Successful or Unsuccessful Erm Implementations by Conducting

¶ … successful or unsuccessful ERM implementations by conducting a review of literature on the subject.

Management consultant Wayne Wilson (2006) cites the Standish Group's Chaos Report which discusses findings on information technology (IT) project success rates. Only 15% of more than 13,000 projects that they surveyed could be classified as out-and-out failures, while 34% were considered unqualified successes. The remaining 51% experienced problems with cost overruns, time overruns, as well as projects that were not delivered with the right functionality to support the business.

Wilson proposes five steps to help ensure that ERP software projects are implemented on time and on budget, along with the business benefits expected:

Choose the right solution, software and hardware with a reputation for performance and reliability.

Partner with professionals, experts who are qualified to offer implementation services.

Plan properly to achieve project profitability by committing the necessary resources (people, time, and money) early on in the project.

Resist scope creep, the tendency to allow frequent and unplanned changes to the scope of the project once it gets underway.

Provide adequate training to help employees get the benefits that the software is expected to deliver (Wilson, 2006).

Ehie and Madsen (2005) also identified eight critical issues in planning for ERP implementation. They cite several statistics that underscore the importance of carefully planning and managing ERP implementation. At the time of their study, 70% of Fortune 1000 companies had or would have installed ERP systems. The market for ERP systems was projected to reach U.S.$15.8 billion in 2008. Survey results from 36 companies showed the following critical factors affect successful ERP implementation: feasibility of ERP systems, critical evaluation of ERP systems, effective project management capabilities, human resource development, business process reengineering, cost and budget issues for IT infrastructure, consulting services, and top management support. It should be noted that Wilson, Ehie, and Madsen identified several critical factors in common.

Ehie and Madsen (2005) offer additional conclusions about ERP implementations. They recommend that the ERP implementation not be viewed as just an IT solution, but rather as a system that transforms the company into a more efficient and effective organize. They also argue that successful implementation is fundamentally tied to top management having set the strategic direction for the implementation process, followed up by continuous support and monitoring.

Management experts have also identified critical factors that cause ERP implementations to fail. To get the maximum value from ERP software requires that employees adopt the work methods outlined in the software. If people do not buy into this process, they will resist using the software. This resistance can lead to user demands that IT customize the software, which in turn leads to instability and maintenance issues (Wailgum, n.d.).