UNIVERSITY OF ZIMBABWE The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again. GRADUATE SCHOOL OF MANAGEMENT A REVIEW OF ENTERPRISE RESOURCE PLANNING SYSTEM IMPLEMENTATION CHALLENGES AT THE WATTLE COMPANY LIMITED FROM 200 6 TO 2011 . By John Jonga [R012816k] Dissertation submitted in partial fulfilment of the requirements for the degree of Master of Business Administration, Graduate School of Management, University of Zimbabwe Supervisor: Mr A. Chidakwa February 2013 Declaration I, John Jonga do hereby declare that this work is the result of my own investigation and research, except to the extent indicated in the Acknowledgements, References and by comments included in the body of the report, and that it has not been submitted in part or in full for any other degree to any other university . --------------------------------------------- Date ………………………… Student’s Signature --------------------------------------- Name: --------------- Date--------------------------------- Supervisor’s Signature i Dedication To TavongaKudzaisheJonga ii ACKNOWLEDGEMENTS I would like to acknowledge and thank the following individuals for their contributions to the success of this dissertation; Mr ArnoldChidakwa, my supervisor, for his valuable insightful guidance throughout the research process. Working under his supervision has been a stimulating and rewarding experience. Without his help, this dissertation would have never been a reality. My profound gratitude goes to The Wattle Company management for affording me the opportunity to carry out this study. Special mention goes to all group one discussion members for their intellectual, moral and financial support, Ms N Murefu for typing services for parts of this dissertation. Further gratitude goes to my wife Yvonne, and our two boys, Tanatswa and Tavonga for consistently supporting me through sacrifices of family time thusenabling me to focus on this marvellous piece of work. These three jewelsI salute! To God be the glory!! iii ABSTRACT After spending five years of development and implementation of an Enterprise Resources Planning (ERP) system The Wattle company declared the project a failure. Considerable sums of money and time were spent in trying to successfully implement the project so that the company could have seamlessly integrated information system thereby enabling management to have timely information for decision making. This study therefore sought to explore how organisations buy ERP systems and investigates major factors that underlie successful ERP project implementation with a view to make strategic recommendations to management. The case study design was adopted as it helps toexplore a contemporary phenomenon within its real life context.A mixed method research strategy with a bias towards phenomenological thrust to better understand the meanings respondents attached to the process was adopted in this study. Study findings show that the process that organisations go through when buying ERP system is more or less the same for other new-task-kind of decision except that in ERP purchasing there is rigorous information search and more collective decision making.Among other host of critical success factors, top management commitment and support, business process re-engineering, need for clear vision and objectives, change management, selection of right ERP package, selecting the right software vendor, effective project management skills, project team leader, consideration to legacy systems and user training emerged highly ranked. Recommendations from the study entail that management should devote due attention to ERP package evaluation during the purchasing process to minimise customisations, provide adequate timely funding for project operations, reduce project staff turnover for effective knowledge transfer management and manage effectively the identified critical success factors in order to achieve successful ERP project implementation. iv LIST OF FIGURES Figure 1.1 Evolution of Enterprise Resource Planning ............................................................... 3 Figure 1.2 ERP Architecture ....................................................................................................... 5 Figure 2.1 ERP Project implementation process .......................................................................23 Table 2.1 A planned oriented ERP implementation ..................................................................24 Figure 2.2 Implementation strategy analysis. ...........................................................................25 Figure 2.3The risk framework management .............................................................................28 Figure 2.4 The phased approach to ERP implementation .........................................................29 Figure 2.5 Degree of ERP customisation ..................................................................................40 Figure 2.6ERP Adoption phases ...............................................................................................47 Figure 4.1 Importance of top management commitment and support ........................................68 Figure 4.2 Importance of the need to change business processes to fit ERP ............................69 Figure 4.3 Successful ERP implementation is about change management ...............................70 Figure 4.4 Importance of project champion ...............................................................................71 Figure 4.5 The importance of clear goals and objectives ...........................................................72 Figure 4.6The significance of selecting the right ERP package .................................................73 Figure 4.7 Should current legacy systems be considered? .......................................................74 Figure 4.8 The significance of selecting the right ERP consultant .............................................75 Figure 4.9 Importance of effective project management strategy and skills ...............................76 Figure 4.10 The importance of user training ..............................................................................77 v LIST OF ACRONYMS ALGOL Algorithmic Language APS Advanced Planning and Scheduling BPR Business Process Reengineering CEO Chief Executive Officer COO Chief Operations Officer COBOL Common Business Oriented Language CRM Customer relationship management CSF Critical success factors ECSS Expeditionary Combat Support System ES Enterprise System ERP Enterprise Resource Planning FORTRAN FormulaTranslation GBP Great Britain Pound GDP Gross Domestic Product GNU Government of National Unity HR Human Resources IBM International Business Machines Corporation IT Information Technology MIS Management Information Systems MNCs Multi-National Corporations MRP Materials Requirements Planning MRP II Manufacturing Resources Planning OBB Organisational Buying Behaviour ROI Return on Investment vi SaaS Software as a Service SCM Supply Chain Management SMEs Small to Medium Enterprises TCO Total Cost of Ownership UK United Kingdom USA Unites States of America USD United States Dollar RBZ Reserve Bank of Zimbabwe ZSE Zimbabwe Stock Exchange vii Table of Contents Declaration ............................................................................................................................................... i Dedication ............................................................................................................................................... ii ACKNOWLEDGEMENTS ........................................................................................................................... iii ABSTRACT .............................................................................................................................................. iv LIST OF FIGURES ...................................................................................................................................... v LIST OF ACRONYMS ................................................................................................................................ vi CHAPTER ONE ......................................................................................................................................... 1 1.1 INTRODUCTION............................................................................................................................ 1 1.2 BACKGROUND TO THE STUDY ...................................................................................................... 2 1.2.1 Evolution of ERP systems ...................................................................................................... 2 1.2.2 Current trends in ERP market ............................................................................................... 3 1.2.3 Architecture of ERP systems ................................................................................................. 5 1.2.4 Why implement ERP systems ...................................................................................................... 6 1.2.5 Background of Case Study Company ..................................................................................... 7 1.3 PROBLEM STATEMENT ................................................................................................................