ERP Fail: When Best Practices Meet Real Life

  • Written By: TEC Staff
  • Published On: February 17 2011



Open University PhD candidate Gabrielle Ford has a new perspective on why, despite an abundance of expert insight, so many ERP implementations continue to fail. TEC is collaborating with Ford to provide a 20-minute survey for ERP users, and is offering three-day free access to its evaluation models and vendor data to readers who complete the survey. Take the survey now. This post signals the start of several contributions from Ford regarding the relationship users have with their ERP systems.

Organizations adopt enterprise resource planning (ERP) systems because of the benefits they expect to derive from their use. The critical issue for success is not whether the system is used (because you aren’t given a choice—you will use it), but rather that benefits arise from its use. While system use necessarily precedes full benefits realization (that’s not to discount the potential benefits to be gleaned from the exercise of gathering requirements and defining processes prior to system selection and implementation), it is the quality of the use that influences the degree to which benefits are achieved.

Why Companies Still Aren’t Happy
Almost 75% of companies report that their ERP systems have fallen short of their expectations, with negative outcomes, including problems of data inaccuracies, resistance by users, customer frustration, high staff turnover, and ultimately a loss in profits. To date, the reasons for this high failure rate are still unclear and are being examined.

But Gabrielle Ford, PhD candidate at the Open University, has a theory about what’s contributing to these statistics. According to Ford, “The stronger the commitment of employees to their occupational communities of practice, the more likely your actual work practices won’t be a great fit with your new ERP.”

Is Employee Commitment a Barrier to ERP Success?
Occupational communities of practice (OCoPs) are the professional organizations you belong to. For example, employees within the accounting and finance department may belong to the Institute of Chartered Accountants, or employees within the sales and marketing function may be members of the Chartered Institute of Marketing. The working practices of the members of these OCoPs are shaped, to a large extent, by the rules and policies that govern the community, and also influenced by the training, organizational experience, and apprenticeship that members undergo in order to become fully fledged and capable members of the community.

Organizations employ staff that belong to several OCoPs. It’s these OCoPs that shape the way companies do business.

In fact, it’s your commitment to your OCoPs—a commitment generally considered a desirable quality in an employee—that sways real-world work practices, and quite possibly presents barriers to the effective transfer of knowledge required for the ERP system to succeed.

ERP Systems Live in the Real World
Your ERP system is built around industry best practices, but the ERP system operates in a real-world workplace. While best practices are an ideal to which all enterprises aspire, real-world practices have evolved to suit the unique business requirements of the particular organization you work for, shaped and informed by your OCoPs. So real-world practices aren’t in perfect alignment with the best practices embedded within the system design. Misfits happen.

When misfits occur, the system can’t meet the needs of the users. In other words, compatibility is lost and therefore the quality of use is reduced. This causes user dissatisfaction, errors, workarounds, loss of productivity, the inability to realize expected benefits, and, ultimately, the perception that the system is a failure.

Is Compatibility a Pipe Dream?
Compatibility, the degree to which using an innovation (technology) is perceived as consistent with the existing sociocultural values and beliefs, past and present experiences, and needs of potential adopters, can be seen as synonymous with meeting user needs.

To enhance work practice compatibility when implementing an ERP system, you need to adapt either the system to suit the needs of the users, or the users’ existing practices to suit the business model embedded in the system. That requires a bidirectional transfer of knowledge between the source (ERP implementation team) and the recipient (the intended users). This transfer of knowledge occurs mainly during the implementation phase of the knowledge transfer process, but often with great difficulty and many known barriers.

So how do you reconcile how you want, or need, to work with how you’re now being forced to work?

Advocating User Needs
All of the critical success factors identified to date are focused on changing user behavior—essentially forcing the system onto the user—through such mechanisms as organizational change management, business process re-engineering, and assuring users that the system is really required.

Studies tend to focus on management: the impact of the system on company-level issues, such as return on investment (ROI), productivity, increased profits. Ford intends to change this. “The problems faced at the company level are simply a consolidation of the problems that occur at the level of the individual.”

Ford wants to refocus the issue: what impact does the ERP system have on the performance and job satisfaction of the users? Implementation teams need to fully understand, acknowledge, and respond to user needs. By uncovering these factors, companies—and software developers—can begin to implement ERP systems in a way that better suit employees, and improve the chances of implementation success.

ERP Satisfaction: A Survey
Ford has devised a survey to uncover some key factors related to user needs and behavior. The questions cover basic issues like:

  • Your involvement in the implementation of the computer system

  • Your perceptions of the system implementation team and your relationship with them

  • Your satisfaction with the current computer system


If you are a user of an ERP system, you are encouraged to participate—the survey takes only 20 minutes to complete, and the potential benefits are huge. Your responses will be completely anonymous.*

If you are an information technology (IT) manager or implementation consultant, please give your ERP users the opportunity to participate in this study. Please share the link to this survey.

TEC Advisor: Free Trial
TEC’s online software evaluation and selection application, TEC Advisor, contains detailed information about enterprise software solutions—collected directly from vendors and validated by TEC analysts—and helps companies make rational, justifiable software selections more quickly and more cost-effectively than traditional methods. TEC is offering a free three-day trial of TEC Advisor to all participants who complete the survey for an evaluation of a software model and vendor of their choice. It’s TEC’s way of thanking readers for providing valuable information about their experience with an ERP system.

It’s Sociotechnical
In Ford’s view, management and ERP vendors are too focused on implementing technology that promises productivity and profits. They need to remember the workforce that comprises the actual users of that technology. People in a workplace are not just automatons performing a task—they have an identity, a past, and individual differences such as cultural values and past experiences, and they belong to communities of practice, all of which shape their identities and beliefs and values and ways of working.

Management needs to remember that an ERP system, like all technology, is a sociotechnical system: it shapes, and should be shaped by, its users.

Gabrielle Ford is a PhD candidate at the Open University (Milton Keynes, United Kingdom). She has worked as a business systems analyst and financial specialist, published on the principles and evaluation of accounting information systems, and lectured on, among other subjects, human–computer interaction. In the coming months, she’ll be reporting on the progress she’s making with her research.

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*No personal information will be collected. Data you provide will be treated as confidential and is protected in compliance with the Data Protection Act, the Open University Ethics Principles for Research Involving Human Participants, and the Market Research Society's Code of Conduct.
 
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