Computers in Industry 56 (2005) 529–544 www.elsevier.com/locate/compind
Critical factors for successful ERP implementation: Exploratory ﬁndings from four case studies
Jaideep Motwani a,*, Ram Subramanian a, Pradeep Gopalakrishna b
Seidman School of Business, Grand Valley State University, Department of Management, 401 West Fulton, Grand Rapids, MI 49504, USA b Department of Marketing andInternational Business, Lubin School of Business, Pace University, New York, NY 10038, USA Received 29 March 2004; received in revised form 14 December 2004; accepted 13 February 2005 Available online 21 July 2005
Abstract As more and more organizations move from functional to process-based IT infrastructure, ERP systems are becoming one of today’s most widespread IT solutions. However, not allﬁrms have been successful in their ERP implementations. Using a case study methodology grounded in business process change theory, this research tries to understand the factors that lead to the success or failure of ERP projects. The results from our comparative case study of 4 ﬁrms that implemented an ERP system suggest that a cautious, evolutionary, bureaucratic implementation process backedwith careful change management, network relationships, and cultural readiness have a positive impact on several ERP implementations. Understanding such effects will enable managers to be more proactive and better prepared for ERP implementation. Managerial implications of the ﬁndings and future research directions are discussed. # 2005 Elsevier B.V. All rights reserved.
Keywords: Case studies;Critical factors; ERP; Implementation
1. Introduction The myriad challenges faced today by global businesses are expected to grow in intensity and complexity as we go further into this century. Expanded global competition has become the norm rather than the exception, with an unprecedented number and variety of products available to satisfy consumer needs
* Corresponding author. Tel.: +1 616 3317467. E-mail addresses: firstname.lastname@example.org (J. Motwani), email@example.com (R. Subramanian).
and desires. In particular, many ﬁrms have implemented company-wide systems called Enterprise Resource Planning (ERP) systems, which are designed to integrate and optimize various business processes such as order entry and production planning across the entire ﬁrm . According to Davenport , thebusiness world’s embrace of enterprise systems may in fact be the most important development in the corporate use of information technology in the 1990s. When used appropriately, ERP software integrates information used by the accounting, manufacturing, distribution, and human resources departments into a
0166-3615/$ – see front matter # 2005 Elsevier B.V. All rights reserved.doi:10.1016/j.compind.2005.02.005
J. Motwani et al. / Computers in Industry 56 (2005) 529–544
seamless computing system. A successful ERP can be the backbone of business intelligence for an organization, giving management a uniﬁed view of its processes . Unfortunately, ERPs have a reputation for costing a lot of money and providing meager results, because the people who are expected to use theapplication do not know what it is or how it works. When ERP software fails, it is usually because the company did not dedicate enough time or money to training and managing culture-change issues. ‘‘Faulty technology is often blamed, but eight out of nine times, ERP problems are performance related,’’ says Pat Begley, senior vice president of educational services at SAP, an ERP software company inNewtown Square, Pennsylvania . Given the large ﬁnancial commitment that an ERP project requires and the potential beneﬁts it can offer if successfully implemented, it is important to understand what is needed to ensure a successful ERP implementation. There are two major objectives of this study. First, using a methodology grounded in business process change theory, this research reports on a...
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