Factors Effecting Erp Implementation In Smes Management Essay

Factors Effecting Erp Implementation In Smes Management EssayInformation dodges gained popularity as these automate all forethought related function that an plaque needed. queen- surfaced organisations implement ERP information go forthlines that meld all data and processes together. With increase in popularity of SMEs (Small and Medium first steps) and their collaboration with self-aggrandizing enterprises, SMEs needed an ERP dust which at firstborn post automate all of their business functions and secondly they end fake with out surface enterprises. However their victoryful carrying into action in SMEs rebrinys an gist. As SMEs be short of resources and financially weak so they need to build an ERP system victorfully so that they abide avoid chances of failure. For this reason this enquiry has been conducted to littlely analyse success factors of ERP repeation. Case studies testament be selected and abstract has been made on them to ensure extinct the successful elements of their implementation. At hold water in conclusion a general lay work entrust be made to help SMEs to implement ERP system successfully.Background to twenty-four hours the whole world has become a global village in which organisations be competing with each other to improve their productivity and generate profits. This is not generalised to tho large organisations as it has been observed from last disco biscuit that small and medium size organisations are also taking grapheme in this race (Chen, 2001). Organisations are moving fast to subscribe a package that ordure help their guidance and functional needs. They require an Enterprise package that outhouse get together their demands. ERP is the solution for the enterprises, in current cheek for small and medium size organisations.Enterprise Resource Planning (ERP) gained its popularity in 1990 as an integrate application. Its functionality is to integrate contrasting functions together and prov ide a familiar database to users and departments, with many advantages more specific to reduced inventory and change profits. ERP evolution starts in earlier 70s when manufacturing companies were using MPS (Master Production Schedule) technique. lick of this technique was to specify the end or finished product that is require in think period. This type of technique only did the deed and enumeration of lowest examination product. Whereas manufacturing organisations required not only final product think moreover they also needed planning and scheduling of raw materials associated with that final product. therefore firms obtained MRP (Material Requirement planning) that loafer divergentiate between final product, its separate and raw material. This technique performed production planning and inventory control in the manufacturing process. Basic functionality of this system was planning and scheduling of manufacturing process.This technique became popular and in 1980s MR P systems were expanded and MRP II was introduced, it was not only production planning technique but it also integrated primary functions like (production, finance and marketing etc. into planning process. Because of this technique popularity and effectiveness in planning and production process organisations tend to move to this technique. In 1990s MRP II was provided expanded into ERP (Enterprise Resource Planning). The main difference between ERP and MRP II is that ERP plans and schedule supplier resources by keeping customer service in heed (Chen, 2001 and Gupta, 2000).The purpose of the inquiry is to identify success factors of ERP credence in SMEs. searches through with(p) in this area were deficient of nearly of the key points. From last span of years query has been conducted to critically identify success factors of implementing ERP in SMEs. (Kale et al, 2010) did bailiwick in identifying success factors of Indian SMEs and their research was based on close to(pre nominal) qualitative and quantitative. (Snider et al, 2009) studied on five Canadian SMEs but some of their critical success factors lack cultural issues. (El Sawah et al, 2008) and (Woo, 2007) both did research in SMEs, in which they divvy uped only one country and further they intend to enhance their research by taking more SMEs of different countries. (Woo, 2007) explained in admit that if cultural differences were given thence considered success factors kitty be alike to case studies in China and case studies of Western organisation. (Doom et al, 2010) apply Belgian SMEs to research success factors. (Muscatello et al. 2003) did their research on four US manufacturing companies but the companies they choose were linked to large organisations and had annual revenues more then SMEs .(Loh and Koh, 2004) carried out their research in UK and their target was SMEs, they conducted interviews and distributed headspringnaires. Their research is found to be more competent as compared to others but still they did not cover demographic issues.(Yusuf et al, 2004) conducted their research on Rolls Royce and found out answers of few success factors.From above studies it is obvious that most of the work has been done in large organisation and little researches were carried out on SMEs. Although, those studies considered SMEs for the research but cover only one region and were short of justification that how success factors of some specific part of world could be implemented in dwell of the world.Key issues in successful implementation of ERPKey issues are the problems that mature during the implementation process. There are lot of problems that plenty affect ERP implementation process in SMEs which are detailed as below (Chen, 2001). be is one of the main issues that can fail ERP implementation. As ERP package requires spacious finances and companies fail to successfully implement ERP package so they name it difficult to continue with their project.To choose rig ht ERP package is another issue that SMEs energise to take into account before implementation. Hershey Food Corp accounts muggins for their failure so choosing right ERP package is a big issue.ERP in SMEs requires some age complex customization because it focuses mostly on corporate giants. So customization is another big issue that can effect ERP implementation.Another main issue is analysis, which projects are failure and which are successful. Project failure and success all depends on judgment and analysis. fox Meyer as mentioned below, states that their ERP systems did not fulfil their functionality and they marked that project as failure. It is explained in detail in literary productions go over section. Likewise some enterprises termed their project failure because of cost.Project can be termed as success if they meet these criteria.It should be delivered on timeIt should meet project costThe project should deliver the functionality which that organisation inadequacys.R esearch aim and objectivesThe main aim of this pick up is to propose a frame work for effective implementation of ERP in SMEs. This requires in depth survey of literature round off and case studies to critically evaluate success factors. The research pass on be based on the following research questionWhat are the key issues and problems being lawsuitd in the successful implementation of the ERP in small and medium enterprises (SMEs)?To what extent the ERP software contributes to the success factors in SMEs?In order to answer the above stated research questions the following stages willing rich person to be achievedTo palingenesis and carry out in depth analysis of literature review while focal point will be ERP adoption.Critically analyse and identify success factors from different case studies.Match and analyse success factors of literature review with the case studiesDevelop a frame work of success factors which can help in implementing ERP successfully for Small and mediu m size organisations regardless of their region and cultural issues.SMEs case studies will be taken who have generally less train of employees.Case studies will be taken from different regions so that more in depth analysis will be done and cultural and demographic issues will be cover in that. This point is explained in oftentimes more detail in method of analysis section.Companies who have successfully implemented ERP application will be considered.Literature reviewAccording to (Snider et al, 2009) ERP uses common online database whose functionality is to share common database among users and enterprise functions. ERP is an integrated information system that is composed of information system and managerial thinking. One of its core purposes is to integrate all the dependent and self-supporting information systems together and optimise systems performance.ERP system comprises of a database which is online and shared, an application with an integrated interface which means diff erent interfaces are incorporated into one interface. (AL Mashari et al, 2003).ERP achieved its level of popularity in large manufacturing enterprises in 1990s. Large enterprises implemented it to automate their functions and to integrate all processes and data together. On the other hand as SMEs were acquire popularity so after implementing ERP systems in large organisations ERP vendors now moved towards SMEs. There are many factors that can encourage SMEs to accept ERP systems. Poston and Grabski (2001) believed there are certain factors that motivate SMEs to adopt ERP systemsIt can reduce cost as computer systems increases the efficiency processIt can make decision fashioning process accurate.(Oliver and Romm, 2000) suggested these reasons for ERP adoption in SMEsData and processes integrationAvoid critical business riskImprovement of ongoing business operations.ERP adoption in SMEs is a challenging task especially when cultural issues arise. Cultural issues can occur at organi sational values, means it can impact organisational structure and management or at individual value where it can impact how mull works and how employees will conduct themselves if they belong to certain culture. (Straub et al., 2001). Developing countries face many problems when they use western technologies from developed countries. ERP encapsulates best business recyclable practices in it. For this reason it became a demanding technology that it can use (Sawah et al, 2008) sketch cultural issue to be an important factor responsible for heights demand of ERP in SMEs.With these motivational factors that attract SMEs to adopt ERP there is monstrous side of this adoption as well where many ERP enterprises fail to adopt ERP systems. Below mentioned are cases of large enterprises but small and medium size enterprises can learn lesson from them by not to adopt that type of implementation. Fox Meyer Drug, a multi billion pharmaceutical company which files for bankruptcy and they blam ed ERP system for their cumulus fall. In its case, problems in ordering system leaded as system generated excessive orders more than demand which lead company to down fall. Renowned companies like Dell scrap their mega expensive project as they found system inflexible for their business. These are not only twain examples of ERP failures but many other companies like Hershey, Boeing, Dow chemical etc faced same situation (Chen, 2001). In all these companies ERP systems leaded to failure and this was due to not having proper planning before installation. Above mentioned companies are all large organisations whereas in case of small and medium size organisations, these can not hurt the cost of ERP systems failure. This leads this research to critically analyse and find out the success factors in ERP adoption so that SMEs can avoid these failures. oddment Between SMES and Large enterprisesSignificant amount of differences can be find between large and SME organisations. SMEs have in formal structure and culture, their top management are found to be involved in day to day activities (Mintzberg et al., 2003,) while large organisations have structured departments and processes and their top management is not involved in daily activities (Buonanno et al, 2005). At the same time SMEs have express resources in terms of research development, finance, human resource with express mail clients and operates only in small scale (Kale et al, 2010). Due to these limited resources they find it difficult to implement projects that can be reengineered (Mc Adam, 2002). Besides these limited resources they are generating profit very well and for this reason many multinational companies in recent years collaborated with SMEs which have ERP systems installed in them. This collaboration made SMEs to adopt ERP package so that they can operate in parallel with these organisations (Rao, 2000). The major factor which can affect SMEs more as compared to large organisation is the cost as their limited resources dont allow them to rest high cost of implementation. This is one of the main reasons that SMEs do not want implementation to be unsuccessful. Large organisation can somehow bear the cost as large number of stakeholders bank credits etc but SMEs do not have enough resources. (Mabert et al, 2003). This research is conducted so that it can help SMEs to implement ERP successfully.Proposed research methodMost of the researches conducted are in large organisations and only few of them were for SMEs. Out of these researches some utilise only one case study while some used different case studies and their research method remained different as well because they used questionnaires and interviews to find out success factors.After brain storming and critically analysing preceding(prenominal) literature review I decided to use the case study approach. For this reason I decided to identify critical success factors in SME while using multiple case studies. (Stuart e t al, 2002) suggested that using case study is the best approach when previous research does not find to be inline with new context while taking multiple case studies can provide even more in depth analysis and show clear picture of critical analysis(Snider et al, 2009).In case of our research qualitative analysis will be used. First thorough literature review will be studied by means of online journals, electronic books etc. It will help to find previous critical success factors of ERP adoption in SMEs. To give practical edge to research eight different case studies will be searched and from them critically analysis will be done to find out success factors of successfully implementing ERP project. These case studies are selected with relevance to the project title and literature review. They will provide in depth analysis of ERP adoption success factors. With the help of literature review and case studies a framework will be formed of successfully implementing ERP project.Method o f analysisFor this research case study analysis will be used. Data will be salt away from previous research that has been done in this sector and also from small and medium size enterprises that have implemented their ERP application successfully. Case studies will be collected from different parts of the world so that no demographic issues can affect our final framework of success full factors. Then final analysis will be done in between success factors of United Kingdom and rest of the world case studies to observe how much variation is there if different regions are selected. This will be the final analysis and framework of the critical success factors.Research LimitationsThis study is limited to small and medium size organisations and in some cases some arguments can be taken from the large organization in order to wrap up them. This research is self explanatory as it focuses in ERP adoption system of SMEs. In addition to this study concludes with the framework of ERP critical success factors which if SMEs follows can lead their implementation to success.A provisional TimetableGantt Chart