An EFQM Based Model to Assess an Enterprise Readiness for ERP Implementation

Document Type: Research Paper

Authors

Department of Industrial Engineering, K.N.Toosi University of Technology, Tehran, Iran

Abstract

In today's competitive market, Enterprise Resource Planning (ERP) system is widely being used by industries. However, the results of the research efforts carried out in this field reveal that the rate of successful implementations for ERP projects is low and in most cases the planned goals are not achieved. Therefore it is necessary to assess maturity of an enterprise in terms of factors affecting a successful implementation of an ERP system. This paper proposes an EFQM based model to assess the readiness of an enterprise for effective and successful ERP implementation. First, the main factors affecting the implementation of an ERP system, called Critical Success Factors (CSF) are identified. Then relations between the factors defined in EFQM model and ERP CSFs are investigated by means of questionnaires by experts working in this field. The results identify those EFQM factors which are related to ERP CSFs. In addition, those ERP specific factors which are not considered in the EFQM model are identified. Consequently a model based on EFQM including ERP specific CSFs is developed. The proposed model is applied to assess the readiness of a company intending to implement an ERP system. Finally the results of the assessment are discussed and concluding remarks are presented.

Keywords

Main Subjects


[1] Abdinnour-Helm S., Lengnick-Hall M.L., Lengnick-Hall C.A. (2003), Pre-implementation attitudes
and organizational readiness for implementing an enterprise resource planning system; European
Journal of Operational Research 146 (2); 258–273.
[2] Akkermans H., Helen K.V. (2002), Vicious and virtuous cycles in ERP implementation: a case study
of interrelations between critical success factors; European Journal of Information Systems 11; 35–46.
[3] Al-Mashari M., Al-Mudimigh A., Zairi M. (2003), Enterprise resource planning: A taxonomy of
critical factors; European Journal of Operational Research 146; 352–364.
[4] Baatz E. (1996), Ready or Not; CIO Magazine; June 15.
[5] Bancroft N.H., Seip H., Sprengel A. (1998), Implementing SAP R/3., second ed; Manning Publications
Co., Greenwich, MA.
[6] Banijamali S.M., Jafarnejad A., Haghparast M. (2005), A framework to assesses the Iranian
organizations readiness for ERP implementation; 3rd International Management Conference; Tehran,
Iran.
[7] Bingi P., Sharma M., Godla J. (1999), Critical issues affecting an ERP implementation; Information
Systems Management; 7–14.

[8] Botta V.G., Millet P.A., Grabot B. (2005a), A survey on the recent research literature on ERP systems;
Computers in Industry 56; 510–522.
[9] Botta V.G., Millet P.A. (2005b), An investigation into the use of ERP systems in the service sector;
International Journal of Production Economics; Available on: www.sciencedirect.com.
[10] Botta V.G., Millet P.A. (2005c), A classification for better use of ERP systems; Computers in Industry
56; 573–587.
[11] Brown J. (2001), Is ERP a silver Bullet? APICS Online Available
http://www.apics.org/magazine/past_issues/2001_01/erp_silver/full/asp.
[12] Buchout S., Frey E., Nemec J. (1999), Making ERP Succeed: Turning Fear Into Promise, Strategy and
Business, 2nd Quarter, [Online] Available: http://www.strategy-business.com/technology/99208/.
[13] Chand D., et. al. (2005), A balanced scorecard based framework for assessing the strategic impacts of
ERP systems; Computers in Industry 56; 558-572.
[14] Dabiri N. (2007), The investigation of enterprise readiness for ERP system implementation; MSc
Thesis, Faculty of Industrial Engineering, K.N. Toosi University of Technology; Iran.
[15] Davenport T. (1998), Putting the Enterprise into the Enterprise System; Harvard Business Review,
Jul–Aug; 121–131.
[16] Davenport T. (2000), Mission critical: realizing the promise of enterprise systems; Harvard Business
School Press, Boston.
[17] EFQM web page. (2007), www.efqm.org.
[18] Ehie I.C., Madsen M. (2005), Identifying critical issues in enterprise resource planning (ERP)
implementation; Computers in Industry 56; 545–557.
[19] Gefen D. (2002), Nurturing clients’ trust to encourage engagement success during the customization of
ERP systems; Omega 30; 287–299.
[20] Gyampah K.A., Salam A.F. (2004), An extension of the technology acceptance model in an ERP
implementation environment; Information & Management 41; 731–745.
[21] Holland C., Light B. (1999), A critical success factors model for ERP implementation; IEEE Software
(May/June); 30–35.
[22] Hong K.K., Kim Y.G. (2002), The critical success factors for ERP implementation: an organizational
fit perspective; Information & Management 40; 25–40.
[23] Hutchins H. (1998), 7 key elements of a successful implementation and 8 mistakes you will make
anyway, APICS, 1998. International Conference Proceedings, Falls Church, VA; 356–358.
[24] Jones M.C., Cline M., Ryan S. (2004), Exploring knowledge sharing in ERP implementation: an
organizational culture framework, Decision Support Systems, Available on: www.sciencedirect.com.
[25] Joshi K., Lauer T.W. (1999), Transition and change during the implementation of computer based
manufacturing process planning system: an analysis using the equity implementation model; IEEE
Transactions on Engineering Management 46; 156–167.

[26] Kale V. (2006), Implementing SAP R/3: The Guide for Business and Technology Managers, Online
available:
www.uky.edu/IT/AdminApps/IRISTechPortal/Presentations/Chapter1/Implementing%20SAP%20R%
20Prest%20Chpt%201.ppt.
[27] King S.F., Burgess T.F. (2006), Beyond critical success factors: A dynamic model of enterprise system
innovation; International Journal of Information Management 26; 59–69.
[28] Kositanurit B., Ngwenyama O., Osei-Bryson K.M. (2006), An exploration of factors that impact
individual performance in an ERP environment: an analysis using multiple analytical techniques;
European Journal of Information Systems 15; 556–568.
[29] KPMG, 2002. Annual program management survey (2002), Report 203-587, UK: KPMG-LLP.
[30] Kumar V., Maheshwari B., Kumar U. (2002), ERP systems implementation: Best practices in
Canadian government organizations; Government Information Quarterly 19; 147–172.
[31] Kwon T.H., Zmud W.R. (1987), Unifying the fragmented models of information system
implementation; Critical issues in information system research, Wiley, New York.
[32] Lam W. (2005), Investigating success factors in enterprise application integration: a case-driven
analysis; European Journal of Information Systems 14; 175–187.
[33] Langenwalter G. (2000), Enterprise Resources Planning and Beyond: Integrating Your Entire
Organization, St. Lucie Press, Boca Raton, FL.
[34] Lea B-R., Mahesh C.G., Wen-Bin Y. (2005), A prototype multi-agent ERP system: an integrated
architecture and a conceptual framework; Technovation 25; 433–441.
[35] Liang H., Xue Y. (2004), Coping with ERP-related contextual issues in SMEs: a vendor’s perspective;
Journal of Strategic Information Systems 13; 399–415.
[36] Mabert V.A., Soni A., Venkataramanan M. (2001), Enterprise resource planning survey of US
manufacturing firms; Business Horizon May-June; 69–76.
[37] Mabert V.A., Soni A., Venkataramanan M. (2003), Enterprise resource planning: Managing the
implementation process; European Journal of Operational Research 146(2); 302–314.
[38] Mandal P., Gunasekaran A. (2002), Issues in implementing ERP: A case study; European Journal of
Operational Research 146; 274–283.
[39] Motwani J., Mirchandani D., Madan M., Gunasekaran A. (2002), Successful implementation of ERP
projects: Evidence from two case studies; International Journal of Production Economics 75; 83–96.
[40] Motwani J., Subramanian R., Gopalakrishna P. (2005), Critical factors for successful ERP
implementation: Exploratory findings from four case studies; Computers in Industry 56; 529–544.
[41] Nandhakumar J., Rossi M., Talvinen J. (2005), The dynamics of contextual forces of ERP
implementation; Journal of Strategic Information Systems 14, 221–242.
[42] Nash K.S. (2000), Companies don’t learn from previous IT snafus, Computer-World, 30.
[43] Ng J.K.C., Ip W.H., Lee T.C. (1999), A paradigm for ERP and BPR integration; International Journal
of Production Research 37 (9); 108-209.

[44] Nikolaou A.I. (2004), Quality of post-implementation review for enterprise resource planning systems;
International Journal of Account Information System (5), 25 – 49.
[45] Olhager J., Selldin E. (2003), Enterprise resource planning survey of Swedish manufacturing firms;
European Journal of Operational Research 146; 365–373.
[46] Oliver R. (1999), ERP is dead! Long live ERP!; Management Review 88(10); 12–13.
[47] Olson d. l. (2004), Managerial issues of Enterprise Resource Planning Systems; International ed,
McGraw Hill/Irwin, New York, NY.
[48] Ptak C.A., Schragenheim E. (2004), ERP: Tools, Techniques, and Applications for integrating the
supply Chain; 2nd ed., St. Lucie Press, New York.
[49] Pui, Ng, C.S., Gable G.G., Chan T. (2002), An ERP-client benefit-oriented maintenance taxonomy;
The Journal of Systems and Software 64; 87–109.
[50] Rajagopal P. (2002), An innovation-diffusion view of implementation of enterprise resource planning
(ERP) systems and development of a research model; Information & Management 40; 87–114.
[51] Rao S. (2000), Enterprise resource planning: Business needs and technologies; Industrial Management
& Data Systems 100(2); 81–88.
[52] Rikhardsson P., Kraemmergaard P. (2006), Identifying the impacts of enterprise system
implementation and use: Examples from Denmark; International Journal of Accounting Information
Systems 7; 36–49.
[53] Sarker S., Lee A.S. (2003), Using a case study to test the role of three key social enablers in ERP
implementation; Information and Management 40(8); 813–829.
[54] Shang S., Seddon P. (2000), A comprehensive framework for classifying the benefits of ERP systems;
In Proceedings of AMCIS2000 2; 1005–1014.
[55] Sheu C., Chae B., Yang C-L. (2004), National differences and ERP implementation: issues and
challenges; Omega 32, 361–371.
[56] Slater D. (1998), the hidden costs of enterprises software; CIO Enterprise Magazine, June 15.
[57] Summer M. (1999), Critical success factors in enterprise wide information management systems;
Proceedings of the American Conference on Information Systems, Milwaukee, WI; pp. 232–234.
[58] Sun A.Y.T., Yazdani A., Overend J.D. (2005), Achievement assessment for enterprise resource
planning (ERP) system implementations based on critical success factors (CSFs); International
Journal of Production Economics 98; 189–203.
[59] Tchokogue A., Bareil C., Duguay C.R. (2005), Key lessons from the implementation of an ERP at
Pratt & Whitney Canada; International Journal of Production Economics 95; 151–163.
[60] Thomas F., Wallace, Michael H., Kremzar. (2001), ERP: Making it Happen- Implementer’s Guide to
Success with Enterprise Resource Planning; John Wiley & Sons, Inc.
[61] Umble E.J., Haft R.R., Umble M.M. (2003), Enterprise resource planning: implementation procedures
and critical success factors; European Journal of Operational Research 146; 241–257.

[62] Wang E., Chou H-W., Jiang J. (2005), The impacts of charismatic leadership style on team
cohesiveness and overall performance during ERP implementation; International Journal of Project
Management 23; 173–180.
[63] Wang E.T.G., Chen J.H.F. (2006), Effects of internal support and consultant quality on the consulting
process and ERP system quality; Decision Support Systems 42; 1029–1041.
[64] Welti N. (1999), Successful SAP R/3 implementation: practical management of ERP projects.
Reading; MA: Addison-Wesley.
[65] Wongnum, P.M., Krabbend, AM J., J., Buhl, H., Ma, X., Kenett, R. (2004), Improving enterprise
system support—a case-based approach, Advanced Engineering Informatics 18, 241–253.
[66] Xue Y., Liang H., Boulton W.R., Snyder C.A. (2005), ERP implementation failures in China: Case
studies with implications for ERP vendors; International Journal of Production Economics 97; 279-
295.
[67] Yusuf Y., Gunasekaran A., Abthorpe M.S. (2004), Enterprise information systems project
implementation: A case study of ERP in Rolls-Royce; International Journal of Production Economics
87; 251–266.
[68] Yusuf Y., Gunasekaran A., Wu C. (2006), Implementation of enterprise resource planning in China;
Technovation 26, 1324–1336.
[69] Zhang Z., Lee M.K.O., Huang P., Zhang L., Huang X. (2005), A framework of ERP systems
implementation success in China: An empirical study; International Journal of Production Economics
98, 56–80.