Critical Success Factors of ERP Implementations in Belgian SME’s: A Multiple Case Study

1. Critical Success Factors of ERP Implementations in Belgian SME’s:A Multiple Case Study Claude Doom and Koen MilisHogeschool-UniversiteitBrussel

2. ERP success • Critical Success Factors (CSF) • Most research: large implementations • Focus on smaller ERP implementations in SMEs • Focus on Belgian market • Many SMEs • Case study of 4 successful implementations • Preliminary results

3. Critical Success Factors for ERP • CSF: improves chances of successful project implementation • Five groups: • Vision, scope, and goals • Culture, communication, and support • Infrastructure • Approach • Project management

4. Vision, Scope, and Goals Enterprise vision, ERP project scope, Implementation goals • Vision, Strategy and Business plan • Clear and motivating business vision • Clear project mission (related to business) • Clear definition of strategic goals • Clear business plan, describing benefits • Model of target business • Scope • Clear definition of ERP project scope • Limitation of scope to essential business functions

5. Culture, Communication, and Support • Senior management support • Project approval • Identifying project as top priority • Senior management participation • Defending and supporting project • Mediation in conflicts • Understanding of technology and issues • Proper resource assignment • Communication of shared vision • Communication of role of new system to staff • Identify and approve new organizational structures, roles and responsibilities • Approve codes of conduct

6. Culture, Communication, and Support • User involvement • Effective change management • Strong corporate identity • Open to change • Encouraging open communication • Determination to accept new technologies • Determination to overcome implementation problems • Project champion • Internal communication • Announcement of project scope, objectives before onset • Formal presentations / user participation (requirements, results) • Supplier management

7. Infrastructure • Standardized IT infrastructure • Suitable business and IT legacy systems

8. Approach Overall approach to project • Formalized project approach and methodology • “Skeleton approach”: limited start  expansion • “Single module”: module per module • “Big Bang”: complete system • Focus on user requirements • Use of external consultants • User training • Data accuracy (at conversion, at input) • Alignment with business processes

9. Project Management • Proper project planning, phasing and follow-up • Project goals description (realistic quality, time and cost goals) • Project scope • Identification business processes • Choice of modules • Identification of changes • Project phasing and critical path analysis • Milestones and deadlines • Resources plan • Project follow-up organization • Contingency measures

10. Project Management • Properly organized project management • Appropriate project teams • A single physical location • Incentives for delivery within time and budget • Incentives and risk-sharing agreements with partners

11. Critical Success Factors in Belgian SMEs Do these CSFs apply to Belgian SMEs? • 76 SMEs with known successful ERP implementations • #employees: 10  250 • Revenue < 50 mio euro • Balance total < 43 mio euro • Limited survey • 4 Representative cases • Different sectors • Structured interview of key players (IT, Management)

13. F-Co • Leading European manufacturer of latex foam • Sites in Belgium, Czech republic • Sales offices in 10 more countries • SAP implementation • Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, asset management, data warehouse • Single site • Project divided into subprojects • 10% modified • “Big Bang” roll-out

14. Duration: 6 months planned, 7-12 months effective Cost: 1 – 1.5 mio euro as planned Useful lifetime: 10 years F-Co: Project

15. F-Co: CSFs • Users heavily involved • Information and participation • Requirements identification • Training • No formal acceptance • Pivotal role of senior management • Project approval • Financial responsibility • Top priority • Change management • Organization open to change • Commitment to new technology • Determination to overcome operational problems

16. F-Co: CSFs • Change management • Project champion • Middle management • Defending project • Project approach and management • Mixed team with external consultants • Project manager selection criteria: competences and experience • Team members • Top performing staff • Mostly part-time involvement • Critical decisions: company management (close collaboration) • Incentive for delivery within time and budget

17. M-Co • Branch of world-wide provider of products and technologies for separation, heat transfer, fluid handling • Intentia ERP suite • Purchasing, order entry, materials management, financial accounting, distribution and logistics, financial management • Interface to data warehouse and reporting tools • Division into subprojects • 20% modifications

18. Duration: 7-12 months, slightly longer than planned Cost: 1 – 1.5 mio euro as planned Useful lifetime: 10 years M-Co: Project

19. M-Co: CSFs • User involvement (outside project team!) • Informed • Not actively involved • Only management participated actively • Requirements, advice and feedback • Positive acceptance of final result • Extensive training • Crucial role of Management participation • Approval • Responsibility • Identification as top priority

20. M-Co: CSFs • Change management • Corporate culture: flexibility, shared values, common goals • Open communication • Project champion • Middle management • Effective contribution unclear • Project approach and management • Project manager selection criteria: capabilities, flexibility, reputation • Team members • Mostly part-time • Consultation with management for critical decisions • No incentives

21. O-Co • European division of global player in development and production of vegetable oils • SAP implementation • Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, financial management, data warehouse, advanced planning • 30% modifications

22. Duration: 7-12 months as planned Cost: 1 – 1.5 mio euro as planned Useful lifetime: 5 years O-Co: Project ?

23. O-Co: CSFs • Particular attention to user involvement • Timely information • Requirements, remarks, feedback • Actively seek user approval • Active involvement top management • Approval • Identification as top priority • Conflict resolution • Active participation • Not final responsibility (final responsibility carried by member of operational management)

24. O-Co: CSFs • Change management • Corporate culture of open communication • Openness to change • Commitment to new technology • Strong will to overcome operational problems • Change agents and Project champion (middle management) • Emphasizing advantages • Defense against critics • Conflict resolution • Contacts with users • Detecting problems with system

25. O-Co: CSFs • Project management • Project team • Best staff members • 50% end users • Project manager selection criteria: capabilities, experience, reputation, flexibility • All critical decisions taken by corporate management • No incentives

26. W-Co • Provider of industrial and agricultural tires and complete wheels • Belgium: 3 sites • Intentia ERP • Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, financial management • Interface with data warehouse • 5% modifications • Loose planning • Split into subprojects

27. Duration: 7-12 months as planned Cost: 1 – 1.5 mio euro as planned W-Co: Project

28. W-Co: CSFs • Major user participation • Information whole community • Representation by a few users • Soliciting user input • Requirements, feedback • No formal approval • Training: “job helpers” • Top management instrumental • Approval • Alignment with corporate strategy • Identification as top priority • Conflict mediation • Necessary changes in corporate culture • Assumed final responsibility

29. W-Co: CSFs • Change management • Project champion • Project management • Project team • Best staff members • Mostly part-time • Project manager selection criteria: reputation, flexibility • Urgent decisions taken by project team • Proper communication with top management

30. Critical Success Factors in Belgian SMEs • Vision, Scope, and Goals • Vision, strategic goals, and business plan • Scope • Efficient management reporting • Culture, Communication, and Support • Senior management support • User involvement • Effective change management • Internal communication • Supplier management 4 4 ? 4 • Explicit scope limitation important 4 4 4 4 • Suitable corporate culture, open to change

31. Critical Success Factors in Belgian SMEs • Infrastructure • A standardized IT infrastructure • Suitable business and legacy systems • Approach • A formalized project approach and methodology • Focus on user requirements • Use of external consultants • User training • Data accuracy • Alignment with business processes 8 ? 4 4 4 4 ? 

32. Critical Success Factors in Belgian SMEs • Project Management • Proper project planning • Proper project management • Good project teams 4 4 4 • Variable project management • No critical path • No contingency • Project champion • Contribution not always clear • Project manager criteria: capabilities, experience • Mix of internal and external specialists

33. Conclusions • Important Critical Success Factors of ERP implementations in Belgian SMEs: • A clear vision on the strategic goals of the implementation • Senior management support • Active user involvement • A suitable corporate culture, open to change • Internal communication on the project (before, during) • Proper supplier management • Formalized project approach and methodology • Focus on user requirements • Use of external consultants • User training: technical, business, practice oriented • Proper project planning, phasing and follow-up • A mixed project team: users, internal technical and business experts, external consultants

34. Thank you