Successfully reported this slideshow.

4. Expectation And Reality In Erp Implementation Consultant And Solution Provider Perspective

4,625 views

Published on

Published in: Technology, Business
  • Be the first to comment

4. Expectation And Reality In Erp Implementation Consultant And Solution Provider Perspective

  1. 1. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0263-5577.htm Expectation and Expectation and reality in ERP reality in ERP implementation: consultant and implementation solution provider perspective 1045 Petri Helo Logistics Systems Research Group, University of Vaasa, Vaasa, Finland, and Received 4 April 2008 Pornthep Anussornnitisarn and Kongkiti Phusavat Revised 19 May 2008 Accepted 4 June 2008 Faculty of Engineering, Kasetsart University, Bangkok, Thailand Abstract Purpose – This paper aims to analyse expectation and reality in enterprise resource planning implementation from the consultants’ and software vendors’ point of view and process these further as requirements of future IT systems. Design/methodology/approach – A small-scale survey among Finnish enterprise resource planning system (ERP) software vendors and consultants on ERP implementation challenges is analysed (n ¼ 59). The results are connected to existing literature in the field of deploying ERP systems in the form of discussion. Findings – The consultants’ opinions show similar results with studies conducted with companies using ERP systems. The implementer’s point of view shows clearly the challenge of using standardized ERP packages for various requirements on different levels. Although the sales presentations tend to emphasize the general purpose and flexibility of software packages, the dilemma between customization and vanilla system remains. The implementer’s viewpoint emphasises challenges in operations: production planning, materials management, sales and marketing. Research limitations/implications – The complexities of large ERP systems represent a true challenge from the knowledge transfer point of view. Standardized ERP packages implement standardized approaches, which has been a key benefit. The results show that the challenges are related to production planning and materials management. Practical implications – Software vendors and consultants have a thorough knowledge of ERP implementation, but still the key challenges remain much the same. ERP project deployment requires careful planning with regard to the change management aspects, but also IT related technical aspects. The paper presents a checklist for matching the ERP system with the specific requirements of the company. Originality/value – The results of the survey triangulate and justify many aspects found in previous research. From the consultants’ point of view developments in production planning and complex products are especially needed. Initial solutions and further research are outlined. Keywords Information systems, Resource management, Manufacturing resource planning, Value analysis Paper type General review Introduction Industrial Management & Data Today, there is no question about how important an information system is to the Systems Vol. 108 No. 8, 2008 operations of both public and private organizations. In the era of globalization, the pp. 1045-1059 q Emerald Group Publishing Limited 0263-5577 ¨ ¨ The authors would like to thank MSc. Mr Jani Lamsa for the empirical part of the study. DOI 10.1108/02635570810904604
  2. 2. IMDS more complex the supply chain, the higher the needs for tools for organizations to 108,8 effectively manage their activities. The information system is considered a fundamental tool for a competitive organization. One of the most mentioned information systems in research and business news is the enterprise resource planning system (ERP). It was estimated that in the past decade about $500 billion was invested in ERP systems worldwide (Gefen and Ragowsky, 2005; Carlino and Kelly, 2003). 1046 In general, the ERP system has been developed from the material requirements planning (MRP) and manufacturing resource planning (MRP-II) concept developed in the 1960-1970s in which the information system is used to automatically coordinate the activities among the production control, inventory and accounting departments (Markus et al., 2000). Later, the scope of the system was evolved and became larger by including human resources, marketing and sales, distribution and supply network. As a result, the ERP has become an enterprise-wide information system that uses database technology to control and integrate all the information related to a company’s business including customer, supplier, product, employee, and financial data. For organizations, including government agencies, that adopted the ERP system, almost of all the business transactions (e.g., inventory management, customer order management, production planning and management, distribution, accounting, human resource management) are entered, recorded, processed, monitored and reported (Davenport, 1998; Umble and Umble, 2002; Gefen and Ragowsky, 2005; Raymond et al., 2006). Despite the fact that the ERP system has been developed, evolved and implemented around the world for almost two decades, there are still many recently published reports about the difficulties in ERP implementation (Tsai et al. (2005); Lui and Chan, 2008). Commonly reported problems usually are issues of over budget and long delays in the implementation schedule. Many reported that ERP implementations failed to achieve the organization’s targets and expectations. According to Chakraborty and Sharma (2007) 90 percent of all initiated ERP projects can be considered failures in terms of project management. In the worst scenarios, many companies were reported to have abandoned ERP implementation. According to previous research and the authors’ experiences, the difficulty in ERP implementation happens regardless of the organization’s investment in the ERP system, which means the organization can spend hundreds of millions of dollars but still face difficulties during the implementation phase. Unlike other information systems, the major problems of ERP implementation are not technologically related issues such as technological complexity, compatibility, standardization, etc. but mostly about organization and human related issues like resistance to change, organizational culture, incompatible business processes, project mismanagement, top management commitment, etc. A lot of research has been done during the last decade about the success and failure of ERP implementation. Most of the data these researchers analysed often came from surveys of organizations which experienced ERP implementation. Many researchers also suggested some key points in overcoming the problems of ERP implementation according to their survey results (Gulledge, 2006; Moon, 2008). This article offers another view of ERP implementation by interviewing experienced Finnish ERP consultants and providers. A total of 59 ERP consultants and providers were interviewed regarding their experience of ERP implementation in Finland. The results of the interview are analysed and critical implementation aspects are suggested.
  3. 3. Literature Expectation and ERP systems are large and complex IT packages aiming to combine aspects of materials management, financial management, and human resources management. reality in ERP Implementation of such systems based on standardized packages requires lot of work implementation related to business processes and different organizations within a company. The literature on this topic has reported several ERP related implementation problems: . Multi-site ERP implementation on geographically dispersed organizations is 1047 generally difficult since the meanings of the concepts “site” and “enterprise” depend on many organizational aspects (Markus et al., 2000). Possible patterns vary between completely autonomous local subsidiaries and totally centralized operations policies for each site, with all the possible shades between these two extremes, including that commonly defined standards take place only in financial reporting. From the technology point of view, it has been attempted to solve these issues with software platforms able to handle single or multiple site operations, and single or multiple financial entities. The flexibility on multi-site configurability in many cases is not only a technological issue, but also a factor affecting the license pricing of the ERP software. (Markus et al., 2000). . Organizational preparedness on implementation of ERP is related to technology such as computers and network connections, but also “soft factors” such as education, training, the maturity of current processes, commitment to release the right people as well as the top management’s commitment (Rao, 2000; Tsai et al., 2005). According to Rao (2000), implementing first a “vanilla version” of the ERP system and then after six-months a customization, should reduce the implementation time significantly. . The decision on acquiring or developing an own ERP system should be considered carefully from the investment point of view. The development and maintenance of software code requires resources within the company, or a close, reliable vendor (Rao, 2000; Ifinedo and Nahar, 2006). Systems can be tailored in many ways, but the investment payback should be considered always a high priority. As Soh et al. (2000) say, organizations need to choose between “adapting to the new functionality, living with the shortfall, instituting workarounds, or customizing the package”. . Vendors and consultants need to understand the business and translate the ERP requirements to the organization and process levels (Gulledge, 2006; Rettig, 2007). According to Soh et al. (2000) misfits arise from requirements that are not supported by the ERP package. These specific requirements can be related to the company level, country level, and public sector type of parameters. Table I below summarizes the misfit types according to Soh et al. (2000). In many cases possible solutions to deal with these matters in ERP implementation is to use manual solutions or develop a complicated procedure in the system to achieve the aimed for result. Al-Mashari et al. (2003) suggested a taxonomy of critical success factors for ERP implementation. They proposed a framework which consisted of the phases of: . setting-up; . implementation; and . evaluation.
  4. 4. IMDS Type Example 108,8 Data format Chinese style to use last name, first name instead of opposite western style. Use of separators in postal addresses and phone numbers Data relationship System generated ID numbers for patients vs using social 1048 security number. Use of running sales order numbers for each manufacturing site instead of sales organization Functional access Data search matched to every-day use cases vs complex procedures to retrieve the required information, e.g. listing value of orders according to customer regions Functional control Validation of information requires modification of source code, e.g. validation of credit card number Functional operational System does not support all the required functionality in invoicing, e.g. payments or factoring finance model. The external system is required to process these parts Output – presentation format Reports miss information such as data fields or heading information, e.g. page number, name of user Output – information content Data attributes are missing from customer information, new fields would be needed to report customer preferences on Table I. delivery Types of ERP implementation misfits Source: Adapted from Soh et al. (2000) The implementation factors included: . ERP package selection. . Communication between organization and people. . Process management. . Training and education. . Project management. . Legacy systems management. . Systems interaction. . Systems testing. . Cultural and structural changes. As the deployment of such an extensive system is process development and related to people’s daily work, resistance to change and change management strategies need to be considered. Huang et al. (2004) assessed risks in ERP projects by interviewing members of the Chinese Enterprise Resource Planning Society (n ¼ 26) and prioritized the top ten risk factors based on factor analysis (Table II). According to the results of this research, soft factors such as senior management commitment to the project, communication with users, training and user support present the key risks. Planning actions for each risk factor require the management of change. Aladwani (2001) has suggested a three-step process-oriented change management approach, which consists of the phases of knowledge formulation, strategy implementation, and status evaluation.
  5. 5. Expectation and Priority Name reality in ERP 1 Lack of senior manager commitment implementation 2 Ineffective communications with users 3 Insufficient training of end-users 4 Fail to get user support 5 Lack of effective project management methodology 1049 6 Attempting to build bridges to legacy applications 7 Conflicts between user departments 8 The composition of project team members 9 Failure to redesign business process 10 Unclear/misunderstanding change requirements Table II. Top ten risk factors of Source: Huang et al. (2004) ERP risk From the technical point of view, the key choice in ERP implementation is to find an optimal strategy to balance between customization of the ERP system versus changing the organizational procedures within the company (Huang et al., 2008; Lui and Chan, 2008). From the organizational point of view it is to manage change and develop the business processes. These two views are merged in many deployment projects. Despite extensive use of software vendors and business process consultants, the impact of their role has not been studied widely. Software vendors can be also blamed for non-successful implementation, but since changing human organization and processes are often beyond the control of people coming from external organizations, these opinions should be interpreted critically. Methodology In order to capture the implementers’ point of view of ERP systems a survey was carried out by sending 130 emails to major Finnish ERP solution providers and consultants. The respondents were selected by the research team from various contact lists. The questionnaire included 20 open and structured questions with regard to ERP systems and projects. The survey was targeted on consultants, ERP sales key accountants and other people involved in several ERP projects. The questions were developed by the research team and the study was not sponsored by any company. It was promised that the respondents would receive a summary of the survey results in exchange for their time in answering the questionnaire. Two weeks after the first round a follow up was emailed to non-respondents. The total response rate was 45.5 percent in the email survey – 59 responses from 12 major companies in the field. The distribution of respondents in terms of background was as follows: (1) System providers (n ¼ 12). (2) Service providers (n ¼ 16). (3) Consultants (n ¼ 12). (4) ERP retailers (n ¼ 14). (5) Research institutions (n ¼ 5). Classification of these five categories was given by the respondents themselves to clarify their role in the business. The respondents were confident of their knowledge of ERP
  6. 6. IMDS systems. To the question “How would you rate your knowledge of ERP systems and 108,8 implementation?” 57.9 percent of the respondents said excellent, 33.3 percent good, 8.8 percent moderate, and none rated their knowledge as poor. Although the sample size is rather small, the empirical data can be considered as a discussion opener in this field. Results 1050 The results of the survey consisted of three main sections: The first part dealt with the background information of the respondents (the demographics). The second part dealt with the business effects of ERP systems such as the advantages and disadvantages of ERP systems. The third part of the questionnaire dealt with implementation issues and organizational changes. For each part the respondents were asked to describe if there is any alternative missing and add free text wherever they found it necessary. Figure 1 below illustrates how the respondents perceived the advantages of ERP system. The most frequently mentioned benefits were related to improved discipline 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% Process improvement and increased 66.10% process controllability Improved process quality and 55.93% predictability of business Standardisation of business processes 47.56% Organisation transparency 44.07% Enables departments to integrate 37.29% activities Improved reporting 32.30% Dicipline in operations 27.12% Customer/supplier network 23.73% management Reduction of lead-time 22.03% Real-time information from products and 20.34% processes Improved reliability of system 20.03% Improved on-time delivery 16.95% Savings on transaction costs 15.25% Enables new business strategies 10.17% Improves market responsiveness 10.17% Supports operative design 8.47% Simplified system support 5.08% Figure 1. Improved flexibility 5.08% Advantages of ERP systems Reliable database systems 5.08%
  7. 7. and control: 66.1 percent of the respondents mentioned controllability, 55.9 percent Expectation and quality and the predictability of the business, and 47,5 percent the standardization reality in ERP of processes. 44.1 percent mentioned improved organizational transparency. All these parameters are related to ways of processing and managing information. implementation Actual business performance parameters are very few and rank much lower: only 16.9 percent mention improved on-time-delivery. Implementation of standardized ERP packages is a mainstream information 1051 management decision. However, companies are different and every software package has its limitations. According to 42.4 percent of the respondents, the standard ERP does not fulfill the business requirements, which is a top three problem of ERP disadvantages. Figure 2 lists the con side of ERP, and shows that complexity of software remains the number one challenge – difficulty in understanding ERP logic (45.8 percent) and complexity 35.6 percent. The section “others” with 44.1 percent represents a great number. However, the open answers section on this question showed issues related to change management, top management commitment, resistance to change, and general leadership issues, and no common single parameter was identified. The results of this part of the survey can be compared with a previous study in Taiwan. Tsai et al. (2005) found that by interviewing top management, ERP project managers, key users and end-users that critical failure factors are mostly related to project management, personnel training and change management. Organizational change plays an important role in many ERP implementation projects. According to the results of the survey, the respondents (n ¼ 58) say that the business process needs to be redesigned (86.2 percent), and only 13.8 percent find this is not necessary. The business process method of design is another big issue. The respondents say that business processes are developed in accordance with the ERP system (25.5 percent); the ERP system should be configured according to the business process (56.9 percent). It is surprising that so many consultants and solution providers actually find tailoring ERP important. Most of the justification in sales talks seems to be in favor of minimized tailoring. The rest of the respondents – “others” – 31.4 percent – seem to suggest a compromise approach, such as: a combination of both (19.6 percent), use of best practices (3.9 percent) or “depending on business strategy“ (2.0 percent). In response to the question “are organizational changes needed to implement ERP?” the respondents (n ¼ 58) have different types of conclusions: 51.7 percent said yes and 42.3 percent no. Typical organizational changes (n ¼ 31) are: . Flatter organizational models (22.6 percent). . The responsibilities of workers are expanding (58.06 percent). . Decision-making is improved (35.5 percent). . Others (22.6 percent). So what is so difficult in implementing an ERP system? Figure 3 presents some results on this question. Most of the respondents say that production planning and control is the hardest part (44.6 percent), while the second place goes to materials management (21.4 percent), and third to sales and marketing (21.4 percent). The “others” (19.6 percent) for this question were analysed in detail and seem to point out the key challenges of current software development. Issues such as distribution/supplier network management, product configuration and offer
  8. 8. IMDS 108,8 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% Difficulty to understand the 45.76% logic of ERP system Others 44.07% 1052 Vendor package ERP does not fullfil 42.37% the business requirements Complexity 35.59% Selection, implementation or 35.59% configuration of the system Underestimating the 30.51% business requirements Costs 28.81% Lack of user centric approach 27.12% Inter-organisational 22.03% communication problems Temporary performance dropdown 20.34% Dominating vendor market position 20.34% Heterogeneous system 16.95% Control of ERP 16.95% Consultants lacking industry-specific 11.86% knowledge, project management or training Does not fit with the management model 8.47% System does not work 6.78% Figure 2. Lost control of process parameters 6.78% Disadvantages of ERP implementation
  9. 9. 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% Expectation and Production planning and control 44.64% reality in ERP implementation Materials management 21.43% Sales and marketing 21.43% Depending case by case Supporting key processes 1053 Network management 19.64% Product configuration Others Offer calculation Design of use cases Training and change management Project management 10.71% Communication between departments Customer and supplier network management 7.14% Human resources 5.36% Figure 3. Difficulties in ERP Finance 5.36% implementation calculation are developing parts in many ERP systems. The differences between the respondents’ group, such as education, experience or the software package that they sell, were tested, but no statistical differences were found on any of these parameters. These results can be interpreted in several ways – there is a possibility that software providers do not understand production and materials management very well, there is a great variance in terms of procedures in manufacturing companies, or the software packages are out of date. Whatever the main reason is, production and material management needs to receive special attention due to its criticality in implementation. Implication of results According to the results there seems to be a trade-off situation between generic purpose systems and customization requirements related to business types and industries. This consultant’s view is also supported by the interviews carried out in companies implementing systems (Rao, 2000). Standardized packages offer standardized processes, which can be monitored and controlled. Still compliance requirements with Sarbanes-Oxley (SOX) Act may cause implementation issues (Huang et al., 2008). However, the competitive advantage of companies comes from business processes, and if the same practices are shared without any tailoring, the competitiveness from production is limited. The operating environment varies between companies: products and processes are different. The results of an empirical study conducted by Elbertsen and Van Reenekum (2008) show that ERP adoption by mid-sized Dutch companies is most significantly driven by competitive pressure and software comparison with the company’s business processes. Consultants are used in this transition. From the ERP implementation point of view the operating environment includes the following customization aspects: . Production control principles are different based on the order-decoupling point. Companies operating make-to-stock, assembly-to-order, make-to-order, or engineer-to-order are very different in many ways. The range of product variety, mix, and stability of variety is driving the management of bill-of-materials.
  10. 10. IMDS For instance, project management based production planning is not supported by 108,8 all ERP systems. . Products are complex and require parameterization. Many systems are built on fixed material codes, but real-life products might include several mandatory and optional parameters to describe the complete configuration. Modularity and parameterization design principles are needed for finished goods, but also for 1054 components purchased from suppliers. . Workflow control describes how tasks are forwarded from one operator to another. These processes actually define the efficiency and productivity of a company and cannot be standardized according to following the restrictions of an ERP system. Performance measurement systems drive developments in these business processes (Phusavat, 2007). . Localization issues are connected to country-specific legislation issues related to accounting principles, but multi-language, multi-site manufacturing with multiple bill of materials (BOMs) and routings for the same sales code could present problems for many ERP systems. The need to adjust the ERP system according to business reality is obvious. Large software packages such as MySAP and Oracle offer many ways to use parameter control for processes, implementation templates, and even industry specific solutions. However, for small and medium scale software packages all flexibility may not be available. Typical attempts to solve this type of challenges include several creative solutions: . Parameterization of software where this is possible. . Report modification for customized work orders, order-confirmations and production control. . Misuse of form and database fields from the original purpose. . User interface modification by using programming tools provided by the ERP supplier. . Using external applications communicating with ERP and taking care of some functionality, e.g. sales order system, manufacturing execution system (MES). . Workflow parameterization to solve process flexibility requirements. The ultimate solution is to build the ERP system from scratch, which is quite extreme, and requires software engineers to maintain and update a tailored IT system. Still, many companies have taken this path, since it ensures that business processes are driving ERP systems, and not vice versa. The results of the survey show that vendors and solution providers are well aware of the challenges of using standardized ERP packages. New tools to match the ERP software and the company requirements are needed. By using checklists and other quick audit types of screening tools, customers and providers could both cross-check the suitability of the proposed package, as well as evaluate the potential need for tailoring the system. Table III shows an example of possible checklist questions, which help in describing the special materials management and production planning related requirements of an enterprise. This list is by no means exhaustive or complete, but it highlights some aspects arising from the difficulties in ERP implementation suggested
  11. 11. Expectation and Aspect Conditions reality in ERP Sales organization Most of quotations and sales orders are generated by: implementation people within the enterprise separate independent sales units Financial entities Number of subsidiaries and companies within the enterprise from the financial reporting point of view: 1055 single many many with hierarchy Need to control supply Sourcing and management of supply is: network (SCM) based on purchase orders requires capacity planning in some extent real-time visibility due to large extent of outsourcing or OEM Production principles To what extent (percent) is production carried out in the following categories? make-to-stock assembly-to-order make-to-order engineer-to-order Complexity of product The products are mainly in which category? project orders engineering driven highly customer specific solutions configurable modular standard services Planning and scheduling The production process can be described as: process industry batch manufacturing job shop product cells Volume, mix and The production process can be categorized with the following parameters: life-cycle annual sales volume of products (sales units) number of product variants sold to customer (pcs) typical life-cycle of product in manufacturing (years) Table III. Quality control Traceability requirements of the company require: A checklist to identify the serial number handling for each component characteristics of time stamps and batch numbering operations (order approvals in workflows fulfillment and extensive test data related to products production planning) External systems The number and types of external data systems that need to communicate from the ERP with ERP on a daily basis, e.g. MES, industrial automation systems, implementation point of testing systems, high-bay warehouses view by providers (Figure 3). The implications of Table III for the specific needs of ERP implementation from both the technical and organizational points of view should be limited to preliminary screening purposes only. Very often implementation checklists consider ERP requirements on a functional level only and do not take into account specialties due to the business environment. The presented checklist aims to take into consideration environmental differences included in the decision making process. No ERP system can fulfill all types of needs and requirements.
  12. 12. IMDS From Figure 3, it obviously shows that the greater the interactions among 108,8 departments in implementing each ERP application module (e.g. Finance, Human resource, Inventory, Purchasing, Production planning), the more difficulty of success implementation. Most implementation works of Human resource and customer and supplier network concerned with data accuracy & updated related to record keeping and transaction management. In addition, the finance module is a straight forward 1056 business processes which is mostly implemented as standard accounting practice. Similar to human resource and customer and supplier network module, financial module focuses on transaction accuracy and record keeping. The objective of finance, human resource and customer and supplier network module are quite simple without any conflicting objective with other departments. The material management and sales and marketing module are more complex in term of interactions and individual departmental objectives. In material management, typically, there are at least two departments involved in the process such as purchasing and inventory and production. Common conflicting objective are purchasing and inventory trying to keep inventory level low and cheaper per unit cost, while production would like to always have raw material available to serve customer requirement change. Production department trends to prefer more expensive raw material that they think improving production throughput. In sale and marketing, customer service is very important and often ends up with changes of customer order with a short period notice to production. More over, the sale and marketing consider order based on monthly or quarterly sales while the production have daily or weekly schedule. The same number of customer quarterly order, may have different impact on production schedule in which leads to overtime cost and delayed shipment. Above all the production planning and control has to deal with many key departments such as purchasing and inventory, production, sales and marketing, etc. which have own objectives which conflicts with others. The implication of Figure 3 is that the sequence of ERP implementation module is important. Starting from less interaction module such as finance, human resource, inventory is recommended. Then, move forward to more interaction module like sale management and material management. The production planning and control module should be implemented last. This recommendation is also supported survey results (Figure 2). From Figure 2, the common problems of ERP implementation are: complexity in logic of ERP system (45.76 percent) and implementation (35.9 percent), underestimating of both ERP requirements (42.37 percent) and company business process requirement (30.51). Therefore, the ERP implementation needs to start slow. By allowing company staffs to learn about ERP system and implementation starts from easy module like finance, human resource and inventory at the same time as ERP consultant to learn more about company problems and preferences. So both company staffs and ERP consultants can develop problem solving relationships and success at the early stage in order to be ready for bigger obstacles later. In addition, this paper concludes that the ERP implementation is not a “how-to” but about “learn-to” processes. Conclusion and future work As the main technical problems in ERP implementation are related to operations: production planning and control, materials management, sales and marketing, one could speculate about the common reasons behind them. The current industrial standard of production planning is to use MRP-II type of logic with higher level Master
  13. 13. production schedule and MRP. These functions combine sales, movement of materials, Expectation and and production into common elements. This type of system works well in many reality in ERP manufacturing industries, but there are some restrictions in this logic. Potential points of improvement on production planning and control project could be faced in the implementation following situations: . Engineer-to-order production. In some cases companies need to promise a delivery date before having an exact bill for materials. Some software packages suggest 1057 using project management tools for these cases, but there are engineering driven companies where factories have tens of thousands “mini-projects”, each including some type of design and engineering. The solution could be the implementation of some type of generic-BOM or descriptive-BOM, which would then get more precise attributes during the design and engineering phase. Variant configurators and phantom products may give a partial solution, but there is still lot of work to do to fully support “white spots” of structure. . Capacity management and production queues. Goldratt (1990) introduced the production control philosophy based on theory of constraints a long time ago as well as some scheduling principles for capacity management. But still many shop floor control systems use traditional first-in-first-out (FIFO), shortest processing time (SPT), longest processing time (LPT), due dates type of scheduling, and do not care too much about key resource capacity planning. . Conversion of sales order to production orders should support complex rules being automated. In the era of mass customization and when built-to-order type of production is seen as state of the art, the sales order system should be linked to production automatically and in real-time. This part of the system should not need any manual production planning work, at least in assembly type of manufacturing. . Integration between manufacturing units within the supply chains. One of the challenges is the case of mid-volume manufacturing with high-mix products. The dependencies are not obvious, and perceiving “a customer project” or “sales order” from several items coming from different factories/production lines is not easy. However, the customer expects to receive everything at the same time. Logistics information systems related to transportation and distribution planning may be required for integration building (Krafzig et al., 2004). Many of the points listed are related to specialties of the industry type; however, there are many assumptions made in the software packages about companies. These assumptions might not be feasible in all types of production and due to historical reasons the current ERP systems do not always support today’s manufacturing requirements. ERP implementation is an important and potentially risky investment for any company. Further research should focus on matching the environmental characteristics and software solutions. As the results from the data collection suggest, there is a certain trade-off situation between the extent of the ERP system – flexibility – and the efficiency of implementation and use. There is good potential for software developers to build new data models that support the complex needs of industries. The research community should also support the development of these environment specific or domain specific ERP models.
  14. 14. IMDS References 108,8 Aladwani, A (2001), “Change management strategies for successful ERP implementation”, Business Process Management, Vol. 7 No. 3, pp. 266-74. Al-Mashari, M., Al-Mudimigh, A. and Zairi, M. (2003), “Enterprise resource planning: a taxonomy of critical factors”, European Journal of Operational Research, Vol. 146, pp. 352-64. 1058 Carlino, J. and Kelly, J. (2003), “AMR research predicts ERP market will reach $66.6 billion by 2003”, AMR Research, Vol. 18, May. Chakraborty, S. and Sharma, S.K. (2007), “Enterprise resource planning: an integrated strategic framework”, International Journal of Management and Enterprise Development, Vol. 4 No. 5, pp. 533-51. Davenport, T. (1998), “Putting the enterprise into the enterprise system”, Harvard Business Review, Vol. 76 No. 4, pp. 121-31. Elbertsen, L. and Van Reekum, R. (2008), “To ERP or not to ERP? Factors influencing the adoption decision”, International Journal of Management and Enterprise Development, Vol. 5 No. 3, pp. 310-30. Gefen, D. and Ragowsky, A. (2005), “A multi-level approach to measuring the benefits of an ERP system in manufacturing firms”, Information Systems Management, Vol. 22 No. 1, pp. 18-25. Goldratt, E. (1990), Theory of Constraints, North River Press, Croton-on-Hudson. Gulledge, T.R. (2006), “ERP gap-fit analysis from a business process orientation”, International Journal of Services and Standards, Vol. 2 No. 4, pp. 339-48. Huang, S-M., Chang, I-C., Li, S-H. and Lin, M-T. (2004), “Assessing risk in ERP projects: identify and prioritize the factors”, Industrial Management & Data Systems, Vol. 104 No. 8, pp. 681-8. Huang, S-M., Hsieh, P-G., Tsao, H-H. and Hsu, P-Y. (2008), “A structural study of internal control for ERP system environments: a perspective from the Sarbanes-Oxley act”, International Journal of Management and Enterprise Development, Vol. 5 No. 1, pp. 102-21. Ifinedo, P. and Nahar, N. (2006), “Do top- and mid-level managers view enterprise resource planning (ERP) systems success measures differently?”, International Journal of Management and Enterprise Development, Vol. 3 No. 6, pp. 618-35. Krafzig, D., Banke, K. and Slama, D. (2004), Enterprise SOA: Service-Oriented Architecture Best Practices (The Coad Series), Prentice-Hall, Englewood Cliffs, NJ. Lui, K.M. and Chan, K.C.C. (2008), “Rescuing troubled software projects by team transformation: a case study with an ERP project”, IEEE Transactions on Engineering Management, Vol. 55 No. 1, pp. 171-84. Markus, L.M., Tanis, C. and van Fenema, P.C. (2000), “Mutlisite ERP implementations – the meanings of ‘enterprise’ and ‘site’ vary depending on unique organizational circumstances”, Communications on the ACM, Vol. 43 No. 4, pp. 42-6. Moon, Y.B. (2008), “Enterprise resource planning (ERP): a review of the literature”, International Journal of Management and Enterprise Development, Vol. 4 No. 3, pp. 235-64. Phusavat, K. (2007), “Roles of performance measurement in SMEs’ management processes”, International Journal of Management and Enterprise Development, Vol. 4 No. 4, pp. 441-58. Rao, S.S. (2000), “Enterprise resource planning: business needs and technologies”, Industrial Management & Data Systems, Vol. 100 No. 2, pp. 81-8.
  15. 15. Raymond, L., Uwizeyemungu, S. and Bergeron, F. (2006), “Motivations to implement ERP Expectation and in e-government: an analysis from success stories”, Electronic Government, an International Journal, Vol. 3 No. 3, pp. 225-40. reality in ERP Rettig, C. (2007), “The trouble with enterprise software”, MIT Sloan Management Review, Vol. 49 implementation No. 1, pp. 21-7. Soh, C., Siew Kien, S. and Tay-Yap, J. (2000), “Cultural fits and misfits: is ERP a universal solution?”, Communications on the ACM, Vol. 43 No. 4, pp. 47-51. 1059 Tsai, W-H., Chien, S-W, Hsu, P-Y. and Leu, J-D. (2005), “Identification of critical failure factors in the implementation of enterprise resource planning (ERP) system in Taiwan’s industries”, International Journal of Management and Enterprise Development, Vol. 2 No. 2, pp. 219-39. Umble, E.J. and Umble, M.M. (2002), “Avoiding ERP implementation failure”, Industrial Management, Vol. 44 No. 1, pp. 25-33. Corresponding author Petri Helo can be contacted at: phelo@uwasa.fi To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or visit our web site for further details: www.emeraldinsight.com/reprints

×