A proper ERP solution has become a crucial need of this period for the enterprises due to the market globalization and gradually growing competition. For the very fact, the ERP solution has become mandatory for an enterprise to run the business in an effective and efficient way. One of the most crucial reasons ERP implementations fail is that the software doesn't meet basic business requirements of industry. Purchasing an ERP application is only half the way. The key to success is a well designed implementation plan. In implementing an enterprise resource planning (ERP) system, top management normally faces an unnecessary outlook from users; they refuse to go along with the implementation process. Management should, therefore, consciously deal with this problem instead of avoiding it.
2. Evolution of ERP Implementation Methodologies
Implementation methodologies used before 1997 were not sufficiently customized to the sole requirements of ERP. Most of the methodologies relied a lot on the As-Is and To-Be phases. In the As-Is phase, an organization's existing business processes were examined. In the To-Be phase, an organization's future business processes were designed.
The main flaw of these methodologies were in the mindless attention to the As-Is phase in which detailed business processes were uselessly examined at an excessive cost to clients (Eric Kimberling, 2006).
In the beginning of 1997 new methodologies evolved that more directly addressed ERP implementations through a straighter approach by the use of conference, templates, and the recycle of business processes. As a result, in very short time, the market was flooded with stories of rapid implementation speeds (Rich 2009). This is true that these new methodologies reduced the implementation time but the speed of implementation created new problems, such as insufficient knowledge transfer, reduced change management, and poor post-implementation monitoring. In the consequent decade, most of these new ERP implementation methods have been developed to tackle such troubles.
Factors of Acceleration
The most vital factor of acceleration is the recycle of existing business process. Because, it is easier to implement a huge system like ERP if the gap between existing and targeted business process can be reduced.
Recycling of existing business process depends on the client's readiness to settle in with the change without trying to make the new system to earlier custom processes. The faster a client sticks on to this principal, the easier the implementation would be.
The main aspects of accelerated ERP implementation are
- Decline in the huge time expended in design and configuration of existing and would be business processes, which usually include more than half of the implementation time
- Recycling of all business documents essentially needed for the implementation
- Decrease scope management procedure.
The popularity of accelerated ERP implementation has resulted in numerous rapid ERP implementations in the last decade and it reflects a remarkable evolutionary picture of growth of the enterprise applications.
There could be several risks of Accelerated ERP Implementation
Main risks of accelerated implementation may be:
- Shortened end user training
- Insufficient change management
- Poor knowledge transfer
- Deficient post-implementation monitoring
3. The Change Management Concept
Technical, managerial and economical reasons have frequently been presented as vital factors for ERP implementation problems but the importance of the human factor has not been much talked about in ERP implementation strategies (Kemppainen, Ilkka). Development strategies, such as ERP implementation, normally involve change. People do not accept change easily. Many ERP systems face implementation problems because of workers' resistance. Hence, responsiveness to internal customers is critical for an organization to avoid the difficulties associated with this change. ERP users need to understand to the new changed environment. Here the attributes of the new enterprise system is very important because they can either positively or negatively influence the user's learning capabilities (Yasar F.Jarrar, Abdullah Al-Mudimigh, Mohamed Zairi). In implementing an ERP system, top management normally faces some unwanted outlook from the users; they refuse to go along with the implementation process. Management should, therefore, consciously deal with this problem instead of avoiding them.
A.M.Aldwani suggested a framework for tackling change management which of following three phases (Figure 2):
3.1 Knowledge formulation phase
This is the first step and it includes close monitoring and evaluation of the potential users and groups of organization. To successfully do this step top management should figure out few key points.
Source:A.M.Aldwani, Change management strategies for successful ERP implementation, Business Process Management Journal, Year: 2001, Volume: 7, Issue: 3, Page: 266 - 275, ISSN: 1463-7154, DOI: 10.1108/14637150110392764, Publisher: MCB UP Ltd.
The key points are:
- Identifying the protesting persons or groups
- Desires of those persons or groups
- Viewpoint and principles of them
- What alternative they want?
Identifying these basic points would help a lot to the top management in finding the root cause of resistance of the potential users to the ERP implementation. Without handling this resistance properly the whole implementation would go in vain because of the resistance of its actual users in future. There could be a lot of reasons of resistance such as, some users may be frightened about their computer illiteracy, or they may feel that they have done a great job in their entire tenure without having a complex system like ERP. Some users may think that their job would be threatened by the new system or they would not have the kind of freeness or independence of doing their job that they used to have in custom procedures. So, all these things could slow down or damage the ERP implementation procedure and should be taken care of by top management delicately.
3.2 Strategy implementation phase
In this phase management should gather the information regarding the potential users from the previous business process to create a new plan that can best overcome their resistance to the new ERP system, and to encourage as many users as possible to accept it. To successfully implement this, a proper plan of action is essential. It could be done by adopting a three level process which includes thinking about the new system, feeling its benefits and acting properly in order to achieve required outcome. Changing the resisting attitude towards ERP is the first and foremost strategy at this phase. An efficient way of achieving this is to use of proper communication. One useful communication strategy is to enlighten the potential users about the effectiveness of ERP. The marketing people generally highlight the benefits of a product, rather than its features, to customers, in order to draw their attention and enhance their understanding and willingness about it. The same strategy can be used to spread awareness amongst the potential users of ERP to attract and make them interested in the new system. In several cases, ERP implementation failed due to inadequate communication.
The second step in this phase is to influence the factors of attitude of the potential users by minimizing cost. The strategy to minimize cost should be developed in such a way that it involves both individual workers and resisting groups. It will be more appealing to the individual workers if they realize that ERP would become a tool for enhancing his/her career or would be helpful in his growing by the organization. In the same way, resisting groups are also be interested in the cost aspect of the implementation procedure.
In the last part of the strategy implementation phase top management should tactfully support the popular and key individuals in the organization. Management should support and endorse the opinions of the group leaders in order to achieve higher adoption rate to new enterprise system. It can be done by convincing the group leaders to engaging them in the implementation process and make them feel that they are main pillar of the new system.
3.3 Status evaluation phase
This is the last component and it includes the observation and status evaluation of the proposed change management framework to ensure that the required results were achieved. This phase is as vital to have a performance monitoring system to scrutinize the development of ERP change management results. To reduce the anxiety of the potential user's is the duty of the top management. This phase dynamically provides the accurate feedback to top management in order to achieve success of the ERP change management system.
Based on the feedback from this phase management should take necessary actions. The feedback from status evaluation phase can be positive or negative. If the feedback is positive, efforts to minimize the resistance of the potential users should be maintained. But if the feedback is negative, management should identify what went wrong
and must make every attempt to re-examine the implemented change management strategy in order to achieve acceptable solution.
4. Basic Causes of Failure
Failure of ERP Software Implementation: Most of the ERP softwares have several modules. Most ERP projects involve considerable amount of customizations. Every organization has its unique business process and requirements. To cater these requirements ERP softwares have a lot of customizations. Complex and expensive customizations often result in making the software more fragile and harder to maintain in go live state.
Failure of Accommodating Evolution of Business Processes: According to Bruce Zhang business processes can be categorized into three levels - strategic planning, management control and operational control. Organizations often redesign their existing business processes to cope up with the volatile market scenario. Many enterprise systems are not capable enough to meet this requirement (http://www.webpronews.com/topnews/2005/03/29/causes-of-erp-failures).
Failure of User Acceptance: End users are the key players in daily activities of an ERP system. Huge projects like ERP implementation brings numerous changes to the organization. These changes initially create new and extra workload for the employees. Without the awareness consciously spread by the top management and proper training the whole project could be in vain by having lack of user acceptance
Apart from the above mentioned causes of failure, it may vary from organization to organization, business type to business type, ERP solution to ERP solution. But, basic failure reasons remain the same: not prepared for implementation, rely on available resources regardless of their skills and experience, opt for a wrong solution, budget constraints to buy low cadre solution, management was not on board, wrong choice of business users, decisions making in close rooms, teams working on different islands and are not on the same page, solving problems on fire fighting mode, high expectations raised. Also sometimes cause of failure is the management who is so busy in other operations and consider ERP implementation is the sole responsibility of IT.
5. Basic reasons of Success
“There is no magic in ERP software.” The benefits of ERP are a straight result of useful preparation, implementation, and appropriate use. This seems apparent, but nine out of 10 companies don't get it correct in the first time (R. Michael Donovan, Successful ERP Implementation the First Time). Due to its persistent character, a new ERP platform creates a significant infrastructure in any company for at least the next decade (Christopher P. Holland and Ben Light, A Critical Success Factors Model for ERP Implementation). Selection of appropriate solution, right technical and business team, management on board, whole organization taken into confidence and their buy in, proper and exact requirement gathering, best approach, processes in place, best plan, exhaustive trainings to all type of users, dedicated team for implementation.
ERP implementation is different from conventional IT Software Projects. If it is implemented properly it comes with a new culture and a fresh breath to a firm. To deal with the users' resistance to change, top management should study the needs of the potential users and the reasons of resistance. Top management should come up with appropriate strategies and techniques in order to implement ERP successfully and evaluate feedback come from the status evaluation phase. ERP implementation can only be accomplished when top management is fully dedicated to the project. Management commitment and dedication is the vital need that will ensure to have the required circumstances for successfully introducing the change brought by ERP into the organization. Successful ERP implementation could only be possible if there is a well structured plan and a clear and committed management vision. This provides the root for understanding the scope and magnitude of the expected changes, and facilitates planning a proper strategy to manage the whole implementation procedure.