Critical Success Factors for Implementation of Enterprise Resource Planning Software
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SSRG International Journal of Computer Science and Engineering Volume 8 Issue 2, 1-5, January 2021
ISSN: 2348 – 8387 /doi:10.14445/23488387/IJCSE-V8I2P101 ©2021 Seventh Sense Research Group®
Critical Success Factors for Implementation of
Enterprise Resource Planning Software
Jigar K Patel
M.B.A (Systems & Marketing), Houston, Texas, USA
Abstract — Ensuring the successful implementation of Because of the resources an organization can puts at risk
Enterprise Resource Planning (ERP) software depends on a during this process, it is crucial that organizations
few critical factors. Nowadays, ERP is generally used in understand the process completely. Once ERP has been
giant corporations, while a few small and medium implemented, and the software is live, employees can take a
enterprises use this important tool. But with that said, long exhale. All hands will be on deck because employees
several companies are not able to utilize ERP to its full will start to adjust to the new system, and soon enough, the
potential because of an inadequate implementation system will start paying its dividends. Once the dust has
approach. Being able to see a unified approach of all settled, and the system is running swiftly, you will want to
departmental operations can streamline processes to a review if the implementation process has achieved the
greater extent, and that’s where ERP comes in. And even assigned goals. This means an ERP implementation is only
though several vendors have created affordable packages for good as the factors you pay attention to while adopting it.
ERP systems, they can still be a massive investment for most
organizations. For many organizations, the cost alone is one A. Clear Goals and Objectives
of the reasons why they do not go for an ERP system Deciding beforehand what you want the software to do for
altogether. But once you are done dealing with the sticker your business is vital. When enterprise resource planning
shock, you can realize how enterprise resource planning can software is implemented, companies can stay in touch with
lead to a positive return on investment. Not only are you real-time information about their business processes. Overall,
saving money, but you are also saving time. Moreover, there ERP is a software package that blends different applications
is no longer a need to train your employees on several to integrate data and show information. If your goals and
different kinds of software once an ERP system consolidates objectives are clear enough for the implementation team to
everything under one roof. This, in turn, means that you do understand, you manage your resources better.
not have to schedule training sessions with many vendors; When the finish line is in clear sight, the software involved
you just have to schedule a workshop with one. in the process can be upgraded accordingly, and workflow
can improve. It is also worth noting that 60% of all ERP
Keywords — ERP Implementation, ERP System, Critical implementations fail because organizations often
factors underestimate the importance of setting clear goals and
objectives.
I. INTRODUCTION First and foremost, organizations need to consider the impact
An ERP system can possibly be one of the biggest of the software implementation on their business processes
investments an organization has to make. Not only does the and the people who work under them. The shift to a new
process require money and time, but it also requires mutual style of working can be daunting for some people, but if the
collaboration and synergy. The enterprise resource planning objectives are clear, it does not have to be!
implementation process, timeline, phases, and complexity
are most dependent on the number of modules an B. Management Support
organization chooses to deploy, the amount of data being The upper management in any organization is a major
converted, the customizations needed, and the project stakeholder in the ERP implementation project. To ensure
management sources available. Depending on the approach the project succeeds indefinitely, it is essential every step of
an organization chooses and the complexity of the process the process is communicated to departmental heads, and they
involved, the procedure can take somewhere between three are engaged in the procedure. It is also vital to have an
months to two years. On the other hand, implementing core effective feedback procedure to channel and complaints or
modules (General Ledger, Accounts Receivable, and concerns the management might have to address the issues
Accounts Payable) can be done quickly. Aligning these that can come up.
modules with manufacturing processes and the essential During any software implementation, the upper management
workflow can take a lot of time. But regardless of the speed, is responsible for providing the essential resources. If the
you decide to go with for the software implementation team responsible for the ERP has not communicated with the
process, having a thorough and well-documented plan is upper management, then having the essential resources might
vital. not be possible. When few employees are freed up to help
This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)Jigar K Patel / IJCSE, 8(2), 1-5, 2021
with the implementation process, managers need to fill those E. Project Management
positions by temporarily assigning those responsibilities to The famous ERP project management triangle of scope, cost,
another employee or hiring people on a contractual basis. and time is infamous for several reasons. You cannot
Ideally, additional costs like these are a part of the overall decrease or increase a factor without doing the same for other
cost of a new ERP system. elements involved. However, since the time corner of the
triangle is usually based on predictions of the future, project
C. Requirement Gathering managers often miscalculate this aspect the most. Therefore,
Having the right requirements for your ERP system is when you are creating a timeline for your implementation,
absolutely essential if you’re trying to move towards swifter try to be realistic when you’re deciding the schedule.
operations. Start by assembling a team of people who will If the ERP implementation project sponsors are forcing you
create a list of the software’s important requirements. The to get done with the requirements in a month, try to talk to
core team members will be subject matter experts (SME). the upper management and give them a reality check. For
Since the ERP system is implemented company-wide, try to almost every ERP implementation, a need for more resources
include at least one member from every functional facet of is common. But it is also important to remember that getting
your business. more resources will not necessarily solve your problem.
Understandably, every business is unique, but every business There is also a good chance that you’ll have several team
has a defined team for finance and sales. Other important members working on the integration and design documents,
parts can be software development, supply chain, but only a few of them will get approved. To make your
engineering, and production. Less important parts of the designers and reviewers consistent, stick to a standard
process can be the external compliance experts who are template. This will remove all adaptability complications,
needed on an ad-hoc basis. While there is no optimal number and reviews will be done a lot quicker.
of SMEs you can include, if your conference room is
overflowing, try to make some cuts so it is manageable. F. Project Timeline
The requirement gathering can also include people who are Even though an implementation accelerator and the best
not a part of your organization. You can include a consultant practices of the industry can help you through the process,
who is an expert in developing ERP systems, and they might there are no doubts that every organization is different.
tell you the agnostic requirements of the process. Some Because of this, every software implementation is different,
businesses also reserve a seat for their financier, but this can and certain aspects of the process can require extra time.
matter if your business is a startup or another organization’s Several ERP vendors often claim that a system can be
subsidiary. If you ask them, they will definitely want a seat deployed in a month, but the answer to this question depends
in the gathering. heavily on the kind of business processes you have.
On average, most companies take approximately 21 months.
D. Selection of Enterprise Resource Planning Software Several vendors also tell their clients not to worry about a
Very often, organizations get confused by the promises business process because everything will be solved once the
different vendors can make. This is because, in some implementation process is complete. But since an ERP
instances, these claimed guarantees never see the light of the software is built to cater to an entire organization, defining
day, and businesses are not able to see a significant increase unique processes can take considerable effort.
in profit. Companies often struggle the most with software So, before you implement the software and try to mold it
implementation when the upper management is not on board. according to your requirements, try to change your business
Nowadays, selecting an enterprise resource planning processes instead. This will reduce the need for extensive
software depends on different factors like the current customization, which will minimize time and reduce costs
technology, the software’s price, and whether a similar drastically.
business has relied on the same software.
G. Team Composition and Skill Sets Required
However, when these considerations are not made,
Hiring an ERP consultant for the implementation process is
companies are left swinging for the fences by making
your best bet. These individuals have the required knowledge
expensive customizations and bolting together make-shift
needed for the process and can get the ERP software running
solutions that do not work. When you are making a selection,
up in no time. A functional consultant has strategic thinking
try to find software that is relevant to the industry you
that can underpin the ERP migration. They can also provide
operate in and designed for your requirements.
you insight into the workflow processes of departments like
You will soon start to see that software built for you has
human resources, sales and marketing, accounting, and
long-term benefits like a healthy ROI (return on investment).
production management.
Moreover, software that has not been defined clearly can lead
A technical consultant is responsible for the tasks required to
to poor implementation. You also need to ensure that every
implement an ERP system. They handle the installation,
stakeholder has a say in the software you decide to go with.
integration, programming, and essential customizations an
organization may require. They can also create automation
2Jigar K Patel / IJCSE, 8(2), 1-5, 2021
tools that employees need to do their job. The skills you will K. User Acceptance
need for the implementation will also depend on the kind of As we stated earlier, more than half of all implementation
implementation you are going with. procedures fail. One of the most prominent reasons ironically
has nothing to do with the ERP software itself. It is essential
H. Prioritize Core Business Processes for the success of every enterprise resource planning
Before a business starts implementing an enterprise resource software that appropriate user acceptance test methodologies
planning system, the vital points to consider (time, cost, and are applied before the software goes live. The end-user or the
scope) have already been decided. Since time and cost can be client conducts this type of testing to ensure that the ERP
easily quantified during implementation, the scope can be software being implemented is usable in the environment it is
hard to define. It is because of this ambiguity that businesses being implemented in. This is because even if the software
tend to focus on core business processes first. developer can create a completely customized solution for
The first two processes that every ERP system should focus your business, they will not be the end-user.
on are sales and finance. Since sales realistically create a When an employee uses the software with a different
business’s balance sheet, it is vital to consider the financial perspective, they identify operational errors and fix several
freedom you have when you are implementing expensive ERP systems processes. An employee’s opinion is important
software. A drastic drop in sales during an important time in because, unlike the upper management and development
the implementation process can mean businesses might have team, the end-user understands the expected outcomes. It is
to hold the decision of getting software if market demand has also important to note that whether a business decides to go
fallen. Because of this reason, monitoring and analyzing with User Acceptance Testing (UAT) or not, it does happen
important sales figures is essential. eventually. Flaws are picked up one way or the other, and
then further customization is required.
I. User Involvement
The emergence of enterprise resource planning software that
L. Training
can work from the cloud has shaken up the industry in many
There are several ways employees can be trained on a new
ways. But one of the less-discussed consequences of an ERP
enterprise resource planning software. One of the most
implementation is the importance of user involvement when
popular methods is the instructor-led training method
the software is being implemented. From an employee’s
because it has proven to be the most effective. That is
perspective, they can feel that their control over the system is
because this method gets employees to leave their job and
diminished or weakened when a system has been
focus on enhancing their skills. The employees learning with
implemented.
this method feel a bit more comfortable since they can ask
They might feel that everything they know is changing, and
questions, and learning is more of a collaborative experience
they are becoming unfamiliar with the new processes the
rather than guesswork. But with that said, this way of
upper management is introducing. This can demoralize
training your employees cannot be effective if you’re dealing
employees and make them lose motivation for their job.
with employees with diverse temperaments. In this
Therefore, user involvement is one of the most important
circumstance, instructor-led training can become difficult
critical success factors of ERP implementation. Higher
and expensive. This is important to note since training costs
engagement levels can lead to stronger group interactions.
is another reason why ERP implementations fail.
J. Testing Environment and Testing Plan Another way employees can learn is by going through the
The testing environment of an optimized ERP solution can manuals of the software themselves. A method like this can
save data from being corrupted when it is being migrated or be cost-effective if the material provided by the software
implemented to design a specific use-case solution. developer discusses the software in depth. But if your
Businesses can also cut costs and delay the potential issues employees have little to no experience with ERP systems,
that arise during the process. The testing environment and even the most detailed instructor manuals will not get the job
testing plan are where organizations run testing procedures done.
for new applications for the ERP module. While this process
alone can add to the cost during the initial implementation M. Employee Motivation and Documentation
phase, it can lead to long-term savings for the organization in When people receive motivation and appreciation every time
the long run. Not only are businesses able to save themselves they learn a new skill, they feel a lot more engaged to be a
from unnecessary costs, but they can also avoid part of that activity. Because of this reason, several business
unpredictable circumstances. owners use gamification to motivate their employees when
This part of the process can be vital for large businesses, an ERP system is being implemented. The more enjoyable an
startups, and financial institutions. Once the implementation ERP implementation experience is, the faster the employees
has been completed and the software is operational, do not be will become comfortable around the software.
in a rush to get rid of the testing environment! It can again be On average, a video gamer typically spends an hour or two
used in the future for an upgrade in your current ERP playing video games. Many of these involve co-operation
software. and teamwork. In the same way, social games are good for
3Jigar K Patel / IJCSE, 8(2), 1-5, 2021
corporations as well since recognition and competition can must have the proper tools in place to troubleshoot any
motivate employees to do better. Likewise, change agents problem as soon as it occurs.
play a huge role in motivating employees to use the software,
too. Change agents are people within the organization who P. Retaining Employees
act as catalysts for change management activities. It is no secret that your employees can tend to feel
They are the bridge between the technical team and the end- insignificant when an ERP system goes live. Because they
users. They make sure that everyone on the team is engaged have reduced control over business operations, they tend to
in the software, and they do this by gamification. think that their input isn't valuable and that they're only
people operating software. Everything your employees once
N. Change Management knew about operational activities has changed, resulting in a
Every department in your organization will have employees lack of enthusiasm for the work they do.
who are opposed to change, even if they often change their This is where business owners need to take control. One of
working habits. This usually happens when employees start the most important factors of making an ERP
to feel that their job is under threat. It is critical to meet the implementation successful is making sure your employees
complaints of these employees help them understand the are comfortable using it, which results in successful ERP
benefits of the ERP implementation procedure. sustainment. Employee engagement matters at this point, and
Additionally, it is equally important to communicate the you need to make sure that employee connections are
change before it takes place. Try to explain to your stronger than ever. Employee retention is a common problem
employees and the stakeholders how the new and updated that arises when an ERP system is implemented.
ERP system will bring improvements to current business When employees are disconnected from their work, they
processes and make employees’ jobs easier. Try a Q&A often tend to show distrust in their leadership. If your
session or a workshop for team members. Additionally, an IT company has an employee who is not too enthusiastic about
manager could liaise between the ERP implementation team the ERP system you're implementing, the software's overall
and your staff. performance can hinder.
A change agent’s help could save your company from II. CONCLUSIONS
detrimental problems too. As the name might suggest, this ERP implementation is a process that can make life tough for
person will promote change in your company. They will give many organizations. Implementing great software only to
the company frequent feedback on how the software is find out that your staff cannot understand it can be
performing and encourage employees to do things the new disappointing. Take your time with the process and make
way. But it is essential that the change agent understands the sure your employees on board. Correct implementation can
culture of the organization and has good people skills. hold several advantages for your business.
ERP sustainment depends on an agile transition to ERP
O. Go Live Support software. Even though this process transforms the working of
The go-live phase is important when the ERP software has your organization and can be time-consuming – the benefits,
gone live. Even if the software users are not proactive, we in the long run, are worth it. But it is also worth
recommend measuring the effectiveness of the software right remembering that successful ERP sustainment depends on a
away. The IT department of a company might start to find thorough and elaborate implementation. Business owners
problems with the software even before the employees even also have to keep in mind that with time the needs of the
though the system might have passed several tests before it people of the organization change, and customer demands
went life, handling live data and several users at one point change, too.
will be a new test altogether. The software you are choosing to implement must be
It is also no secret that your employees will not have a lot of adaptable and flexible to change. This way, ERP sustainment
time to go through each manual you present to them. This is smooth sailing.
will reduce their productivity, and it will take months until Implementing large-scale software such as an ERP system
you can make full use of the ERP system’s complete has a massive impact on the functions and operations of the
potential. To ensure everyone understands what is going on, organization. With that said, continuous improvement and
try to provide an on-demand guide who can guide your having an adaptive mindset is necessary. After everything
employees through the complexities of the software. It is also has been said and done, the ERP software provider and the
worth considering that costly errors will occur while your end-user must know the software on equal levels. Because as
employees are waiting for the solution to a problem. the end-users continue using the software for an indefinite
Your support team will work tirelessly around the clock to period of time, they will need additional support. Users will
ensure these errors do not occur, but sometimes they will not also have to recommend solutions for potential pitfalls in the
be fast enough. When your employees are unable to find system.
answers, they will try to solve the problems they face In conclusion, the ERP system you implement is only as
themselves, and that is something you do not want! A minor good as the team using it. Stay wary of the critical success
slip can result in a business’s meltdown. Because of this, you factors, and the process will be swift!
4Jigar K Patel / IJCSE, 8(2), 1-5, 2021
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