404 Part III • Acquiring Information Systems
software, as well as to provide some of the up-front and
ongoing consulting services. Nevertheless, even with the
help of third-party consultants, many initial ERP imple-
mentation projects have not been successful.
According to Brown and Vessey (2003), five factors
need to be managed well for an ERP project to be success-
ful. These factors are described in some detail next.
- Top management is engaged in the project, not just
involved. Because enterprise systems demand funda-
mental changes in the way a company performs its
business processes, its business executives need to be
visibly active in the funding and oversight of the proj-
ect. Lower-level managers will not have the clout
needed to ensure that not only will the ERP modules
be configured to align with the best business process
solutions for the company but also that all relevant
business managers buy in to the organizational
changes that will be necessary to take advantage of
the software package’s capabilities. Turnover among
project sponsors (given the length of most ERP proj-
ects) may mean that new top management is less
engaged in the project, so the job of the project leader
to keep top management engaged requires constant
effort. Also, it is common that benefits from the ERP
implementation will take time to occur, well after
significant initial costs. Initial reactions from some
stakeholders (e.g., employees, customers, and suppli-
ers) may be negative due to start-up difficulties and
the initial net cash outflow (Markus et al., 2003).
Again, top management engagement is needed to
stay committed to the ultimate expected goals
through each project phase. - Project leaders are veterans, and team members are
decision makers. Because ERP system implementa-
tions are extremely complex, the leaders of the proj-
ect need to be highly skilled and have a proven track
record with leading a project that has had a major
impact on a business. The team members who are
representing different business units and different
business functions (e.g., finance, marketing, manu-
facturing) need to also be empowered to make deci-
sions on behalf of the unit or function they represent.
If the team members do not have decision-making
rights, the project leaders will likely not be able to
meet the agreed-upon project deadlines. It is also im-
portant to try to keep the project team members intact
for as long as possible because of the need for the
right people on the team and because of the ramp-up
time needed to become an effective team member. - Third parties fill gaps in expertise and transfer their
knowledge. As described previously, ERP systems
are typically implemented with the help of third-
party implementation partners (consultants), as well
as the software vendor. The skill sets of the consult-
ants needed will depend on the skill sets and experi-
ences of the purchasing company’s own business and
IT managers. If there are no internal project leaders
with the necessary project management skills,
consultants should also be used to help manage the
project. However, before the consultants leave, the
internal staff needs to acquire the knowledge needed
to continue to operate the new system. Many organi-
zations develop agreements with consultants that
explicitly refer to the transfer of knowledge to inter-
nal staff as a part of the consultant contract.- Change management goes hand in hand with project
planning. Many of the early adopters of ERP systems
underestimated the need for project resources to help
prepare the business for implementing the new
system. ERP systems typically require training not
only in how to use the new system but also in how to
perform business processes in new ways to take
advantage of the package’s capabilities. Because of
the tight integration of the ERP modules, workers
also typically need to learn much more about what
happens before and after their own interactions with
the system. Companies with the fewest problems at
the time of implementation began to plan for these
types of changes as part of the overall project
planning activities. The fundamental changes are to
business processes. It has been found that it is better
to change business processes to adapt to the best
practices embedded in ERP systems than to try to
modify the purchased software; not modifying busi-
ness processes to fit the ERP software is a main
reason for ERP project failure. Remember, the reason
an ERP solution is being adopted is to reengineer
business processes to best practices and better inte-
gration across business units. Not all ERP systems
are created equal. Each has its roots in some industry
(e.g., manufacturing, banking), sector (i.e., public or
private), or country (e.g., U.S. or European). Thus, it
is important to select an ERP package that is based
on the set of best practices and business processes
you want to adopt (see Kien and Soh for more on
this topic). - A satisficing mind-set prevails. Because of the inte-
grated nature of the modules of an ERP package,
companies typically implement the package in as
“vanilla” a form as possible. This typically means that
business personnel will be asked to “give up” some
functionality that they had in a system that the ERP is
replacing. In other words, the company needs to be in