Researchers, Ms Li Fang and Sylvia Patrecia, of Jonkoping International Business School, Swedish college, conducted a research on what are the critical success factors in implementation of ERP. It was an academic research based on both secondary and primary research. The objective of the study was to identify factors that make an ERP implementation successful and to determine criticality of each factor in successful implementation.
After selecting the factors, they interviewed different stakeholders such as Customers ) VSM Group, Scania), ERP Vendors ( Oracle and SAP) and IT Consultants or ERP implementers Sverige AB, SYSteam and Cap Gemini Sverige. The researchers also relied on direct observations and review of documents to score the CSFs. The scores were as follows
1 – Strongly determines success
2 – determines success
3 – necessary for success
Hence the factors that have scored the lowest, e.g. top management support are most critical to success of ERP implementation.
To recap, the team concluded that most critical factors as per ranking are
- Top Management Support – Management is committed to implementation of ERPs and willing to provide its time at every step of implementation. Management allocates resources for the project.
- Business Process Engineering – Companies need to identify their current structures, business processes and IT systems. Modify them, if need be, to suit their current and future growth plans. ERPs are complex systems and its easier to work with configured ones than with extensive customizations. BPR not only helps in choosing an ERP that requires minimal customizations but also cuts down to implementation time significantly.
- Project and Team Management – Project teams should be a good blend of external consultants and management with knowledge of processes and industry best practices. The team needs to allay fears of job loss and also deal with resistance arising out of changed job descriptions. Team’s communication strategy is an important ingredient in successful implementation.
- Effective Communication
- ERP Strategy
- Consultant and Vendor Support
- Organization Culture
- Retain Experienced Employees
- Monitoring and Evaluation of Performance
- Problem Anticipation
- Cultural Diversity