Critical Success Factors of ERP Implementation: Evidence from Manufacturing Sector of Karachi

Abstract

This study explores the critical success factors of ERP implementation in the manufacturing sector of Karachi. Data were collected from 252 such employees of the manufacturing sector of Karachi who have been using ERP solutions for the time duration of at least one year. Exploratory Factor Analysis and Multiple Regression Analysis were used. The results of the factor analysis indicate the presence of four factors. Three of these factors, namely Data Quality (DQ), System Quality (SQ), and Consultant Support (CS) were the critical success factors, whereas, the fourth was the dependent variable i.e. successful ERP Implementation or ERP Success. Once the factors were extracted, the reliability was tested, and then the CFA was used to test the convergent and discriminant validity of the instrument. Multiple Regression Analysis was then applied to determine the impact of each factor on successful ERP Implementation or ERP Success. It was found that the Data Quality (DQ), System Quality (SQ) and Consultant Support (CS) have a significant impact on Successful ERP Implementation (henceforth known as ERP Success). Therefore, it is recommended that while implementing the ERP systems, firms must ensure that data accuracy while they are entering the data or providing the data to the vendor/consultant. It is also recommended that the firms must be mindful of the system quality and the consultancy services (software support services) provided by the ERP vendor.