Identification and classification of ERP critical failure factors in Iranian industries

  • Authors:

  • Amin Amid;Morteza Moalagh;Ahad Zare Ravasan

  • Affiliations:

  • Department of Industrial Engineering Tehran North Branch, Islamic Azad University, Iran;Department of Information Technology Management, Shahid Beheshti University, Tehran, Iran;Department of Management and Accounting, Allemeh Tabataba'i University, Tehran, Iran

  • Venue:
  • Information Systems
  • Year:
  • 2012

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Abstract

Implementation of Enterprise Resource Planning systems (ERPs) is a complex and costly process, which usually results in serious failures. The majority of previous studies and research projects have been conducted in identifying ERP Critical Success Factors (CSFs) rather than Critical Failure Factors (CFFs). On the other hand, most studies have been devoted to developed countries, while in developing countries, many companies have moved towards using such systems. The majority of IT/IS management standards and guidelines have been developed by technologically-leading countries. But developing countries, which mostly confront with especial challenges, have a different condition from the implicit assumptions of leading countries. Iran is one of these countries that many of its ERP implementation projects led to failure. There is no comprehensive study that identifies ERP CFFs in Iranian industries. The main purpose of this study is to identify such factors and classify them to help other industries, consultants and implementers to prevent failures in the implementation of ERP projects. So, at first, with the semi structured interviews and literature reviews, 47 failure factors were identified. After that a questionnaire developed and sent to ERP project team members in Iranian industries that failed in their ERP projects. Robust Exploratory Factor Analysis (EFA) has been used for data analysis, which finally classified critical failure factors in seven groups named as vendor and consultant, human resources, managerial, project management, processes, organizational and technical. The results of this study have provided a very useful reference for scholars and managers to identify the relevant issues of ERP projects failure in developing countries.