An Analysis of Success and Failure Factors for ERP Systems in Engineering and Construction Firms

Abstract

Even though the use of ERP systems is growing and becoming more popular, these systems are still somewhat unfamiliar in the construction industry. Many engineering and construction firms know how beneficial ERP systems are, but they still hesitate to adopt these systems due to their high cost and risk. Without a doubt, a successful ERP implementation is an essential for the benefits from such systems, so this issue is always considered top priority in the ERP related research area. It is obvious that several important factors must be considered for successful implementation, but most engineering and construction firms have no idea what factors should be considered most heavily. Therefore, the main goal of this research is to help these firms better understand the critical factors that need to be considered to ensure the success of ERP systems.

This research formulated the conceptual ERP success model based on strong background theories and knowledge gained from several industry practitioners. The survey instrument was designed based on the conceptual ERP success model, and was tested before conducting the main survey. The ERP success model and its variables were finally fixed after completing a series of data analyses with the main survey.

Since there have been few studies attempting to validate empirically the factors affecting both ERP implementation and user adoption, this research focused on identifying the factors for the ERP success from both implementation project and user adoption perspectives. Then, identified factors were examined to verify their relationships with success indicators associated with the redefined ERP success. Furthermore, the research suggested recommendations for the ERP success showing how to approach ERP implementation to avoid failure and what we should do considering the significance of each factor to a given dependent variable based on the findings of the study. These recommendations can provide helpful information to engineering and construction firms when they consider implementing or upgrading their ERP systems. This information should help companies reduce tremendous ERP implementation risks so that companies can have more chances to improve their business value with the success of EPR systems.