Abstract

In this chapter we discuss the problem of enterprise resource planning (ERP) system implementation failure. Presented here is a short description of the ERP system's complexity and the methodological background of implementation. The statistics concerning the implementations process and their results are gathered. Additionally, the lesson learned from the ERP implementation's failures and guidelines on how to prepare the proper implementation process are given.

Complexity of ERP System— a Brief History

ERP is software often perceived as a backbone for a whole business due to the integration, in one application, of the core aspects of the enterprise function— accounting, finance, HR/ payroll, production, sales, logistics, inventory and so forth. The development of ERP has almost a fifty- year history (Figure 5.1): the term was introduced by The Gartner Group in 1990 as a consequence of its application not only in industry but also in non- manufacturing enterprises (Antero, 2015; Jacobs and Weston, 2006).

The origins of ERP date back to the 1970s, when the Materials Requirements Planning (MRP) systems began to be developed by ERP vendors and used to support production processes and inventory control systems (Jacobs and Weston, 2006; Abramek et al. 2014). The crucial element of MRP systems was integration of the inventory processes, material management and production on the basis of a prepared production schedule. In comparison with the previously known inventory control systems, the MRP was equipped with a module responsible for forecasting and determining the range of inventories as well as for tracking and quantitative settlement of production. Three main objectives were the background for developing the MRP system:

MRP allowed companies to reduce inventories, define materials and components delivery time, analyze production costs, to make more effective use of the infrastructure, have faster response to changes observed in the environment, control the various production stages, collect the business data for analysis and do better planning.

The progressive development of MRP systems was the background for extension of the concept of operational management for the whole manufacturing process, including such aspects as marketing, finance and sales.