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Manuscript ID : 537216 Visit : 171 Page: 95 - 110

Article Type: Original Research

Identifying Critical Factors in Enterprise Resource Planning (ERP) Implementation

Subject Areas : Industrial Management

Hassan Farajzadeh Dehkordi 1 , Shiva Mosalanejad 2 , Mohammad Hossein Fatheh 3 , Morteza Shafiee 4

1 - Assistant Professor, Faculty of Accounting, Raja University, Iran
2 - Ph.D. Student in Accounting, Islamic Azad University, Science and Research Branch Tehran, Iran.
3 - Instructor, Department of Accounting, Faculty of Management, Economics and Accounting, Payame Noor University, Iran.
4 - Assistant Professor, Faculty of Management, Islamic Azad University, Shiraz Branch, Iran

Received: 2014-09-28 Accepted : 2015-02-11 Published : 2015-04-09

Keywords:

Abstract :

Regarding the fact that companies implement different information systems in their organizations, there is an increasing need to integrate this information. Enterprise resource planning (ERP) is both a database and an application which integrates the business activities of a company to ensure integrated business processes. So far, only a few empirical studies have been conducted in order to determine the key factors in implementing ERP. The present study examines the factors influencing the successful implementation of ERP experimentally and its results are presented. Using a standard questionnaire distributed among 12 companies that implement ERP in Iran, the experiences of managers, staffs, and professionals in implementing, ERP and its pros and cons were collected; the data were analyzed through the SPSS software using t-tests and Friedman ANOVA. Based on the literature, 10 potential factors in implementing ERP have determined: system selection criteria, consultant selection criteria, supplier selection criteria, principles of project management, re-engineering process, human resources development, Chief Executive Officer  (CEO) support, cost and budget, IT structure, and consulting services. The results of the study show that all ten mentioned factors have a significant relationship with successful ERP implementation. Among these factors, CEO support is the most significant factor in implementing successful ERP, while the cost was identified as the least important factor. Furthermore, the variables of CEO support, re-engineering process, and project management has caused the greatest customer satisfaction in ERP implementation.  

References:


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  6. Bernroider, E & Koch, S. (1999). Decision making for ERP-investments from the perspective of organizational impact: preliminary results from an empirical study, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 773–775.
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  8. Brynjolfsson, E & Mendelson, H. (1993). Information systems and the modern enterprise, Journal of Organizational Computing, 3(3), 245–255.
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  9. Chatfield, A.T. & Andersen, K.V. (1998). Playing with LEGO: IT, coordination and global supply management in a world leader toy manufacturing enterprise, Proceedings of the Sixth European conference on Information Systems, 4(6), 1680–1687.
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  11. Ghazanfari, M., Jafari, M., Taghavifard, M. T. & Rouhani, S. (2008). ERP Evaluation Requirements for Business Intelligence: The Case of Trade Promotion Organization of Iran. Quarterly Journal of New Economy, 4(13), 22-45. (Translated in Persian).
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  16. Klaus, H., Rosemann, M & Gable, G.G. (2000). What is ERP?.  Information System's Frontiers. 2(2), 141–162.
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  17. Koh, S.C.L., Gunasekaran , A & Goodman T. (2011). "Divers, barriers and critical success factors for ERP2 implementation in supply chains: A critical analysis", The Journal of Strategic Information Systems, 20(4), 385-402. 
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  18. Mabert, V., Soni, A. & Venkataramanan, M. (2003). The Impact of Organization Size on Enterprise Resource Planning (ERP) Implementations in the US Manufacturing Sector. International Journal of Management Science, 31(3). 235-246.
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  22. Nazemi, E., Sharifi, E. & Tarokh, M. J. (2007). A Conceptual Model for Enterprise Resource Planning Performance Measurement, Case Study: Zarbal Complex. Pajouhesh & Sazandegi (in Animal and Fisheries Sciences), 20(2), 145-155. (Translated in Persian).
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  25. Richardson, B., (2004). Five Ideas About ERP, AMR Research, April, 2004, http://www.amrresearch.com/Content/View.asp?pmillid= 17203&docid=19061 (effective link on 15 October 2004).
    26.
  26. Sanchez, L.S, Nickel, M.N & Rodriguez, S.G. (2010). "The role played by interdependences in ERP implementations: An empirical analysis of critical factors that minimize elapsed time". Information and Management, 47(2), 87-95. 
    27.
  27. Scott, J.E. (1999). The FoxMeyer drugs bankruptcy: was it a failure of ERP? Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 223–225.
    28.
  28.  Shafia,  M. A.,  Manian, A &  Raeesi Vanani, I. (2012). Designing a Fuzzy Inference System for Predicting the Implementation Success of ERP Solution. Journal of Information Technology Management,  5(1), 98-106. (Translated in Persian).
    29.
  29. Shanks, G & Parr, A. (2000). Differences in critical success factors in ERP systems implementation in Australia and China: a cultural analysis, Proceedings of the Eighth European Conference on Information Systems Vienna.
    30.
  30. Slooten, K & Yap, L. (1999) Implementing ERP information systems using SAP, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 226–228.
    31.
  31. Smethurst, J & Kawalek, P. (1999). Structured methodology usage in ERP implementation projects: an empirical investigation, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August. 13(15). 219–221.
    32.
  32. Soh, C., Kien, S.S. & Tay-Yap. J. (2000). Cultural fit and misfit: is ERP a universal solution? Communication of the ACM, 43(3), 47–51.
    33.
  33. Stefanou, C.J. (1999). Supply chain management (SCM) and organizational key factors for successful implementation of enterprise resource planning (ERP) systems, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August. 13(15). 800–802.
    34.
  34. Stein, T. (1998). SAP Installation Scuttle—Unisource Cites Internal Problems for $168m Write-off, InformationWeek, January 26. (34).
    35.
  35. Sternad, S., Gradisar, M & Bobek, S. (2011). "The influence of external factors on routine ERP usage", Industrial Management & Data Systems, 111(9), 1511-1530
    36.
  36. Sumner, M. (1999). Critical success factors in enterprise wide information management systems projects, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 232–234.
    37.
  37. Sweat, J. (1998). ERP—Enterprise Application Suites are becoming a Focal Point of Business and Technology Planning, Information Week. 704, October 12, 42–52.
    38.
  38. Upton, D & McAfree, A. (1997). Vandelay Industries, Harvard Business School Publishing, 1–16.
    39.
  39. Weston, F.C. (2001). ERP implementation and project management, Production & Inventory Management Journal. 42(3), 75–80. 
    40.
_||_

  1. Aalam Tabriz A., Motahari Farimani, N. & Yazdani, H. (2010).  Evaluation of Implementation Strategy ERP Plan for Small and Medium Enterprises. Journal of Strategic Management Studies,  1(3), 113-123. (Translated in Persian).
    2.
  2. Appleton, E. (1997). How to Survive ERP. Datamation. 50–53.
    3.
  3. Austin, R.D., Cotteleer, M.J & Escalle, C.X. (2003). Enterprise Resource Planning: Technology Note, Harvard Business School Publishing, 33, 1–8.
    4.
  4. Basu, C. & Palvia, P.C. (1999). Towards developing a model for global business process reengineering, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 283–285.
    5.
  5. Behboudi Asl, M., Rahmani Youshanlouei, H., Ansari, M & Mir Kazemi Mood, M. (2012). Identifying Factors Influencing the Selection of Enterprise Resource Planning Systems from Expert Views. Journal Of Information Technology Management, 4(12), 1-22. (Translated in Persian).
    6.
  6. Bernroider, E & Koch, S. (1999). Decision making for ERP-investments from the perspective of organizational impact: preliminary results from an empirical study, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 773–775.
    7.
  7. Bingi, P., Sharma, M.K & Godla, J.K. (1999). Critical issues affecting an ERP implementation, Information Systems Management, 16(3), 7–14.
    8.
  8. Brynjolfsson, E & Mendelson, H. (1993). Information systems and the modern enterprise, Journal of Organizational Computing, 3(3), 245–255.
    9.
  9. Chatfield, A.T. & Andersen, K.V. (1998). Playing with LEGO: IT, coordination and global supply management in a world leader toy manufacturing enterprise, Proceedings of the Sixth European conference on Information Systems, 4(6), 1680–1687.
    10.
  10. Ehie , I.K.C & Madsen, M. (2005). Identifying critical issues in enterprise resource planning (ERP) implementation, Computers in Industry, 56, 545–557.
    11.
  11. Ghazanfari, M., Jafari, M., Taghavifard, M. T. & Rouhani, S. (2008). ERP Evaluation Requirements for Business Intelligence: The Case of Trade Promotion Organization of Iran. Quarterly Journal of New Economy, 4(13), 22-45. (Translated in Persian).
    12.
  12. Gleick, J. (2002). ERP Implementation, Future Trends in the Center for Information Technology and Management Newsletter, 6 (3), accessed from in: http://citm.udallas.edu (effective link on 12 March 2003).
    13.
  13. Hatami Lankarani, F., Tarokh M. J. & Akbari Jokar M. R. (2011). ERP Implementation Roadmap in Health Care Centers, International Journal of Industrial Engineering & Production Research, 22(2), 205-213. (Translated in Persian).
    14.
  14. Holland, C.P & Light, B. (1999). A critical success factors model for enterprise resource planning implementation, Proceedings of the Seventh European Conference on Information Systems, Copenhagen, Denmark, June. 23.
    15.
  15. Hong, K.K & Kim, Y.G. (2002).  The critical success factors for ERP Implementation: an organizational fit perspective, Information & Management. 40, 25–40.
    16.
  16. Klaus, H., Rosemann, M & Gable, G.G. (2000). What is ERP?.  Information System's Frontiers. 2(2), 141–162.
    17.
  17. Koh, S.C.L., Gunasekaran , A & Goodman T. (2011). "Divers, barriers and critical success factors for ERP2 implementation in supply chains: A critical analysis", The Journal of Strategic Information Systems, 20(4), 385-402. 
    18.
  18. Mabert, V., Soni, A. & Venkataramanan, M. (2003). The Impact of Organization Size on Enterprise Resource Planning (ERP) Implementations in the US Manufacturing Sector. International Journal of Management Science, 31(3). 235-246.
    19.
  19. Malhotra, R & Temponi, C. (2010). "Critical decisions for ERP integration: small business issues"  International Journal of Information Management. The Journal for Information Professionals, 30(1), 28-37.
    20.
  20. Markus, M.L & Tanis, C. (2000). The enterprise systems experience— from adoption to success, R.W. Zmud (Ed.), Framing the Domains of IT Research: Glimpsing the Future Through the Past, Pinnaflex Educational Resources, Inc., Cincinnati, OH, USA. 173–207.
    21.
  21. Markus, M.L & Robey, D. (1998). Information technology and organizational change: causal structure in theory and research, Management Science, 34(5), 583–598.
    22.
  22. Nazemi, E., Sharifi, E. & Tarokh, M. J. (2007). A Conceptual Model for Enterprise Resource Planning Performance Measurement, Case Study: Zarbal Complex. Pajouhesh & Sazandegi (in Animal and Fisheries Sciences), 20(2), 145-155. (Translated in Persian).
    23.
  23. Oana, V. (2010). "Strategic alignment of ERP implementation. Information & management. 47(3). 158-166.
    24.
  24. Rajagopal, P. (2002). An innovation-diffusion view of implementation of enterprise resource planning (ERP) systems and development of a research model. Information & Management, 40, 87–114.
    25.
  25. Richardson, B., (2004). Five Ideas About ERP, AMR Research, April, 2004, http://www.amrresearch.com/Content/View.asp?pmillid= 17203&docid=19061 (effective link on 15 October 2004).
    26.
  26. Sanchez, L.S, Nickel, M.N & Rodriguez, S.G. (2010). "The role played by interdependences in ERP implementations: An empirical analysis of critical factors that minimize elapsed time". Information and Management, 47(2), 87-95. 
    27.
  27. Scott, J.E. (1999). The FoxMeyer drugs bankruptcy: was it a failure of ERP? Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 223–225.
    28.
  28.  Shafia,  M. A.,  Manian, A &  Raeesi Vanani, I. (2012). Designing a Fuzzy Inference System for Predicting the Implementation Success of ERP Solution. Journal of Information Technology Management,  5(1), 98-106. (Translated in Persian).
    29.
  29. Shanks, G & Parr, A. (2000). Differences in critical success factors in ERP systems implementation in Australia and China: a cultural analysis, Proceedings of the Eighth European Conference on Information Systems Vienna.
    30.
  30. Slooten, K & Yap, L. (1999) Implementing ERP information systems using SAP, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 226–228.
    31.
  31. Smethurst, J & Kawalek, P. (1999). Structured methodology usage in ERP implementation projects: an empirical investigation, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August. 13(15). 219–221.
    32.
  32. Soh, C., Kien, S.S. & Tay-Yap. J. (2000). Cultural fit and misfit: is ERP a universal solution? Communication of the ACM, 43(3), 47–51.
    33.
  33. Stefanou, C.J. (1999). Supply chain management (SCM) and organizational key factors for successful implementation of enterprise resource planning (ERP) systems, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August. 13(15). 800–802.
    34.
  34. Stein, T. (1998). SAP Installation Scuttle—Unisource Cites Internal Problems for $168m Write-off, InformationWeek, January 26. (34).
    35.
  35. Sternad, S., Gradisar, M & Bobek, S. (2011). "The influence of external factors on routine ERP usage", Industrial Management & Data Systems, 111(9), 1511-1530
    36.
  36. Sumner, M. (1999). Critical success factors in enterprise wide information management systems projects, Proceedings of the Americas Conference on Information Systems (ACIS), Milwaukee, WI, USA, August, 13(15), 232–234.
    37.
  37. Sweat, J. (1998). ERP—Enterprise Application Suites are becoming a Focal Point of Business and Technology Planning, Information Week. 704, October 12, 42–52.
    38.
  38. Upton, D & McAfree, A. (1997). Vandelay Industries, Harvard Business School Publishing, 1–16.
    39.
  39. Weston, F.C. (2001). ERP implementation and project management, Production & Inventory Management Journal. 42(3), 75–80. 
    40.

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