Implementation of Enterprise Resource Planning Using the Value Engineering and System Dynamics Methods

Abstract

The Enterprise Resource Planning (ERP) system is an integrated software package applied by many enterprises as an operations platform over the past years. However, according to an industrial survey, the failure rate of ERP system implementation is relatively high because of high implementation costs and long implementation time, incapable implementation teams, process misfits, resistance to change and inadequate training. This paper proposes a Value Engineering (VE)-based framework that combines the System Dynamics (SD) method to support implementation of ERP systems. Within the framework, VE is a systematic, functionally oriented method for generating decision alternatives, whereas SD can simulate the possible outcomes in terms of the generated decision alternatives so that a suitable strategic decision for the ERP implementation can be evaluated and selected. The proposed method is applied to a SAP R/3 implementation case in the manufacturing industry. The application case shows that the method can achieve a positive result indicating the high value-added output of ERP systems implementation.