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Frank Reynold

Factors behind Failure of Implementing Enterprise Resource Planning Systems

Frank Reynold

Enterprise Resource Planning (ERP) systems are software packages that are used in business to help companies manage their resources. These software systems help in collecting data from several sections of the business activities such as human resources, sales, finance, production, and so on. The implementation of these systems in today’s business has become an important tool for companies that look forward to survive competition and put their organizations on the pathway of big corporations.

According to several researches, many companies have effectively implemented the ERP systems and get full benefits, but many others have failed in the mission and complained of the disappointing results. A number of researches have been conducted to understand what’s behind these failures including a recently published study carried in Sri Lanka.

 As mentioned by this study “ERP systems, if implemented properly, provide enormous benefits to organizations. However, not all ERP implementations deliver the promised enterprise improvements. There are many situations where ERP implementation has become a failure.”

The study which is published recently in a Journal of Enterprise Resource Planning Studies has tried to find out the factors that lie behind the implementation of these systems through clients and consultants perspectives.

The aim of carrying the study was “to identify significant factors that have an impact on ERP implementations, to find out the perception of the client and consultants on application of these factors and to recommend a set of guidelines to overcome the poorly practiced implementation factors in order to avoid failures in future ERP implementations.

The study is conducted by researchers from School of Management, Plymouth University, United Kingdom and University of Sri Jayewardenepura, Sri Lanka. To find the answers of ERP implementation failures, researchers have analyzed a number of answers they got through questionnaires they used in their deductive approach.

As already mentioned, the research tried to find out failure factors from both consultants and clients’ perspectives. The study comes with conclusions that factors behind failures of ERP implementation “are product selection procedure, project planning, client commitment, (by consultants) competency of consultants (by clients) and communication of support requirements during the pre-implementation stage (by both parties).” Researchers added that “level of practice of rest of the factors is good according to both clients and consultants.”

Researchers mentioned that in this study they have focused only on micro factors. But they also stressed out that “macro factors (regional, government, economy and economic growth, etc) also have an impact on ERP implementations.”

The ultimate objective of looking for factors behind implementation failures is to bring rich lessons for those businesses that are planning to implement these systems. Learning failure factors means to avoid them, and instead conduct successful implementation of these ERP systems that have become great tools in effective management of businesses. 

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