How to Disable Mortal Loops of Enterprise Resource Planning (ERP) Implementation: A System Dynamics Analysis

Abstract

Successful Enterprise Resource Planning (ERP) implementation depends upon various factors known as critical success factors (CSFs). This study developed a system dynamics model of ERP implementation based on CSFs to discuss ERP implementation complexities, which identifies the effect of CSF interrelations on different aspects of ERP project failure. Based on the model hypothesis, CSF interrelations include many causal loop dependencies. Some of these causal loops are called mortal loops, because they may cause the failure of risk reduction efforts to a more severe failure in effect of lack of system thinking on CSFs interrelations. This study discusses how system thinking works as a leverage point for overcoming ERP implementation challenges.

Implementation and Unification of the ERP System in a Global Company as a Strategic Decision for Sustainable Entrepreneurship

“…Another reason may be strategic acquisitions, either purchase or sale, and the subsequent harmonization of all processes into one programme. The parameters that influence the implementation decision of a unified ERP system include the company's turnover, number of employees, number of products, number of countries where the company is represented, and mainly the company's long-term strategy [22,26]. Maddison Warren [25] noted if the strategy is aggressive or ambitious, the unification and implementation of the ERP system is an unavoidable step.…”

“…The economic systems, or economic software, are systems that support most basic processes, such as tax record keeping, accounting, purchasing, sales, invoicing, salaries, and other administrative tasks [26]. They are designed for small firms and entrepreneurs that cannot afford an extensive information system, such as an ERP.…”

“…Enterprise Resource Planning systems present a business program system in one package. The system enables the automation and integration of most of the business processes, communication of shared data, and practical matters within the whole company [26].…”

“…The preparatory phase is key to the entire ERP implementation process [26]. The better the preparation, the more successful the implementation process, and the better it eliminates potential threats to the company.…”

“…It must be performed quickly; and since the implementation of the ERP system is done while the company is in full operation, a replacement option is planned for each part of the process to ensure its operation. To eliminate and minimize errors and unexpected events, companies use the so-called trial implementation, i.e., a dry run [26], at a time when the company has a break, for example, on a weekend. Simulation of the implementation and real testing of each step takes place, giving the company real data and experience, based on which the implementation plan is further modified [29,40].…”