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Implementation of Enterprise Resource Planning inFirms Operating in the Construction IndustrySun Yue Chia a & Florence Yean Yng Ling aa Department of Building , National University of Singapore , 4 Architecture Drive,Singapore , 117566Published online: 10 Oct 2011.

To cite this article: Sun Yue Chia & Florence Yean Yng Ling (2003) Implementation of Enterprise Resource Planning in FirmsOperating in the Construction Industry, Architectural Science Review, 46:3, 323-331, DOI: 10.1080/00038628.2003.9697000

To link to this article: http://dx.doi.org/10.1080/00038628.2003.9697000

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UDC: 338.98 Ke!wrds: Compuier applicarion; Construction industry; Enterprise resource planning.

Archirectunl Sricnce Revsa. Volume 46, pp 323-331

Letter to the Editor The papers in the Architectural Science Review are refereed, but the journal contains sections that are not refereed because they contain expressions

of opinion which may not be scientifically verifiable. These are the Editorials, the Book Reviews and the Letters to the Editor. The following interesting paperbychiaandhngis alsoin that category, and it is therefore published in the "Letter to the Editor"section, which is not part ofthe refereed journal.

Implementation of Enterprise Resource Planning in Firms Operating in the Construction Industry

Sun Yue Chia* and Florence Yean Yng Ling*+

Enterprise resource planning (EM) is a computer software that integrates the majority of a firm's business processes. This software is known to help firms to achieve competitive advantage eficientiy and effectively. Four case studies relating to ERP implenaentation by firms operating in the construction industry are investigated. It is found that to ensure eficient implementation, firms must first have a good reason why ERP should be implemented, determine the tradeoffs, choose an appropriate re-engineering process, identih and mitigate risks that may arise. Based on the findings, strategies for managing the implementation of ERP in the construction industry are developed.

Introduction The deployment ofstandard software is an important factor in business

process optimization [l]. A major focus of standard software is on Enterprise Resource Planning (ERP) systems. ERP is a computer-based system designed to process an organization's transactions and facilitate integrated and real time planning, production and customer response [2]. In addition, it has the following essential features: a packaged software designed for the client's business environment; integration of the majority of the business processes; processes a large majority of an organization's transactions; uses an enterprise wide database that typi- cally stores each piece of data once; and allows access to the data in real time. The essential feature of ERP is its ability to integrate the business processes of the organisation.

Theobjectivesof the paperare (1) toexamine how ERP can benefit firms operating in the construction industry; (2) to determine risks and prob- lems associated with the use of ERP; and (3) to recommend strategies to manage the implementation of ERP. The scope is limited to firms operating in the construction industry, hereby labelled as cotzstruction enterprises. The first objective is important because not many studies on ERP's benefits toconstruction enterprises have been done. In spiteof the many benefits of ERP, some ERP systems fail. The second objective is therefore significant because it will inform future ERP users in the construction industry on potential pitfalls. The third objective is impor- tant because one of the main reasons for ERP failure is the problems faced during ERP implementation are not satisfactorily resolved [3].

Previous works have largely concentrated on the benefits, associated risks and problems, and critical success factors for implementing ERP in

and the manufacturing intiustry in panicular, This study c,n ERP application in the construction industry is therefore timely.

*Department ofBuilding, National Uni\.ersityofSiiigapore. 4Architecture Drive. Singapore, 117566. ?Corresponding :iuthor. E-mail: IdgIy@:nus.edu.sg

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Re-engineering Polices

Minimal organizational and software change

Extensive organisation change and minimal software change

Minimal organisation change and extensive software change

Extensive organization and software change

Table 1 : Re-engineering

Advantages

. Faster and cheaper implementation - Implementation time and cost can be easily predicted from past examples

- Facilitates future upgrading - Minimal technical hiccups in software - Minimal implementation time . Technology-enabled re- engineering

. Software cater better to companies’ needs - Companies’ unique best practices are included in the software . Clean slate re-engineering

. Firm becomes a first mover, gains competitive edge and creates an npportunity to enter or increase share of market

Source: O’Leary (200(

Literature Review The characteristics of ERP are described as follows 141:

As part of their design, ERP systems allow information to enter a single point in the process and update a database for all functions that directly or indirectly depend on this information. This integra- tion should take place in real-time, not through interfaces or programs that transfer information to one or more modules only after the information has already been processed and updated in themodule throughwhich it enteredthesystem. Once placedinto the system, the information should be available in all the necessaT forms through which it may be assessed, throughout the system.

Companies implementing ERP have four rationales for doing so: tech- nology, business process, competitive and strategic rationales [2]. Tech- nology rationales are technology problems companies faced with their old computer systems, hence motivating them to implement ERP. Busi- ness process rationales aim at improving companies’ performance. Com- petitive rationale is the need for companies to stay competitive in business. Strategic rationales are strategies which companies wish to implement through ERP, where existing software does not support. Business process and strategic rationales can be used to guide the design of the ERP svstems or to evaluate the success of EKP.

iolicies and their characteristi

Disadvantages

- Minimal or no re- engineering of business processes - Software may fail to meet organisation’s unique needs

- Value creating processes are being changed to generic processes - Organization process changes may not be successful, ultimately losing the benefit gain through use of software

- Difficult to maintain and upgrade software . Additional cost for initial modification, future upgrades and support over time

- Expensive and difficult to upgrade or change software

I

Likely implementers

- Firms implementing generic (e.g. financial) processes. - Small to medium sized firms, due to lack of ability and resources to customize software ~ Large firms, where speed of change is of priority.

- Companies that perceive that changing people is easier than changing software

- Companies with unique value creating processes

~ Larger companies with greater resources - Larger companies with less flexibility to change their business processes to fit thc software

- Large firms with market power due to huge resources needed

ERP facilitates value creation by the following ways: integrating the activities of an organisation; using ‘best practices’ inherent within the software; enabling organizational standardization; eliminating informa- tion asymmetries; providing on-line and real-time information; allowing simultaneous access to the same data for planning and control; and facilitating intra and inter-organization communication and collaboration [ 5 , 6 781.

ERP, as a re-engineering process, can be implemented along a spectrum of approaches ranging from technology enabled approach to clean slate approach 191. Technology enabled re-engineering refers to using ERP to perform reengineering before the business processes are re-engineered. Organizations should be willing to change business processes to fit the software with minimalcustomisation [ 101, Modificationsshouldbeavoided to reduce errors and to take advantage of newer versions and releases [ 111. Since the ERPimplementationdidnotinvolvealteration ofsoftware, time and cost of implementation is lower compared to clean slate re- engineering [2]. It is recommended that technology enabled reengi- neering, using off-the-shelf ERP software be used when employees are able to adapt to change easily.

In clean slate re-engineering, the design of the ERP system starts from scratch. First, firms decide how they ~ 3 n t to re-engineer their business processes. An ERP software is then designed to fit the business opera-

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tions. This approach is relatively more costly than technology enabled approach, but it could meet a company's needs better. Moreover, the firms' best practices could be incorporated into the ERP software. This approach is recommended to firms that have unique value creating processes, firms with large resources and less flexibility to change their business processes to fit the software [2] .

The advantages, disadvantages and likely implementors of different re- engineering policies are summarised in Table 1.

Despite its advantages, ERP implementation carries with it some risks. For example, Foxmeyer was reported to have gone into liquidation in 1996 after three years of unsuccessful ERP implementation [ 121. The highest probability of successful implementation of ERP software occurs when there is only minimal need to change business processes and ERP software [2]. Some risks associated with ERP implementation are: lack of adequate technology infrastructure [ 131; failure of technology to meet specifications [ 141; application complexity [ 141; customisation and inte- gration complications [S]; user-unfriendly applications [7]; and misun- derstanding user requirements [ 151.

Previous studies on ERP showed that it can bring about revolutionary change and benefits to organisations. Horvever, there is a lack of research on ERP implementation in the construction industry. The findings of these studies may not be applicable to the construction industry because of its unique characteristics. These include: construction work is under- taken under adverse climatic conditions; construction products are stationary; no two projects have the same design; the process of design and construction is long, arduous and complicated; there are many parties involved such as designers, contractors, suppliers and regulators; construction methods depend on site conditions; there is a long gesta- tion period between inception and commissioning of the building; building owner is deeply involved in the construction process; construc- tion involves large scale and complex assemblies; the players such as the management team and workforce are transient; and the industry is fragmented [ 161. It is therefore necessary to examine if ERP can benefit firms in the construction industry. As ERP is a complex system it is also important to determine the risks and problems that construction enter- prises will face during the implementation phase. There is also a need to investigate how implementa-

specialising in mechanical, electrical, civil and structural engineering services and other construction related consultancy

130 of which 7 Developed are IT staff in-house

tion of ERP can be properly managed.

Off the ~ shelf system

Research Methodology

Property developer specialising in real estate (commercial and residential) development and management of hotel properties.

This study investigated four cases ofERP implemen- tation in the Singapore construction industry. Data for the case studies were gathered through semi- structured interviews to gain a deeper insight and understanding of the experiences of the firms.

Firms in the construction industry that had imple- mentedERPwerefirst identified. Fourfirmscompris- ing an architecture-engineering consultancy firm, a property developer and two contractors, agreed to provide more information about how they managed the implementation of ERP in their firms. Table 2 shows the characteristics of the firms. The four firms chosen were of different nature, to represent the different major players in the construction industry Key personnel involved in ERP were contacted, and

600 of which 15 are IT staff

interviews were arranged. For each case, three sources were interviewed: the chief executive officer (CEO), the IT manager and one line-manager. This satisfies the triangulation rule which states that information about a single phenomenon should be collected from at least three different sources [ 171, This is because if verification is done by only one expert, there maybeaproblemwithdatavalidity,and bias maybeintroduceddue to self-justification or post-rationalisation [ 181.

The interviewees belonged to the senior management and were actively involved in the ERP project, from planning to implementation stages. The IT managers were the 'project champions' of the ERP systems.

The intewiewees were first contacted by telephone, and appointments were fuced. The interview questions were also faxed to them prior to the interviews. On the appointed day and time, the authors met the inter- viewees at the latter's offices. The interviews were based on the semi- structured questions, but interviewees were allowed to discuss other issues. Each interview lasted between one and two hours.

Results The results of the interviews are summarised in this section. Firm A

started developing ERP A1 in 1996, and implemented it two years later in 1998. The CEO described the motivation behind the project as:

The desire to improve productivity, increase competitiveness and also staff expectationsare rising. . . . . . likeacandle is being burned out in both ends, so unless you come up with something new, a quantum leap, you will be phased out, this simple fear drives us to develop ERP A1 .

ERPAl was developed in-house. Firm Achose clean slate re-engineering [ 91 because extensive customization of off-the-shelf software would be needed to fit its unique business processes. It also had adequate resources and time to develop the software. Thus, ERP A1 was designed specifically for Firm A and suited its needs well.

ERP A1 is a 'virtual manager' which undertakes the document manage-

Table 2: Characteristics of firms and ERP adopted h

ERP used I No. of I employees Nature of business I I I Architecture-engineering consultancy firm I

I lservices I

Large general contractor undertaking civil engineering and building works.

Large specialist contractor undertaking mechanical and process engineering works, maintenance work and project management.

300 of which 14 are IT staff

100 of which 11 are IT staff

Developed in-house

Developed in-house

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Tech nology Business Process Strategic

I - Automated documentation I - Effective enforcement of IS0 - Increased productivity - Costs savings

- Integration of whole process chain

- Clean slate re-engineering

I - Paperless operation I ~~

- Integration of business processes . Ability to upgrade system . Support and maintenance of system by vendor . Improve communication - Extensive database serving as an archive . Minimal implementation time

- Automated generation of reports to assist in decision making - Streamlining of operation and manpower - Standardization of business processes - Sharing of information and resources in real time

- Technology enabled re- engineering

I - Improve management of I business processes

~~

- Integration of business processes

- Clean slate re-engineering I . Sharing of information in real time

- Increase productivity and I quality of work

I - Standardize business I processes - Improve communication network

. Integration of business processes . Sharing and updating of information in real time . Effective communication between sites and head office

- Reduction of paperwork, data duplication, human errors in data entry and work redundancies - More time for value added tasks - Increase productivity and efficiency - Ability to make better projection using historical data

- Realisation of firm's values of being customer focused, emphasizing continuous learning, commitment and cost effectiveness - A shared sense of cohesiveness and corporate identity within the firm - Clean slate re-engineering

ment system of Firm A. It oversees the whole process chain and carries out activities such as filing, tracking of man-hours used, deadlines for reports anddrawings and manyotheractivities. The CEOdescribed these activities as repetitive but essential chores. Firm A is a service-oriented company and its 'product' is the engineers' expertise. In other words, knowledge and time are sold by the firm. When the 'virtual manager' is responsible for the chores, engineers can concentrate on activities that require their expertise. Productivity of the firm increased and this amounted to cost benefits and competitive advantage. The system also incorporated the company's best practices.

Firm Bstarted engaging thesenicesofan ERPvendorin 2000 to provide IT expertise and support. The vendor was chosen because its ERP software (ERP B1) appeared to reflect Firm B's business process, and therefore needed minimal customization.

The process of design to implementation stage took only nine months. The firm chose to purchase the software from the vendor because of the technical support it prmided. The firm also wished to implement the ERP within a short time frame and incur minimal business disruption. After some minimal customization of ERP software, training and obtaining feedback from employees, the system was implemented in hlay 2001.

Competitive

- Competitive advantages due to pioneering efforts in implementation of system.

Nil

Nil

- Retain or attract new customers who are impressed with the system - Pioneering efforts in its field received intangible benefits such as gaining a reputation For being a technologically advanced firm

Firm C developed an in-house ERP system (ERF'C1) because an off-the- shelfsoftware would need extensive customization. It also had adequate resources and expertise to progressively develop and implement the system. It was also important that changes were initiated progressively to avoid disruption to the business and allow employees more time to adapt to change.

Firm D's ERPsystem (ERP D1) was a concept conceived by top manage- ment in 1993 and the internal IT department developed the system in- house. Firm D foresaw constant changes to requirements, and therefore, an in-house developed software could easily cater to these changes. In addition, technical support From in-house IT staff would be more effi- cient.

The software development took nearly four years to complete. In 1395, a few modules ofERP D1 were implemented but the whole ERP suite was only fully implemented in 1997. ERP D1 is an integrated information system providing seamless integration and functionality with accurate and on-line infonnation across the company's sales, operations, engi- neering and support divisions.

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Discussion

Risks (potential problems) Problems (risks that actually materialized)

Benefits of ERP Table 3 summarizes the benefits achieved by the four firms. The

inteniewees felt that the most important benefits include time savings in handling data, and reduction of paperwork, data duplication and human errors in data entry. The findings concur with previous study [5] which showed that ERPofafirmacts likeasinglecomprehensivedatabasewhich collects dataand feeds data into modular applications supportingvirtually all of a company’s business activities - across functions and business units. When new information isenteredin one place, related information is automatically updated.

~ Firm B admitted that due to insufficient training, employees experienced initial confusion when using the system. Comprehensive training was subsequently undertaken.

Risks and problem of ERP projects Interviewees were also asked to identi@ risks (potential problems) and

actual problems that they faced in their ERP projects (see Table 4) . Many of the problems identified are consistent with previous studies [ 5 , 151. lack of senior management involvement or management structure could

3

be a potential stumbling block for ERP implementation. The top manage- ment of these four firms therefore provided all the necessav support. Lack of technical expertise, inappropriate staffing and personnel shortfall also could lead to implementation problems. This was experienced by firm B. Other risks include lack of user commitment and ineffective communication with users. This was also experienced by Firm B, in the form ofinsufficient reskillingofend users and ineffective communication.

Logically speaking, it would seem that firms which used a ready-made ERPsoftwareaould be morelikely tosucceed, as they arenot re-inventing the wheel. However, looking at the problems that surfaced, it appears that Firm B, which adopted technology enabled re-engineering by using an off-the-shelfsoftware, faced more problems. Firm B’s assumption that it is easier to change their business process to support the ERP software was incorrect. They also had to eschew the notion that it is easier to change people than change the software. Other disadvantages are consistent with those identified by Kmhmer [ 11: adaptation problems due to mismatch between the software solution and user requirements; interface problems between various standard software products; and dependency on software manufacturer.

Firm B felt that the potential benefit of the system could be improved if the I testing period was longer. Lack of sufficient software testing

B

Insufficient training and reskilling of end users

Firm D failed to recognise the importance of this aspect, which resulted in a high rate of resignation within the early implementation stage of the system. Lack of sensitivity to user resistance

9

0

Lack of a proper management structure This risk was well managed, and did not materialize.

Lack of senior management support This risk was well managed, and did not materialize.

Failure to upgrade system This risk was well managed, and did not materialize.

Failure to implement an enterprise- wide system This risk was well managed, and did not materialize.

Insufficient internal expertise

Failure to recognise the unique business processes of own firm

Ineffective communication

Firm B experienced business disruption when a technical fault occurred and there was insufficient internal expertise. Even though the vendor provided support, business operations were still affected.

Firm B admitted that performance of the ERP system was not ideal due to lack of customization.

Firm B initially felt that communication was not critical and top management used their authority to enforce compulso~ usage of the system. Initial user resistance was quite substantial. Subsequently, the management changed their approach.

This risk was well managed, and did not materialize. I Failure to redesign business processes to fit the software

Lack of adequate and sufficient technology infrastructure This risk was well managed, and did not materialize.

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Fgure 1: Framework for managing the intplenientation of ERPprojects.

Strategies for managing ERP implementation Kirchmer has proposed a general procedure for implementation of

software into a firm [l]. This section does not wish to repeat the steps outlined by Kirchmer, but aims to recommend strategies that construc- tion enterprises could adopt for implementing ERP. Data obtained from the four case studies were analysed to extract the common traits and actions that led tosuccessful ERP implementation. Thesearesurnmarised in Figure 1 and discussed below. In the discussion, firms that are considering implementing ERP are referred to as 'potential implemen- tors'.

Justfi the need for ERP The fmt step to implementing ERP is to justify its necessity based on

costs and benefits to the firm. There should be a justification for the investment (such as to solve a problem) and any changes must be in tandem with the direction the company is headed [ 191. Firms would need to ask themselves: how might an ERP system strengthen our competitive advantages? [ 51.

For firms in the Construction industry, ERP may be justifiable because the architectural designs prepared upstream would be subsequently used by design engineers, quantity surveyors and contractors. For example, specification and quantity of materials could be used by the purchasing department (ordering of materials), contracts department (interim pay- ment claims) and site (delivery and usage). Information should be entered into the computer system only once, and any updates which are entered in the system nil1 ensure that related information is autoniatically updared.

Determine the trade-offs If the ERP implementation is justifiable, in Step 2,

potential implementors investigate the reengineering approaches available (see Table 1). For each approach, theyshould identify the trade-offs that their companies are willing to make. Step 2 also requires potential implementors to determine whether their business processes are unique. If they are, clean slate re-engi- neering may be necessary. If technology enable re- engineering is chosen, it is inevitable then that business processes must be moulded to fit the software (201,

In the construction industry, public sector construc- tion clients may have very different requirements and procedures in which off-the-shelf software may not be able to handle. On the other hand, smaller design and construction firms may adopt standard software as it would be too expensive to develop and maintain cus- tomised software which needs computer specialists. Instead of reaping competitive advantage, the firms may have higher overheads.

Decide on a re-engineering approach After a detailed analysis, the choice of re-engineer-

ing approach should be made (Step 3). Once the re- engineering approach is determined, the firm should devote fullcommitment to theexecutionofthe project (211. The re-engineering approach should include a clear business plan to steer the direction of the ERP project throughout its life cycle [22]. The business

plan should outline proposed strategic and tangible benefits, resources, costs, risks and timeline [23].

Risks analysis ERP project implementation has five distinct phases: planning, require-

ments analysis, systems design, systems implementation and mainte- nance, and systems operations phases. At each of these phases, there are many inherent risk factors. Based on the risks and problems identified in Table 4, these risks are allocated to different ERP implementation phases (see Table 5) . The likely risks and strategies to minimize them must then be evaluated (Step 4).

The people who are responsible for mitigating the risks are identified (seeTable 5) . Human resource management (HRhl) is responsible forthe human aspects of the ERP project, including handling user resistance, setting of a specialised task force for the project and involving the top management to support and participate in the project. In the construc- tion industry, the task force should comprise members from different departments whose work would be changed because of the ERP. In a multi-disciplinary consultancy firni, architects, engineers and quantity surveyors should be strongly represented.

Information technology management (IThl) is responsible for the technical aspects of the ERP project. Each situation requires different combination ortype ofmanagement. Forexample, when the firm recruits personnel due to insufficient internal expertise, I m h HRhl and IThl are responsible for the recniitment exercise. This is to ensure that the recruitment exercise is efficient and suitable expertise is recruited.

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Risk factor Risk mitigation action Action by

PHASE 1: PLANNING

Top management to be committed to restructuring and following an

Top management to give support. enterprise-aide project. HRhl 1.1 hck of senior management support

~~

Effective use of strategies for recruiting and retaining specialised technical

Fechnology driven reengineering: effective use of external consultants. ersonnel.

~ ~ ~~

1.2 Failure to recognise the unique business processes of firm

HRhl& ITM

Clean slate reengineering: identify unique business process and commit to extensive customization of software.

Identify a project champion.

ITM 1

HRhl

~ ~ ~~

1.3 Insufficient internal expenise

Establish a communication network. HRM & ITM

1.4 Failure to redesign business professes

~~

Same as 1.3 above.

Empower the specialised task force.

HRM & ITM

HRM

3.3 Insufficient testing Sufficient testing prior to implementation. ITM

4.3 Lack of proper management structure

4.4 Ineffective communications

Top management should lead by example.

Effective communication.

5.1 Lack of senior management support Commitment to upgrade software at specified periods. HRhl

5.3 Ineffective communications Effective communication. HRhl 8r IThl 1 I

Technology driven reengineering: commitment to redesigning business process.

1.5 Lack of proper management structure

PHASE 2: REQUIREMENTS ANALYSIS

2.1 Failure to implement and enterprise- wide system

~~~ ~

Clean slate reengineering: design of software should cater to enterprise-wide process. ITM

Technolo methodog# and best practices specified b

firm' s operations.

Establish a specialised task force.

driven reengineering: commitment to using project management

Clean slate reengineering: commitment to 8 esignmg vendor. software that fits the 2.2 Failure to recognise the unique business processes of firm

2.3 Lack of proper management structure ~ ~

2.4 Ineffective communications

PHASE 3: SYSTEMS DESIGN ~~ ~

3.1 Insufficient internal expertise

3.2 hck of proper management structure

4.1 Insufficient training and reskilling Effective reskilling of workforce. Effective user training. ITM 1

4.2 Insufficient internal expertise Acquire technical expertise. ITM 1

4.5 Lack of adequate and sufficient technology infrastructure Acquire technical infrastructure. ITM 1 4.6 Lack of sensitivity to user resisrance Emplo suitable strategies to deal with user resistance.

Use dirferent management strategies to handle different users and situations.

~ ~~~~

5.2 Insufficient internal expertise ~ ~~ ~

Acquire technical expertise. HRII & ITM

i 5.4 Lack of proper management strurture Permanent staff to mainmin the system.

-

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Manage change Step 5 is to manage change in the firm, brought about by the ERP

through, among others, effective leadership, effective communication and appointment of a project champion. Studies have shown that firms that are open to change, emphasize quality, have a strong computing ability and a strong willingness to accept new technology, are more likely tohavesuccessfulERP [11,24]. From thecasestudies,fourmainmethods used to manage change surfaced.

Firstly, it is important to have a specialized task force with diverse expertise [23]. The task force should consist of the best people in the organization [ll, 20,221. Havinga teamofmixedconsultantsandinternal staff is also critical as the staff can develop the necessary technical skills for ERP design and implementation [21). Members of the task force must work full time on the ERP project. They should also be given compensa- tion and incentives for successfully implementing the system on time and within budget. The task force should be familiar with the business functions and products [ 111.

Secondly, support from top management is important. It needs to publicly and explicitly identify the project as a top priority [23]. Senior management must becommitted, by being personally involved and being willing toallocatevaluable resources to the implementation effort [lo]. A powerful project champion, who can set goals and legitimise change, must also be identified (11, 19, 21).

Thirdly, employees should be specifically involved in the implementa- tion process [ 11. They also need to be reskilled and trained. Employees need training to understand how the ERP will change business processes. There should be extra training and on-site support for staff and managers during implementation.

Fourthly, effective communication is an important way to manage change [ 191, Expectations at every level need to be communicated. User input should be managed in acquiring their requirements, comments, reactionsand approval [ 111. Communication includes the formal promo- tion of project teams and the reporting of project progress to the rest of the organization [lo]. Employees should be told in advance the scope, objectives, activities and updates, and be made to realise that change is inevitable [21].

software development, testing and troubleshooting In Step 6, software development, testing and troubleshooting are

undertaken. The overall ERP architecture should be established before deployment, taking intoaccount the most important requirements of the implementation. This prevents re-configuration at every stage of imple- mentation [23]. Before actual implementation, the ERP software should be tested on certain construction projects (preferably those that can be easilycontrolled by the project champion) by having a dual-track process; one based on existing practice and one based on the ERP. The outputs can then be compared. Vigorous and sophisticated software testing [ll] and troubleshooting errors are critical [lo] and must be carried out

ERP imnplenzentation In Step 7, the firm finally implements the ERP. The firm should work

closelywith uendorsandconsultants to resolve software problems. Quirk response, patience, perseverance, probleni solving and "fire-fighting" Capabilities are important 1111.

As a construction enterprise usually handles many projects at any one time, it is recommended that instead of having the whole company embrace ERP at the same instance, certain projects be chosen for ERP implementation first. The early proof of success will help to manage scepticism [ll].

Continuous monitoring and evaluation After implementation, continuous monitoring and evaluation of per-

formance is necessary at the shakedown phase (Step 8). Using project management techniques, milestones and targets to keep track ofprogress must be set, and achievements measured against project goals [24]. Monitoring and feedback include the exchange of information between the project team members and analysis of user feedback [24].

The outputs of the ERP should be presented in the form of reports. Improvements, such as shorter time to prepare progress payment cenifi- cafes and reduced time to track variations and design changes, must be highlighted to management and users.

Conclusion Four case studies of construction enterprises that adopted ERP were

investigated. Firms A, C and D used clean slate re-engineering which had high probability of failure according to previous research [2]. However, their ERP systems were instead successfully implemented and benefits were derived (see Table 3). These firms were found to have successfully mitigated the risks that were associated with ERP (see Table 5).

This study found that the main benefits of ERP to construction enter- prises are integration of business processes, automated generation of repons to assist in decision making, and achievement of competitive advantage. This is important to construction enterprises, because the construction industly is known to be fragmented and having competitive advantage helps these firms to win more projects.

The problems faced by construction enterprises in implementing ERP include insufficient training of employees and short software testing period. It is recommended that firms do not rush intoimplementing ERP [j], and be mindful that it may be easier to change the software than change the human being (as was the case in Firm B).

In this study, strategies to manage the implementation of ERP in construction enterprises were proposed. These include (1) justify the need for ERP based on cost and business benefits; (2) determine the trade-offs the firm is willing to make; (3) decide on a re-engineering approach, and devote full commitment to the execution of the ERP project; (4) identify potential risks and devise appropriate mitigation strategies; and ( 5 ) manage change through, among others, effective leadership, effective communication and appointment of a project cham- pion.

One possible limitation of this study is that the findings are based on experiencesofonlyfourfirms. Thiscould notbearoidedasERPisstil1 not widely implemented by firms in the construction industry. However, it is believed that the findings of this study can still help firnis to take the first step towards management of ERP implementation.

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