Research Proposal

A Process approach of

Selecting And Implementing ERP System

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INDEX

1. Introduction ………………………………………...…………………………..….. 3

2. Research objectives ………………………….......…………………………….........6

3. Research Questions……………………………………………...………………..…7

4. Literature Review…………………………………..……………………………...11

5. Methodology…………………………………………..……………………………12

6. Time Scale................................................................................................................14

7. References…………………………..……………………………………………....16

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Introduction

ERP implementation is a socio-technical challenge that requires a fundamentally different

outlook from technologically-driven innovation, and will depend on a balanced perspective

where the organisation as a total system is considered. ERP implementation is considered to rely

on behavioural processes and actions. It is a process that involves macro-implementation at the

strategic level, and micro-implementation at the operational level. This therefore means that

implementation in the context of ERP systems is not possible through an ON/OFF approach

whereby deployment of the new systems will necessarily yield the desired and expected results.

Understanding the implementation process through a balanced perspective will therefore prevent

any unpleasant surprises, and will ensure and guide the change process to be embedded in a

painless fashion. The balanced perspective means that socio-technical considerations must be

borne in mind; the strategic, tactical and operational steps clearly defined; and the expected

benefits evaluated and tracked through creating seamless and solid integration. This paper

proposes an integrative framework for ERP implementation based on an extensive review of the

factors and the essential elements that contribute to success in the context of ERP

implementation. European Journal of Information Systems (2001) 10, 216–226.

Enterprise Resource Planning (ERP) systems involve the purchase of pre-written software

modules from third party suppliers, rather than bespoke (i.e. specially tailored) production of

software requirements, and are often described as a buy rather than build approach to

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information systems development. Current research has shown that there has been a notable

decrease in the satisfaction levels of ERP implementations over the period 1998-2000.

The environment in which such software is selected, implemented and used may be viewed as a

social activity system, which consists of a variety of stakeholders e.g. users, developers,

managers, suppliers and consultants. In such a context, an interpretive research approach

(Walsham, 1995) is appropriate in order to understand the influences at work.

This paper reports on an interpretive study that attempts to understand the reasons for this

apparent lack of success by analyzing issues raised by representatives of key stakeholder groups.

Resulting critical success factors are then compared with those found in the literature, most

notably those of Bancroft et al (1998).

It has been widely reported that a large number of ERP implementations fail to meet

expectations. This is indicative, firstly, of the magnitude of the problems involved in ERP

systems implementation and, secondly, of the importance of the ex-ante evaluation and selection

process of ERP software. This paper argues that ERP evaluation should extend its scope beyond

operational improvements arising from the ERP software/product per se to the strategic impact

of ERP on the competitive position of the organisation. Due to the complexity of ERP software,

the intangible nature of both costs and benefits, which evolve over time, and the organisational,

technological and behavioural impact of ERP, a broad perspective of the ERP systems evaluation

process is needed. The evaluation has to be both quantitative and qualitative and requires an

estimation of the perceived costs and benefits throughout the life-cycle of ERP systems. The

paper concludes by providing a framework of the key issues involved in the selection process of

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ERP software and the associated costs and benefits. European Journal of Information Systems

(2001) 10, 204–215.

ERP implementation is a socio-technical challenge that requires a fundamentally different

outlook from technologically-driven innovation, and will depend on a balanced perspective

where the organisation as a total system is considered. ERP implementation is considered to rely

on behavioural processes and actions. It is a process that involves macro-implementation at the

strategic level, and micro-implementation at the operational level. This therefore means that

implementation in the context of ERP systems is not possible through an ON/OFF approach

whereby deployment of the new systems will necessarily yield the desired and expected results.

Understanding the implementation process through a balanced perspective will therefore prevent

any unpleasant surprises, and will ensure and guide the change process to be embedded in a

painless fashion. The balanced perspective means that socio-technical considerations must be

borne in mind; the strategic, tactical and operational steps clearly defined; and the expected

benefits evaluated and tracked through creating seamless and solid integration. This paper

proposes an integrative framework for ERP implementation based on an extensive review of the

factors and the essential elements that contribute to success in the context of ERP

implementation. European Journal of Information Systems (2001) 10, 216–226.

5

Research Objectives and Research Questions

Research Objectives

• Innovation and Learning - To Bring out some facts of importance of Successfully

Implementatio of ERP

• Customer Perspective - To Bring out the effeciently the individual user needs.

• Internal Processes- Improve the internal business processes with with successfully

implementation of ERP

Research Questions

• What are the issues involved in the acquisition of an ERP solution?

• How would we evaluate the various information sources?

• Impacts of ERP systems on the integrated-interaction performance of Organisation ?

• Critical factors for successful implementation of enterprise systems ?

6

Literature Review

Abstract

The study investigates critical management issues in Enterprise Resource Planning (ERP)

implementation projects such as selection of ERP vendor, project manager, and implementation

partners; constitution of project team; project planning, training, infrastructure development,

on-going project management; quality assurance and stabilization of ERP. The innovation

process study approach is taken and data is collected from 20 organizations using a

questionnaire and structured interviews. Although each adopting organization has a distinct set

of objectives for its systems project, we found many similarities in motivations, concerns, and

strategies across organizations. This study identifies many critical concerns in ERP project

management.

Enterprise resource planning (ERP) systems are reshaping business structures because they

promise to solve the challenges posed by portfolios of supposedly disconnected and

uncoordinated business applications (Davenport, 1998). Also referred to as enterprise-wide

systems or enterprise systems due to their enterprisewide scope, these integrated enterprise-

computing systems provide seamless integration of all the information flowing through an

organization (Davenport, 1998; Markus and Tanis, 2000).

A large and rapidly expanding marketplace1 that has developed for ERP systems signifies

adoption of ERP by a substantial number of organizations while near term success and long-term

survival of such systems is difficult to predict. Organizations that have successfully adopted ERP

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systems view them as one of the most important innovations that have lead to the realization of

substantial tangible and intangible improvements in a variety of areas (Davenport, 1998, 2000;

Markus and Tanis, 2000). However, there are a implementation projects by surveying the

organizations which have adopted ERP systems. ERP systems are packaged software

applications originally targeted at manufacturing companies. Several studies to date have focused

on adoption of packaged software applications and advanced manufacturing technologies (Dean

Jr., 1986; Noori (1992); Kumar et al. (1996); Siegel et al. (1997); Lassila and Brancheau (1999).

However, associated organizational and process re-engineering in ERP projects, the enterprise-

wide implications, high resource commitment, high potential business benefits and risks

associated with ERP systems make their implementation a much more complex exercise in

innovation and change management than any other software package or advance manufacturing

technology. Radding (1999) argues that when an organization puts millions of dollars into a core

business application and re-engineers its business processes around it, the exercise is destined to

become much more than an systems development project.

ERP applications lock the operating principles and processes of the organization into software

systems. If organizations fail to reconcile the technological imperatives of the enterprise systems

with the business needs, the logic of the system may conflict with the logic of business systems

(Davenport, 1998). The cost, complexity, investment of time and staff, and implications of

modifications, however, make a rollback very difficult. One extreme example of not getting

strategic ERP implementation choices right is FoxMeyer Drugs, where the bankruptcy trustees

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are suing its systems’ vendor and consultant company, blaming the ERP system for its business

failure (Davenport, 1998).

This research explores the key considerations and successful strategies in an ERP

implementation projects such as selection of project manager, ERP vendor and implementation

partners; constitution of project team, challenges in training, and upgrading the infrastructure,

ongoing project management, quality assurance and stabilization of ERP. The theoretical

foundation is based upon the innovation process theory approach wherein we adopt the

“enterprise systems experience cycle” framework of Markus and Tanis (2000) to delineate the

innovation process. The next section provides a literature review of ERP and the organizational

innovation process of ERP implementation. Section 3 describes the methodology used in

collecting data and analysis. Section 4 presents findings and managerial implications and Section

5 presents our conclusions and recommendations for further research.

Enterprise resource planning systems: a literature review

The literature reviewed for the study can be classified into two main areas: one related to ERP

and the other related to the organizational innovation process of ERP implementation. ERP,

being a relatively new concept, made a review of the literature on ERP systems important, while

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the literature review on the adoption process within organizations was undertaken to develop the

theoretical background and rationale for the study.

Enterprise resource planning systems (ERP)

The ERP applications we see today can be traced back to and have evolved from Materials

Requirement Planning (MRP) and Manufacturing Resource Planning (MRPII) systems. The

Gartner Group is credited for coining the term “Enterprise Resource Planning”, for a concept

they developed in the 1990s for the next generation Manufacturing Resource Planning (MRPII)

systems (Dahlen and Elfsson, 1999; Keller, 1999). The concept posited to integrate software

applications of manufacturing beyond MRPII to other functions such as finance and human

resources. Russell and Taylor (1995) define ERP as an updated MRPII with relational database

management, graphical user interface and clientserver architecture. The initial definition of ERP

was targeted at manufacturing companies. But being a framework of integrated application suites

that unites major business processes, the use of the term ERP has expanded. Today, ERP

encompasses all integrated information systems that can be used across any organization (Koch

et al., 1999). Watson and Schneider (1999) describe Enterprise Resource Planning (ERP) as a

generic term for an integrated enterprise computing system. They define it as an integrated,

customized, packaged software-based system that handles the majority of an enterprise’s system

requirements in all functional areas such as finance, human resources, manufacturing, sales and

marketing. It has a software architecture that facilitates the flow of information among all

functions within an enterprise. It sits on a common database and is supported by a single

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development environment. Various other descriptions have been provided in the literature but for

the purpose of our research we adhere to the description of ERP provided above by Watson and

Schneider (1999).

The key underlying idea of ERP is using information technology to achieve a capability to plan

and integrate enterprise-wide resources, i.e. by integrating the applications and processes of the

various functions such as design, production, purchasing, marketing, and finance. Enterprise

wide integration goes beyond physical computer integration (i.e. using computer communication

networks and protocols) and system integration (i.e. building integrated systems based on shared

data and exchange formats, and common architecture). A salient feature of enterprise integration

is business integration, i.e. understanding the way business processes and enterprise policies are

structured. How they relate to one another and how they are efficiently executed using the

enterprise means (e.g. human resources, applications, and physical resources) depending on the

availability of internal or external enterprise objects (e.g. events, information entities, physical

entities, etc.) or conditions.

Both computer integration and systems integration are important means of achieving enterprise

integration but other coordinating and integrating mechanisms such as standardization of work

processes, norms, skills and output, and supervision structure are equally important for realizing

the potential benefits of integration (Davenport, 1998; Alse`ne, 1999). While, there are

unparalleled performance benefits in integrating enterprise systems, achieving effective

integration remains very problematic domain due to the numerous technical and organizational

challenges (Joshi and Lauer, 1999; Kumar and van Hillegersberg (2000)

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Methodology

The design of research to be used here is mainly the descriptive approach and so it is going to

be quantitative. It will also have a qualitative approach. In this type of research, facts are related

to the nature and status of a situation, as it exists at the time of the study (Creswell, 1994). This

also believes that the relationships and practices that are existing, philosophy and processes that

are ongoing, things that are being felt, or new trends that are developing. (Best, 1970)

Furthermore, this type of research approach tries to illustrate current conditions, actions or

systems based on the impressions or reactions of the respondents of the research (Creswell,

1994).

Quantitative approach will be used in collecting data.As at one side Quantitative method is well-

suited with the study because it allows the research problem to be conducted in a very specific

and set terms (Frankfort-Nachmias and Nachmias, 1992). Besides, a quantitative research clearly

and uniquely specifies both the independent and the dependent variables under enquiry

(Matveev, 2002). It also follows definitely the real set of research goals, arriving at more

objective conclusions, testing hypothesis, determining the issues of causality and eliminates or

reduce the subjectivity of judgment (Kealey and Protheroe, 1996). Further, this method allows

for longitudinal measures of subsequent performance of research subjects (Matveev, 2002).

Finally, it provides achieving high levels of reliability of gathered data due to i.e. controlled

observations, laboratory experiments, mass surveys, or other form of research manipulations

(Balsley, 1970).

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Project planning is key to the success of any large project. Complexity, large resource

commitment, and enterprise-wide scope of ERP projects make them an intricate exercise in

planning and project management (Radding, 1999). Many ERP analysts have stressed the

importance of project management and planning for successful implementation (Davenport,

2000). Respondents were asked how the ERP project was planned. If they were planned in

stages, what were the typical activities in those stages? Not surprisingly, each project was

planned in a number of stages. Each organization had its own nomenclature for stages. A similar

planning approach was seen in some organizations, which was linked with using the

implementation methodology proposed by the common vendor. These organizations adopted

ASAP methodology proposed by SAP. Interestingly, not all SAP adopters used ASAP. There

were about six stage models, which emerged in the literature. All the stage models reported

could be clubbed into four broad phases of planning, configuration, testing, and implementation

(Table 8). There was a difference in precedence of activities and the stage when a common

activity was undertaken. For example, user training was initiated in some organizations in

parallel with the configuration efforts.

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Timescale

5-April

15-may 1- july

25-sept

10- nov

25- dec

5- Jan

28- feb

PROPOSAL

INTRODUCTORY

CHAPTER

LITERATURE

REVIEW

RESEARCH DESIGN

SURVEY-

QUESTIONNAIRE

CONDUCTING THE

SURVEY

CONDUCTING

INTERVIEW

DATA COLLECTION

PRELIMINARY

ANALYSIS

FINAL ANALYSIS

SUBMISSION OF

PROJECT

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