The implementation of an ERP system to improve business operations for SMEs in the local context

Abstract

Enterprise Resource Planning (ERP) systems are well organised systems which integrate an organisation’s business processes efficiently. It organises them into different segments called “modules” which are then used to run the core areas of the business such as sales management, inventory, finance, etc. Their efficiency and respective use of a centralised database is what differentiates them from other solutions. However, the substantially high implementation failure rate is to be taken into consideration as they may occur in 40% to 90% of projects. As a result of the increasing demand for these systems, the importance of reducing this failure rate is evergrowing as they require substantial investments which is a major obstacle for Small and Medium-sized enterprises (SMEs). This study aims to tackle the high implementation failure rate present in local SMEs which make up 99.8% of Maltese enterprises. This was attempted by conducting several interviews with experts in this field, from which a list of Critical Success Factors (CSF) and Critical Failure Factors (CFF), tailored for Maltese SMEs was extracted. CFFs are not as heavily researched as CSFs are, especially with regards to local studies. Therefore, the formulation of these lists means that the implementation process may be enhanced, and the subsequent implementation failure rates may also be reduced if these factors are given importance. As a result of this research, a number of factors influencing the success and failure of ERP implementations were identified, which appear to be unique to Maltese SMEs.