Developing a framework for Evaluation of ERP Pre-Implementation Readiness: The Case of Dashen Bank Share Company.
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Date
2016-02-01
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Addis Ababa University
Abstract
In recent years the use of Enterprise Resource Planning (ERP) systems has been increasing in companies and government corporations in developed countries, while developing countries lag far behind. However, due to recent economic growth, developing countries such as Ethiopia are increasingly becoming major targets of ERP vendors. As a result, there is now an urgent need for understanding ERP implementation issues in developing countries. Since they face additional challenges related to economic, cultural and basic infrastructure issues.
The purpose of this study is to investigate ERP Pre-implementation readiness using parameters (constructs) such as technical, organizational, and cultural in the context of Dashen Bank Share Company with the view to develop a framework for evaluation of ERP Pre-Implementation readiness and design a solution framework to address those issues. The Pre-implementation aspect is a critical step in the implementation process. We must take the necessary steps to ensure any company hits the ground running with their new system.
For achieving the objective, the study adopted Somers and Nelson’s twenty two CSFs (Critical Success Factors) as theoretical (conceptual) framework. In their study, they included ten financial institutions among others to study what CSFs can be relevant and appropriate. I believe the CSFs can represent the financial institutions in our country too. The adopted and other critical factors are discussed widely in various literatures and those are believed to be the key factors for successful ERP implementations by different researchers. This study provides some key insights into the Pre-implementation readiness issues in commercial banks in Ethiopia. In addition, the study investigates the challenges faced by organizations implemented ERP systems referring literature reviews and factors influencing ERP implementation in general.
This study employs survey method. Questionnaires were prepared based on the stated research model (theoretical framework). Twenty two end users from various departments of the organization with different job positions, roles, and work experience who also represented in the IT governance structure for ERP implementation were participated in this study. Purposive sampling were used for this research. These selected staff members are consisting of executive
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management, project managers, risk managers, IT professionals and department managers and were involved in their respective work unit’s business re-engineering processes for the proposed ERP implementation. Moreover, existing documents at the company were studied to gain more information about the company’s profile, business process studies performed by the consulting firm, business case studies and request for proposal documents to learn about the company and its initiatives for the specified project.
The research can be taken as a framework that guides us through successful ERP Pre-implementation preparation and evaluation in commercial banks and can also be considered as a pre-investment activity on which we ask ourselves about the environment we are in. I believe it is a decent inquiry and a sensible decision to investigate what the ERP demands and our existing environment to reconcile the gap before we break out with the project.
In order to answer the research questions and achieve the objective of the study, a critical success factors framework was adopted from Somers and Nelson and incorporated into eleven pillars to overall assess every dimension of organizational setup. These eleven pillars ultimately were classified under organizational, technological and cultural readiness aspects.
The organizational aspect of the organization comprises five pillars namely: IT strategy and planning, IT governance, Risk Management, Capacity and Capability. The technological aspect of the organization was erected by three pillars namely: Application management, Service management and IT resource management. In relation to cultural aspect of the organization, communication, commitment and Change culture were identified as pillars.
Questionnaires were prepared based on the eleven pillars I mentioned above. The questionnaires were distributed to twenty two participants and twenty of them successfully returned. The survey shows that the case company has limitations on the number of dimensions and has also shows areas the company must pay a visit to fill the gap. Based on the findings, this study proposes a framework for evaluation of ERP Pre-Implementation. This study is believed to ensure that we have a solid preparation and understanding about the upcoming implementation project, and in order to stay on timeline and within budget that can improve
the implementation of ERP system in commercial banks. It is recommended that any organization interested in implementing ERP can use the proposed pre-implementation framework to addresses all aspects of an organization to attain implementation success.
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Keywords
ERP, ERP pre-implementation readiness, ERP implementation