ERP Lifecycle: A Retirement Case Study

ERP Lifecycle: A Retirement Case Study

Moutaz Haddara, Ahmed Elragal
Copyright: © 2013 |Pages: 11
DOI: 10.4018/irmj.2013010101
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A lot of research has been undertaken focusing on ERP systems lifecycles, but very little paid attention to retirement. ERP retirement means the replacement of an ERP with another. The aim of this research paper is to investigate why and when should organizations retire their ERP systems. A convenience case study of a SME has been selected from Egypt. The case study under investigation has retired their local ERP system and replaced it with SAP ERP. Results of the analysis indicate that reasons of retirement were: wrong selection, users were not involved in the selection process, and lack of an official implementation methodology. This is considered a new finding since main stream literature was mainly focused on retirement after maturity.
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1. Introduction

Enterprise resource planning (ERP) systems are comprehensive systems designed and engineered to integrate main business processes and functions (Ifinedo & Nahar, 2006). ERP systems are information systems (IS) that integrate several business functions together. An ERP system combines inventory data with financial, sales, and human resources data. They evolved from basic inventory software systems into material requirements planning (MRP) and manufacturing resource planning. Nowadays, the organizational and technical complexity associated with the implementation of ERP systems requires more attention in making implementation-related decisions. ERP projects involve difficult technical and managerial choices and challenges. It is one reason why organizations buy their ERP systems off-the-shelve instead of developing them in-house (Wu & Wang, 2006).

Towards the fulfillment of the implementation of ERP systems, organizations usually contract with an ERP vendor having specific ERP knowledge, to provide a turnkey project that meets their needs without having to learn the complexities of the ERP implementation process. Having said that, the result of implementing ERP, however, is not always successful. Many large organizations have installed an ERP system but had to cancel their implementation. This is mainly because ERP implementations are often complex, and require too expensive expertise. Therefore, top managers are likely to require an evaluation of the success of the resulting system. Although it may be more desirable to measure system success in terms of monetary costs and benefits, such measures are often not possible due to the difficulty of quantifying intangible system impacts and isolating the IS effect from numerous intervening environmental variables that may influence organizational performance. It is expected that improved performance will automatically follow if the system meets information needs. This does not imply that satisfaction causes performance. Performance and user satisfaction are both caused by the extent to which requirements are satisfied (Wu & Wang, 2006).

ERP systems are commercial software packages that enable the integration of transaction-oriented data and business processes organization-wide. As increasing numbers of organizations have chosen to build their IT infrastructure around this class of applications, there has been a greater appreciation for the challenges involved in implementing these complex technologies. Although ERP systems can bring competitive advantage to organizations, the high failure rate in implementing such systems is a major concern (Kim, Lee, & Gosain, 2005).

An ERP system is a packaged business software system that enables a company to manage the efficient and effective use of resources (materials, human resources, finance, etc.) by providing a total, integrated solution for the organization's information-processing needs. It supports a process-oriented view of the business as well as business processes standardized across the enterprise. Among the most important attributes of ERP are its abilities to: automate and integrate an organization's business processes; share common data and practices across the entire enterprise; and produce and access information in a real-time environment. ERP implementations are costly. Although ERP software is expensive, an even more substantial amount of business cost is typically spent on consulting to overcome difficult software implementation. ERP is a packaged solution with long complicated interrelated code containing a set process (Nah, Lau, & Kuang, 2001).

ERP systems are usually implemented as projects. ERP implementation projects usually involve selecting the ERP vendor, establishing business process reengineering, implementation, and evaluation of the adopted system. ERP implementation projects normally involve internal IT & business personnel from the adopting firm as well as external consultants from implementation partners in order to be successful. This shows how human resources intensive ERP projects are. It is also worth mentioning that a good implementation partner is considered one of the most important factors for the success of ERP projects, and is another addition to the complexity of ERP implementation projects (Elragal & Al-Serafi, 2011).

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