The invention of information technology systems has brought numerous results to organizations; when the right level of technology is implemented, chances of effective and improved business are high. ERP are information systems strategies that aims at integrating business processes for effective business processes however, they have been problematic for many organizations; there are many reports of substantial failures, the implementation of packaged ERP software and many organizations are threatened to have the systems as monumental disaster unless the process is handled carefully (Runyan, Smith and Smith,2008). The main issue that comes with information technology systems is the risks that they pose to the adopting company in the implementation stage; the risks come from either the project logistics or may be associated with organizational factors like organizational culture, organizational politics, change management issues, and project management processes adopted. At the system level, there is risk that an organization may adopt a system that does not fit its organizational structure thus misses the point of integrating operational processes and the ERP programs under implementation. SAP R3s are some of the main ERP programs that have been implemented in organizations but failed to meet the managerial expectations; they have failed to cost cut costs or create efficiency or they have taken longer than they had been anticipated. In the extremes some companies have experienced an increased cost of implementation and total failure of the project (Barney, Tyson, Mackey and Ketchen, David,2005).
In the strategic management approach, scholars have realized the need to have effective project management strategies that address the needs of the project and ensure that the project is aligned with the needs of the organization. In the theory of project management, projects are defined as interrelated processes that have a common destiny. Programs that have been implemented using strategic project management models and structured development methodologies have been a success in most companies thus there is need to borrow some strong points from the approach and use them when implementing ERP programs in an organization. The strongholds of strategic project management models and structured development methodologies will be borrowed without forgetting that every program has its own specifications that can be handled differently (Saeed and Abdinnour-Helm, 2008).
With the above two cases, one with some elements of failure (ERP programs), and others with record of success (strategic project management models and structured development methodologies), this research aims at offering sound recommendations that can be used by ERP implementation teams for effective running of the projects. The research will elaborate on how Project Management Body of Knowledge (PMBOK) can be integrated in ERP implementation program to assist in risk management. To build and get the materials and offer sound recommendations and conclusions, the research will focus on survey of companies that have failed in the implementation of ERP programs and learn from them the factors that lead to the failure. When the issues have been analyzed, they will be integrated in Project Management Body of Knowledge (PMBOK) to ensure there is improvement of the specific issue that came into play. The research found it important to survey organizations where ERP or SAP R3s have been successful; when this was done, it offered more insight on the recommendation and conclusion (Barney, 2001).
The research was motivated by the need and rising demands for ERPs despite the high risks of failure that they have lead to in those organizations that have used the traditional method of implementation. It will concentrate on understanding the risks and controls critical for the successful implementation and offering sound and practical recommendations that can yield higher results in the future (Scheer and Habermann, 2003).
To collect data and reviews, the research was initially built on wide literature reviews on the two set of business management or business operations (strategic project management models and structured development methodologies and ERP’s); the reviewed offered a wide background on the strengths that each has as well as sources of threats and how scholars had recommended them to be handled. With the background information, hypotheses were made and questionnaires to address the issues were developed. At the end of the research, there will be a recommendation on future areas of study to improve knowledge in the segment of business process.
Enterprise resources’ planning is a strategic management tool that makes use of information in the organization to support work and resources management; the system uses an integrative information system to ensure that resources have been managed effectively and effectively. The operations of an ERP system is based on complex integration of processes and systems that ensure that supply chain and logistics management within an organization are interlinked with other production processes for an effective utility of resources (Barney, Wright and Ketchen, 2001). The system when implemented successfully has massive benefits to the implementing company; however implementation of an ERP system is complex, consumes a large volume of company’s funds calls for massive integration within an organization. Some scholars have argued that an ERP system is the largest information system that has ever been implemented in an organization; it involves lying IS systems in place as well as redesigning work progress to its alignment. In modern business environments, there has been the growth of strategic management tools and processes; the tools are aimed at ensuring that projects have been implemented effectively in an organization within the time using the minimal resources as possible; with the knowledge an diversity of thoughts and policies as developed by project management; ERP can be implement like any other project within an organization and risks associated with its implementation minimized (Nicolaou, 2003). Although in its development in the 1990s’, ERP posed as a special program that had its requirements when being implemented, it fits in the frameworks of strategic project management models and structured development methodologies in the following areas: large, complex projects, involving large groups of people and other, when all the processes have been managed strategically, then the success of the implementation process is likely to be successful (Benford and Hunton, 2001).
Research has shown that risks in successful implementation of ERP programs come from two main areas; the system itself and organizational factors. ERPs should improve business processes in organizations however they should not be seen to challenge the status quo within an organization; the best approach method is to systematically change the processes and improve the processes. To be able to undertake above approach, the programs chosen must be quality that they can be aligned with business processes and diffuse or merge effectively. The steering committee in an ERP program has the main task of ensuring that the program they selected for their company meets the requirements of the company.
From its onset, ERP program implementation process takes a similar form with project management; both have goals and objectives to attain within a set time and resources framework. However, traditional ERP programs implementation programs have offered organizations some challenge with high chance of failure especially in SAP R3 programs, on the other hand, Project Management Body of Knowledge (PMBOK) has offered some strategic project management models and structured development methodologies that have seen numerous projects success in organizations. The main question that this research will seek to answer is where is the weakness in ERPs implementation programs and where the strong points of strategic project management models are and structured development methodologies. When the two extremes have been well understood, the research will use the strong points in of strategic project management models are and structured development methodologies to improve traditional ERP program implementation projects (Bernroider and Koch, 2001).
The main question that the research aimed at addressing was how project management strategies can be adopted in implementation of ERP systems; the research aims at offering sound recommendations that can be used to mitigate problems and risks that have been common with the ERP implementation. To address the problem, the research will review current failures in the ERP and the strengths that can be learnt from strategic project management systems.
The main research question is how strategic project management models and structured development methodologies can be used to improve the implementation process of enterprise resources programs (ERPs).
The secondary questions to support the research and are as follows:
- What are the main risk areas that affect the implementation of ERP programs; the risks will be addressed from a general angle?
- What is the relationship between strategic project management models and structured development methodologies and ERP implementation process?
- What are the strong points that can be learnt from strategic project management that can be used in successful implementation of ERP programs?
Under this section the proposal will limit itself to the literature materials that have been developed by scholars on different topics and issues of ERP; the section will also take a look at the systems adopted by strategic project management models and structured development methodologies and analyze how they can be of benefit to the implementation of an ERP system within an organization; the relationship of the two management systems will also be a point of consideration:
The ERP system
In modern computerized world, with high competitive business environments, business require to adopt systems that address the needs that they are facing; computerized systems is one of the most recent and well embraced systems of operation. The concept of ERP was coined by Gartner Group in 1990 as an extension of the resources management planning strategy called manufacturing resources planning; the system was an improvement of the old system that aimed at integrating internal and external systems within an organization for an effective business management. Since then the policy has been embraced in different organization where it has integrated the finance/accounting department, manufacturing department, human resources, sales and service, and CRM to have the business as a single unit of operation with a similar target that they want to attain (Bernroider, 2008).
The main objective of an ERP is to integrate internal systems of an organization and ensuring that all the areas of the business are recognizing their interrelation and are acting to them as effective as possible; when implementing the ERP system, all departments are seen as equal units that can lead to the success or failure of the organization. It is integrated in such a way that some issues or some matters in a certain department will translate to some issues in another department and the source of problem established before higher damage has been done in the organization. In a nutshell an EPS has the following characteristics, it is a real time system that integrates all the internal system without having some periodical updates; the organization shares a common database to support different applications in the organization, the database has the main role of ensuring there is uniformity and equality in processes within the organization (Berson, Shamir, Avolio and Popper, 2001).
The central database that might be under the management of the information technology department has the main role of feeding software and hardware with the organization and ensuring that incase of any error, then there is a system of tracing the problem to the main server. The totality in approach and the intervention of different players ensures that the organization has the right policies operating effectively in the same time; however the above benefit forms one of the implementation risk associated with the system. To have internal processes in one framework and developing them to be operating in real time together is a challenge and risk that makes most ERP programs to be delayed and get accomplished after having utilized funds more than the budgeted ones.
The system has numerous advantages to a company; some benefits are direct while other is indirect; benefits can either be tangible or intangible however they are more inclined to intangible side of it. The main aim of a business establishment is to get profits; when an ERP system has been implemented, it integrate myriad processes in the most efficient manner that lead to minimization of expenses and reduction of costs. Different areas of the organization are managed under one system to have a single unit of operation; the common database and information system works in real time thus an organization is able to record and overall improvement of systems and policies. A well implement system has the potential of improving customer service within an enterprise, which in turn results to increased business (Bharati and Berg, 2005). The benefits brought by the system can be categorized into three main areas, they are:
One of the most obvious advantages is the integration of different departments in to one system. When an organization is working as a single unit, then the corporation and business integration is enhanced, there is no one department that feels is more superior to the other. Leaders in such organizations will be able to monitor transactions and business deals at a single point thus facilitating establishment of areas of deficit for strategic actions. ERP system allows for data capture in one section then the data is distributed throughout the organization; this reduces the time of data processing, saves the human resource energy that could have been used to key in data and reduces the error in data that mostly result from multiple data entry. When an organization has free flow of data, decisions are made fast from reliable internal and external data.
One area that the system has assisted is in management of inventories; it is able to manage the flow of an order and updates records within the system that triggers purchases decision making. The system is made in such a way that when a customer makes an order, and the order has been accepted, the data passes to the warehouse department, which records a deduction of inventory. The system has the capability of managing the reorder level of stock thus when the level is reached, it raises an alarm to the procurement department. When the company adopts and integrated supply chain management, it will have a just in time stock management system. This system ensures there are minimal stocks in the warehouses thus reducing warehouse costs (Bharadwaj, 2000).
When a company is using the system, at any one point within the organization, a customer can be advised on the level at which his transaction has reached. The customer only needs to contact one person who will not have to run from one section to another demanding to know the level of progress of a customer’s transaction. When customers get quality services, they are bound to be loyal to the company; this has long benefits to the company.
When the system is implemented, it comes with as strong software that interlinks different business sections; there is high likelihood of reduction of computer operation costs as a result.
For example when tracing an order, it is easy to know the level that the order has reached from one desk without having to move from one department to another looking for the order. This reduces customer service time, offers informed, and real time information (Borut, 2005).
The diagram below shows a typical ERP
Traditional ERP implementation process
With the development of ERP, there were some best projects that have been developed however they have been challenged by test of time; the process seemed to ignore some important factors that have in turn lead to the paid of the project. The following is the traditional “best” practices that had been used to implement ERPs:
Traditional method adopted three main service levels as consulting, customization, and support; Grant, David; Richard Hall, Nick Wails, Christopher Wright (March 2006) suggested that the traditional method supported small and medium enterprises to spend about fourteen months with an involvement of 150 consultants for an effective ERP program. In the case of Multinationals, the process was suggested to take years and hundreds of consultation (Hkkinen and Hilmola, 2002).
- Process preparation. Traditional method suggested that ERP programs preparation is the first step development and implementation of an ERP program; at this stage the main task was to link current processes with organizational strategy. At this stage the management has a business rule set, authorization hierarchies, data semantics developed, and decision centers linked via Master data management. This stage involves the management starting to align the organization with the needs of the ERP; it may include interdepartmental transfers, staff educations and buying of the equipments that are needed to lay the process into operation. In this stage, there exist three main activities as:
- Configuration. Under configuration involves the developing team to balance the way the system works and the way the organization adopting the systems needs the system to work; this is the main problem that offers a high risk to ERP success. When a system has been developed, the developer had the ideal business environment that he has in mind, in the case that some configurations needs to be done, then something is not adding up.
- Customization. This occurs when the system has some areas that cannot be changed or configured but calls for the developer to adopt a slight different approach to the entire system. This process is expensive and complicated, and can delay implementation; it has been agued as one of the issues that face the successful implementation of ERP within the stipulated time and cost framework (Huang, Chang, Li, and Lin, 2004)
- Extension. When the program has been laid to work, the next method is to extend the system to other areas or third parties like printers, scanners and some specialized data. At this stage the company ensures that the process has been adopted effectively and every department is responding to the needs of the system. This is one area that have resulted to a number of issues as staffs are expected to adopt the system yet they had not been prepared effectively to embrace and use it in their operations. They may find the system change meant to distort the status quo in the company thus chances of repellence are high (Delone and Mclean, 1992).
- Data Migration. This is the most crucial stage in an ERP process that involves migrating of information from the old system to the new system; this stage is crucial as it determines the quality of data migrated and ensuring that right migration was effected is paramount.
It involves the following main processes:
The above process ensures that the company has migrated its organizational data for effective integrations. In case there was some failure in the way the process was conducted, the program will be laid but with some defects that will lead to the entire project collapsing or failing to offer the expected results (Duh, Chow and Chen, 2006).
The main issues with the Traditional ERP implementation process
As had been illustrated earlier, ERPs have been a challenge to a number or organizations leading to project failures, delays, increased implementation costs, and resistance from employees. The following are the assumptions that were made by the system that led to its failure:
- There was less regard of staffs and change management projects within the ERP programs
- There was the believe that programs already developed can be customized for a certain business organization
- The implementation team were seen as outsiders and more preference was made to their experience than the involvement of organizational leaders and staffs
- The preliminary and preparation strategies failed to have effective policies of risk management
- The theory had more emphasis on the information and technology department and felt that change could come from the department and be distributed to other sections of the organization. In this context, the theory ignores the concept of organizational culture and organizational politics (Dunk, 2007).
Risks associated with ERP systems
Despite current growth and embracement of ERP systems, they have been challenged not to be offering the expected results, they have been argued as book strategies that have not been able to give the anticipated benefits: however different scholars have come to the rescue of the criticism and argued that the damage caused by ERP, critical success factors Of ERP and the possible cause of low productivity can be attributed to the failure and inefficiencies in the implementation system or programs. Other scholars have argued that the benefits brought about by an ERP system can only be weighed by looking at the intangible benefits that it brings and not the financial part of the system (Ehie and Madsen, 2005).
To develop the system that fits a certain organization is a complex and expensive process, customization of the system is problematic. When a company is developing the system, there is risk that there will be a shift of focus in a business; the businesses may be more concerned with the computer systems and forgets the original corporate goals it was implemented to fulfill. In the same light, implementing an ERP system is similar with implementing a change in an organization, thus a company will suffer the dangers brought about by such changes (Scott,1999). Other than rolling out the system, which is an expensive exercise, a company needs to incur further expenses training employees on how to use the system. Another shortcoming of the system is chances of integration of unnecessary sectors in the company, this leads to departmental dependency that could be ignored for better efficiency within the company (Finney, Zachary, Lueg and Campbell, 2008)
A research conducted by Garrity, Coolege and Sanders, 1994 on the success of ERP implementation programs shown that only 42% of the companies using the system embrace the policy of intangible benefits evaluation while the others are more inclined to financial benefits.
Under the frameworks of risk analysis, there are different risks that have been associated with the implementation of ERP systems; they start with the decision to adopt the system and chances that the management were not critical when deciding the particular system they are going to use. There are different system of ERP but each seem to work well in a certain environment or business industry; when the management fails to consider and note the special attributes that would be special to the company and its implementation (Garrity, Coolege and Sanders, 1994).
Prior research has looked to the risks associated from a technological perspective or from the software development angle, under this concept the researchers were concerned on the risk that the system and security of database and systems adopted may not be guaranteed. When organizational information happens to fall in the hands of competitors due to lack of security, then the company is more likely to suffer the damages. Other areas of the system are the quality, reliability, satisfaction level, and the impact of information technology.; in the same frameworks of system development, there is the issue of complexity, lack of user experience, and lack of role clarity of role definitions of individuals on the project; when the systems have been developed and laid in an organization, their operations becomes an issue that need to be looked effectively, the expertise in most cases is the problem (Frow, Marginson and Ogden, 2005).
At the implementation stage, the systems can be taken as changes and structural adjustments in an organization, the changes when in an organization has the risk of hampering the effective operation of business systems and affects the operating teams general expertise exercise. In most cases, when the programs are being implemented, there is the issue of user resistance, proper project management including project scope definition, top management sponsorship, and having a project team that possesses the appropriate skills; this means that an organization is forced to use more funds to created the supporting atmosphere in the organization; to create such an atmosphere may have already caused un-repairable damage to the organization (Avlonitis and Panagopoulos, 2005).
In order to maximize the probability of the project success, there is need to have the risks associated with the task minimized as minimal as possible; the main approach that can be taken to ensure that the project does not get the company to the chances of failure is that the project, management should consider the use of strategic project management models and structured development methodologies: under the methods the main emphasis will be on: e risk of audit failure through the identification of inherent, control and detection risks and the implementation of such policies that will see the project a success (Govindarajulua, Reithelb, and Sethi, 2000).
Literature has identified that alignment of the organizational strategy, structure, and the processes chosen for ERP system is one of the risks that comes with the implementation of an ERP system: the risk comes because the structure and the needs for an ERP system cannot improve the organization processes on its own but calls for the restructuring of organizational structures in its implementation process. an ERP must be a business initiative thus there is need to have strategic clarity of the system and have a clear purpose for the same; when the system is not implemented effectively, then there are high chances that it will fail in its operations (Arnold and Sutton, 2001).
Commercial ERP systems
A number of commercial systems have been developed to perform and integrate processes within an organization; some of the most common systems are:
- NetSuit. It is the most current system in the market and aims at striking an often claimed but seldom achieved balance between value and cost, through its wholesome approach to an organizations operations; it integrates products, services and competitors into one processes to facilitate decision making regarding the development of products and services. The system plays an important role in pricing strategy and management of costs within an organization. When a company is using the system, the management is able to generate periodical trend analysis within the organization and the industry for strategic decision-making. The system incorporates transactional backbone, advanced application and management dashboard (Hung, 2003)
- Microsoft CRM. The system is concerned with the general welfare of the customer; it aims at developing strategies that facilitate quality service and customer satisfaction. It focuses in areas of marketing, customer service, and customer after sales, and considers customer feedback when making decisions. The system is widely used in the service industry however; its positive effects have pulled manufacturing and products industry to use the system. The system integrates the customer by offering feedback mechanisms and uses the data from customers to improve on services and products (ShaN and Siddiqui, 2005).
- Compiere. It is Italian software distributed by Consona Corporation ; it was founded in 1999 and has been improved with time with the latest version produced in 2006. The system targets small and medium scale businesses that are mostly in the retailing, manufacturing and distribution system. The system has a number of inbuilt systems that can be rolled out while others can be blocked; the systems include Quote to Cash, CRM (Customer relationship management) systems, Integrated Supply Chain Management, and Double-entry Book-keeping (Greenstein and McKee, 2004).
- OpenMFG. The EPS system covers three main business applications: accounting, customer relation management and supply chain management. A system can be dismantled to have the ones that are required by a particular company. The system is an open source based fully-integrated system that offers room for modifications by organizations in the move to satisfy their needs. The system can be accustomed to the needs and line of business of a company.
- SAP R3. The system has been developed by Analyst Steven Briggs; it is based on five info-objects, which are used to describe business variable relationships. They come in different languages, hierarchy, currency, weights among others. So far, it is the most known and sold system. The advantage with the system is the integration of different departments and generation of reports for decision-making; it is used as a tool managing through information. The major difference with Netsuit is that SAP does not include competitors in its analysis.
SAP’s has been the most implemented ERP systems with SAP R3 the most common one; SAP R3 has been successful in most large companies but has failed to take its full effect in small and medium sized companies; the main issue that faces the system is the need for highly qualified personnel’s who can drive the process to the next higher level (Guimaraes, Staples and McKeen, 2007).
When implementing and testing of SAP R3, there are some issues that are faced the implementing companies that limit the success of the system: the implementation method fails to address how requirements will be met as well as the criteria that will be used for testing, the tools of testing. When implementing SAPs there is need for step by step success testing to ensure that every stage has been completed successfully, when one stage fails to take effect like it had been expected, then the entire project is bound to fail. Current approaches to implementation of SAPs fail to offer specific testing roles and responsibilities as well as how defects in the system may be addressed, managed and resolved; without the clear recommendations, when the policies are faced with issues, the managers find themselves fixed with projects that cannot offer the company the expected results (Andersen and Segars, 2001).
In the design stage, SAP s lack the elements of accountability, they include unclear requirements, inability to trace the system design and lack of clear definition of the final outcomes of the systems. Other than the systems and their implementation issues, implementation is further affected by the implementing companies’ issues, for example when implementing the systems, they are changes being implemented in an organization, change is not always welcomed by staffs and sometime the management for various issues.
When there is resistance to change, the system lack much needed staff and management support thus it takes a lengthy time before it derivers results, the longer the implementation, the higher the cost of implementation. Guy Gable in his study called “SAP R/3 Implementation Issues for Small to Medium Enterprises” in 2007 stated that one of the problems that hamper the implementation of SAP R3 in small scale and medium enterprises is the preparedness that the companies put in place when adopting the change, he was of the opinion that small scale business are not able to prepare this human capital to the changes they will get when the systems have been put in place (Akmanligil and Palvia, 2004).
According to Saunders, 1999 and Scheer and Habermann, 2000, another issue at organizational level is the lack of expertise that a company embraces when implementing SAP/R3 systems, according to the writers, many ERP programs ends up incurring more expenditure than the initial budgets that had been allocated for the work. Other than having an increased implementation costs they have failed to keep the promise of cost reduction in the company. The costs incurred during implementation include management cost , license costs, staff training costs, and hardware costs; the above are the costs that have become more expensive that they are mostly estimated in the initial budget as constructed (Shin, 2006).
With the issues that come with the implementation strategies, there is need to have an effective method that can lead to successful implementation of SAP/R3 within the time set framework and within the operational budget frameworks. Traditional models for predicting and controlling implementation method have been the main source of risks in the process of implementation; they had been based on predominantly empirical analyses of code-development which have been at the risk of cost increases and time consuming (Ismail and King, 2005).
The approach of strategic project management models and structured development methodologies
Modern projects management system takes place within micro-projects of related and interlinked processes; they follow a multi-project management within an organization. The project management approach gives room to execution of multiple important activities (projects) simultaneously without conflicts of interest and each enjoying from the intensive cross-functional cooperation. Resources are scarce; thus, they need to be managed effectively, when implementing a multi-project organization, it offers a channel of flexibility in resource allocation, the flexibly assists in allocating resources effectively and reducing any chance of waste or delay in completion of a project for resources purposes (Ittner and Larcker, 2001).
When using strategic project management approach to implement SAP/R3 projects, the implementation process will be scientifically managed where all processes will be managed with an expected outcome. The methodology adopted will ensure that every minor detail that may lead to poor results of the project implementation has been addressed.
Strategic project management take the following main steps (the steps will be discussed from a general point of view but in the analysis stage the relation and how they can be used for implementation of SAP R/3 will be discussed) (So and Smith, 2004).
- Project process. The process of a strategically managed project starts from planning and ends with closure of the project after the goals set have been attained. Through different projects call for different approaches in management, the underlying concept is the same; it may be conducted differently but the end results should be the same (Sorensen, Chapman, Hopwood, and Shields, 2008). Both traditional theories of project management and modern approaches have agreed that a project is an undertaking with a process to follow; the following is the process of project management:
- Initiation.Initiation is the first stage in project management, at this stage, the scope and nature of a project is determined; when the stage is not effectively done, chances that the project will not meet its proprietor’s goals and objectives are minimal. According to Critical Chain Project Management theory, at this stage the project manager should ensure that he understands all underlying factors that are likely to affect the project, factors affecting a project may be positive or negative, and they may emanate from inside a company or be internal or external. When the factors have been understood then the critical path (the longest period that the project can take are then developed). The stage is more of a forecast and laying a plan that will be used in the future to see the project a success; the stage also involves taking an analysis of the current business situation and developing measure that can be used in making the project a success. In scientific project management theory, the stage sets some goals within the main project goals the following are the main objectives of initiation stage:
- Analyzing of the current operations and trends, this is the point that the role that implementation of the project will play is analyzed (Stefanou, 1999).
- Using measurable goals and performance outcomes, the current needs in a
- Taking a Financial analysis of the costs and benefits; this is the point that project budget is drafted
- Analyzing the capacity of an organization in terms of Stakeholder analysis, including users, and support personnel for the project
- Undertaking and drafting Project charter; project charter looks into costs, tasks, deliverables, and schedule (Juul 2005). Having the basics and the corner stone of the project, then the company has a clear vision of what it want to do and which path it is going to follow to attain the goals and objectives of a project. The above stage assists in clear understanding of the underlying forces in an organization for an effective implementation method (Kanungo, Duda and Srinivas, 1999).
- Planning and development. According to PRINCE2 project management theory and Agile Project Management theory, with the clear understanding of what kind of project the organization wishes to develop, the next important stage is the planning and development stage At this point, project manager has the idea of deficits that is in the organization and know the project that can be implemented to see the organization benefit; with the data and information, the manager at this roles plans on how to attain success in the project. According to Frederick Winslow Taylor, decision should only be made after a scientific interpolation of the information gotten; his theory is of the opinion that success in managing a project can only be attained if there is good collaboration among the team members (Kemp and Low, 2008). Planning is the main stage in projects that can take some time; it involves the following activities:
- Determining how to plan. Planning itself need to be planned, at this stage the manager analyses the information and the project ahead of him and decides the best approach he want to use to see to successes. The decision at this stage involves the team members to be involved, services to be outsourced, and sensitization to be done, seeking internal authority and external authority, and establishing an operation base (Kulmala, Parank and Uusi-Rauva, 2002).
- Developing the scope statement. The coverage of the project and the areas that will be affected are analyzed, there should be proper documentation of the project and how it will affect different areas. If the project is in an ongoing organization, any interference that it might cause to the firm are well explained and if any litigation measure to be taken it is taken.
- Selecting the planning team. A project is attained through collaboration of a number of people, managers, supervisors, people on the ground and any contractors. The team and its combination should be selected and given the specific tasks that they are wanted to perform in the organization.
- Identifying deliverables and creating the work breakdown structure with the team at hand, the project charts and work breakdown schedules are developed, plan to give what will be done when and at what time is developed; it is important to note that some tasks can be delayed to future data and other are dependent on completion of other all this factors should be taken into consideration (Kwok and Sharp, 1999)
- Identifying the activities needed to complete those deliverables and networking the activities in their logical sequence. Some tasks may be special and require experts, the kind of experts to be contracted and at what time they will be contracted is planned. There are times need for research on availability and costs of contractors to ensure that a contract is entered early enough.
- estimating the resource requirements for the activities
with the required team, and the resources that will be required, the next step is to analyze the amount of resources and finances that will be required for the completion of the project (Sutton, 2001).
- estimating time and cost for activities. Other than the general stipulated time, at this point the manager is in a better situation to determine the amount of time required for the completion of the project. The costing points and activities are determined and measures implemented to ensure that there will be proper monitoring.
- developing the budget. After determining the cost points and all related expenses that will be incurred in course of the project, a budget that consolidates all the costs is prepared; the budget should analyze all the areas that the project will fulfill and ensure that expense floors and ceilings are made; since the future is unpredictable, it is important to have flexible budgets.
- risk planning. There are different risks that can occur in projects; some risks can be prevented in the planning stage through adoption of the right policies and methods however some risks cannot be overseen and thus uncontrollable. Come measure to reduce loss from some risks include insuring the project.
After the planning stage, the project now is set to get running, all required parameters and information has been documented and measures to litigate any risk taken (Talaulicar, Grundei and Werder, 2005).
- Project execution. This stage is only undertaken when the project manager is confident that he has his tools to go; it is the actual setting the program running. The manager should ensure that all the needed resources both physical and human resources are available; incase there is a deficit in any one area, the main analysis that the manager should do is to understand how long the project can run without the resources lacking. Frederick Winslow Taylor theory of scientific management advises that a manager should have a schedule that explains when and what amount of resources will be needed at want particular time. Then before he let the project go, he should have ensured that there are enough mechanisms and plaices to see the project have required resources at any one time. The theory further advises that it is inefficient that to have all the resources needed in a project at once but they should be delivered when needed. A just in time materials and resources delivery should be adopted; this will save on costs like warehouse costs (Talaulicar, Grundei and Werder, 2005). The stage has the project plan and schedule as the main drive, the project team should ensure that it combines human capital, different phases and experts in a way that leads the project to success (Daellenbach, Rouse and David and Donald, 2007).
- Monitoring. When the project is running and undergoing different stages to accomplish the main goal set, there is need for monitoring and control. Monitoring does not mean supervision but includes supervision, it is where a manager offers guidelines, and measures stage results and appraise the outcomes that the project is giving. The stage is important since it helps to keep the project in course; incase there is any deviation between the expected result in a certain period of time or the budget set, the difference should be analyzed early enough so that a solution can be sort.
The following are the main objectives of this stage:
- Measuring the “where we are and where we want to be”; this is a measure if the ongoing of a project activities
- Monitoring and evaluating the project variables; the main variables of a project are cost, effort, and scope, against what had been planned (where we should be interpolation);
- In case there are issues arising then identify corrective actions to address them (How can we get on track again);
- In case the project seems to be impossible and leading nowhere, then change the entire project.
This is the last stage of a project management task; at this stage the project manager lead the team to evaluate the success they have attained. It is a stage where reports and final touches like any rights of use are attained. It involves both project closure and the termination of initial contract engaged. When closing the project the implementation team should ensure they have developed structures and policies that can be used to improve the project in the future or such policies that can assist the project into the future (Tarafdar and Gordon, 2007).
This chapter will focus on how concentrates on different methods and procedures that were used to collect, analyze and make inferences in the research; it will also discuss a full description of research methods used, different techniques employed and give a justification of each method adopted (Dechow and Mouritsen, 2005)
This research employed the use of qualitative and quantitative research methods since other than offering the situation, the paper was interested in finding theories that explained the relationship between project management and implementation of ERP programs in an organization. Qualitative is a method more common in social sciences and marketing studies. It is used to understand human behavior and the reasoning behind the behavior; in this case it will relate the risk component of implementation of ERP programs (specifically SAP R3) in organization; when the analysis is made, then the issue of integrating strategic management processes will come into play. The main questions that the method aims to answer is how and why on top of what and when. Focusing on the customer will give the researcher the required information. To collect data, qualitative research methods use the following methods of data collection interviews, focus groups, cases studies and observation, it is not limited to the above methods (Churchill, 1979).
One element that supports qualitative research method is the use of deductive reasoning when collecting data and information about the matter at hand. Deductive reasoning method is a systematic method of obtaining knowledge where one proceeds from a general point of view to a specific analysis. The researcher starts from the known to explain the unknown. It provides a means of testing validity of a conclusion by having major premises and minor premises. In this case, the research is aware of the risks and failures that have occurred in ERP programs (Choe, 2008).
Under the quantitative method, the data collected will be on the success rate of the programs in different companies in both the projects (ERP implementation and strategic project management)
Data collection methods
To collect data, this research used a survey data collection method supported by wide literature review. Survey is data collection methods were questionnaires and/or statistical surveys are conducted on places that will offer quality information about the topic at hand. In this case, the survey will be focused on respondents who come from organizations that have in the past implemented ERP programs. To get the two sides of the survey, the research will not limit itself on organizations that have success in ERP but will undertake reviews even in organizations who’s the projects have failed to give the required or expected results (Choe, 2004)
Since the research was based on survey method of collecting data, the sampling methodology adopted is that survey sampling method; in specific, the method that was adopted was two staged sampling where population was at two levels:
Level one population: this was composed of companies that have adopted ERPs and those that had not adopted the method. For the list level two populations was selected; using convenience sampling, the method assisted in identification of those companies which have started or at least have implemented an ERP system whether successfully or otherwise.
Level one population
|Industries||Number of companies||Probability of choice|
|Hospitality and tourism industry||10||0.067|
|Food manufacturing companies||20||0.133|
|Animal feed manufacturing companies||20||0133|
|Furniture making and selling companies||10||0.067|
|Retail business companies||30||0.2|
|Cloth making companies||25||1.667|
With the above number of population, the nest step was to divide the population according to the industry that each company came from; this is using Stratified sampling methods: because of the division, there were 10 cluster groups where every company stood an equal chance to be selected for the interview. From the cluster a total of thirty companies were selected for questions; the following chart shows the number of companies that were selected:
|Industries||Number of companies||Probability of choice|
|Hospitality and tourism industry||2||0.067|
|Food manufacturing companies||4||0.133|
|Animal feed manufacturing companies||4||0133|
|Furniture making and selling companies||2||0.067|
|Retail business companies||6||0.2|
|Cloth making companies||4||1.667|
With the target population, the next method of choosing the specific companies that will be sampled was reached using probability sampling method; under the method, ever company stood and equal chance of becoming an element of the research (Chittipa and Nicholas,2005). The researcher ensured that the sample was representative and unbiased; unbiased sample had the expected value of the sample mean equal to population mean (E(ȳ)=μ); with the characteristic of objectivity and un-biasness having been attained, then the research was conducted being focus more on the qualitative aspect of the research. The research was conducted with a 99% level of confidence and the margin of error was expected to be as low as possible. The sample resulted to a total of thirty companies of which only twenty of them were co-operative and willing to offer information, however the sample size was a representative of the population (Chakraborty, Paul, and Cui, 2008).
After the companies to be interviewed have been noted, the next action was to choose the specific people whom the questionnaires were to target; in the research the information technology departments were the departments of focus with the head of the section as the person who was to offer information through filling the questionnaire (Teo and Ranganathan, 2003). Each company was given a questionnaire making the total questionnaires distributed as thirty. The questionnaires were structured to offer an in-depth analysis about the research; it contained multiple and writing questions (see the appendix for a sample questionnaire)
Among the selected companies, only twenty of them responded to the questionnaires they are;
|Industries||Number of companies|
|Hospitality and tourism industry||1|
|Food manufacturing companies||3|
|Animal feed manufacturing companies||2|
|Furniture making and selling companies||1|
|Retail business companies||4|
|Cloth making companies||3|
It was from the above stated industries that data was collected.
The design that has been used in the research was process onion approach as presented by; the method was superior as it offered a suitable research approach that doable the strategies of this study. The first layer raises the question of the research philosophy to adopt; the second layer flows from the first layer and considers the subject of research approach that was adopted in the research. The third layer portrayed the research strategy followed by the forth layer which was more concerned about time frames that the researcher used when conducting the research; the final layer (fifth layer), the approach provided for data collection method that were employed in the research. The approach was systematic to ensure that data and the situation on the ground was well understood to offer a background for recommendation and conclusion (Cagwin and Bouwman, 2001).
Ethical issues within the research design and conduct of the research
Informed consent and confidentiality
The data collected needed to be treated with privacy and protected the identity of the companies that were used; this was to ensure that no internal information that would get to hands of competitors at the expense of the company giving information. Disclosures that be at their own free will and should be given the right of information protection and security. Despite protecting the information offered, to avoid the ethical problems encountered, the researcher informed the participants of areas that might touch their company’s lives or competitiveness and offered them free will to disclose or hold the information; when the information was disclosed, it was kept under privacy and confidentiality (Byrd,Thrasher, Lang, and Davidson, 2006).
Area of study
To assist in collection of data and information, the area of primary data collection and analysis was chosen to be the United Republic of Tanzania with the researcher concentrating on companies situated at Dar es Salaam and Dodoma for interviews with business executives and IS managers. To reach other areas in the country, the researcher sent questionnaires to people living in different cities using mails and emails; the questions were inclined to go in line with the research questions but since the country has different people of different backgrounds in race, education, and economic standing, different approaches will be made. Efforts were made to ensure that the answers given are objective and the respondent never felt that they are being interrogated; data to the extremes was trimmed off the analysis stage (Abernethy and Vagnoni, 2007)
Why this research is interesting and worth doing
The research was aimed at offering in-depth knowledge and solution to current problems facing companies when implementing ERPs; when the research is practically implemented, it will lead to improved business environments with more focus on those businesses that are adopting SAPs R/3 as well as other ERP programs. The business world has been wasting substantial amounts of funds, time and resources when implementing ERPs, thus there is need to conduct a research that will save them the pain and the expense (Broadbent, Weill and St. Clair, 1999)
Other than recommending a hybrid system which integrates strategic project management models and structured development methodologies and ERP implementation process for a successful ERP implementation, the research will expose the main issues facing the implementation process and recommend of how they can be solved in already failed ERPs programs (Tharenou, Saks and Moore, 2007).
The table below shows how ERP implementation risks and their associated controls are correlated:
|Lack of |
|Loss of Control |
|Lack of |
|User involvement training and training||x||X|
|Internal audit involvement||x||X|
From the literature review conducted as well as the primary survey suggested that there are some risks associated with implementation of ERP programs; the literature pointed out that the main problem comes into play when the kind of program adopted for a particular company seems not to be the fit one for the organization (Torkzadeh, Van and Thomas, 2005). Other than the program issues, the issue of internal politics, change management, organizational culture and preparedness came into play:
Statistical charts analysis
The nature of the study offered a chance to compare the success rate of indifferent industries and learning from their strong points; the furniture making and selling company portrayed to have higher success rate of ERP programs than the case was for other industries in the sample.
- Mean rate of success. The mean rate of success as portaryed by the statistics colected was 63.2.
- Median rate of success.The median of the success rate was 56.
- Mode of the sample.The most frequent rate of success was between 50 and 60.
- Standard deveiation of the success rate. The standard deveiation was 13.20%.
On the other hand, the success rate of startegically managed projects were as folows:
From the above two charts, it can be shown that the success rate of strategic management projects is higher than the rate of success of ERP programs:
The following are the statistical informtaion of strategic management projects:
- Mean rate of success. The mean rate of success as portaryed by the statistics colected was 92
- Median rate of success. The median of the success rate was 90
- Mode of the sample. The most frequent rate of success was between 90 and 100
- Standard deveiation of the success rate. The standard deveiation was 3.7.
The statistics collected was tested using A 99% Level of confidence using Z-test- T-test, F-test, and ANOVAs; all the tests proved that the sample was a representative of the population.
Z-test- this is based on normal probability distribution and its used for judging the significance of several statistical measure, particularly the mean of a sample. The same test is used for judging the difference between mean of two different samples. T-test- this is based on t distribution and considered appropriate for judging significance of the difference between mean of two samples. The relevant test statistic ‘’t” is calculated from sample data then compared with its probable value based on t distribution read from “t” statistical tables. The chi-square- this is based on chi-square distribution and is used for comparing sample variances to a theoretical population variance. F-test- this is based on f- distribution and is used to compare the values of two independent samples. This test is also used in context of analysis the variances called “ANOVAs”. ANOVAs are used for judging significance of more than two samples means one at a time. After it has been calculated it is compared with probable values in the f-ratio tables
The research has shown those companies who took their time to understand the ERP programs that are in the market then aligned got the best one for their company had a lower risk than those companies show embraced a new program by the virtue that it has been developed. Despite the increased number of information technology tools, they are applicable and give improved results to companies that they can meet their specific needs; otherwise they will be waste of time and resources. Since an SAP R/3 program integrates different sections of a business to one database, when it is being implemented, there is need to prepare the entire organization and individual departments about the change that is likely to come into the organization (Dechow and Mouritsen, 2005).
With changes that the programs are likely to bring to an organization, there is need to have Business Process Reengineering (BPR), rethinking and radical redesign of business processes; the above three business management systems will align ERP programs with operation processes within an organization. One mistake that organizations seems to make is to assume that when implementing an ERP it will result to a complete change of business process and change of channels of operations. However this is not the case directly; although there are some changes that will occur, the initial stage is to improve current processes (Daellenbach, Rouse and David and Donald, 2007).
ERP implementation should originate as a business initiative with the main pillars on detailed planning, baseline metrics on current processes and aligning of the system with business operations of the organization adopting it: what the above statement implies is that those companies which have had their processes as an independent business approach that do not respect the ongoing business operational processes (Turban, McLean and Wetherbe, 1999). When there is adequate alignment risks of failure of ERP implementations will be minimized as the business will be able to adopt the process with ease. Those companies that used strategic project management models and structured development methodologies to implement their ERP programs have a higher success than those who were adopting tradition methods of ERP programs implementation; the problem on preparedness was covered in the initiation and planning stage (Churchill, 1979).
Organizational culture and internal politics
The research conducted portrayed that an organizational and internal politics have a great influence on the success of an ERP program; organizational culture can be divided general to those organizations that had positive culture and those whose culture were negative and held negative perceptions. Organizations with positive organizational culture were observed to have high value for change and believed that implementation of ERP programs were for their own good and for general improvement of an organization’s functions and operations (Choe, 2008).
SAPs in organizations that had good communication strategies and policies were more successful than in organizations that had dictatorial leadership approach where communication was one way; SAPs success was seen to have high dependency on the communication channels that were available in an organization. Specific organizational culture that seemed to shape the perception and deter successful ERP programs was molded by the communication systems in an organization and past experiences that an organization has had. Since computer systems are not new in the contemporary business world, those companies which experienced successful transitions that improved their business processes and were created value to staffs shown less resistance to ERP programs (Choe, 2004).
Change management issues
When implementing ERP programs, they are changes that are being implemented in an organization; those companies that had effective change management structures were more likely to have fewer risks in ERP programs. User resistance is associated with almost all system changes when programs like SAP R3 are being put in place, employees worry that they may be replaced by the system new system, this is even higher is those organizations that combine elements of BRP (business re-engineering processes) with ERP programs. Employees feel that the system has come to affect and disorient their status quo in the organization. Resistance is not limited to staffs only, however some managers may be seen supporting the change but deep down they are lamenting and wishing that the program collapse (Umble, Haft and Umble, 2007).
When implementing, there may be need to do some restructuring and transfers within the organization, those employees that suffer the change grief and wonder their fate in the new segment of the organization a factor that might result to low productivity. To manage staffs resistance, managers have the main task of ensuring that employees feel comfortable about the system they are going to adopt; they include the use of soft skills like improving communication, team building and employees involvement in the process from initiation all the way to the final closure “ceremony”. When involving users, it is seen as a “buy in” policy where the company engages staffs to understand the areas that are creating some threats to the successful implementation of the project (Chittipa and Nicholas,2005).
ERP programs have been marked as some of the most complex programs in the business information technology environment; the complexity of the programs comes from the need to combine and different business processes to one database (Nada and Robert, 2005). The minimization of risk associated is linked with the formulation of pro-steering committee, appointment of a project sponsor, project management, senior managers’ support, internal audit a project team with adequate skills, the development of a detailed implementation plan, and involvement of consultants; when the parties come into play, they are able to mitigate against any probable risk in the project for a successful implementation (Nah, Lau, and Kuang, 2001). Senior managers are involved in the appointment of the steering committee; on the other hand if they get on the ground and show their support to the project, then there are high chances that the project will be successful. In the research, it was observed that those organizations whose senior management personnel were part of the steering committee shown a fast implementation without much resistance and reduced risks; they acted as encouragement for employees, system users and the IT department (Naranjo-Gil and Hartmann, 2006). Those organizations that have the steering committees as outsiders or people who knew little about the organization were having difficulties attaining the objectives of ERP , for ease in top management process monitoring, project sponsor or project heads were supposed to be people in the top management with clear understanding of the company for an effective implementation. The project sponsor should be directly involved in the day to day project operation, he is accountable and responsible for the project and reduce chances of risks occurring in the project (Chakraborty, Paul and Cui, 2008).
The research has identified the main areas and routes that can be followed to have an effective implementation of ERP systems specifically SAP R/3’’s; under the system, the process will borrow some strong attributes from strategic project management models and structured development methodologies (Ussahawanitchakit, 2007). The research will term the strategy as” Hybrid system”
The hybrid system
The hybrid systems should incorporate the Strategic Project Management Models and Structured Development Methodologies and those of traditional method of ERP implementation to offer an organization a lasting solution to issues in the implementation of ERP’s (Ngai, Law and Wat, 2008). The procedure and process that should be taken is systematic and should follow the following structure:
Project kick off and team forming
This stage concedes with the initiation stage of project management; it starts far before the project has been laid into operation. This stage establishes the need for the program as well as the best teams that will see it through (Cagwin and Bouwman, 2001).
The following are the best practices in the stage:
Pre-implementation actions and measures: at this stage the company establishes the issues that it is facing in the organization and seeks the best project that can be used to solve the issues, the program needs to a system that has the best features and characteristics that define the existing issues within the organization and has well framed outcomes. When doing this the management who have identified the need for improvement of process suggest that ERPs should be implemented; this is one area that the traditional method was having issues; the management where the ones who were choosing the specific program that needed to be implemented (O’Donnell and David, 2000). However under the hybrid system the management role are as follows:
- Suggest that ERP should be implemented
- Appoint a steering committee (the manager who came with the idea should be a member of the steering committee)
- Appoint a separate audit team or officer (the team of audit are not necessarily employees of the company, however they can be the experts and full consultants in the system)
With the team ready to go with clear mind set of what the company wants, at this level limited to improvement of the current systems using ERP, they get to the commercial market to get the right program for the company. During this period, wind should be going through the company that there are some changes that will be implemented to improve the systems operations in the company. After the specific program that will be implemented has been gotten, the management calls for trainings and mentorship with the employees where using the organizational structure portrays in power point or in diagrams how the system will be implemented in the system (Byrd, Thrasher, Lang, and Davidson,2006).
The above effort of involving the staffs is important as it creates higher chances of acceptance and embracement of the program by the entire work force. For example when the company has chosen to develop SAP3/R, the entire organizational processes will need to be interlinked, thus employees from all departments should be trained and censored of the benefits of the new system. There is high risk that employees will show resilience at this stage but it’s an important feature since the steering committee will get more time with them before the project has been rolled out. It is crucial to understand that employees cannot take all the measures positive at once thus an allowance that some will be resistant should be allowed (Broadbent, Weill and St. Clair, 1999). The steering committees will be guided by three main thoughts that should be with them all through the process, they are:
- What processes needs to be improved? (in the case of SAP R/3s, the process will involve improving the entire processes in the company)
- What measures are available for the improvement?
- How can the improving program take place?
They should understand that the project success lies with their efficiency and capability of defining things right.
The steering team with the project in mind as well as understanding the expected outcomes of the process should customize the program to meet the demand of the company; in this case it is important to understand that it is the program that is coming to the company and not the other way round, thus the management should fit the program in the company and ensure that operations can be well integrated in the current structure without adverse effects (O’Donnell, 2004). At this stage, the team should have the following main tasks:
- Size and effort estimation; ERP programs comes in different shapes and sizes, they can be used for a single department or can be used to integrate the entire organization, this stage is to make the process more clear and understandable by the team and the organization
- Gap presentation and analysis, at this stage, the current situation that the company is and where it is supposed to be delivered by the new system should be the subject of discussion; companies with clear gap analysis have the following process of gap identification:
The process involves three main stages as:
- Current state analysis: this stage is concerned with the current policies and strategies are in operation in the organization, they include analyzing the financial, human resources, capital structure and the strength of information and technology department. The steering team should understand the strategies, assessing strategic alignment and review current policies and procedure; with the understanding the company will be able to get the right approach of implementation. The strength of the information and technology department should be analyzed as it plays an important role in the implementation of ERPs; in case they are not strong enough, then measures are put in place to improve and support their efficiency (Parssian, 2008).
- Future expectations analysis: the steering committee has the role of understanding where they want the company be delivered by the ERP program, this is crucial as the difference is the gap and the gap will be met by implementing the ERP program. At this point care should be taken to ensure that the suggested outcomes are attainable, they will look like the objectives of the programs and when they have been met, then the gap in the organization will have been filled effectively. When the gap has been known, the next crucial method is to device policies and functional structures as wells as job descriptions that will be used for the food of the organization. Future expectations should be attainable with the resources available, off-course considering the strengths that will come with ERP programs (Peng, Xiaosong, Roger and Shah, 2008).
- Devise the roadmap: After coming up with the gap analysis, the next crucial documentation that the committee should have is the mapping of the best pathway that the organization should follow for an effective implementation of the project. The roadmap should offer the budget, the time framework, fall back actions, risk indicators, stoppers, and possible challenges along the way. After every milestone, there should be a review of the process and observing what can be done for an effective business. When developing this stage, the involvement of experts consultants as well as the audit team is crucial; it is the stage that sets the background for the physical project thus care should be taken when deciding the road map (Poon and Wagner, 2001).
First feedback and proposal presentation
ERPs and SAP 3/Rs have failed in the past as management were going through the process without looking back and seeing what they have attained and probable reaction and outcome as a result. At this stage, the employees have a wind that there will be changes in the company, however they have not felt the changes as they will be. The fact that there will be a change and employees are aware, will generate some debates and some psychological discomforts among employees informal and formal groups. What they are saying needs to be documented and analyzed for an effective understanding of the effects of the method. When getting the feedback, there are high chances that opinion leaders among groups will be identified, when well identified, he or she should be recruited as a non executive member of the steering committee that he can attend meetings and follow the proceedings of the implementation. When this is done, there are high chances that he will see the process as legitimate and reinforce it among employees (McLean, DeLone and Ephaim 2003).
The main actions that the steering committee should conduct after considering the feedback given are as follows:
- Identification of departments that will be affected and the level at which they will be affected; in the case that the department is expected to be resistant, then a member of the steering committee should be allocated the department to keep negotiation with the staffs on individual and collective basis to ensure they well understand the change that is likely to come. This approach has been borrowed for PRINCE2 of project management (Powellmand Dent-Micallef, 1997).
- Identification of key success areas, risky areas and acceptable operational criteria, it is also important to have a well structured policy that will define the outcomes of every stage at the best approach and the worst outcome (Prisana, and Mark, 2003).
This stage has minimal involvement of the experts and third parties as managers and the steering committee can handle it effectively. Employees should not feel that an outsider is coming to develop and implement things in the organization. Effective communication measures should be implemented together with effective change management (McAdam and Galloway, 2005).
When the entire organization has been made aware of the changes that the company is likely to adopt and they have been made to understand that the process will not affect their status quo, the next most important stage is to get the program running through the purchase of the physical equipments like hardware and implementing the project. This stage of buying is crucial to the project as an expenditure that surpasses the set budget is likely to affect the final project cost; however since some changes may occur, the management should have an allowance for such changes. The choice of equipments is crucial for the project success; the stage is borrowed from scientific project management theory where the need to research on the equipments and the things that will be bought is highly advocated for (Mauldin and Ruchala, 1999).
Since ERPs will involve the use of computers, there are a number of elements that will need to be put into consideration to have a quality project, for instance the speed of the data base holder should be fast enough to feed and carry a wide range of data and information that the company would like to transmit. The communication pathway and individual computer hardware and the running software must be user friendly. This is the stage that data and information that was to be transferred from the old operating system of the company is transferred to the new system and checks and balances enacted to have the program work effectively. One stage that have been risky in the implementation of ERP is the transfer of data and information; when the data is being transferred, there is need to exercise maximum care and diligence for an effective business operation (Masquefa, 2008).
Training and developments
When this stage is being reached, two things are for sure, the employees are pregnant with the change (the pregnancy may be to support or repel the project however this varies with individuals), and the initial outlay of the project has been raid out. The best method to lay the project is on phases and starting form one section or department then diffusing the project all over the other departments. Training takes different form and formats; it may be through small groups or in the capacity of individuals if the team that will be affected is small teams (Marsden, Pakatb and Wibowo, 2002). When training the following considerations should be made by the steering committee:
- Identification of functional areas and subsequent knowledge transfer: after the rolling out, the training should be focused on the group or teams that will be affected by the systems they should be given the first priority and care exercised that the implementing team will move to the next department after the successful understanding of the current system by the target group
- Have live seminars on functional areas conducted by experts in the area, the seminars are important and mostly focus on the information and technology department as they emphasis on the in-depth analysis of how the project operates; an implementing company needs to understand how the program works and possible signals of risks that it can offer (Ramaraj, 2005).
- Finalizing the go-ahead data and ensuring that they have been integrated with the entire systems.
- During the training, the staffs should be given a hand-on experience with the system and any issues that comes into play be addressed accordingly. Many are the times that staffs feel that information technology has come to replace them; this worry should be polished and assurance given to them that the worst that can happen is restructuring of their working stations.
When the above step has been implemented, then a gradual switching from the old system and adopting the new one should be embarked on (Marble, 2003).
Project acceptance and adoption
When the system has been implemented and adequate measures implemented, there is need to enforce the acceptance of the project in the organization; acceptance is gotten when the teams, successfully switch from the old system to the new system. The critical turning point should be done through a team building process where the launch is announced and free interaction of staffs, management, steering committee, audit teams, consultants, and experts is facilitated. When this happens then the company is ready to start the project (Ramraj and Sushil, 2001) Depending with the nature of the system, there may be the involvement of third parties other than the staffs; for example the management may consider customers and stakeholders in the bid to ensure that there is an effective system in place for the company. Some business stakeholders like suppliers, transporters and systems providers need to be taken as part of the team to undergo training (Major and Hopper, 2001).
Reviews and feedbacks
When the project is running, at the initial stage, the steering committee should be on the ground polishing some issues that are likely to come with the project; any issue should be addressed on its own merit and care exercised to ensure that the program will remain active as long as possible. The following are some of the main activities and methods of reviews:
Weekly meeting reviews, they can be facilitated by departmental managers and getting the feedback from the users will be the main task, the users might also have some special needs like on the improvement of the process to ensure that the process runs smoothly without much of delays (Ravichandran and Raii, 2001). User feedback system: when using this approach, the management gathers information on the perception of staff on the systems as well the general environment that has been created by the system. The management should ensure that the ERPs objectives have been attained and in the case there was a problem, then the management should be able to know exactly where the problem is and address it accordingly (Maiga, Jacobs and John, 2007)
ERP system improvement
With the system up and running, the company is required to embrace some policies that can be used to improve and make the system more updated. Improvement can take different forms and it depend with the outcomes that have resulted from the system implemented; for example in case there has been challenges because of power failures, the system can be backed with standby generators for continued results (Riccardo and Suresh, 2006). The diagram below summarizes an effective ERP system implementation method which has been integrated with strong points of project management.
ERP programs have been marked as some of the most complex programs in the business information technology environment; the complexity of the programs comes from the need to combine and different business processes to one database (Rivard, Raymond and Verreault, 2006). According to the research, the complexity of ERP programs have on average been successful to the rate of 63.2% with a standard deviation of 13.2%; this is far less compared with the mean of strategic project management models and structured development methodologies of 92% with a standard deviation of 3.2%. The research has shown that there are a number of lessons that can be learnt from strategic project management models and structured development methodologies by ERP implementation programs.
When implementing ERP programs, the company implementing the program is undergoing change they are changes that are being implemented in an organization; those companies that had effective change management structures were more likely to have fewer risks in ERP programs. User resistance is associated with almost all system changes when programs like SAP R3 are being put in place, employees worry that they may be replaced by the system new system, this is even higher is those organizations that combine elements of BRP (business re-engineering processes) with ERP programs (Liu and Hu, 2008).
In the past, ERP programs have offered some challenges to businesses implementing the systems; the challenges are in the form of costs of implementation, time, and the rate of delivery of the system. The main problems facing the implementation emanates from the system itself and organizational issues in the implementing organization. During implementation, the organization needs to align its needs with the available system and ensure that the adopted system will offer solution to improve current conditions in the organization. ERPs take the form of change, thus organizations needs to embrace them like any change management system (Liu and Pan, 2007).
Risks associated with implementing of ERPs have hampered the benefits that are likely to be derived from their implementation; when project surpass their budget in time and cost, the company is unlikely to enjoy the benefits of the program. In contemporary business environments, scholars have established strategic project management systems which can be adopted to solve the risks that come along with the implementation of ERPs. When the system is implemented, it combines the strengths of the system with those of traditional ERP implementation process to get solution to the risks associated with ERP system. The research using a sample of twenty companies which have implemented ERP systems, has identified some of the risk areas that face the implementation of ERP systems; after identifying the risk areas, the research went further to seek sound and practice solutions to the problem. The recommendations offered by the research will be a lasting solution to the problem that has affected the business arenas for a long period of time (Lin, 2009).
The best system that can be adopted for an effective ERP implementation has been named as hybrid system; under the system ERP system was taken systematically involving all stakeholders (stakeholders included staffs, shareholders, business partner, and customers) in every stage of the implementation. Experts and consultants were an integral part in the system as they offered such professional advice that assisted in the implementation of the projects. Every process should be taken on its own merit and care exercise d that moving from one process to the other will only happen when the preceding process has been effective and successfully implemented. ERP implementation steering committees need to have risk management programs to mitigate against any risks that come with the project (Lin, 2007).
When implementing an ERP program, companies should understand that they should not be implemented in a hurry but they should consider every detail to ensure that they are effectively managed and implemented. The process should have checks and balances at every stage which is more likely to result to a program that addresses every issue in the company. Information and technology department should be reinforced as it offers the required support for successful implementation of ERPs (Lee, Wagner and Shin, 2008).
Although there have been a number of researches conducted on the best approach and best ways of implementing ERP programs, there are minimal research that focus on certain issues in the implementation process that affect the success of the process. Some of the areas that need to be focused on include:
The relationship between organizational culture and organizational politic on the implementation of ERP programs; the available research suggest that organizational culture has either adverse or positive effect on the implementation process however it does not elaborate the nature of the relationship or whether the relationship can be improved or not. Organizations that have a negative organizational culture and have in effective communication systems are not adequately address and probably recommendations regarding the best approach to the systems have not yet been developed (Lee and Kim, 1999).
ERPs are external programs that are fitted to an organizational need; although they are adopted via the assistance of information and technology department, there is minimal research on the best approach that should be implemented in relation to the strength and the experience that organizational information technology have. Developers of ERP systems are of the assumption that people companies have strong and supportive information and technology departments however this may not be the truth of the situation. Further research should be undertaken to advise and offer a pool of knowledge of how organizations need to improve there IS departments in the preparation of ERP systems (Vlahos, Ferratt and Knoepfle, 2004).
In current organizations, there is an influx of generation Y age group; the age has an impact on how operations are conducted in an organization; the generation seems to support information and technology adoption in an organization. So far, there has been no research conducted to offer in-depth details on the effect and its flow or effect in current organizations. When a research reflecting on the current generation has been conducted, then the suggested methods of effective implementation can be improved further for the benefit of modern companies. Globalization has resulted to diverse human resources in an organization; the way the organizations adopt to change have been affected by the nature of organizations therein; there have been no research conducted that address the effects that diverse workforce have on an organization (Lee, KiM and Gupta, 2009).
To come up with a research viable doing, the initial point was to develop the problem through undertaking massive literature review that assisted in getting a green area that needed further analysis through a research. The research questions, primary, secondary and tertiary, were formulated; care was practiced to ensure that the questions that were developed were able to address the topic appropriately. The research aimed at solving a problem facing contemporary business environment when implementing ERPs and SAP 3/Ps programs, it focused on how strategic project management can be used to solve the risks of implementing ERPs. The main strength of the dissertation is that it aimed at solving issues facing the implementation of ERPs; although in the past a number of researchers had considered relevant topics, the research was unique of its kind and added more fresh and recommendations to past researches on the topic (Wang and Liao, 2007).
The research has one main weakness in that it discussed the topic from a general point of view; it concentrated on how to solve the entire problems facing ERP implementation and failed to offer solution to specific problems facing the implementation. The main constraint facing the research is time, resources, and data sensitivity of the research; time was not adequate to gather more data on the research. The research faced some financial constraints that it could not collect data in countries outside the researcher’s country of residence, Republic of Tanzania. There is a possibility that the problems that were faced or addressed were unique to developing countries, where Tanzania falls.
Some companies were finding offering the information as a sensitive matter and opted not to share the experience they have had with the researcher; they feared the security of the data. In some companies, the managers that were there during ERP implementation had long left the companies thus the research relied on data from third parties that might not be as accurate and would have been wanted. Finally, the research was more inclined in the implementation of SAP R/3’s (Yao, Palmer and Dresner, 2007).
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The questionnaire used (The questionnaire below is aimed at collecting information for writing a dissertation any information provided will be treated with maximum privacy)
- What is your position in the organization?
- IS General Manager
- IS data manager
- IS department supervisor
- Were you present when the company was implementing ERP/SAP 3/R?
- Nature of business
- Sole proprietor
- Public company
- Private company
- Which year was the ERP/SAP 3/R Implemented?
- Between 1990 and 2000
- Between 2000 and 2005
- Between 2005 and 2010
- In which departments was the ERP implemented?
- How can you rate the success of the program in the company
- Below 50%
- Between 50 and 60
- Between 60 and 70
- Between 70 and 80
- Between 80 and 99%
- If not 100% then:
- What are the issues facing the project?
- What has the company done to improve the current implementation process?
- If the success was 100%
- What are the strengths that saw the company attain a success rate of 100%?
- Has your company adopted Strategic Project Management Models and Structured Development Methodologies
- If yes, in which projects?
- Has the projects using Strategic Project Management Models and Structured Development Methodologies approach been a success?
- How can you gauge the success rate of the projects?
- Below 50%
- Between 50 and 60
- Between 60 and 70
- Between 70 and 80
- Between 80 and 99%
- Give reasons why you believe that the projects scored the mark you stated above?
- How do you believe are the ways of solving issues of project management?
- From your experience and understanding do you think that implementation of ERP Programs can be managed as any other project within a firm (give reasons for your answer)
- With the failure rate that companies get when implementing ERP programs what lessons do you think they can learn from Strategic Project Management Models and Structured Development Methodologies approach
- What lessons do you think Strategic Project Management Models and Structured Development Methodologies approach can learn from ERP implementation?
- Do you think that strengths of Strategic Project Management Models and Structured Development Methodologies can be used to solve the issues faced by ERP implementation? (Please explain your answer)
- What can you advise other companies implementing the program to consider when undergoing through the process?