1. Critical Success Factors of ERP Implementations in Belgian SME’s: A Multiple Case Study Claude Doom and Koen Milis H OGESCHOOL -U NIVERSITEIT B RUSSEL

2. ERP success Critical Success Factors (CSF) Most research: large implementations Focus on smaller ERP implementations in SMEs Focus on Belgian market –Many SMEs –Case study of 4 successful implementations Preliminary results

3. Critical Success Factors for ERP CSF: improves chances of successful project implementation Five groups: 1.Vision, scope, and goals 2.Culture, communication, and support 3.Infrastructure 4.Approach 5.Project management

4. Vision, Scope, and Goals Enterprise vision, ERP project scope, Implementation goals Vision, Strategy and Business plan –Clear and motivating business vision –Clear project mission (related to business) –Clear definition of strategic goals –Clear business plan, describing benefits –Model of target business Scope –Clear definition of ERP project scope –Limitation of scope to essential business functions

5. Culture, Communication, and Support Senior management support –Project approval –Identifying project as top priority –Senior management participation –Defending and supporting project –Mediation in conflicts –Understanding of technology and issues –Proper resource assignment –Communication of shared vision –Communication of role of new system to staff –Identify and approve new organizational structures, roles and responsibilities –Approve codes of conduct

6. Culture, Communication, and Support User involvement Effective change management –Strong corporate identity –Open to change –Encouraging open communication –Determination to accept new technologies –Determination to overcome implementation problems –Project champion Internal communication –Announcement of project scope, objectives before onset –Formal presentations / user participation (requirements, results) Supplier management

7. Infrastructure Standardized IT infrastructure Suitable business and IT legacy systems

8. Approach Overall approach to project Formalized project approach and methodology –“Skeleton approach”: limited start  expansion –“Single module”: module per module –“Big Bang”: complete system Focus on user requirements Use of external consultants User training Data accuracy (at conversion, at input) Alignment with business processes

9. Project Management Proper project planning, phasing and follow-up –Project goals description (realistic quality, time and cost goals) –Project scope Identification business processes Choice of modules Identification of changes –Project phasing and critical path analysis –Milestones and deadlines –Resources plan –Project follow-up organization –Contingency measures

10. Project Management Properly organized project management Appropriate project teams –A single physical location –Incentives for delivery within time and budget –Incentives and risk-sharing agreements with partners

11. Critical Success Factors in Belgian SMEs Do these CSFs apply to Belgian SMEs? 76 SMEs with known successful ERP implementations –#employees: 10  250 –Revenue < 50 mio euro –Balance total < 43 mio euro Limited survey 4 Representative cases –Different sectors –Structured interview of key players (IT, Management)

12. CompanyActivityEmployeesRevenue in 2006 (mio euro) F-CoLatex-foam 11334.1 M-CoProcess engineering 5714.5 O-CoVegetable oils 8784.0 W-CoTires and Wheels 5140.5

13. F-Co Leading European manufacturer of latex foam Sites in Belgium, Czech republic Sales offices in 10 more countries SAP implementation –Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, asset management, data warehouse –Single site –Project divided into subprojects –10% modified –“Big Bang” roll-out

14. F-Co: Project ComponentFraction of cost Hardware10% Software60% Consulting 5% Implementation team 5% Training20% Duration: 6 months planned, 7-12 months effective Cost: 1 – 1.5 mio euro as planned Useful lifetime: 10 years

15. F-Co: CSFs Users heavily involved –Information and participation –Requirements identification –Training –No formal acceptance Pivotal role of senior management –Project approval –Financial responsibility –Top priority Change management –Organization open to change –Commitment to new technology –Determination to overcome operational problems

16. F-Co: CSFs Change management –Project champion Middle management Defending project Project approach and management –Mixed team with external consultants –Project manager selection criteria: competences and experience –Team members Top performing staff Mostly part-time involvement –Critical decisions: company management (close collaboration) –Incentive for delivery within time and budget Project participantsFraction of staff Users50% Business analysts15% Technical experts10% External consultants25%

17. M-Co Branch of world-wide provider of products and technologies for separation, heat transfer, fluid handling Intentia ERP suite –Purchasing, order entry, materials management, financial accounting, distribution and logistics, financial management –Interface to data warehouse and reporting tools –Division into subprojects –20% modifications

18. M-Co: Project Duration: 7-12 months, slightly longer than planned Cost: 1 – 1.5 mio euro as planned Useful lifetime: 10 years ComponentFraction of cost Hardware30% Software35% Consulting10% Implementation team10% Training15%

19. M-Co: CSFs User involvement (outside project team!) –Informed –Not actively involved –Only management participated actively Requirements, advice and feedback –Positive acceptance of final result –Extensive training Crucial role of Management participation –Approval –Responsibility –Identification as top priority

20. M-Co: CSFs Change management –Corporate culture: flexibility, shared values, common goals –Open communication –Project champion Middle management Effective contribution unclear Project approach and management –Project manager selection criteria: capabilities, flexibility, reputation –Team members Mostly part-time –Consultation with management for critical decisions –No incentives Project participants Fraction of staff Users40% Business analysts20% Technical experts20% External consultants 20%

21. O-Co European division of global player in development and production of vegetable oils SAP implementation –Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, financial management, data warehouse, advanced planning –30% modifications

22. O-Co: Project Duration: 7-12 months as planned Cost: 1 – 1.5 mio euro as planned Useful lifetime: 5 years ComponentFraction of cost Hardware10% Software10% Consulting50% Implementation team20% Training10% ?

23. O-Co: CSFs Particular attention to user involvement –Timely information –Requirements, remarks, feedback –Actively seek user approval Active involvement top management –Approval –Identification as top priority –Conflict resolution –Active participation –Not final responsibility (final responsibility carried by member of operational management)

24. O-Co: CSFs Change management –Corporate culture of open communication –Openness to change –Commitment to new technology –Strong will to overcome operational problems –Change agents and Project champion (middle management) Emphasizing advantages Defense against critics Conflict resolution Contacts with users Detecting problems with system

25. O-Co: CSFs Project management –Project team Best staff members 50% end users –Project manager selection criteria: capabilities, experience, reputation, flexibility –All critical decisions taken by corporate management –No incentives Project participantsFraction of staff Users50% Business analysts10% Technical experts 0% External consultants40%

26. W-Co Provider of industrial and agricultural tires and complete wheels Belgium: 3 sites Intentia ERP –Purchasing, order entry, materials management, production planning, financial accounting, distribution and logistics, financial management –Interface with data warehouse –5% modifications –Loose planning –Split into subprojects

27. W-Co: Project Duration: 7-12 months as planned Cost: 1 – 1.5 mio euro as planned ComponentFraction of cost Hardware 5% Software15% Consulting50% Implementation team10% Training20%

28. W-Co: CSFs Major user participation –Information whole community Representation by a few users –Soliciting user input –Requirements, feedback –No formal approval –Training: “job helpers” Top management instrumental –Approval –Alignment with corporate strategy –Identification as top priority –Conflict mediation –Necessary changes in corporate culture –Assumed final responsibility

29. W-Co: CSFs Change management –Project champion Project management –Project team Best staff members Mostly part-time –Project manager selection criteria: reputation, flexibility –Urgent decisions taken by project team Proper communication with top management Project participantsFraction of staff Users10% Business analysts50% Technical experts20% External consultants20%

30. Critical Success Factors in Belgian SMEs Vision, Scope, and Goals –Vision, strategic goals, and business plan –Scope –Efficient management reporting Culture, Communication, and Support –Senior management support –User involvement –Effective change management –Internal communication –Supplier management Explicit scope limitation important 4 4 ? 4 4 4 4 4 Suitable corporate culture, open to change

31. Critical Success Factors in Belgian SMEs Infrastructure –A standardized IT infrastructure –Suitable business and legacy systems Approach –A formalized project approach and methodology –Focus on user requirements –Use of external consultants –User training –Data accuracy –Alignment with business processes 8 4 ? 4 4 4 ? 

32. Critical Success Factors in Belgian SMEs Project Management –Proper project planning –Proper project management –Good project teams 4 4 4 Variable project management No critical path No contingency Variable project management No critical path No contingency Project champion Contribution not always clear Project manager criteria: capabilities, experience Mix of internal and external specialists Project champion Contribution not always clear Project manager criteria: capabilities, experience Mix of internal and external specialists

33. Conclusions Important Critical Success Factors of ERP implementations in Belgian SMEs: –A clear vision on the strategic goals of the implementation –Senior management support –Active user involvement –A suitable corporate culture, open to change –Internal communication on the project (before, during) –Proper supplier management –Formalized project approach and methodology –Focus on user requirements –Use of external consultants –User training: technical, business, practice oriented –Proper project planning, phasing and follow-up –A mixed project team: users, internal technical and business experts, external consultants

34. Thank you