Critical Success Factors of Enterprise Resource Planning Implementations

Abstract

Enterprise Resource Planning (ERP) system is a strategic business solution, which helps the enterprise to gain competitive edge in the turbulent business environment by employing proven business processes and equipping the enterprise with the necessary capabilities to integrate and synchronize the isolated functions to streamlined business processes. Recently, ERP has become a buzzword that many Egyptian organizations are rushing toward. Unfortunately, it was observed that many ERP projects have not been effective and hence unable to achieve the results envisaged. Thus, this research examines ERP implementation success in the Egyptian organizational context. Through an extensive literature review, followed by a series of interviews with key persons involved in ERP implementations in Egypt, a theoretical framework was developed to aid the research process. The proposed framework formulates ERP implementation success as function of interrelated set of Critical Success Factors (CSFs) and Egyptian organizational culture. A measurement scale was designed to measure identified research constructs. Afterwards, data was collected through a cross sectional survey involving 45 ERP adopters. Partial Least Squares (PLS), a Latent Variable Modeling (LVM) technique, was used to model hypothesized relationships and predict ERP implementation success index following. similar approach used for American Customer Satisfaction Index. Key findings involve exploring ERP implementations in Egypt, identifying their broad features, gaining insights about achieved success and discovering potential problems. Egyptian organizational culture is proved to have negative influence on the implementation process. We identify the effects of the users' culture, the organizational structure, the power distribution and the reliance on information as primary influences on a successful implementation. Most of the research hypotheses are supported by the returned empirical data. Model results are discussed in light of the survey findings. On the practical side, the study improves the understanding of Egyptian organizations on how to implement ERP systems within the challenging organizational culture. A clearer understanding of the human and organizational factors provides a blueprint for a higher success level in the future, and the leverage effect for continuous improvements for those who use ERP solutions today. Moreover, we provide ERP adopters with a self-assessment tool that helps them to measure and monitor their achieved CSFs, evaluate and predict the likelihood of the project success. Theoretically, we attempt to bridge the gap in literature about the impact of culture driven issues on the acceptance and success of imported IT.