Happy New Year 2012 from Argus Team

Critical Success Factors in ERP

Here in this blog, I wish to discuss more about common pains in ERP Software Implementation. ERP software integrates and automates all facets of business operations. This includes all modules required to an organization such as Inventory Control, Procurement, Sales, Finance and Human Resources. We can define it as a company-wide computer software system used to manage and coordinate all the resources, information, and functions of a business from shared data stored. ERP is very useful as it saves lots of time of every individual within the enterprise.

However, the implementation of ERP is a complex exercise, and many adopters have encountered problems in different phases. Once you decide to buy ERP software what are the steps you have to carry out? Hope most of you already aware that the difficulty in ERP implementation. The high failure rate in the implementation of ERP calls for a better understanding of the process. In order to reduce the failure rate of ERP implementation, a number of studies have attempted to identify the critical success factors in the implementation of ERP.

What is CSF? CSF means critical success factors here describes about success factors in the implementation of ERP. CSFs are the few key areas where ‘‘things must go right’’ for the business to flourish and for the manager’s goals to be attained’. CSFs for ERP implementation bring a concept that helps an organization identify the critical issues that affect the process of implementation. Though a better understanding of the CSFs for the implementation of ERP, an organization can determine the corresponding solution to eliminate or avoid the most common causes of failure in implementation.

You can have an in-depth overview about CSF in the article ‘Examining the critical successfactors in the adoption of enterprise resource planning’. In the article, through a review of the literature across 10 different countries/regions, 18 CSFs were identified with more than 80 sub-factors, for the successful implementation of ERP. The 18 CSFs are as follows:

1.      Appropriate business and IT legacy systems

2.      Business plan/vision/goals/justification

3.      Business process reengineering

4.      Change management culture and programme

5.   Communication

6.      Data management

7.      ERP strategy and implementation methodology

8.      ERP teamwork and composition

9.      ERP vendor

10.   Monitoring and evaluation of performance

11.   Organizational characteristics

12.   Project champion

13.   Project management

14.   Software development, testing, and troubleshooting

15.   Top management support

16.   Fit between ERP and business/process

17.   National culture

18.   Country-related functional requirements