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Identifying Success Factors of Implementing ERP in Small Organisations

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The paper tells that ERP systems are computer software packages that enable companies to manage all of their operations, such as sales, manufacturing, inventory, accounting, etc. using a single platform. ERP systems officially arrived in the early 1990s, though they evolved over the previous few decades as the separate programs of each functional area began to be integrated into one program. The intent of a single integrated software package was to reduce the direct costs associated with multiple packages (re-entering, reformatting, and reconciling redundant data) while aiding the communication between the functional areas of a business, such as sales and production. The market for ERP systems continues to grow faster than any other software market with significant number of companies worldwide have already implemented an ERP system. The vast scope of an ERP system magnifies the typical "risk-reward" relationship of any business initiative. Davenport described ERP systems as profoundly complex pieces of software that require large investments of money, time and expertise. Correspondingly, he stated that although implementing an ERP system could deliver great rewards for a company, implementation failure could be fatal. In fact, many well- known companies experienced significant challenges implementing their ERP systems. This led researchers to provide insight into what organisations could do to increase their chances of implementation success, resulting in the identification of ERP system implementation Critical Success Factors. …
These factors are not specific to any particular ERP software program as they are based on the organisational aspects of the implementation rather than the technical functionality of the program. Examples of such factors include strategic visioning/planning, management support, project management, and training. Proficiently addressing these CSFs should increase the chances of a successful implementation (Ehie, 2005. Thomas &amp. Huq, 2007). However, with so many factors involved in an ERP system implementation project, there can be no guarantee of implementation success. Problem Statement ERP systems, like many other technological advances, were initially implemented only at large organisations. Over the years, software vendors began to provide ERP systems specifically targeted for midsize market price tolerance and functionality requirements, leading more and more small organisations to implement ERP systems. Small organisations have been shown to posses significantly different characteristics when compared to large organisations (McAdam, 2002, Ghobadian and Gallear, 1996, Lee and Oakes, 1995). Their organisational structures and culture are relatively informal, their leadership is intimately involved in daily operations and typically lack long-term strategic planning. Furthermore, they have limited human and financial resources, and often lack a dedicated full-time Information Technology (IT) person. All of these factors combine into a significantly different organisational environment for an ERP system implementation when compared to large organisations. The existing research on ERP CSFs is heavily based on experiences at large organisations. This is understandable, considering that