ERP Adoption in Indian Organizations

Abstract

Enterprise resource planning (ERP) systems integrate various functions and processes in organizations. ERP software is developed in the form of different modules, each of which helps to perform distinct functions within the company. The modules interface with the same database and are integrated so that workflows can be designed across different modules. The software helps standardize business processes and ensures organization-wide availability of transaction data. ERP software evolved from earlier manufacturing resource planning (MRP) systems, which included inventory management, procurement and production planning functions. The implementation of ERP software started in the early 1990s and during the late 1990s, the growth rate of the ERP market was between 30 to 40%. As of 2001, 30,000 companies around the world had implemented ERP and the total value of the ERP market was at $25 billion. There is not much literature relating to ERP implementation and adoption in companies in Asia and other parts of the developing world. These organizations face issues that are significantly different from those faced by organizations in the developed world, because of differences in the sophistication of IT use, and in the cultural and social contexts. In this article, we describe some experiences that companies in India have gone through in implementing ERP systems. We present a framework for analyzing the critical factors and issues that influence the ERP adoption process, and highlight the areas of opportunity and risk. The framework is sufficiently general so as to be extended to other developing countries.