—Information and communication (ICT) technology
related projects, such as enterprise resource planning (ERP)
projects have a high failure rate.
Planned and systematically
adopted risk management procedure is crucial to keep projects
on time and within budget with all requirements fulfilled. In
this paper, we have analysed the critical risks of ERP projects
through the case study of three manufacturing small and
company-specific risk analysis method, the critical risks of the
ERP projects have been identified and assessed. Second, by
using characteristics analysis method, the recommendations of
how to divide the ERP projects into manageable sub projects
have been given.
—Enterprise resource planning, risk analysis
method, characteristics analysis method, small and medium
Enterprise resource planning (ERP) systems, when
successfully implemented, links all functions of an
organisation including order management, manufacturing,
human resources, financial systems, and distribution with
external suppliers and customers into a tight integrated
system with shared data and visibility . The primary
motive for ERP implementation is the potential for enhancing
the firm’s competitiveness. ERP systems provide significant
benefits, and companies adopted them with the goal of
replacing inefficient stand-alone legacy systems, increasing
communications between business functions, increasing
information processing efficiencies, improving customer
relations, and improving overall decision making .
Despite the significant benefits that ERP systems provide,
the Statistics show that under 30 % of ERP implementations
are successful , which means that projects are completed
on time and on budget, with all features and functions
originally specified. ERP projects are major and risky
exercises for any size of company. The average
implementation time of ERP system is between 6 months and
2 years  and the average cost is between US$1,3M and
US$70M , and they require disruptive organisational
change . ERP implementation requires the allocation of
special competences, and a number of financial and human
resources. Also, the implementation is usually carried out
concurrently with the daily business, which already ties up
the available resources . Especially in small and medium
size enterprises (SMEs), which employ less than 250 persons
and an annual turnover is not exceeding 50 M€, and/or an
annual balance sheet total is not exceeding 43 M€, scarce
Manuscript received March 2, 2009.
P. Iskanius is with the Raahe Unit, University of Oulu, Oulu, Finland.
(phone: +358 44; fax: + 358; e-mail: paivi,Iskanius@oulu.fi).
resources are badly needed in the daily business operations.