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The IUP Journal of Systems Management
An Analytic Framework for Evaluation of ERP Implementation
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Enterprise Resource Planning (ERP) integrates all facets of business enterprise by making information accessible seamlessly across various functions. ERP implementations at numerous organizations are unsuccessful since the business processes are not reengineered to necessities of the new system. The literature review shows lack of research of an analytic framework which evaluates organizations who have implemented ERP. This paper utilizes one of the Six Sigma tools called the Cause and Effect (CE) diagram to consolidate the Critical Success Factors (CSF) of ERP implementations available in the literature. An analytic model is developed by leveraging the CSFs to analyze the performance of ERP implementation. The case study-based research is used to validate the analytic framework. The two case studies are: one a company that implemented ERP successfully; and the other a company that initially failed in implementing ERP and subsequently reengineered its way to success. Evaluation of organizations confirms that the new framework can be used to analyze the effectiveness of ERP implementation.

 
 

Successful implementation of new technologies and Information System (IS) is vital for sustaining and enhancing the competitive position of an organization (Jing and Qiu, 2007). One important strand in management thinking and practice which reflected these trends was the attempt to relate Information Technology (IT)-based development to the strategic needs of the business, and thereby, develop a competitive advantage (Robert and Walter, 2000). IS, such as manufacturing control systems, have undergone a major transformation since the early introduction of Material Requirements Planning (MRP). Over the years, a family of management practices took shape, which accompanied these `closed-loop' MRP and Capacity Requirements Planning (CRP) systems and gained status as de facto standards. These practices came to be called Manufacturing Resource Planning (MRP) or MRP II. As, computing concepts and technology advanced with time, the scope of the business systems widened to become Enterprise Resource Planning (ERP).

Today's fiercely competitive business environment requires greater interaction between customers and manufacturers. ERP facilitates this process by integrating the company-wide IS with the potential to go across companies (Pramod, 2002). From business perspective, ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide back-end processes. The business processes that were traditionally disjointed and functional-oriented were made seamless and process-oriented. From technological perspective, ERP has evolved from legacy implementation to more flexible tiered client-server architecture (Rashid et al., 2002). ERP helps get the most benefits of databases and ensures that the system environment is built following an open system approach (Al-Mashari, 2003). Companies can now standardize business processes with ERP system and more easily ratify best practices. By creating more efficient processes, companies can concentrate their efforts on serving their customers and maximizing profit for the organization (Laframboise and Reyes, 2005). As ERP continues to evolve into a real-time planning tool, it will play a more strategic role in helping companies achieve their business objectives.

 
 

Systems Management Journal, Enterprise Resource Planning, Information System, ERP, IS, Critical Success Factors, CSF, Continuous Quality Improvement, CQI, Critical Success Factors, CSFs, Quality Management System, QMS, Business Process Change, BPC, Organizational Structure, Information Technology, Since Supply Chain Management, Business Environment, Research Methodology.