Critical Success Factors in ERP Upgrade Projects

1
Critical Success Factors in ERP Upgrade Projects

• David L. Olson
• Fan Zhao
• University of Nebraska
• CONFENIS 2006, April 2006

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ERP Market

• ERP a major part of most organizations
• Market emerged in the 1990s
• Focus on large organizations
• Aided by concern for Y2K
• 21st Century developments
• Focus on open systems (Web linkage)
• Consideration to small-to-medium sized
  organizations
• Consideration to government, non-profit
• UPGRADE of 1990s systems

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Upgrade Projects

• Most ERP research has focused on installation
• To include selection
• BPR
• Upgrade projects a different environment
• Easier in many ways
• Organization knows what they are getting into
• Inherently easier than initial installation
• Persistent
• Will probably occur as often as every 3 years
• Interest in Upgrade Critical Success Factors

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Critical Success FactorsAll IT Projects
additional ERP Installation
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Why Upgrade?

• Take advantage of new technologies
• New enabled business strategies
• (BPR)
• Swanton 2004
• 55 of upgrades voluntary
• New functionality, expansion, consolidation
• 24 technology changes
• Hardware, software
• 15 vendor cutting support
• 6 bugs, statutory changes

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Upgrade BenefitsCollins 1999

• Eligibility for Help Desk Support
• Most vendors stop technical support 12-18 months
  after next version becomes available
• 6 of 13
• Solutions to bugs design weaknesses
• Most bugs resolved by fix-by-fix, or all-at-once
  as part of next release
• 1 of 13
• New, Expanded, Improved Features
• 9 of 13 (5 Web functionality)

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Upgrade Cost

• Swanton 2004
• 50 of original software license fee
• 20 of original implementation cost per user
• Over 6 million for 5 thousand user system
• 8 to 9 month effort
• 3 to 11 months (average 6.2 months)
• Team one FTE per 35 business users

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ERP Upgrade ProcessCarr 1996 Collins 1999

• Assessment
• What changes required?
• Justification of changes
• Identification of resources required
• Planning
• Obtain stakeholder commitment
• Feedback mechanism
• Action
• Personnel in place
• Communicate to entire organization
• Review organizational implications
• Renewal
• Monitor evaluate changes
• Train educate

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ERP Upgrade CSFs
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Structured Interviews13 CIOs
11
Smaller Firms
12
E-Business Related
13
Public Sector
14
Top Ranked CSFs
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Problems Reported

• 5 of 13 no problems
• Indicating that upgrades much easier than initial
  installation
• Customization
• One organization needed to modify vendor code
• Another had trouble with patch to FedEx, UPS
• Add-ons
• One organization wanted to add CRM dropped
• Another had difficulties with TMS add-on
• Scalability
• Solved by vendor
• Testing
• One organization had to make extra iterations
• Training
• One reported the need to schedule many users

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Conclusions

• ERP upgrade projects growing in importance
• Seem much more controllable than initial
  installation
• 10 of 11 hypothesized CSFs identified
• BPR not identified
• Already done?
• 1 not on list
• Customization
• Control it
• Meet organizational needs