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  • 1. Critical Success Factors of ERP Implementations in Belgian SME’s: A Multiple Case Study Claude Doom and Koen Milis HOGESCHOOL-UNIVERSITEIT BRUSSEL
  • 2. ERP success
    • Critical Success Factors (CSF)
    • Most research: large implementations
    • Focus on smaller ERP implementations in SMEs
    • Focus on Belgian market
      • Many SMEs
      • Case study of 4 successful implementations
    • Preliminary results
  • 3. Critical Success Factors for ERP
    • CSF: improves chances of successful project implementation
    • Five groups:
      • Vision, scope, and goals
      • Culture, communication, and support
      • Infrastructure
      • Approach
      • Project management
  • 4. Vision, Scope, and Goals
    • Enterprise vision, ERP project scope, Implementation goals
    • Vision, Strategy and Business plan
      • Clear and motivating business vision
      • Clear project mission (related to business)
      • Clear definition of strategic goals
      • Clear business plan, describing benefits
      • Model of target business
    • Scope
      • Clear definition of ERP project scope
      • Limitation of scope to essential business functions
  • 5. Culture, Communication, and Support
    • Senior management support
      • Project approval
      • Identifying project as top priority
      • Senior management participation
      • Defending and supporting project
      • Mediation in conflicts
      • Understanding of technology and issues
      • Proper resource assignment
      • Communication of shared vision
      • Communication of role of new system to staff
      • Identify and approve new organizational structures, roles and responsibilities
      • Approve codes of conduct
  • 6. Culture, Communication, and Support
    • User involvement
    • Effective change management
      • Strong corporate identity
      • Open to change
      • Encouraging open communication
      • Determination to accept new technologies
      • Determination to overcome implementation problems
      • Project champion
    • Internal communication
      • Announcement of project scope, objectives before onset
      • Formal presentations / user participation (requirements, results)
    • Supplier management
  • 7. Infrastructure
    • Standardized IT infrastructure
    • Suitable business and IT legacy systems
  • 8. Approach
    • Overall approach to project
    • Formalized project approach and methodology
      • “ Skeleton approach”: limited start  expansion
      • “ Single module”: module per module
      • “ Big Bang”: complete system
    • Focus on user requirements
    • Use of external consultants
    • User training
    • Data accuracy (at conversion, at input)
    • Alignment with business processes
  • 9. Project Management
    • Proper project planning, phasing and follow-up
      • Project goals description (realistic quality, time and cost goals)
      • Project scope
        • Identification business processes
        • Choice of modules
        • Identification of changes
      • Project phasing and critical path analysis
      • Milestones and deadlines
      • Resources plan
      • Project follow-up organization
      • Contingency measures
  • 10. Project Management
    • Properly organized project management
    • Appropriate project teams
      • A single physical location
      • Incentives for delivery within time and budget
      • Incentives and risk-sharing agreements with partners
  • 11. Critical Success Factors in Belgian SMEs
    • Do these CSFs apply to Belgian SMEs?
    • 76 SMEs with known successful ERP implementations
      • #employees: 10  250
      • Revenue < 50 mio euro
      • Balance total < 43 mio euro
    • Limited survey
    • 4 Representative cases
      • Different sectors
      • Structured interview of key players (IT, Management)
  • 12. Company Activity Employees Revenue in 2006 (mio euro) F-Co Latex-foam 113 34.1 M-Co Process engineering 57 14.5 O-Co Vegetable oils 87 84.0 W-Co Tires and Wheels 51 40.5
  • 13. F-Co
    • Leading European manufacturer of latex foam
    • Sites in Belgium, Czech republic
    • Sales offices in 10 more countries
    • SAP implementation
      • Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, asset management, data warehouse
      • Single site
      • Project divided into subprojects
      • 10% modified
      • “ Big Bang” roll-out
  • 14. F-Co: Project
    • Duration: 6 months planned, 7-12 months effective
    • Cost: 1 – 1.5 mio euro as planned
    • Useful lifetime: 10 years
    Component Fraction of cost Hardware 10% Software 60% Consulting 5% Implementation team 5% Training 20%
  • 15. F-Co: CSFs
    • Users heavily involved
      • Information and participation
      • Requirements identification
      • Training
      • No formal acceptance
    • Pivotal role of senior management
      • Project approval
      • Financial responsibility
      • Top priority
    • Change management
      • Organization open to change
      • Commitment to new technology
      • Determination to overcome operational problems
  • 16. F-Co: CSFs
    • Change management
      • Project champion
        • Middle management
        • Defending project
    • Project approach and management
      • Mixed team with external consultants
      • Project manager selection criteria: competences and experience
      • Team members
        • Top performing staff
        • Mostly part-time involvement
      • Critical decisions: company management (close collaboration)
      • Incentive for delivery within time and budget
    Project participants Fraction of staff Users 50% Business analysts 15% Technical experts 10% External consultants 25%
  • 17. M-Co
    • Branch of world-wide provider of products and technologies for separation, heat transfer, fluid handling
    • Intentia ERP suite
      • Purchasing, order entry, materials management, financial accounting, distribution and logistics, financial management
      • Interface to data warehouse and reporting tools
      • Division into subprojects
      • 20% modifications
  • 18. M-Co: Project
    • Duration: 7-12 months, slightly longer than planned
    • Cost: 1 – 1.5 mio euro as planned
    • Useful lifetime: 10 years
    Component Fraction of cost Hardware 30% Software 35% Consulting 10% Implementation team 10% Training 15%
  • 19. M-Co: CSFs
    • User involvement (outside project team!)
      • Informed
      • Not actively involved
      • Only management participated actively
        • Requirements, advice and feedback
      • Positive acceptance of final result
      • Extensive training
    • Crucial role of Management participation
      • Approval
      • Responsibility
      • Identification as top priority
  • 20. M-Co: CSFs
    • Change management
      • Corporate culture: flexibility, shared values, common goals
      • Open communication
      • Project champion
        • Middle management
        • Effective contribution unclear
    • Project approach and management
      • Project manager selection criteria: capabilities, flexibility, reputation
      • Team members
        • Mostly part-time
      • Consultation with management for critical decisions
      • No incentives
    Project participants Fraction of staff Users 40% Business analysts 20% Technical experts 20% External consultants 20%
  • 21. O-Co
    • European division of global player in development and production of vegetable oils
    • SAP implementation
      • Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, financial management, data warehouse, advanced planning
      • 30% modifications
  • 22. O-Co: Project
    • Duration: 7-12 months as planned
    • Cost: 1 – 1.5 mio euro as planned
    • Useful lifetime: 5 years
    ? Component Fraction of cost Hardware 10% Software 10% Consulting 50% Implementation team 20% Training 10%
  • 23. O-Co: CSFs
    • Particular attention to user involvement
      • Timely information
      • Requirements, remarks, feedback
      • Actively seek user approval
    • Active involvement top management
      • Approval
      • Identification as top priority
      • Conflict resolution
      • Active participation
      • Not final responsibility (final responsibility carried by member of operational management)
  • 24. O-Co: CSFs
    • Change management
      • Corporate culture of open communication
      • Openness to change
      • Commitment to new technology
      • Strong will to overcome operational problems
      • Change agents and Project champion (middle management)
        • Emphasizing advantages
        • Defense against critics
        • Conflict resolution
        • Contacts with users
        • Detecting problems with system
  • 25. O-Co: CSFs
    • Project management
      • Project team
        • Best staff members
        • 50% end users
      • Project manager selection criteria: capabilities, experience, reputation, flexibility
      • All critical decisions taken by corporate management
      • No incentives
    Project participants Fraction of staff Users 50% Business analysts 10% Technical experts 0% External consultants 40%
  • 26. W-Co
    • Provider of industrial and agricultural tires and complete wheels
    • Belgium: 3 sites
    • Intentia ERP
      • Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, financial management
      • Interface with data warehouse
      • 5% modifications
      • Loose planning
      • Split into subprojects
  • 27. W-Co: Project
    • Duration: 7-12 months as planned
    • Cost: 1 – 1.5 mio euro as planned
    Component Fraction of cost Hardware 5% Software 15% Consulting 50% Implementation team 10% Training 20%
  • 28. W-Co: CSFs
    • Major user participation
      • Information whole community
        • Representation by a few users
      • Soliciting user input
      • Requirements, feedback
      • No formal approval
      • Training: “job helpers”
    • Top management instrumental
      • Approval
      • Alignment with corporate strategy
      • Identification as top priority
      • Conflict mediation
      • Necessary changes in corporate culture
      • Assumed final responsibility
  • 29. W-Co: CSFs
    • Change management
      • Project champion
    • Project management
      • Project team
        • Best staff members
        • Mostly part-time
      • Project manager selection criteria: reputation, flexibility
      • Urgent decisions taken by project team
        • Proper communication with top management
    Project participants Fraction of staff Users 10% Business analysts 50% Technical experts 20% External consultants 20%
  • 30. Critical Success Factors in Belgian SMEs
    • Vision, Scope, and Goals
      • Vision, strategic goals, and business plan
      • Scope
      • Efficient management reporting
    • Culture, Communication, and Support
      • Senior management support
      • User involvement
      • Effective change management
      • Internal communication
      • Supplier management
      ?     
    • Explicit scope limitation important
    • Suitable corporate culture, open to change
  • 31. Critical Success Factors in Belgian SMEs
    • Infrastructure
      • A standardized IT infrastructure
      • Suitable business and legacy systems
    • Approach
      • A formalized project approach and methodology
      • Focus on user requirements
      • Use of external consultants
      • User training
      • Data accuracy
      • Alignment with business processes
      ?    ? 
  • 32. Critical Success Factors in Belgian SMEs
    • Project Management
      • Proper project planning
      • Proper project management
      • Good project teams
      
    • Variable project management
      • No critical path
      • No contingency
    • Project champion
      • Contribution not always clear
    • Project manager criteria: capabilities, experience
    • Mix of internal and external specialists
  • 33. Conclusions
    • Important Critical Success Factors of ERP implementations in Belgian SMEs:
      • A clear vision on the strategic goals of the implementation
      • Senior management support
      • Active user involvement
      • A suitable corporate culture, open to change
      • Internal communication on the project (before, during)
      • Proper supplier management
      • Formalized project approach and methodology
      • Focus on user requirements
      • Use of external consultants
      • User training: technical, business, practice oriented
      • Proper project planning, phasing and follow-up
      • A mixed project team: users, internal technical and business experts, external consultants
  • 34. Thank you