Implementing Erp

1. Introduction

Due to the frequent fluctuations in business operations nowadays, companies especially large ones are trying to face these changes in many ways such as creating competitive edge, entering new markets and improving customer satisfaction. And so in order to achieve these goals, com-panies often turn to enterprise resource planning systems implementation that has two main ad-vantages; firstly it provides a single view of all functional areas of the organization. Secondly, it provides a single enterprise database that includes all business data. J. Umble, et al( 2003: 241). However, faulty implementation of ERP systems can lead to major problems, that explains why companies care about the implementation process to be done appropriately, "For instance, Her-shey Foods Corporation in 1999 reported a 19% drop in 3rd-quarter profits and a 29% increase in inventories over the previous year due to order processing problems caused by its faulty $112 million ERP implementation"Motwani, et al( 2002: 83).

Due to the significance of successful ERP implementation process and how austere problems caused by faults in implementation; it's important to discuss the critical factors that lead to suc-cess of the implementation process in large companies, which will be the focus of this research.

This paper is comprised of two main sections. The first sections consists of the definition of en-terprise resource planning system, evolution and history of ERP and the main benefits that com-pany will gain from successful ERP implementation. While the second section explores the major critical success factors of ERP implementation that consists of three subsections; firstly man-agement factors which are effective project management, change management and top manage-ment support. Secondly, technical factors which are business process reengineering, data accu-racy and infrastructure. And finally the other factors subsection which consists of training and education, user involvement, vendor support and effective communication.

2. Enterprise Resource Planning Systems

"ERP enables companies to derive the optimum inter-operability between all parts of the organization, electronically closing the loop between the information sys-tems that operate on each site."

- John Wolfenden, Fourth Shift UK

2.1 Definition of ERP

According to Zuckweiler et al. (2003: 5), enterprise resource planning system is a pool of soft-ware modules grouped together into an single computer system to help the company to manage its resources in an efficient and effective way; the idea behind ERP is that it provides a full view of all functional areas, moreover to business process standardization through whole the organiza-tion. Also Musaji (2002:1) pointed that enterprise resource planning (ERP) System implementa-tion is combine an art and science that consists of planning, implementation, and ongoing maintenance. While Hong et al. (2001: 25) defined ERP as the application package that solved the long lasting disadvantages of information technology such as cutting down costs, faster im-plementation and enhancing the quality of the system.

A successfully implemented ERP system merges all functional areas of the organization such as production, human resources and finance into a closed unified system, where all departments have access to information at the same time Chen (2001: 374).

2.2 Evolution of ERP

In 1960s, the main concern of organizations was the efficient management of inventory, and so they used to keep "just in case" inventories to be able to respond to sudden orders and not losing their customers, until the development of software packages that's

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