Elsevier

Computers in Industry

Volume 61, Issue 3, April 2010, Pages 297-308
Computers in Industry

Managing the full ERP life-cycle: Considerations of maintenance and support requirements and IT governance practice as integral elements of the formula for successful ERP adoption

https://doi.org/10.1016/j.compind.2009.10.004Get rights and content

Abstract

Companies adopting enterprise resource planning (ERP) systems have often focused primarily on implementation-related factors while neglecting those of post-implementation. As a result, the usefulness and operation of the ERP systems, once installed, are compromised. This research adopted a case study approach to demonstrate that ERP adoption efforts that fail to pay attention to post-implementation requirements (especially those relevant to maintenance and support (M&S)) from an early stage in the project lifecycle will face dire consequences. It points out that poor planning and management of M&S services can imperil the normal operations of an ERP system and the daily activities of a business. With the life span of ERP systems getting shorter, sound M&S practices can extend their life and create a stable system platform to support efficient and effective business operations. M&S issues deserve to be considered as integral elements among the critical success factors (CSF) of ERP adoption projects. In other words, ERP success requires a full lifecycle perspective to be taken by adopting companies. With lessons having been learned from the mistakes in the first project, the company in this case study revamped its ERP implementation second time out, with due consideration being given to M&S strategies and practices from project initiation onward in order to realize a stable, usable, and maintainable system. The case study explores and identifies the critical success factors (CSF) of ERP adoption, and shows that M&S must be included as a key element from the outset and throughout the system lifecycle. Our findings capture a great deal of experience for any ERP adopting companies to follow in order to avoid learning costly lessons both in implementation and subsequent M&S throughout the lifespan of the system. A set of propositions is also presented for academic researcher to consider in future ERP research endeavors.

Introduction

The successful implementation of enterprise resource planning (ERP) systems can create competitive advantages for companies which adopt them. With product life span becoming increasingly shorter, the installation of an ERP system alone cannot sustain competitive advantage unless it is properly maintained and allowed to evolve to satisfy new business requirements. In other words, the perspectives and practices of project management must be extended to encompass post-implementation activities in the ERP lifecycle. Maintenance and support (M&S) services, as an intrinsic part of an ERP system, can improve its quality and extend its life span. High quality M&S can result in the system having a profound and lasting impact on adopters’ competitive advantage [17].

The extant academic and practitioner literature centers mostly on adoption and implementation issues, ranging from ERP-process fit, business process re-engineering (BPR), and implementation methodologies to organizational impacts [26]. Post-implementation issues are as important as matters concerning adoption, yet they are often under-researched [26]. Such issues encompass ongoing requirements, change management, user support, and maintenance and upgrade of ERP systems. As Glass and Vessey [14] point out, the total post-implementation cost, including maintenance, of a piece of software could be as high as 70% of the total cost, and annual M&S could amount to 25% of the cost of implementation. This shows how important M&S is to ERP as well as to other types of software systems. It is therefore critical for companies and other stakeholders to fully understand and manage maintenance issues so as to devise appropriate measures to address problems, mitigate interruptions to daily operations, and extend the life and benefits of the enormous investment made in ERP systems [25].

This study set out to investigate, analyze, and report on the strategies, challenges, and practices of ERP adoption and maintenance in a multinational firm operating in the Greater China region, which comprises Taiwan, China, Macao, and Hong Kong. We consider the full ERP lifecycle of the projects with a focus on M&S issues, since we believe the requirements of the latter are of paramount importance [26] to the success of implementing as well as operating the system. Using ERP projects as examples, this study will explore the linkage between implementation and M&S, and highlight the impact of the latter on the success of implementation and operations. While ERP implementation issues have been discussed widely in the extant literature, M&S issues tend not to be. Therefore, the results of an extensive review of the literature are reported in section two. In this section, we attempt to summarize key conceptual and practical issues pertinent to the M&S of ERP, all of which made a significant contribution to defining the focus and objectives of the study. The methodology adopted to operationalize this study is discussed in the third section, followed by a detailed description of the ERP experience of the company studied in section four. Based on an analysis of the case study, section five identifies and discusses eight critical success factors (CSF) and their implications, so far as relevant, to the M&S of ERP. Along with the CSF, a set of propositions is also presented. The academic contributions and limitations of this study, and directions for future research, are presented in section six while section seven sets out our concluding remarks.

Section snippets

Stages of the ERP lifecycle

ERP systems can be deployed in a big-bang or phased approach, either of which initiates the stages of a system's project lifecycle. According to the staged implementation model [20], the project lifecycle consists of four phases—adaptation, acceptance, routinization, and infusion. The last two phases – routinization and infusion – are the post-implementation stages that are most relevant to this study, though they cannot be examined without reference to the practices and decisions of previous

Research methodology

This research project is aimed at understanding the “what” and “how” aspects of M&S as integral parts of the whole ERP lifecycle. Because of the nature of this type of study, we believe a case study approach has the potential to provide insight into these issues in a real-life context [6] and allows us to explore topics that are not yet well understood [41].

For this research, we chose an American-based multinational company which is one of the major world producers of process control systems.

The ERP M&S practices of the international company

With its headquarters located in Hong Kong, the business units of the company in the Greater China region provide to its customers industrial and building control systems, spare parts, and consulting services via its sales forces, joint ventures, and distributors. Its revenue in this region amounts approximately to US$ 250 million annually.

In this study, we analyzed the evolution of two ERP implementations with the emphasis on M&S issues, based on Nolan's Stage Model of Organizational Computing

Analysis and findings

An analysis of the experience of the two ERP projects clearly points to a set of factors or issues that must be managed properly in order for the implementation and maintenance of the ERP system to be successful. It is obvious that many of the CSF are not exclusive to only one stage of the lifecycle. Some issues or factors appeared early, and the decisions made about them would have a profound impact on the whole project. Although the list of factors we have identified is not exhaustive, we

Implications

This case study has offered us an important opportunity to closely examine and compare the experience of an international firm in two consecutive ERP projects. Much has been learned by the company as it accumulated these experiences. Its lessons on ERP implementation and maintenance have been learnt the hard way, and such findings would surely benefit both academics and practitioners involved in ERP systems. The lessons learnt are highlighted below, followed by our suggestions for future

Conclusion

This study has shown that M&S are important to the ERP lifecycle, and so must be handled properly in order for investment in ERP to yield benefits to the organization. Using an in-depth case study comparing two ERP implementation projects within the same international company, a framework of CSF for successful M&S, and a set of propositions for future research, have been presented. It is anticipated that the results of this study will benefit the ERP-using communities and MIS researchers alike.

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