Revisiting the critical failure factors of ERP to explore their relationships - an ISM based approach

Abstract

One of the widely adopted technologies in recent times is the enterprise resource planning, known commonly as ERP. ERP transforms organisations as it completely re-engineers the existing business processes to achieve significant competitive advantage. But, data shows that 90% of the SAP R/3 ERP projects run late and outcome of nearly 3/4th of ERP projects taken up so far are considered to be a failure or unaccepted. Hence, a basic research question that is still not properly addressed is What are the critical failure factors (CFFs) that needs to be carefully monitored by the companies implementing ERP?. Another important and unaddressed research question is How these CFFs are related to each other?. To answer these questions, published case studies describing the failure of ERP implementation are reviewed and associated factors that lead to the failure are identified. Apart from this, insights are also obtained from published research literature on ERP. Interpretive structural modelling (ISM) is applied to develop a framework capturing the relationships between the identified CFFs. The study concludes by discussing the research and managerial implications of the framework developed.