Computersight -

Enterprise Resource planning system is an integrated one large computer system which incorporates different sub-systems crossing many functional areas of a business. In essence it is a huge data base system to enable the business to coordinate the business well and also assist in making sound decision making and retrieval of information to manage day-to day activities efficiently. In nature it is a complex system and very costly.

As expected there is evidence that the enterprise resource planning software or system after implementation did not improve efficiency and also increase profitability by many large and medium size businesses around the world particularly in USA and in the western world. For example Nielson J.L in an article has highlighted that enterprise resource planning systems have not produced the results expected and has negatively affected many organizations.

In his article he has highlighted many factors contributed to this failure. The causes he has highlighted are cost overruns, incompatible and difficult to incorporate with existing systems, difficulty to customize the system for flexibility, training cost, poor quality of software in monitoring systems and security, staff not happy with the benefits of the system, difficult to get information, unable to help in planning, not compatible with business processes, power and politics, inadequate knowledge of business and systems, organizational cultural and structure issues.

The critical factors of successful implementation of the enterprise resource planning system they highlighted in this article and according to their research are efficient decision making framework, management structure, top management support, external expertise, balanced project team, research, clear goals focus and goals, effective project management, change management, user participation in implementation and planning process, education and training, presence of a leader, minimal customization, business

process reengineering, discipline and standardization, effective communication and best people full-time planning, technical

and business knowledge, culture, monitoring and evaluating performance, software development, testing and troubleshooting, management of expectations, vendor/customer partnership, use of vendor development tolls and selection of vendor package, interdepartmental cooperation and communication, information access and security and implementation approach.

In other words the enterprise resource planning in itself do not produce the expected benefits in all organizations and it depends on the way it is planned and implemented and the process used for its implementation and all stakeholders are involved and have the support of top management and the quality of the software and the strategic aim of introducing the system in the organization. It has to accept that the implementation is painful and must accept it is costly and prepare to accept this pain for the overall benefit of the organization. Project management and change management is very crucial to reinforce the benefits of such change and also be prepared to reengineer its business processes and practices. That is it must have the management structure and culture, which is prepared for the huge change this system introduces to the existing system and commit for such change and have a implementation approach considering its constrains and opportunities. If these critical factors are not considered when implementing such huge systems in large, medium organizations it will not deliver productivity benefits and also will not increase the profitability and competitiveness of the organization.