Framework for Selection of ERP System: Case Study.

Abstract

Currently, for all businesses, due to market competition and continual economic pressure on businesses, there is perpetual need to adopt innovative tools and techniques, to cope with these pressures and to make the best decision to respond to market changes. This is particularly true for small to medium sized enterprise (SME), therefore, in order for SMEs to be competitive and responsive to continuously changing of the market, they need integrate all of the units within company at the information level, to have correct information in real time to make quick and right decision. This can only occur by adopting the most appropriate system relating to the business and the manufacturing strategy of the company. Consequently, integration systems such an Enterprise Resource Planning (ERP) currently are in high demand for both manufacturing and service organisations. Implementing an ERP system is a significant investment decision and challenging for all companies, particularly SMEs as their resources are limited. There are numerous stages in the ERP implementation procedure. One of the initial and most critical stages is that of ERP selection. It is very important to pay detailed attention to select the right systems to for the company, as the adoption of an ERP system can lead to undesirable outcomes were an inadequate ERP system selected and implemented causing detrimental to the company’s performance. Literature review indicates a failure rate as high as 70%, due to the selection and adoption of an inappropriate ERP system. Therefore, this paper developed a theoretical framework that can be used by SMEs to select the most appropriate ERP system, the framework consist of three phases: Define, Evaluate and Select. The approach taken in this work consist of two phases: the first phase is a literature review of studies in ERP selection, to develop a theoretical framework, second phase, presents a practical case study, to validate the developed framework. The findings of this work supports both manufacturing and service organisations seeking to implement ERP systems by determining the most appropriate ERP system invaluable toward enhancing successful implementation, minimising the risk of a non-fitting ERP system and consequent project failures. Moreover, this enables decision makers to formulate better strategies to enhance ERP system implementation, and to identify critical elements of the implementation process.