Managing risk factors in ERP implementation and design: an empirical investigation of the Indian industry

Abstract

Enterprise Resource Planning (ERP) systems, which has became a buzzword in the late 1990, are the most integrated information systems that cut across various organizations as well as various functional areas. Small and medium enterprises, competitor’s behavior, business partner requirement are the identified and established dimensions that affect ERP systems. Further it has been observed that ERP systems prove to be a failure either in the design or its implementation. A number of reasons contribute in the success or failure of an ERP systems. Enterprise resource planning systems inherently present unique risks due to tightly linked interdependencies of business processes, related databases, and process reengineering, etc. Knowledge of such risks is important in design of system and program management as they contribute to success of overall system. In this paper an attempt has been made to study the design and implementation risks factors for ERP systems in Indian organizations. For this two public sector companies namely PUNCOM and PTL located in northern India have been selected. Based on the model used to study ERP risks and thus the findings, various recommendations have been put forward to suggest a strategy so as to mitigate and manage such risks.

Using Fuzzy Analytic Network Process to assess the risks in enterprise resource planning system implementation

“…In C2, "insufficient training and re-skilling" implies that adequate re-skilling and understanding are crucial in an ERP implementation project [36]. Moreover, sufficient training is a necessity in the process of successful adoption [37][38][39]. In C3, "ineffective communication with users" is a risk factor.…”

“…The adoption may cause trouble if planning is inadequate [38]. In B3, "automating existing redundant or non-value-added process in the new system" indicates that the ineffective redesign of the business process is often a risk factor in ERP utilization [36,37,39]. To achieve success in the implementation of ERP, the business process should be redesigned to fit the software.…”

“…In dimension C, C1, "failure to get user support" may lead to major problems in the adoption process [39]. User involvement and support are important in the process of ERP implementation [38].…”

“…The methodology should include project planning and control functions, as well as risk M a n u s c r i p t 9 management procedures. In A4, "risks of reliance on third parties" is a risk factor because widespread reliance on computer and Internet connectivity might become a crisis for ERP implementation [39].…”

A Study on Enhancing Capacity Utilization in a Mattress Making Unit in Kerala

“…The identification of bottlenecks become much more difficult as we move from the high volume low variety repetitive manufacturing scenario towards low volume high variety job shops and finally to the project environment (Mukherjee and Chatterjee, 2006). Enterprise Resource planning (ERP) systems, which has become a buzzword in the late 1990, are the most integrated information system that cut across various organization as well as various functional area (Singla and Goyal, 2006). ERP is a software that organizes and manages a company's business process by sharing information across functional areas.…”