Critical success factors are "those limited number of areas in which satisfactory results will ensure successful competitive performance for the individuals, departments or organization" (Bullen and Rockart, 1986). CSFs are the key areas where things must go right if organization wants to have full benefits of ERP system. Following are some of the most important CSFs which have been widely cited in the literature.
- Business Plan & Vision
- Project Management
- Effective Communication
- Business Process Reengineering (BPR)
- Change Management
- Top Management Support
- Data Management and Accuracy
- Monitoring and Evaluation of Performance
- Teamwork and Composition
- Project Champion
- Education and Training
- Testing and Troubleshooting
Key people from the whole organization should create a clear and coherent vision of how company should operate in the coming years. The vision must be defined at the start of the project (Abdinnour-Helm et al., 2003). The vision should be incorporated in the business plan. The business plan should also include the justification of investment along with the project mission and goals (Ngai et al., 2008).
Project management is about establishing the cycle of activities which will make it possible to ensure that the implementations goes ahead as planned initially (Zhang et al., 2005).
Successful ERP implementation requires that company engage itself in excellent project management with clear objectives and project progress (Elisabeth et al., 2003).
Clear and effective communication is very important whether it's within the teams or across the organization including the shop-floor employees before and during the ERP system implementation (Nah et al., 2003). An open and honest information policy should be formulated which will satisfy user's needs and where will show the progress of the project to the rest of organization (Ngai et al., 2008).
A certain level of BPR is required usually with the implementation of ERP systems because these systems may be incompatible with the processes of organization (Nah et al., 2003; Ngai et al., 2008). Throughout the BPR, the business processes must be reviewed with certain tools. The more in-depth reviews will give better outcome of the BPR. Various numbers of techniques and tools can be used to support the different stages of BPR (Francoise et al., 2009).
Change management strategies are certainly required for the effective implementation of ERP systems. So the induction of a formal change management program should be considered. One of the key tasks of change management program is to build a user acceptance and positive employee attitude towards the project (Abdinnour-Helm et al., 2003). This should also involve securing the support from opinion leaders throughout the organization (Finney et al., 2007).
The top management support must be approved before the commencement of ERP project. It is crucial for the top management to allocate the necessary resources and time for the project to be executed properly (Nah et al., 2001). Because of the scale of the ERP projects and their implications on different stake holders throughout the organization, top management should get involved to resolve political conflicts between different groups when necessary (Ngai et al., 2008).
Because ERP systems contain different modules that are interlinked with each other, data should be managed properly to ensure its accuracy. Data should be validated and converted into a single and consistent format before the system goes live (Ngai et al., 2008). This might also involve cleaning of some suspect data (Yusuf et al., 2004), because if someone plays with the wrong data, implications could be very negative.
It is very important to monitor and evaluate project performance, because anything that can not be measured can not be managed (Jarrar et al., 2000). Implementation progress must be measured regularly for more efficient and effective control. Through monitoring and feedback from the users, performance can be reviewed and evaluated to assess whether it is achieving required business goals and objectives (Ngai et al., 2008).
It is very critical to form a team which consists of the organization's best and brightest individuals. But composition of team should be balanced and should, therefore, have both technical and business competence available. There should also be commitment from management to release these individuals on full-time basis for the project, instead of additional duties to their normal jobs (Shanks and Parr, 2000). Also the decision maker in the project team should have sufficient authority to take decisions (Shanks and Parr, 2000).
Project champions are very important and play a critical role in the implementation of ERP systems and dealing with the organization change. Project champion should be a high-level executive, who can champion the project throughout the organization (Ngai et al., 2008). Project Champion facilitates team motivation and helps to create enthusiasm and convergence on common goals through his/her position and persuasions (Francoise et al., 2009).
This is probably the most widely recognized critical success factor, because user understanding and buy-in is essential (Elisabeth et al., 2003). Training should encourage the development of IT skills and it should be hand-on. So there should be some consideration given to the planning of training. Management should also keep in mind about how staff may need to be restructured as part of the project (Finney et al., 2007).
Because of the BPR, ERP systems must be configured and sometimes modified. After this, before it is transferred to the new platform it must be tested and strategies for troubleshooting should be put in place. Final testing should be done before the system goes live (Francoise et al., 2009).