Critical Success Factors for ERP Implementation
Social Science Research Network
FROM THE TRENCHES: Wolfgang B. Strigel, editor • email@example.com ompanies are radically changing their information technology strategies by purchasing prepackaged software instead of developing IT systems in-house. Price Waterhouse predicts that by 2000, two-thirds of all business software will be bought off the shelf. More specifically, Deloitte and Touche states that businesses prefer to replace legacy systems with enterprise resource planning systems. According to AMR Research, the ERP
... s market was $15.68 billion in 1997 and is likely to increase at a compound rate of 36 percent, to $72.63 billion, by 2002. The associated consultancy market is approximately $30 billion. These statistics clearly indicate a shift in the ERP market. There are mixed reports concerning the outcome of ERP projects. Successful ERP implementations are certainly publicized, such as Pioneer New Media Technologies (see http://Datamation.com/PlugIn/erp/index.htm) and Monsanto, 1 but less successful projects have led to bankruptcy proceedings and litigation against IT suppliers. 2 Approximately 90 percent of ERP implementations are late or over budget, 3 which may be due to poor cost and schedule estimations or changes in project scope rather than project management failure. 4 Christopher P. Holland and Ben Light, Manchester Business School An effective IT infrastructure can suppor t a business vision and strategy; a poor, decentralized one can break a company. More and more companies are turning to off-the-shelf ERP solutions for IT planning and legacy systems management. The authors have developed a framework to help managers successfully plan and implement an ERP project. M a y / J u n e 1 9 9 9 0 7 4 0 -7 4 5 9 / 9 9 / $ 1 0 . 0 0 © 1 9 9 9 I E E E A Critical Success Factors Model For ERP Implementation I E E E S o f t w a r e M a y / J u n e 1 9 9 9 Most implementation models ignore legacy systems and underestimate their importance on the choice of ERP strategy.