WCE2009_pp752-756 - Proceedings of the World Congress on...

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Abstract —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 medium size enterprises (SMEs). First, by using 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. Index Terms —Enterprise resource planning, risk analysis method, characteristics analysis method, small and medium sized enterprise. I. INTRODUCTION 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 [1]. 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 [2]. Despite the significant benefits that ERP systems provide, the Statistics show that under 30 % of ERP implementations are successful [3], 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 [4] and the average cost is between US$1,3M and US$70M [5], and they require disruptive organisational change [4]. 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 [5]. 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.
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This note was uploaded on 11/05/2010 for the course FCBA MBA608 taught by Professor Dr. during the Spring '10 term at Baptist College of Health Sciences.

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WCE2009_pp752-756 - Proceedings of the World Congress on...

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