineering theory. International Journal of Business Intelligence and Data Mining, 13(3):3-14.
Wanas, G. (2018). FMEA Approach for Decreasing ERP Implementation Failure using Critical Failure Factors. International Journal of Computer Applications, 179(49):42-51.
Wang, W. and Y. Wu. (2019). A Tale of Two Systems: ERP in China–Failure and Success. Handbook of Research on the Evolution of IT and the Rise of E-Society, IGI Global, 162-178.
Wang, Y., Q. Yang, B. Zhu, S. Ye, X. Tian and F. Krueger. (2020). High levels of psychopathic traits increase the risk of transferring reactive aggression to innocent people after provocation: Evidence from an ERP study. Biological Psychology, 153:107891.
Wang, C., L. Xu, X. Liu and X. Qin. (2005). ERP research, development and implementation in China: an overview. International Journal of Production Research,43(18):3915-3932.
Wu, J. (2007). Critical success factors for ERP system implementation. Research and practical issues of enterprise information systems II, Springer:739-745.
Yadav, S. K. and D. Joseph. (2020). Prioritising critical failure factors for the adoption of ERP system using TOPSIS method. International Journal of Operational Research,39(2):145-159.
Yan, X., G. Yu and P. Ji. (2019). ERP investment and implementation between China and US: difference and enlightenment. Information Technology and Management, 20(4):175-185.
Zare Ravasan, A. and T. Mansouri. (2016). A dynamic ERP critical failure factors modelling with FCM throughout project lifecycle phases. Production Planning & Control, 27(2):65-82.
Zhan, Y., X. Xiao, Q. Tan and Y. Zhong. (2020). Influence of self-relevance on moral decision-making under reputational loss risk: An ERP study. Chinese Science Bulletin, 65(19):1996-2009.
Zhang, Z., M. K. Lee, P. Huang, L. Zhang and X. Huang. (2005). A framework of ERP systems implementation success in China: An empirical study. International Journal of Production Economics,98(1):56-80.
Zioga, I., R. Hassan and C. D. B. Luft. (2019). Success, but not failure feedback guides learning during neurofeedback: An ERP study. NeuroImage, 200:26-37.
_||_
Aloini, D., R. Dulmin and V. Mininno. (2012). Risk assessment in ERP projects. Information Systems, 37(3): 183-199.