Avoiding Failure Implementation of Erp Projects by Adopting Project Management Practices

Avoiding Failure Implementation of ERP projects by Adopting

Project Management Practices: The Impact of Scope Management, Communication Management, Risk Management, Human Resource Management

Turki A. Aldowaihes

Webster University

Abstract

The evolution of enterprise resource planning (ERP) systems has been increasing ever since its initial development. Companies seek ERP systems as the most effective information technology solution for their business operations and productivity. It helps the companies integrate their various IT solutions of different business functions. Yet, as an ERP system requires the sharing of most organizations' resources, the implementation of the ERP system needs strict project management disciplines to avoid losing the ERP system and the adverse consequences of its failure -i.e. cost, time, and competitive advantage. Most ERP project implementations are subject to critical challenges such as scope creep, lack of project communication, poor risk planning, and insufficient in-house IT human resources allocation. To address these threats on the success of ERP project implementations, this term paper demonstrates how embracing project management practices, namely, project scope management, project communication management, project risk management, project human resource management contribute to a successful ERP project implementation.

Keywords: Enterprise resource planning (ERP), Project management body of knowledge (PMBOK)

Avoiding Failure Implementation of ERP projects by Adopting

Project Management Practices: The Impact of Scope Management, Communication Management, Risk Management, Human Resource Management

The project management practices should be fully utilized in implementing enterprise resource planning (ERP) projects because project management practices or disciplines are typically appropriate to any kind of project -whether it's engineering, software, construction, automotive, etc. The project management practices are defined by project management body of knowledge (PMBOK) which is a collection of processes and knowledge areas generally accepted as best practice within the project management discipline (Haughey, 2010). The PMBOK deals with application of knowledge, skills, tools, and techniques to meet project's requirements. The PMBOK is also adopted and recognized by IEEE standards (1940-2003) which states that "the subset of the Project Management Body of Knowledge that is generally accepted is identified and described in this guide. Generally accepted means that the knowledge and practices described are applicable to most projects most of the time, and that there is widespread consensus about their value and usefulness." (2003). Thus, the PMBOK project management practices identify five basic process groups and nine knowledge areas that are applicable for most projects, programs, and operations (Haughey, 2010). The five fundamental processes are initiating, planning, executing, monitoring and controlling, and closing. These five processes overlap and interact throughout a project or phases, as well as, they are considered in terms of inputs, tools and techniques, and outputs. The inputs are formed as documents, plans, or designs; while the outputs are formed as documents, or products. The tools and techniques are mechanisms applied to the inputs and outputs (Haughey, 2010).

The nine project management knowledge areas are project time management, project cost management, project quality management, project integration management, project scope management, project human resource management, project communications management, project risk management, and project procurement management (in regards to ERP project implementation process, the project management knowledge areas of scope management, human resource, communications, and risk management are the most critical areas for its successful implementation). These knowledge areas of project management are process-oriented. Meaning, each project management knowledge area involves all or some of the five processes. Particularly, this means project team is functioning within these nine project management knowledge areas through the five processes (see Figure 1). Consequently, the project is completed through the integration of project management five processes life cycle (see Figure 2).

The approach of PMBOK is covering most of the managerial essentials that are required for ERP project implementation. That is because, first, ERP systems provide significant benefits for the organizations who implement them for the purpose of replacing ineffective legacy systems, increasing communications between business functions, increasing, information processing efficiencies, improving customer relations, and improving overall decision making, the ERP projects are, in general, huge and complicated (Iskanius, 2009). Specifically, the ERP systems "are software packages composed of several modules, such as human resources, sales, finance and production, providing cross-organization integration of data through imbedded business processes," as well as, "these software packages can be customized to answer the specific needs of each organization." Esteves and Pastor stated (1999). Moreover, the ERP model consists of four conceptual components: software component, process flow, change management, customer mindset (Wonglikphai, n.d), (see Figure 3). The software component is perceived as the ERP product by the users for the reason of being the most visible component. This component contains various generic modules such as finance, human resource, supply chain management, supplier relationship management, customer relationship, and business intelligence. The process flow component demonstrates the flow of the information among the different modules within an ERP system. This component gives broader view for showing how the ERP system functions. The change management component is assisting to manage the impact of the ERP system changes on these following different levels: user attitude, project change, business process change, system change. Lastly, the customer mindset component is dealing with user resistance so that it is trying to influence user, team, and organization to embrace change or new system's way of functionality.

These four components are employed through a methodology which is considered a systemic approach to implementing these four components in an adequate integrated manner during