The University of Hanover

School of Economics and Management

The Institute for Information Systems Research

Prof. Dr. Michael H. Breitner

Dipl. Oec. Lubov Lechtchinskaia

Theme Nr. 6

ERP Implementation: IT project

management using the SAP Roadmap

Author: Ekaterina Gracheva

Matriculation Number: 2481380

Konradstrasse 2A

30826 Garbsen

E-mail: ekaterina_gr@yahoo.de

Hanover, 20.05.2010

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Contents

I. Introduction 2

II. Basic Definitions 3

II.1. Project and Enterprise Systems

(ES) Project Management 3

II.2. Enterprise Resource Planning Systems

SAP ERP 4

III. ERP Implementation Using the SAP Roadmap 8

III.1. ASAP 8

III.2. ASAP Roadmap 9

III.3. ASAP Benefits and Problems 13

IV. Critical Success Factors of the ERP Implementation 15

V. Summary 25

Bibliography 27

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I. Introduction

In the age of globalization and new technologies, competition between market players has

become enormous. This has led to new dimensions such as information advantage and

information technologies becoming an essential instrument for gaining this advantage. The

way in which companies use information and how they make it work for them determines

their success in the market. Business software applications enable the enterprises to optimize

data processing and increase the efficiency of their business processes immensely.

SAP – standing for Systems, Applications, and Products in Data Processing – is a world

leader in the provision of business software.1 The range of SAP products extends from distinct

solutions, which meet the needs of small businesses and mid-sized companies, to suite

offerings for global multinational companies. “SAP software supports enterprises around the

world to improve customer relationships, enhance partner collaboration and create efficiencies

across their supply chains and business operations.”2 In addition to developing business

applications software, SAP provides extensive training and consulting services, which support

customers in implementing the SAP software.

This work aims to analyse the implementation of the main SAP product – the Enterprise

Resource Planning (ERP) System. In order to speed up the ERP implementation projects, in

1996 SAP introduced the Accelerated SAP (ASAP) implementation methodology which aims

to enable new customers to utilize the experience and expertise gleaned from thousands of

ERP implementations worldwide.3 The SAP ERP implementation using the ASAP roadmap is

the focus of the theoretical part of this work. Furthermore, the discussion part of the paper is

dedicated to the analysis of the critical success factors (CSFs) of the ERP implementation. In

order to realise this, a couple of papers were studied dealing with the experience of the ERP

implementation.

In accordance with these objectives the paper is structured as follows: First, the basic items

used in this work are defined (Chapter II). Second, the ERP implementation using the ASAP

1 Arif, N. and Tauseef, S. (2008), p.20 2 SAP Unveils Road Map for Next Wave of SAP NetWeaver Innovations (2007), p.1 3 Esteves, J. and Pastor, J. (2001), p.1020

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roadmap is described (Chapter III). The critical success factors of the ERP implementation are

discussed in Chapter IV. Hereby the papers studying the experience of companies in

implementation projects are analysed and the SAP ERP implementation framework with the

roadmap phases and adequate critical success factors are elaborated. The conclusions follow

at the end.

II. Basic Definitions

II.1. Project and Enterprise Systems (ES) Project Management

According to the DIN norm 69901, a project is “an endeavour essentially characterized by

the uniqueness of its conditions within the context of the whole. The conditions include the

following:

- Agreed-upon goals

- Prescribed time

- Limited resources (personnel, material, financial and so on)”.4

A Guide to the Project Management defines the project as “a temporary endeavour undertaken

to create a unique product or service”.5 This means that every project has definite beginning

and end points and that the project outputs are different in some distinctive way from all other

products or services. Besides uniqueness (novelty) the following possible characteristics of

the project can be identified: complexity of scope, exposure to a high dynamic, requirements

for interdisciplinary collaboration and creation of specific organisation.6

Project management is defined as “totality of leadership skills – organisational, technical

and financial – used to achieve the goals of the project. <...> project management involves the

direct, cross-departmental co-ordination of the planning, monitoring and decision-making

processes for cross-departmental tasks”.7 The management of the project can be understood as

the application of knowledge, skills, tools, and techniques to project activities in order to meet

the project requirements and to achieve the project goals. It includes processes such as: 4 Draeger, E. (2000), p. 1 5 A Guide to the Project Management Body of Knowledge (2000), p. 4 6 Draeger, E. (2000), p. 1 7 Draeger, E. (2000), p. 2

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initiating, planning, executing, controlling and so on. The Guide to the Project Management

Body of Knowledge provides a well-developed systematic overview of project management

areas as Project Integration, Scope, Time, Cost, Quality, Human Resource, Communications,

Risk and Project Procurement Management.8

Like in the case of traditional projects, the following three pillars are important for ES

projects: functional requirements, costs, and deadlines. The organisation seeks more efficient,

faster and cheaper production with more functional requirements. In addition to these three

traditional elements, one other key pillar is essential for ES projects: How does the enterprise

move from the as-is to the to-be? “How is flexibility built into the processes to enable the

organisation to manage the evolution from the current state to the desired state?”9

II.2. Enterprise Resource Planning Systems; SAP ERP

“Enterprise Resource Planning (ERP) Systems or Enterprise Systems are software systems

for business management encompassing modules supporting functional areas such as

planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource

management, project management, inventory management, service and maintenance,

transportation and e-business.”10 Kumar & Hillsgersberg (2000) defines ERP as “configurable

information systems packages that integrate information and information-based processes

within and across functional areas in an organisation”.11

So ERP is a sophisticated software package designed to run an organisation’s core business

processes (like order entry, procurement, finance, manufacturing, warehousing, human

resources, etc.) in order to support, automate and optimize them.12

Why do companies implement ERP? A good overview of the benefits of the Enterprise

Resource Planning Systems is presented by Khan (2002). The typical benefits of an ERP

system are summarized as follows:

8 A Guide to the Project Management Body of Knowledge (2000), pp. 7 - 8 9 Portougal, V. and Sundaram, D. (2006), p. 79 10 Fui-Hoon Nah, F. (2002), p.36 11 Kumar and Van Hillsgersberg (2000), p. 24 12 Khan, A. (2002), p.1

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- in the sphere of business ERP supports companies with global operations and

accommodates rapidly changing business conditions;

- it improves the company’s internal integration by integration company-wide

data and information and enabling the better consolidation of team groups due

to the availability of centralized data in one system;

- ERP enables enterprises to standardize the business processes and implement

the best business practices;

- it provides flexibility for changes within the company, for example, ERP

allows the addition or upgrade of other system components or functionality due

to open system architecture; any change can be realized for all locations/groups

through a configuration change at one central point;

- ERP provides some benefits also in the sphere of reporting and information

access; it allows the availability and easy access to transaction flows and

document history, standard reports and customized reports can be developed;

- cost savings, inventory and personnel reduction, productivity improvements

and order management improvements etc.13

SAP is the world’s largest business software company and is globally recognized as a world-

class Enterprise Resource Planning (ERP) solution. More than 75 000 customers in more than

120 countries run SAP® applications worldwide.14 In 2008, SAP achieved more than 100 000

successful implementations worldwide with a customer base of more than 41 000. According

to the ERP Market Sizing Report, SAP took first place among ERP vendors ranked by

application revenue in the years 2005 and 2006 (Table 1). The 2010 ERP Vendor Analysis

Report outlining the actual ERP selection and implementation from 1600 organisations

around the world announced SAP as the most short-listed ERP solution.15

Until December 2003 the SAP’s predecessor of the ERP system was SAP R/3. “R” stands for

real-time and the number “3” relates to the three-tier client-server architecture including

database layer, application layer and presentation layer.16 After the mySAP ERP 2004

solution the last version provided was SAP ERP 6.0. The application delivers the following

solutions, which are described briefly below:

13 Khan, A. (2002), pp. 4-7 14 Gruber, S. (2008), p.4 15 Home Page of “Panorama Consulting Group” (version 17.04.2010): http://panorama-consulting.com/the-2010-erp-vendor-analysis-results-are-in-and-the-winner-is/ 16 Arif, N. and Tauseef, S. (2008), p.20

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• SAP ERP Financials

• SAP ERP Human Capital Management

• SAP ERP Operations

• SAP ERP Corporate Services17

Table 1: ERP vendors ranked by application revenue, 2005-

200618

17 Dosch, T. (2007), p.7 18 Jacobson, S. Et al. (2007), p.5

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The aim of the SAP ERP Financials is the meeting of the actual challenges in finance with the

industry-leading financial management software. It enables the enterprises to address

changing financial reporting standards, and optimize the control over cash flows and financial

risk’s management.19

SAP ERP Financials consists of Financial Supply Chain Management, Financial Accounting,

Managerial Accounting, and Corporate Governance.20 Financial and management accounting

produces, e.g., the high-quality financial and managerial reports that meet the requirements of

the international accounting standards with a company-wide control, the integration of

financial information and the central tracking of financial data. Other features are, e.g.,

valuation and documentation of the financial data including all cost- and revenue-related

reporting.21 The “financial supply chain management” (SAP FCSM) helps to analyse the

customer credit worthiness, manage the customer credit risk exposure, reduce the average

collection period and ensure the faster accumulation of delinquent payments.22 The “Treasury

Application” provides a system of control over hedging transactions and allocating cash.23

SAP ERP Human Capital Management (SAP ERP HCM) enables enterprises to optimize their

HR processes like attracting the right people, developing and leveraging their talents,

combining their efforts with corporate objectives and achieving top performance. Talent

Management, Workforce Analytics, Workforce Process Management and Deployment are a

part of SAP ERP HCM.24

The SAP ERP Operations solution aims at the provision of the operational effectiveness in the

main business areas like product development, manufacturing, procurement and sales. The

optimization of the day-to-day operations in order to achieve cost reduction, maximization of

profitability, improvement of customer service and increased earnings are the goals of this

solution.

19 SAP home page (version 01.05.2010): ERP Software From SAP: http://www.sap.com/solutions/business-suite/erp/index.epx 20 Sharma, S. (2009), p. 28 21 SAP home page (version 01.05.2010): Features & Functions of SAP ERP Financials: http://www.sap.com/solutions/business-suite/erp/financials/featuresfunctions/fin_managerial_accounting/index.epx 22 SAP home page (version 01.05.2010): Features & Functions of SAP ERP Financials: http://www.sap.com/solutions/business-suite/erp/financials/featuresfunctions/fin_supply_chain_mgmt/index.epx 23 SAP home page (version 01.05.2010): Features & Functions of SAP ERP Financials: http://www.sap.com/solutions/business-suite/erp/financials/featuresfunctions/treasury_applications/index.epx 24 SAP home page (version 01.05.2010): ERP Software From SAP: http://www.sap.com/solutions/business-suite/erp/index.epx

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The SAP ERP Corporate Services solution supports enterprises in the efficient management

of enterprise assets, safety compliance, corporate travel and real estate. The latter helps to

reduce costs arising from real estate development and property issues. SAP ERP Corporate

Services provides support in project and portfolio management, environment, health and

safety management.25

III. ERP Implementation Using the SAP Roadmap

As mentioned in Chapter II the ES project management has to find a way to enable the

organisation to manage the evolution from the current to the desired state. The successful ERP

implementation is an ambitious goal even for the experienced project manager. The industries

have looked for a solution that could ensure a quick and cost-effective ERP implementation

and observable return on the ERP investment. SAP took note of this need and developed a

standardized implementation methodology for project management – the Accelerated SAP

(ASAP).26

III.1. ASAP

ASAP is a structured implementation approach, the aim of which is to ensure the successful

on-time delivery of the project by providing templates, methods, tools etc. that have been built

based on the previous experience of thousands of successful SAP implementations.27 ASAP is

SAP’s total implementation solution; it optimizes time, quality, and effective resources in

ERP implementations. This complete solution consists of four elements:

1. ASAP roadmap

2. Toolkit, which designates all the tools employed in ASAP

25 SAP home page (version 01.05.2010): ERP Software From SAP: http://www.sap.com/solutions/business-suite/erp/index.epx 26 Miller, S.S. (1998), p.2 27 Arif, N. and Tauseef, S. (2008), p.21

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3. Service and support are further components of ASAP including consulting from the

first planning stages through completion of the implementation and to education and

support services like hotline, archiving etc.

4. Training including training strategies for the project team and end-user training, and

train-the-trainers techniques for effective knowledge transfer from the project team.28

III.2. ASAP Roadmap

The ASAP roadmap gives a detailed algorithm for all implementation activities. It structures

the implementation process into five phases and offers detailed project plans to assist the

project team by implementing the ERP. The documentation stored at each level of the

roadmap tree structure contains recommendations for ERP implementation and links to

helpful tools and accelerators.29 The aim of the ASAP Roadmap is the detailed demonstration

of the totality and coherence of the project. It designates exactly what must be realized in each

phase.30 The ASAP roadmap addresses the following five phases and can be presented

graphically:

1. Project preparation (15-20 days)

2. Business blueprint (25-40 days)

3. Realization (55-80 days)

4. Final preparation (35-55 days)

5. Go live and support (20-24 days)31

Figure 1: ASAP Roadmap32

28 Miller, S.S. (1998), pp.11-12 29 SAP home page (version 12.04.2010):

http://help.sap.com/saphelp_47x200/helpdata/en/48/623972d55a11d2bbf700105a5e5b3c/content.htm 30 Miller, S.S. (1998), p.13 31 Brandt, H. (1999a), p. 23

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Each phase is structured as follows: it consists of a group of work packages which are

structured in activities. Each activity includes a group of tasks. Each task implies a definition,

a set of procedures, results, deliverables and documentations.33

1. Project preparation is the initial phase of the project where planning and preparation

work have to be done. Each project should have exact-defined objectives and a

precisely developed plan for achieving it.34 During the project preparation phase the

strategy for the ERP implementation should be determined, the project team has to be

identified and mobilized, the project standards have to be defined, and the project

work environment has to be set up.35 The technical project team has to determine the

technical demands and select the database and hardware vendors.36

The further deliverables from the first phase should be:

� Confirmation of high-level scope: the identification of the modules, that needs

to be implemented like Financials, Controlling, and Materials Management etc.

� Agreement on a technology plan through the key IT and functional

stakeholders, i.e. the commitment about the SAP version etc.

� Project milestone dates

� Definition of the methodology

These points should be presented in project charter. They are the overriding principles

and guidelines for the project.37

2. Business blueprint

The main objective of this stage is to document the business requirements for the

implementation.38 The SAP ERP implementation project should formulate a clear

conceptual design collecting current valid business requirements (so-called “as-is”),

and conforming how the SAP solution will meet these requirements (called “to-be”).

In order to achieve this, discussion meetings and workshops with the key stakeholders

32 http://www.sceis.sc.gov/images/roadmap.jpg 33 Esteves, J. and Pastor, J. (2001), p.1020 34 Arif, N. and Tauseef, S. (2008), p.21 35 Rainer, E. (2005), p. 1 36 Hartwig, B. (1999b), p. 5 37 Arif, N. and Tauseef, S. (2008), pp.21-22 38 Gulledge, T. And Simon, G. (2005), p.716

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are needed. At the end of this phase the conceptual design must be formulated in a

business blueprint document.39

The developing the blueprint document is accompanied with some further tasks:

� Capturing a list of reporting requirements;

� Listing of enhancements: approval of functionality that is not provided by

standard SAP and will require custom development;

� Creation of a prototype system to show the functionality of the accepted

solution;

� Development of date migration strategy from legacy system;

� Mobilization of technical, financial and human resources for training and

change management etc.40

3. Realization

The aim of this phase is to configure the ERP system. The output of this phase is the

“baseline system” based on the agreed-upon business blueprint and configured to

match the “company structure” 100 percent.41 The realization is the longest phase of

the ERP implementation and also requires the completion of the following tasks:

� The organizational change management and internal communication strategy

have to be implemented;

� Test scripts and performance of unit testing and integration must be developed;

� User training and documentation must be developed and provided

� User roles for access to the system have to be defined and configured;

� Field mapping and cleansing activities for data migration have to be detailed

� The cutover plan to control activities during the go-life period has to be

developed.42

At the end of this phase, project management has to prove the status of deliverables for

completeness and accuracy. In addition to this internal quality check an external,

independent third party quality control should be organised.43

39 Arif, N. and Tauseef, S. (2008), p.23 40 Arif, N. and Tauseef, S. (2008), p.23 41 Gulledge, T. And Simon, G. (2005), p.716 42 Arif, N. and Tauseef, S. (2008), p.24

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4. Final Preparation (Cutover)

The purpose of this phase is to complete the final preparation of the ERP system for

going live. The Final Preparation phase focuses on the administrator and end-user

training, the final system tests and the beginning of the data-load exercise. It can be

considered a cutover period with the objective to transfer existing data, functions and

users from an old to a new system. This phase includes the following deliverables:

� Any open issues like a report setting, training etc. must be solved;

� The training must be complete;

� The disaster recovery scenario has to be provided;

� The final sign-offs (go or no-go decision) have to be received.44

5. Go Live and Support

In this the final phase of the implementation project. The newly implemented SAP

ERP system has to be declared as “live” for “day-to-day” business usage.45 The data

must be migrated from the legacy systems, the activation of the new system must

occur and the post-implementation support has to be organized.46 “Immediately after

going live, the system is reviewed to ensure that the business environment is fully

supported. This means validating the business processes and technical parameters, and

interviewing end-users”.47

Users have normally a lot of questions during the first few weeks. For this reason, the

project team must establish the help-desk covering the calls and e-mails coming from

the end-users according to the ongoing activities and problematic issues. The long-

term release strategy has also to be defined at the end of this phase.48

43 Home Page of “Enterprise Resource Planning Portal” (version 12.04.2010): http://www.erpgenie.com/sap/asap/roadmap.htm 44 Arif, N. and Tauseef, S. (2008), p.24 45 Batni, B.R. (2008), p. 3 46 Rainer, E. (2005), p. 1 47 Gulledge, T. and Simon, G. (2005), p.717 48 Brandt, H. (1999b), p.7

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III.3. ASAP Benefits and Problems

The usage of the Accelerated SAP program by implementation of the ERP system has several

benefits. First, quality, time and efficient resources utilization are optimized throughout the

implementation. The program’s five phases beginning with collecting and assessing the

resources of the company and ending with the Go Live and supporting stage places you at a

distinct advantage in terms of time, and organises the project so that everyone can work

together as a cohesive unit.49

Second, it offers the standard approach to ERP implementation for partners and consultants so

that you are assured of the quality and guaranteed implementation knowledge. The ASAP

program was developed and tested at customer sites by SAP to ensure the faster returns on

ERP investments. The SAP team examined the collective experiences of ERP

implementations over many years so that ASAP methodology has been refined across a huge

number of implementations. On the basis of this broad empirical data the successful

accelerators in business processes were determined.50

Third, SAP has a professional services organization. It supports the Accelerated SAP program

by providing its own consultants in order to assist customers before and during the

preparation phase. They also assure that there is always an SAP manager available for

customers and consultants during all five phases. The SAP consultants offer specialized SAP

product knowledge and quality assurance for successive implementations. “The result is that

the majority of Accelerated SAP customers are in a position where they can evaluate potential

professional service providers to enhance their internal capabilities and the support that the

SAP consultants offer”.51

In order to support the initiation of the Accelerated SAP, SAP provides so called “spring

training” classes for partners giving detailed information about people, tools, and processes

that make up this program. The training classes about the ASAP techniques are results in

partner certification. SAP certifies implementation partners in order to provide the effective

utilization of the Accelerated SAP.52

49 Miller, S.S. (1998), p.202 50 Miller, S.S. (1998), pp.202-203 51 Miller, S.S. (1998), p. 213 52 Miller, S.S. (1998), p.214

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Gulledge, T. and Simon, G. (2005) describe the SAP implementation methodology, and

clarify the problems arising from using ASAP. The standardized character of ASAP has a

disadvantage for companies with unique and unusual business processes. In case of one-of-a-

kind requirements, e.g., DoD Funs Management or Moving Average Cost calculations, the

ASAP methodology can lead to suboptimal results of the implementation project and

inefficient business process configurations.53

53 Gulledge, T. And Simon, G. (2005), p.718

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IV. Critical Success Factors of the ERP Implementation

As we have seen ASAP was developed as so-called “Rapid Implementation Methodology” to

avoid the excessive implementation cycle times and cost overruns.54 However, the success of

this methodology is still disputed. On the one hand, there are a lot of examples described in

the modern literature showing that many companies had improved their productivity and

organisational culture, optimized their human resource management and minimized costs

through a successful ERP implementation. On the other hand, there are also many enterprises

which underestimated the risks in ERP projects and failed in its implementation. The question

we are interested in is which factors can affect the success of the ERP implementation project

and its particular roadmap phases presented above from an empirical point of view. To find an

answer, papers dedicated to the identification of the critical success factors of the ERP

implementation and their relevance for the diverse phases of the SAP roadmap were analysed.

In order to show the results systematically the table of ASAP roadmap phases and adequate

CSFs is elaborated (Table 3).

The first critical success factor we would like to point out is the optimal selection of the

project leader and project team members. As mentioned above in the first ASAP stage the

project team has to be put together. Within this step a number of important factors can affect

the success of the ERP implementation. M. Al-Mashari, et al. (2006) refer to individual ability

of each project team member to take on the management tasks with high motivation, an open

mind and professionalism as important elements of the ERP implementation project. The

successful execution of people-oriented and work-oriented leadership tasks is needed. The

first task’s group aims at getting people in a team to communicate with each other to manage

conflicts and supply positive and corrective feedback. The second task’s group deals with

monitoring and setting goals and providing any needed recourses.55

The optimal project team must consist of a wide range of various talents with flexible and

creative management styles. Esteves, J. and Pastor, J. (2001) called this the “adequate project

54 Gulledge and Simon (2005), p.716 55 Al-Mashari, M. et al (2006), pp.173-174

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team composition”56. The following is a suggested list of ideal criteria for the selection of the

project team members:

- Some persons who know the process inside-out and some persons who do not

know the process at all;

- Some customers, if possible;

- One or two technology gurus;

- Some team members representing impacted organisations;

- And “each person your best and brightest, passionate and committed”.57

The project team composition is more relevant in the first phase of the roadmap, which is why

this factor is placed in Table 3 accordingly in the first line of “the project preparation” and in

the column “the project management”. But it must be emphasised that the project team can be

restructured along the implementation phases to meet the implementation needs.

W.-H. Tsai et al. (2005) analyse the correlation between the ERP project failure and six

critical factors like time frame and project management problems, technology planning

problems, training and learning problems, system integration and testing problems, leadership

problems, and change management problems. The study was conducted with a sample of 657

enterprises in Taiwan. About 60.7 percent of the responses belong to the manufacturing

sector, and 39.3 percent fall in the service sector. The failure reasons of the ERP

implementation projects were examined on the basis of the questionnaire answered by top

managers, project managers, key project members and end users of the responses’ group. The

study results show that the problems with the ERP system implementation are more about

people than about process and technology (Table 2).58

As Table 2 shows, the three common types of critical factors were statistically confirmed:

time frame and project management problems, training and learning problems, and change

management problems. The first group includes the fact that many implementation projects

are late or delayed. The reasons are poor schedule estimates and uncertainty about the time

frame of the ERP implementation. Many implementation projects exceed the planned budget

56 Esteves, J. and Pastor, J. (2001), p.1020 57 Al-Mashari, M. et al. (2006), p.174 58 Tsai, W.-H. et al. (2005), pp. 232-233

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because of poor project management or poor scope identification.59 Both contents belong to

the project preparation phase – Table 3.

Table 2: Descriptive statistics, correlations and reliability60

Training and learning problems are identified in the study of W.-H. Tsai et al. (2005) as

statistically the next most common reasons cited for ERP implementation failure. They refer

to the lack of user training. End users will become frustrated if they have to use the system

without an exact knowledge and understanding of the various business processes behind the

ERP applications.61 As we know, SAP provides an effective training programme for the end

users and is an objective of stage 4 of the roadmap. However, in the previous phases the

project-team training and the preparation of the end-user training have to be organised.

The third group of problems empirically identified in the study mentioned above was the

change management. The ERP implementation leads to structural, organisational and

personnel changes in companies. The provision of the high professional change management

is a key element in the successful on-time delivery of the project. The detailed description of

the change management and its role in the ERP implementation project can be found also by

59 Tsai, W.-H. et al. (2005), p. 233 60 Tsai, W.-H. et al. (2005), p. 233 61 Tsai, W.-H. et al. (2005), p. 233

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M. Al-Mashari et al. (2006). The change management includes the following four critical

factors:

1. Communication

2. Sponsor involvement

3. Resource and training

4. Personal Management.62

The first step of the change management is the understanding of the gap between advocates of

change and those who resist it. In order to overcome this problem, the top management and

project leader should learn who will be affected by the change and also how the change will

be allowed and brought forward by those affected, through communication with them. The

personal management is responsible for the communication on the level of the individual

members: the major task here is to send a clear message about why the company needs

change and what the company and individual benefits from this change are.63 W.-H. Tsai et al.

(2005) also indicate the lack of communication as one main reason for ERP implementation

failure. “Communication should not occur only within the small group of project team

members. Frequent interlocking discussions between different functional teams should also be

scheduled. <...> additionally, communication should include feedback from the end users

during the design phase”.64

Top management’s commitment and leadership make real the sponsor’s involvement to have

a significant impact on the success of the change through the ERP implementation. The role

of the top management within the project is to make the change policy understandable and

attractive and to provide an open discussion environment to create the best way of

organisational change. The visible commitment of the top management in the ERP

implementation project, the top management training for change and communication with

stakeholders are recommended as a good way to advocate the change process in the company.

Some possible mistakes the top management can make in this context are not having direct

involvement in the project, sending inconsistent signals, not communicating enough, changing

priorities too soon, not understanding the importance of the change management in a

company and hence not adequately providing the needed resources.65

62 Al-Mashari, M. et al. (2006), p.175 63 Al-Mashari, M. et al. (2006), pp.175,176 64 Tsai, W.-H. et al. (2005), p. 226 65 Al-Mashari, M. et al. (2006), p.175

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Also some other authors determine the sustained management support, in other words “the top

management buy in”66 as an important critical factor for the success of the ERP

implementation. The Unified Critical Success Factors Model for SAP Implementations of

Esteves, J. and Pastor, J. (2001) can be mentioned as an example. In this study the relevance

of this factor for the beginning and the end of the implementation project is emphasised: “The

reason is that at the beginning senior management should help in the rollout of the project. At

the end, there is the need to encourage the system usage and help in the commitment of user

involvement”.67

Another factor affecting the success of the ERP implementation is the human resources of the

company, which means the number, ability and skills of the members. Training and

recruitment policy should follow the organisation change concept. The ERP implementation

is a knowledge-intensive process and has to be accompanied with the needed knowledge

transfer to the employees.68

It is evident that the human recourse training and know-how transfer have to be provided in

particular in the beginning of the implementation project while the personal management,

communication and sponsor involvement are important within the whole project duration.

However Esteves, J. and Pastor, J. (2001) especially emphasised that the “strong

communication inwards and outwards” more relevant in the first two roadmap phases because

of a strong need for communication between senior management and the project team to

define the project plan and scope, and in the final phase where the strong communication with

the whole organisation is required in order to start the go live & support of the SAP system.69

These three elements are ordered accordingly in the mentioned roadmap phases and areas

management and human resources (Table 3).

Two further case studies analysing the factors which facilitate or inhibit the success of ERP

projects are provided by Motwani, J. et al. (2002). Data was collected by interviewing

members of the two organisations and by studying their achieved records. One company had a

positive ERP implementation experience; the other a negative one. The first company is 66 Home page “The Spot 4 SAP” (version 13.04.2010): http://www.thespot4sap.com/Articles/Critical_Success_Factors.asp 67 Esteves, J. and Pastor, J. (2001), p.1020 68 Al-Mashari, M. et al. (2006), p.176 69 Esteves, J. and Pastor, J. (2001), p.1023

20

working in the pharmaceutical industry; the second in the footwear industry. The data was

collected by studying archival documents and conducting interviews at various levels of the

enterprises. The importance of the CSF’s presented in Figure 3 below was examined.

Similar to studies of W.-H. Tsai et al. (2005) and M. Al-Mashari, et al. (2006) the role of the

effective provided change and process management as two essential parts of the ERP

Implementation management is emphasized here. However, contrary to both authors,

Motwani, J. et al. (2002) point out the role of information technology (IT) in the success of

the ERP implementation, especially regarding so-called IT leveragability. Enterprises have to

ensure that users and all functional areas are considered in the system’s development process.

In order to achieve this, the business analyst group can be formed and given access to the ERP

virtual screens in order to provide additional feedback to the ERP experts.70 The company that

was successful in the ERP implementation project involved such a group in the pilot testing of

the system. In the “dry ran” the team entered orders and tracked them as they were

downloaded to the warehouse, and included in financial reports and transactions. The

successful response company started this process as soon as the ERP crew had set up the

system and kept it going until two months before the “go-live date”. IT leveragability is

placed in Table 3 accordingly.

The next CSF determined by Motwani, J. et al. (2002) differing him from the previous

authors is the strategic initiatives, which take central place in the critical success factors

system (Figure 2) and include a number of elements. Strategy-led proactive stimuli and

formulation scope like, e.g., articulation and maintenance of the strategy of the revolutionary

change from the beginning of the implementation project belong to this field.71 Esteves, J. and

Pastor, J. (2001) share this view and emphasise the importance of the formulation scope for

the project preparation stage because within this time frame the project managers have to

define the scope and for the last two phases of the ASAP road map because the scope is

usually revised and changed.72

70 Motwani, J. et al. (2002), p.92 71 Motwani, J. et al. (2002), p.88 72 Esteves, J. and Pastor, J. (2001), p.1023

21

Figure 3: ERP implementation management73

Also the top management style in the decision-making process indicates the significant

difference between the two response companies. Motwani, J. et al. (2002) found that the

autocratic managerial style “with top management mandating initiative without taking into

consideration the majority sentiment of the company”74 was evident in the company which

failed in the ERP implementation. The interview with one employee of this company

describes the problem well:

‘We <...> tried to prepare ourselves for the implementation in every means possible.

Thousands of hours of training classes were completed and selected individuals were polled

for their opinion of readiness for the ‘‘go-live’’ date. However, upper management ultimately

made the decision to throw the ‘‘ON’’ switch before the employees believed in or understood

the software. The result was extremely costly, not only in dollars, but also in lost customers

and customer service. Many employees wondered why the switch was ever made from the

73 Motwani, J. et al. (2002), p.85 74 Motwani, J. et al. (2002), p.88

22

legacy AS/400 system to the ERP. Employees were disturbed and frightened by the new and

complicated ERP system’’.75

Contrary to the so-called autocratic managerial style, the team approach was preferred and

realized at the second company. This was achieved through corporate-level initiative and

significantly supported the implementation project: “The staffing of the project was the first

challenge at hand. A strategic thinking team was assembled to assess the benefits and

drawbacks of the ERP software. The crew attended seminars and spent countless hours

discussing alternative systems. At least one representative from each function of the business

was included in the group and at least one individual from each division. The group decided

to implement the ERP in only the marketing and finance functions of the business. Only the

basics of the ERP were implemented. The idea was to introduce the system, stabilize the

system, and build upon the foundations to optimize the system”.76

The next CSF empirically defined as the factor affecting the success of the ERP

implementation is cultural readiness.77 This refers to the human resources of the company

and, according to the ideas of W.-H. Tsai et al. (2005) and M. Al-Mashari, et al. (2006),

stands alongside sponsor involvement, knowledge transfer and communication as important

elements which prepare the whole company at the HR level for the harmonic adoption of the

ERP system. Further CSF’s defined in the study by Motwani, J. et al. (2002) like knowledge

sharing, feedback loops and learning capacity were found by both authors mentioned above

and are shown in Table 3 (s. below).

In addition, the importance of the process management practice is emphasised. The successful

process management includes the use of the process measurement in the form of, e.g., process

metrics, process information capture, improved feedback loops and process audit.78 Esteves, J.

and Pastor, J. (2001) point out the so-called preventive troubleshooting and its relevance for

the final phases, especially in the fourth phase where issues can arise while the system is

being tested.79

Last but not least the technological perspective studied in the Unified Critical Success Factors

Model for SAP Implementations of Esteves, J. and Pastor, J. (2001) have to be integrated in 75 Motwani, J. et al. (2002), pp.89-90 76 Motwani, J. et al. (2002), p.90 77 Motwani, J. et al. (2002), p.92 78 Motwani, J. et al. (2002), pp.86, 92 79 Esteves, J. and Pastor, J. (2001), p.1024

23

the implementation overview shown in Table 3. Within the critical success factors in this

context the obvious elements like the adequate ERP version and adequate software

configuration have to be observed. The adequate ERP version is equally relevant for all the

phases of the roadmap. From the beginning until the end of the project, SAP advocates the

upgrade and adoption of new SAP releases. The adequate software configuration is a case of

the final preparation phase of the roadmap; it should follow the business requirements defined

in the previous phase.80

The adequate legacy system knowledge is less important at the first stage of the

implementation project because it aims at the preparation of the ERP implementation. But in

the following roadmap phases the knowledge of the legacy system plays an important role in

minimizing the effort of configuration and supporting the migration of data and development

of interfaces.81 We put this last element in the implementation overview shown in Table 3 and

proceed to the summary part of this paper.

80 Esteves, J. and Pastor, J. (2001), p.1024 81 Esteves, J. and Pastor, J. (2001), p.1024

24

Table 3: Summary Overview of the ERP implementation project: ASAP Roadmap, Phases and Critical Success Factors

ASAP

Roadmap:

5 phases

The main goal of the phase Key Deliverables of the

Phase Critical Success Factors

Strategy

M.J.*

Technology

M.J., E.P.*

Management M.J., A.M., T.W.H., E.P., *

Human Resource M.J., A.M., T.W.H,

E.P. *

Project Management

M.J., A.M., E.P.*

Change Management

T.W.H., E.P. *

1. Project

preparation

Initial planning and preparation for an ERP implementation project. Identification of the needed modules. Identification of the objectives, scope and priorities of the project.

Project Charter, Project Plan, Scope, Project Team Organisation, Standards, Project Methodology & Procedures. Project milestone dates.

Strategic initiatives: stimuli, formulation scope, decision making, strategy-led.

IT leveragability, adequate ERP version.

The optimal selection of the project leader and project team. Time frame, exact schedule and budget estimates, sustained top management support.

Personal management, communication, sponsor involvement. Strong communication inwards and outwards.

Motivation, individual abilities, talents and skills. Project-team training, knowledge transfer. Learning capacity.

2. Business

blueprint

Documentation of the business requirements for the ERP implementation; development of the clear conceptual design.

Business Blueprint. List of reporting requirements, development of date migration strategy from legacy system, mobilization of resources.

Team approach

Adequate legacy system knowledge IT leveragability, adequate ERP version.

Process measurement, process metrics, process information capture.

Strong communication inwards and outwards. Personal management, communication, sponsor involvement.

Learning capacity.

3.

Realization

System configuration, performance of the unit and integration testing. Data mappings and data requirements are finalized for migration.

Baseline system, organizational implementation of the change management and internal communication strategy. The definition of the user roles for access to the system. The cutover plan to control activities.

Team approach

Adequate legacy system knowledge IT leveragability, adequate ERP version.

The successful execution of people-oriented and work-oriented leadership tasks Feedback loops, process audit. Preventive troubleshooting.

Personal management, communication, sponsor involvement.

Learning capacity.

4. Final

preparation

Administrator and end-user training, the final system tests, the data load exercise. Transfer existing data, functions and users from an old to a new system.

Solve any open issues like a report setting; the training is complete; the disaster recovery scenario is provided; the final sign-offs are received.

Team approach. Formulation scope.

Adequate software configuration, IT leveragability, adequate ERP version, legacy system knowledge.

Personal management, communication, sponsor involvement.

End users’ training Learning capacity.

5. Go live

and support

Migration of the legacy data to SAP, activation of the new system. The organisation of the post-implementation support.

The system is reviewed to ensure that the business environment is fully supported.

Team approach. Formulation scope.

IT leveragability, adequate ERP version.

Sustained top management support.

Personal management, communication, sponsor involvement.

Learning capacity.

25

V. Summary

This work analysed the ASAP methodology of the ERP implementations projects. In the

focus of the theoretical part is the presentation of the ASAP roadmap, its pros and its cons.

The empirical part discussed the factors that can affect the success of the SAP ERP

implementation. The number of critical success factors is identified and classified according

to their relevance to the diverse phases of the ASAP roadmap.

As we have seen, Enterprise Resource Planning (ERP) is characterised as a commercial

software package providing an integration of information flow through a company and

combining diverse sources of information into a single database.82 Enterprises exist today in

conditions of globally intensifying competition and increasingly selective customers. They

have to look for ways to achieve better business performance and secure competitive

advantage through effective management of their resources and business processes.83 SAP is a

worldwide-leading producer of the business software package ERP and the structured

implementation methodology the ASAP roadmap for the successful on-time delivery of an

implementation project. The presence of the SAP ERP as a market leader is realised not least

through the provision of this implementation route.84

The five phases of the SAP roadmap described below represent the detailed algorithm for all

implementation activities. Each phase consists of a group of work packages; each activity

includes a group of tasks, and each task implies a definition, a detailed set of procedures,

results and deliverables. The main advantage of this implementation methodology is the fact

that it has been refined according to the successful experiences of thousands of previous SAP

implementations and can thus guarantee the quality, time and efficient recourses utilization

throughout the implementation. The problem of the SAP roadmap methodology arises more

from the standardized character of the ASAP in companies with unique business processes. In

case of one-of-a-kind business requirements the ASAP methodology can lead to non-optimal

results.

82 Fui-Hoon Nah, F. (2002) p. 37 83 Tsai, W-H. et al. (2005), p. 220 84 Arif, N. and Tauseef, S. (2008), p.20

26

Empirical data about the numerous ERP implementation projects shows that a standardized

implementation in the form of ASAP is often used. However, the success of this methodology

is still disputed. One possible explanation of the failure in the ERP implementation could be

so-called critical success factors (CSFs), which are inherent in the technological perspective,

culture, management or human resource characteristics of each company.

Summing up, there are four key issues needed to be kept in mind in SAP ERP implementation

in the context of CSFs: issues that have an impact on people (Human Resources), issues that

have an impact on processes within the company (Project and Change Management), and

issues of technological and strategic context. Each type issue has its own specification for

each phase of the roadmap.

According to the empirical evidence CSFs do not have the same importance along the diverse

phases of an SAP implementation project.85 Thus, the table systemising a distribution of the

CSFs along the SAP project was elaborated. Their respective mapping to the five roadmap

phases is presented in Table 3. According to the empirical evidence, not taking these CSFs

into account explains the possible failures in the ERP implementation project.

Concluding, it can be foreseen that advantages and disadvantages of the SAP ERP system and

its implementation possibilities will impact its further blossoming in already-entered markets

in the world economy and its penetration of new ones. Today the vision of SAP is “for all

companies of all sizes to see clearly, think clearly, and act clearly so that they can close the

gap between strategy and execution and become best-run businesses.”86

85 Esteves, J. and Pastor, J. (2001), p.1019 86 SAP home page (version 13.04.2010): http://www.sap.com/about/vision/index.epx

27

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