Successful Implementation of Enterprise Resource Planning Systems in Public Settings: A Synthesis of Current Literature
As organizations both private and public continue to grow in complexity and sheer size, enterprise resource planning (ERP) has become an increasingly important function in order to effectively and efficiently carry out operations an ensure stability and longevity. The use of information technologies and a variety of different theoretical frameworks has been applied to ERP problems and successes in both empirical and academic research undertaken in the field, and many recommendations and other conclusions have been reached. There has been a much greater use and investigation of ERP technologies and frameworks in the private sector than by public entities and organizations, however, and thus the potential for research of ERP in public settings as well as, of course, the published results of such research has been significantly limited. Reliable findings of ERP success in public settings are thus difficult to come by.
The following summary and synthesis of certain literature in the area works towards a more refined and comprehensive understanding of ERP implementation in public organizations/entities. Two studies that directly examined real-world ERP implementation in public settings and two studies that discuss general risks and opportunities in ERP adoption are examined and their findings combined to yield recommendations for future ERP adoption and implementation by public governments and other public organizations. This yields both practically and theoretically relevant information.
An after-the-fact examination of the City of El Paso's ERP development and implementation process reveals certain planning issues and considerations that are far more relevant to private entities than they would be to most private organizations, including an increased need to outsource and a lack of true resource flexibility (Solis et al., 2006). The major issue identified in this case study was the continued reliance on an outsourced host for the ERP platform and its management, which was not planned by the government and has led to inefficiencies in continued operations despite being clearly advantageous during development and initial implementation (Solis et al., 2006). This highlights the need for planning all stages of ERP system transition in public entities, as the lack of resource flexibility combined with slower knowledge acquisition increases uncertainty overall (Solis et al., 2006).
A larger-scale public ERP initiative -- the first truly large-scale program of its kind, according to the study's authors -- in Pennsylvania involved fifty different state agencies and led to a largely successful program adoption (Wagner & Antonucci, 2009). Through extensive interviews including more than twenty individuals over a three-year period, problems of complexity and the development of a customer service model that fit the public sector were noted as ERP obstacles, while increased procurement flexibility was cited as a major success factor in the project (Wagner & Antonucci, 2009). Continuing uncertainties as a result of legislative and electoral processes contribute o system risks, however (Wagner & Antonucci, 2009).
An early study in enterprise-wide management systems including ERP systems found several common risk factors, some of which are expected to be far less influential in program success today (Sumner, 2000). An extensive meta-analysis of previously published research found that tailoring business processes to meet software needs was a major concern throughout the late 1990s; increasing software capabilities and customizability in the subsequent decade has almost certainly eliminated much of this problem (Sumner, 2000). Other identified problems and risks, including knowledge and skill growth and/or acquisition to allow for more effective and efficient implementation and issues with outsourcing both technologies and processes, remain problems that private and public organizations undergoing ERP implementation might experience (Sumner, 2000).
A more recent study of customization in ERP development and implementation projects found that while technological customizability has indeed increased, this is not always of direct benefit to entities undertaking this development (Haines, 2009). In fact, through a series of semi-structured interviews it was found that customizations were often made in the absence of or even counter to identified strategic goals of the organization and/or project (Haines, 2009). This, coupled with other findings, reinforces the strong need for planning and control at all phases of ERP development and adoption, without which programs tend to evolve on their own in unexpected and often counter-productive or inefficient ways (Haines, 2009). Though a study of private organizations, the lessons here are entirely applicable to public entities.
The above-summarized literature begins to provide an answer to the question of specific success factors in ERP development and implementation in pubic settings. The resource, operation, and revenue complications of public entities leads to fundamentally different operations and processes in many regards, and thus not all lessons learned from private organizations can be applied to the much more infrequently studied public setting. Enough general evidence regarding overall system risks and considerations can be drawn from the larger body of research on private ERP adoption to warrant certain recommendations based on these findings. Combined with the findings from specific analyses of public projects, a series of initial recommendations can be made to any public entity or government considering the adoption of an enterprise-wide resource planning system.
It is clear that the planning phase of such projects is even more essential in public organizations when compared to private settings, not that planning is not crucial in private settings, but that the scope and detail of planning must be much greater and more precise in public organizations (Solis et al., 2006; Wagner & Antonucci, 2009; Haines, 2009). This is due to a variety of factors, the first of which is a matter of resource availability and control (Solis et al., 2006; Haines, 2009). The experience in El Paso demonstrated the lack of flexibility in resource control that will be an issue for any public entity of any considerable size -- certainly for municipal governments and larger entities (Solis et al., 2006). Availability is also a constraint.
Public entities have far less control over resource availability and revenue streams than do private organizations, which are already of limited power and demonstrable incapacity when it comes to properly aligning available resources in light of framework changes such as ERP adoption (Solis et al., 2006; Wagner & Antonucci, 2009; Haines, 2009). Planning down to the most practical and operational level of every phase in the ERP development and implementation process addresses the concerns raised by resource inflexibility in the most direct, comprehensive, and risk-reductive manner possible (Haines, 2009). In this regard, the inflexibility of many mandates and operations that must necessarily be included in a public entity's functions actually serves as something of an advantage, as it allows for more concrete, accurate, and certain projections of future resources and organizational demands. Planning is also of key importance in private organizations, as well, however their greater flexibility and customer-and/or profit-oriented objectives makes flexibility and plans more of a component in private ERP adoption settings than in similarly-sized public and governmental organizations (Haines, 2009; Sumner 2000).
Another issue confronting public organization when it comes to effective ERP implementation is knowledge and skill acquisition. This is directly related to planning and resource control, and again human resource development and changes are typically harder in public organizations than in private settings, which can delay knowledge acquisition even when such needs are properly identified (Wagner & Antonucci, 2009). Proper measures taken beforehand to identify development needs and ensure that appropriate knowledge and training resources are available for implementing and utilizing the ERP system is essential.
Specific considerations of planning and resource control, including human resource control and development, that public organizations should be aware of in ERP adoption programs include process- and objective-oriented software and system customization, system-relevant knowledge and training programs that can be implemented with available resources, and attempting to retain process consistency whenever possible. Outsourcing should also be carefully considered, and plans for transitioning away…