Estimating the impact of enterprise resource planning project management decisions on post-implementation maintenance costs: a case study using simulation modelling

Abstract

Organisations often make implementation decisions with little consideration for the maintenance phase of an enterprise resource planning (ERP) system, resulting in significant recurring maintenance costs. Poor cost estimations are likely related to the lack of an appropriate framework for enterprise-wide pre-packaged software maintenance, which requires an ongoing relationship with the software vendor (Markus, M.L., Tanis, C., and Fenema, P.C., 2000. Multisite ERP implementation. CACM, 43 (4), 42-46). The end result is that critical project decisions are made with little empirical data, resulting in substantial long-term cost impacts. The product of this research is a formal dynamic simulation model that enables theory testing, scenario exploration and policy analysis. The simulation model ERPMAINT1 was developed by combining and extending existing frameworks in several research domains, and by incorporating quantitative and qualitative case study data. The ERPMAINT1 model evaluates tradeoffs between different ERP project management decisions and their impact on post-implementation total cost of ownership (TCO). Through model simulations a variety of dynamic insights were revealed that could assist ERP project managers. Major findings from the simulation show that upfront investments in mentoring and system exposure translate to long-term cost savings. The findings also indicate that in addition to customisations, add-ons have a significant impact on TCO.

Investigating the Effect of Customization on Rework in a Higher Education Enterprise Resource Planning (ERP) Post-Implementation Environment: A System Dynamics Approach

“…While there is certainly no shortage of research regarding ERP implementation issues, such as those noted by Akkermans et al (2003), Akkermans and van Helden (2002), Choi andBae (2009), Fryling (2010b), Ifinedo and Nahar (2007), Li et al (2008aLi et al ( , 2008b, Livermore and Rippa (2010), Murcia and Whitley (2007), Soja (2009), Staehr (2010), Staehr, Shanks, and Seddon (2012), Sun, Yazdani, and Overend (2005), researchers have acknowledged that the literature on postimplementation ERP environments is limited, such as Al-Mashari (2003), Brehm et al (2001), Hitt, Wu, and Zhou (2002), Ifinedo (2007), and Ifinedo and Nahar (2006), despite the fact that the post-implementation phase is an important component of ERP project management (Fryling, 2010a). The lack of proper post-implementation management increases the likelihood of ERP discontinuance intentions (Furneaux & Wade, 2011) and the reasons for system abandonment have been identified by Eden et al (2014) as a current research gap.…”

Research on the group decision-making about emergency event based on network technology

“…Wireless communication technologies are used into emergency response in some researches. For example, Fryling [10] develops a simulation model ERPMAINT 1 which enables theory testing, scenario exploration and policy analysis. Rosmuller and Beroggi [11] develop a participatory methodology to converge decision makers' views, which has been integrated in a mobile multimedia group decision network system; Yoon et al [12] develop a low-cost computer-based training prototype with a decision support system tool; Belala et al [13] describe a mobile emergency system aimed at reducing mortality by improving the readiness of hospital personnel.…”

A Framework for ERP Post-Implementation Amendments: A Literature Analysis

“…This is because an upgrade within the same series excludes licensing costs and maintenance and support costs, not to mention training and general organisational change approaches, and very often is freely provided. An upgrade to a higher series on the other hand is accompanied by numerous changes in system structure, business processes and possibly the architecture (Fryling 2010;Ng 2001). While testing associated with an upgrade also introduces cost as the help of external testing firms may be required (Zarotsky et al, 2006).…”

“…For example, maintenance costs are determined by the estimated number of hours and cost of labour to implement the patch. Additionally, the number of changes included as part of the maintenance is known to impact maintenance costs (Fryling, 2010;Ng, 2001). For instance, it may be necessary to revisit all customisations when applying new updates.…”

“…As such, technical upgrades are necessary in order to keep abreast with advancing technology (Chorafas, 2001), and are likely to be accompanied by a high technical impact but low business impact. A functional upgrade on the other hand is undertaken solely for the purpose of gaining substantial enhancements as well as new functionality (Fryling, 2010;Kremers & Dissel, 2000;Ng, 2001). A functional upgrade is defined as "an upgrade undertaken to extend the business process functionality of an existing system (Functional-SAP-upgrade, n.d.), and it is more complex than a technical upgrade and involves the adoption of new business processes as well as automation of previously un-automated processes".…”