In ERP Definition - A Systems Perspective, we have identified the four components of an ERP System:
The failures in one or more of those four components could cause the failure of an ERP project. The failures in hardware are more easier to
identify and to fix, we'll examine the failures in software implementation, business process and user acceptance.
- ERP software,
- Business Processes that ERP software supports,
- Users of ERP systems, and
- Hardware and Operating Systems that run ERP applications.
Failure of ERP Software Implementation
Module-based ERP software is the core of ERP systems. Most ERP projects involve significant amount of customizations. Packaged ERP software
modules have built-in functionality that work in a standard and simplified enterprise environment. However, every organization is unique
in data requirements and business processes. It is the customizations that transform packaged ERP software into ERP software that meets
organizations' individual business processes and operations. Long and expensive customization efforts often result the pass of release deadline
and budget overrun. Customizations make the software more fragile and harder to maintain when it finally goes to production. Major changes may be
required in the later stage of the implementation as a result of incomplete requirements and power struggles within organizations
Failure of Accommodating Evolution of Business Processes
Business processes fall into three levels - strategic planning, management control and operational control. Organizations continuously realign
their business processes of all levels in response to the ever-changing market environment. Many ERP systems aren't flexible enough to accommodate
evolution of business processes. AN ERP system that worked well last year may need major overhaul.
Failure of User Acceptance
The users of ERP systems are employees of the organizations at all levels. ERP projects usually modify the company's business processes which
create extra workload for employees who use them initially. They may not think that the workflows embedded in the software are better than
the ones they currently use. Ongoing end-user involvement and training may ease the difficult in organization's adaptation of new systems and
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