Critical failure factors in enterprise resource planning implementation at Indian SME

Abstract

Many companies in developing countries have implemented Enterprise Resource Planning (ERP), to capture its benefits; still there is a lack in examining Critical Failure Factors (CFFs) that influence failure of ERP implementation at Indian Small and Medium­size Enterprises (SMEs). This paper develops an ERP implementation failure model by identifying and ranking the twenty CFFs that differs from existing models in that it has a broader and more holistic focus. It proposes a framework in terms of recommendations for managing these CFFs. A quantitative survey based method was used to collect the data from the Indian ERP consultants. The data collected were analyzed using statistical techniques. This paper argues that Indian consultants often fail in recognizing the technology, vendor, employee, project etc related influence to the ERP implementation, as a consequence for the evaluation of ERP, instead of choosing a system supporting specific business functions. ERP is not just a technological work; it’s a socio­ technological challenge, which mandates modifying existing applications and redesigning processes that may put Indian SMEs on the competitive position. Findings are discussed along with the implications of the research for the future work to bridge the current literature gap and provide practical advice for both academics and practitioners.