What is the success factors for ERP implementation ?

An enterprise resource planning (ERP) system is an integrated set of programs that provides support for core organizational activities, such as manufacturing and logistics, finance and accounting, sales and marketing, and human resources. An ERP system helps the different parts of an organization share data and knowledge, reduce costs, and improve management of business processes. In spite of their benefits, many ERP systems fail (Stratman & Roth,1999). Implementing an ERP system is a major undertaking. About90% of ERP implementations are late or over budget (Martin,1998), and the success rate of ERP systems implementation is only about33% (Zhang et al.,2003).Over the past few years, limited research has been conducted about ERP implementation issues: mainly, case studies in individual organizations have been reported. A major problem with such ERP case studies is that very few implementation failures have been recorded in the literature, and thus, the reasons why implementations fail are not known to practitioners and researchers. That is a motivation toward conducting empirical studies to explore critical factors that affect ERP systems implementation. A recent summary of ERP literature stated that research of critical success factors (CSFs) in ERP implementation is rare and fragmented (Nah, Lau, & Kuang,2001). The idea of identifying CSFs as a basis for determining the information needs of managers was popularized by Rockart (1979). CSFs are those factors that are critical to the success of any organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail—perhaps catastrophically (Rockart,1979). In the context ofERP project implementation, CSFs represent the essential ingredients, without which a project stands little chance of success. This study examines the CSFs for implementing ERP systems in Venezuela. Managers from seven corporations, who were identified as having key roles in ERP systems implementation, were surveyed in order to assess empirically which CSFs are critical in leading a successful implementation of ERP systems in Venezuela. This article is organized into four sections. First, ERP-related literature is reviewed.The next section introduces the research methodology, followed by presentation of the results. The article ends with the conclusions and implications for future research and practice.

Implementing an ERP system is not an easy task. It can cause dramatic changes that need to be carefully administered if the potential advantages of an ERP solution (Al-Mudimigh, Zairi, & Al-Mashari,2001) are to be gained. In some well-documented cases, spectacular results have been achieved (Johnston,2002). There is, on the other hand, a relatively high failure rate: it was reported that three-quarters of ERP projects were judged to be unsuccessful by the ERP implementing firms (Kyung & Young,2002). Also, failures are much less extensively documented. As a result, pitfalls to be avoided tend to be less well known. Venezuelan companies are just starting to use ERP systems. They started applying ERP concepts late in the1990s. Because of the complex and integrated nature of ERP, and the large investment involved, it is imperative for organizations to study the experiences of others and to learn from their practices and success factors (Zairi et al.,2000). Identifying CSFs relevant to local companies is one way to increase the chances of a successful local implementation (Sum, Ang, & Yeo,1997).

It is probably a combination of factors that is important in explaining ERP implementation success (Zhang et al.,2003). From the review,20 factors emerged as critical to the successful implementation of ERP systems. They were obtained after careful analysis and grouping of related subfactors:1. Top management support2. User training3. Use of consultants4. User participation5. Vendor package selection6. Use of steering committee7. Discipline and standardization8. Minimal customization9. Use of vendor’s development tools10. Best people full time11. Technical and business knowledge12. Implementation approach13. Clear goals, focus, and scope14. Business process reengineering15. Project management16. Effective communications17. Presence of a champion18. Interdepartmental cooperation and communication19. Management of expectations20. Vendor/customer partnership