Why enterprise resource planning implementations fail in organizations

Business - Information Systems

This report aims to answer the question, why have so many Enterprise Resource Planning or ERP implementation projects failed? The report will also focus on IS organizations no longer needing to develop proprietary infrastructures because of technological advances such as the Internet. The internet there may provide an opportunity to have businesses again focus mainly on the development of needed applications.

Throughout the 1990's, organizations made substantial investments in information systems and the objective was to utilize technology as a way to resolve a plethora of business related problems. These organizations purchased and installed company-wide Information Systems known as Enterprise Resource Planning systems or ERP's. ERP's integrate a business's planning, purchasing, manufacturing, sales, distribution, accounting, and customer service functions through software and hardware. But these implementations do not all go well for many reasons. "ERP implementations have not achieved profit goals and objectives primarily because organizations had difficulty jumping new technology hurdles in getting these complex and expensive systems configured and implemented, and the difficulty from senior executives to understand and recognize the importance organizational change and business process redesign." (Ross & Weill, 2002)

There are many more reasons that these ERP processes were unsuccessful. The bulk of them revolve around the fact that companies ignored factors such as the need for other organizational cultural changes and structural needs, the level of in-house employee skill sets and an understanding of the need for a complete evaluation of existing business processes.