An Extended Framework for ERP Post-Implementation Success Assessment

An Extended Framework for ERP Post-Implementation Success Assessment

Ali Zare (Department of Management and Accounting, Shahid Beheshti University, Tehran, Iran) and Ahad Zare Ravasan (Department of Management and Accounting, Allemeh Tabataba'i University, Tehran, Iran)
Copyright: © 2014 |Pages: 21
DOI: 10.4018/irmj.2014100103

Abstract

Implementing enterprise resource planning systems is a sophisticated, lengthy and costly process which tends to face serious failure. Thus, it is essential to perform the success assessment at the post-implementation stage of an ERP project to evaluate how much the system has succeeded in achieving its predetermined objectives. This paper proposes a practical and extended framework for assessing a firm's ERP post-implementation success. The factors contributing to the post-implementation success assessment have been adapted from the original model of Ifinedo et al. (2010) encompasses service quality, system quality, information quality, individual impact, workgroup impact, and organizational impact surrogates. Also, a new surrogate of inter-organizational impact proposed in this research. Using this model, the firm's ERP system success can be determined and the required improvement projects can be proposed to promote the success level. The proposed model is then applied to a real international company in the field of manufacturing and supplying turbines to measure the firm's ERP post-implementation success. Finally, the results of the assessment are discussed.
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Introduction

ERP systems are described as information systems aimed to process and facilitate integrated and real-time transactions within organizations (O'Leary, 2000). These systems are designed to address the problem of fragmentation as they integrate and streamline internal processes by providing a suite of software modules that cover all functional areas of a business (Koch, Slater, & Baatz, 2001). Although ERPs can bring competitive advantages to organizations, the high failure rate is a real challenge (Davenport, 1998). It is said that, about 70 percent of ERP implementations fail to deliver anticipated benefits (M Al-Mashari, 2000) and three quarters of these projects are unsuccessful (Hong & Kim, 2002; Kumar, Maheshwari, & Kumar, 2003). The failure rate of ERP implementations has been estimated at between 60% and 90% (K. Y. Kwahk & Lee, 2008). These projects are on average 178% over budget, took 2.5 times longer to implement than intended and delivered only 30% of committed goals (Zhang, Lee, Huang, Zhang, & Huang, 2005). These statistics imply that ERP projects are one of the most difficult system development projects. They are very complex projects and often require fundamental organizational changes (Rouhani & Zare Ravasan, 2012). To avoid such costly failures and helping organizations to make a better use of their resources, many efforts have been done by scholars and practitioners. Some researchers have provided valuable insights into the process of ERP implementation (e.g., Soja, 2008; Subramanianh & Hoffers, 2005; Wang, Shih, Jiang, & Klein, 2008; Yusuf, Gunasekaran, & Abthorpe, 2004) and others identified a variety of critical factors affecting on success or failure of the system (e.g., Amid, Moalagh, & Zare Ravasan, 2012; Hanafizadeh & Zare Ravasan, 2011; Nah & Delgado, 2006; Somers & Nelson, 2004; Zhang, et al., 2005).

Organizations implement ERP systems to meet predetermined corporate goals and improve functional and organizational goals (M. Al-Mashari, Al-Mudimigh, & Zairi, 2003; Davenport, 1998, 2000; Yusuf, et al., 2004) and post-implementation ERP success means that these systems could help organizations to meet their goals and achieve potential benefits (Wang, et al., 2008). ERP implementation is not the final goal but is an important milestone to start continuous improvements in organizations (Yu, 2005). So, organizations need to define post-implementation review (PIR) to measure ERP system success (Nicolaou & Bhattacharya, 2006). Such evaluations could determine failure factors and offer improvement projects to strengthen poor areas in the organization (Mandal & Gunasekaran, 2003); But assessing or evaluating the success of complex IT systems such as ERP in adopting organizations is difficult due to the complex nature of such technologies (Davenport, 1998, 2000; Gable, Sedera, & Chan, 2003; Ifinedo & Nahar, 2007; Markus & Tanis, 2000). Despite its importance, prior research works have overlooked these areas (Gorla, Somers, & Wong, 2010), while, it is a research interest as noted by Law, Chen and Wu (2010).

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