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23 - 24 July 2015, Sheraton LaGuardia East Hotel, New York, USA, ISBN: 978-1-922069-79-5
1. Introduction
Sensible use of technology can give organizations a competitive advantage. This may be especially
true for enterprise resource planning systems that are capable of transforming organizational
processes through integration and automation, stated by Markus, and Tanis (2000). ERP systems
often provide firms a positive return, Hayes, Hunton, and Reck (2001), but that is not always the case.
ERP systems are costly and have often resulted in inconsistent economic returns. According to Ivo
De Loo (2011), One reason ERP may fail to meet expectations is poor implementation. A second
reason is that an ERP system is a poor fit for a particular firm and perhaps should not have been
adopted, publication of Hong, and Kim (2002). Motivated by this second reason, coupled with the
frequent failures of ERP systems, the author explores the ERP adoption decision process. This idea
could suggest that the effects of institutional pressures on ERP adoption decisions are moderated by
the level of ambiguity surrounding the costs versus benefits of adopting an ERP system.
Enterprise resource planning (ERP) systems, when successfully implemented, links all functions of an
organization including order management, manufacturing, human resources, financial systems, and
distribution with external suppliers and customers into
a tight integrated system with shared data and visibility, stated by Chen (2001). The primary motive
for ERP implementation is the potential for enhancing the firm's competitiveness. ERP systems
provide significant benefits, and companies adopted them with the goal of replacing inefficient standalone legacy systems, increasing communications between business functions, increasing
information processing efficiencies, improving customer relations, and improving overall decision
making, Cereola (2011). However, Risks are part and package of ERP project., Nonetheless a
_____________________________________________________________________
Assoc. Prof. Abdelmageed Elsadek Abdelrazek, MIS dept., Email: arazek@ubt.edu.sa, College of Business
Administration (CBA), University of Business and Technology (UBT), Jeddah, Saudi Arabia
Also, as indicated from Figure 2 the most stated benefits on the mentioned survey are: information
availability 33.3%, increased interaction across the enterprise 23.1%, and customer interaction
12.8%.
4. ERP Adoption Challenges
Many changes that come about due to an ERP implementation will substantially affect employees.
Success depends on how effectively you understand and manage the impacts of these changes.
Many challenges could surfaced up during the implementation process that should be cleared and
managed to assure the success of the implementation. Next we stated some of these challenges that
must be addressed by the project management:
First, it is very important that the implementation is done in stages. "Planning is absolutely necessary
if you want your ERP project to succeed, you simply cant wing ERP, stated by Erik Kaas. If you dont
do proper planning it will lead to confusion and chaos down the road because the organization might
not fully understand their current processes and how to evolve them to maximize business benefits
and efficiencies.
To do a proper planning, organizations should conduct an internal audit of all of their processes and
policies before choosing an ERP system. In addition, putting together an ERP evaluation team
composed of stakeholders from across the business. Moreover, if you feel you do not have the inhouse capability to properly evaluate ERP systems, consider hiring an experienced third-party,
vendor-neutral consultant, who has experience implementing ERP solutions at companies in your
industry. Second, proper training is very essential during and after implementation. The staff should
be comfortable in using the application or else, it will backfire, with redundant work and functional
inefficiencies. A lack of proper training is one of the most common reasons that ERP projects fail, and
it can also result in employees resenting the new system because they don't understand it. Without
knowing features, companies miss opportunities to automate business processes, complete functions
faster, and meet business objectives. In addition, upgrades, enhancements, and maintenance are
more
Define
Outline Implementation Strategy
Define Project Objective
Establish Project Team & Define Project Scope
Business Requirement Definition
Conceptual Design & Infrastructure Analysis
Define Test Strategy & Quality Process
Plan
Define Business Process
Prepare Detail Design
Establish Technical Infrastructure
Finalize GAP Analysis & Project Scope
Project Team Familiarization & Training
Finalize Test Plans & Quality Process Results
Build
Module Build & Baseline Configuration
Configuration Training
System & End User Documentation
Develop RICEF Objects
Establish System Security & End User Privileges
Quality Review & Corrective Actions
Deploy
Integration & System Testing
Load & Stress Testing
End User Training
User Acceptance Testing
Cut-over Plan & Production Migration Plan
Quality Review & Corrective Actions
Operate
Cut-over Operation
Production Migration
System Readiness Audit & Go Live
Establish Change Control Process
Validate Production Entries
Quality Review & Corrective Actions
Support & Optimize
Post Production Support Process
New System Adoption & Learning
System Monitoring & Fine Turning
End User Handholding
Recommend
Business Process Optimization
Validate Project Scorecard
costly, and less likely to succeed. All of that is because there isnt proper training. The organization
have to make sure employees have a chance to become comfortable with the new system before it
goes live will do wonders for your chances at ERP success. In addition, the organization should
create a master list with all the features, tracking usage, and periodically reviewing the list to
determine which features are being used and which are the most helpful. Third, lack of proper
analysis of requirements. It will lead to non-availability of certain essential functionalities. This might
affect the operations in the long run and reduce productivity and profitability. Fourth, lack of support
from Senior Management will lead to unnecessary frustrations in work place. Also, it will cause delay
in operations and ineffective decisions. Hence, it is essential to ensure that the Senior Management
supports the transformation.
Fifth, compatibility Issues with ERP Modules leads to issues in integration of modules. Companies
associate different vendors to implement different ERP modules, based on their competency. It is
very essential that there is a way to handle compatibility issues. Also, the organization should
decommission legacy applications. Sixth, cost overheads will result, if requirements are not properly
discussed and decided during the planning phase. Therefore, as we discussed in the planning phase
a detailed plan with a complete breakdown of requirements should be worked out before execution. In
addition, the organization should have a maintenance strategy. Because if they dont have it then they
are not taking full advantage of their ERP investment and their maintenance dollar. By not applying
maintenance, their systems will quickly become obsolete (from a technical perspective) as will their
business processes. Moreover, it is very important to the keep the kernel up-to-date with the right
legal changes applied to prevent potential problems. Finally, investment in infrastructure is very
essential. ERP applications modules will require good processing speed and adequate storage. Not
allocating suitable budget for infrastructure will result in reduced application speed and other software
issues.
Also another study performed by Kamhawi (2008) in Bahrain, where he made a list of 18 possible
challenges. The top ten out of eighteen barriers of ERP adoption are as follows. (1) Large capital
investments required for ERP systems; (2) Requires too much training for employees; (3) Other
important priorities for now; (4) No need now for the drastic change that ERP systems require; (5) We
lack the experience needed to develop and support ERP systems; (6) It would be difficult to integrate
ERP system with our existing systems; (7) Too risky projects; (8) Lack of project management
experiences; (9) Difficult for our organization to learn how to operate this new system; (10) Lack of
resources.
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