Critical Challenges in ERP Implementation: A 20-Year Analysis

A groundbreaking research synthesis by Mahmood, Khan, and Bokhari (2019) provides a comprehensive examination of Enterprise Resource Planning (ERP) implementation challenges from 1999 to 2018. Through a systematic literature review (SLR) methodology, the researchers analyzed 53 carefully selected studies from a pool of 103 research papers, focusing on understanding the persistent challenges organizations face when implementing ERP systems.

The study stands out for its rigorous methodology and broad scope. Starting with over 100 potential papers, the researchers refined their selection to focus on 53 high-quality studies published in reputable journals. This careful curation ensured that the analysis captured the most relevant and reliable insights into ERP implementation challenges across both small and large organizations.

What makes this research particularly valuable is its timing. Despite ERP systems being a mature technology with over two decades of implementation experience, organizations continue to struggle with successful deployment. The study addresses this paradox by systematically identifying and categorizing the most critical challenges that persist across different organizational contexts and time periods.

Through their systematic review, the researchers identified 31 distinct challenges, with special attention given to emerging issues related to cloud-based ERP systems. Their findings not only highlight traditional implementation hurdles but also shed light on new challenges arising from modern deployment methods and technologies.

Let’s explore the specific findings and their implications for modern organizations.

Top 10 Critical Implementation Challenges

1. Top management approach
2. Change management
3. Training and development
4. Effective communication
5. System integration
6. Business process reengineering
7. Consultant/vendor selection
8. Project management
9. Project team formation
10. Team empowerment/skilled people and data conversion/migration

Cloud ERP-Specific Challenges

The study also identified several challenges unique to cloud-based ERP systems:

• Security risks and data security
• Cloud awareness
• Functionality limitations
• Service level agreements
• Subscription expenses

Study Significance

The research is particularly valuable because it:

• Spans a significant time period (20 years)
• Analyzes both traditional and cloud-based ERP implementations
• Provides insights for both small and large organizations
• Considers socio-technical aspects of implementation

Important Context

Despite ERP systems being around for over two decades, the study highlights that implementation success rates remain problematic. While success stories exist, the failure rate is notably high, emphasizing the importance of understanding and addressing these challenges before implementation begins.

This analysis provides organizations with a comprehensive view of potential pitfalls, allowing them to develop preventive measures and better prepare for ERP implementation projects. The findings suggest that successful ERP implementation requires careful attention to both technical and organizational factors, with a particular emphasis on management and human resource considerations.

 

Thus to avoid failure in ERP implementation, organizations should focus on addressing the most critical issues and challenges identified in the research. Here are the key areas to prioritize:

1. Secure Top Management Support

Ensure strong commitment and involvement from top management throughout the ERP implementation process. This is crucial for project success and is identified as one of the topmost challenges. 1

2. Implement Effective Change Management

Develop a comprehensive change management strategy to address the organizational and cultural shifts that come with ERP implementation. This is essential for overcoming resistance and ensuring smooth adoption. 2

3. Provide Adequate Training and Development

Invest in thorough training programs for all employees involved in the ERP system. This will help in building the necessary skills and knowledge for effective system use. 3

4. Establish Clear Communication Channels

Maintain effective communication throughout the implementation process. This ensures that all stakeholders are informed and aligned with the project goals and progress. 4

5. Focus on System Integration

Pay close attention to system integration to ensure that the ERP system works seamlessly with existing processes and other software. This is crucial for maximizing the benefits of the new system. 5

6. Conduct Business Process Reengineering

Be prepared to reengineer business processes to align with ERP best practices. This may involve significant changes to existing workflows but is essential for optimal system performance. 6

7. Carefully Select Consultants and Vendors

Choose experienced and reliable consultants and vendors who understand your organization’s specific needs and can provide appropriate support throughout the implementation process. 7

8. Implement Strong Project Management

Employ robust project management practices to keep the implementation on track, within budget, and on schedule. This is critical for avoiding common pitfalls and delays. 8

9. Form a Skilled Project Team

Assemble a competent project team with the right mix of technical and business expertise. Ensure the team is empowered to make decisions and drive the implementation forward. 9

10. Plan for Data Conversion and Migration

Develop a comprehensive strategy for data conversion and migration to ensure that all necessary information is accurately transferred to the new system without loss or corruption. 10

By focusing on these key areas, organizations can significantly improve their chances of successful ERP implementation and avoid the high failure rates often associated with these complex projects.

 

Title: ERP issues and challenges: a research synthesis 1

Authors: Faisal Mahmood, A. Khan, R. H. Bokhari 2

Year: 2019