Critical Success Factors for the Implementation of Enterprise Resource Planning Systems in Malaysia

Enterprise resource planning (ERP) systems as the last version of Manufacturing Resource Planning (MRP II) can be considered as the most important development in the corporate use of information technology and is beginning to be the backbone of organizations. The difficulties and high failure rate in implementing ERP systems have been widely cited in the literature. Factors affecting ERP implementation are complex and abundant. Numerous authors have identified a variety of factors that can be considered to be critical to the success of an ERP implementation. The objective of this research is to identify and evaluate the critical factors that affect ERP systems implementation success in Malaysia. The importance of these factors and the measures of a successful ERP system implementation have been investigated. These critical success factors (CSFs) were derived through a process that involved identification and synthesis of those critical requirements for implementation that have been recommended by practitioners and academicians through an extensive review of the literature. Through this comprehensive review, ten factors were found to be critical to ERP implementation success: top management support, clear goals and objectives, communication, effective project management, business process reengineering, data accuracy and integrity, suitability of software and hardware, vendor support, education and training, and user involvement. By using questionnaire survey method, these factors were investigated in Malaysian companies in order to know their importance. A questionnaire including these criteria was formed to secure data from companies. To measure the importance of various critical factors, a five-point Likert scale was used in the questionnaire. Statistically the importance of the identified CSFs has been determined between Malaysian firms. “Top management support” and “Clear goals and objectives” have been shown to be the extremely important factors for ERP implementation in Malaysia. Case study review was conducted as a supplementary work to enhance the results of the survey. Data analysis showed that CSF is vital to ERP implementation and more awareness of CSFs leads to a more satisfied and successful ERP implementation. Moreover, the data analysis confirmed that more awareness of CSFs leads to more outcomes of ERP systems. This study proves the significance of CSFs in ERP implementation. The practical implications of this study are useful information about ERP systems situation in Malaysia. Recommendations from this study are useful for ERP vendors, consultants and Malaysian companies that are implementing ERP or expecting to implement it to make certain their success.

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