The factors causing failure of foreign enterprises resource planning (ERP) systems in Pakistan

Abstract

The purpose of this paper is to examine the causes and reasons of failure of foreign enterprises resource planning (ERP) system’s adoption in Pakistan. ERP integrates all the resources (hardware, software, man power, product and process) of an organization and provides a link to each department for smooth flow of data, information, knowledge, resulting in increased productivity and efficient processes. The paper takes on the descriptive research (research design) to explore the factors that lead to failure of ERPs in developing economies focusing on Pakistan. In this study, data was collected through interviews (mixed mode) and questionnaires from ERP providing companies aimed at gathering data on situations where ERP was implemented and failed. The research identified many factors required for the successful implementation of the ERP and many reasons for failure. Although, the research was carried out on a small scale (and can be enhanced), yet it is assumed to set out the parameters for the successful ERP implementation in Pakistan. The research has also shown that the benefits of some areas of ERP are still to be understood by the stakeholders, while the proper need definition from the ERP implementing organization and knowledge of the ERP usage by the top management remains the highest factors of influence towards the failure of foreign ERP systems in Pakistan.