Critical success factors for ERP implementation in SMEs

Abstract

ERP implementation is regarded as complex, cumbersome and costly, and, very often, it exceeds the initial estimated resources. The process involves a thorough examination of the business processes in the organisation; selection of the best available software solution that matches the requirements of the enterprise; configuration of the selected systems;, training of staff; and customisation of the selected software solutions including development of required interfaces. Finally, the existing MIS of the organisation is replaced totally or partially by the new system. All the implementation processes should be carried out without affecting the daily operations across the whole enterprise. This can only be achieved by having an understanding of the key elements forming the infrastructure of the organisation, an effective plan for the implementation and an effective procedure to measure and evaluate the project throughout the implementation process. This paper presents the results of a study to identify and analyse the interrelationships of the critical issues involved in the implementation of ERP in small and medium sized enterprises (SMEs). Three basic research questions were addressed. First, what are the main critical success factors? Second, how do these factors interact throughout the implementation process? Third, which factors have their highest impact and in what stages? In order to answer these questions, over 50 relevant papers were critically reviewed to identify the main critical success factors (CSFs) for ERP implementation in large organisations. Then, the applicability of the identified CSFs to SMEs was investigated. Next, an industrial survey was also undertaken to identify which CSF has highest impact in what stages. The findings on relationships of the critical success factors have been utilised to develop a tool to monitor, and eventually improve, ERP implementations for SMEs. In the development of the tool, eight people from industry and academia with experience of ERP implementations were interviewed with the aim of validating the model being developed. The overall results provide useful pointers to the interplay of organisational and operational factors for the successful implementation of ERP.