Eindhoven University of Technology, Eindhoven, The Netherlands; 2
Minase BV, Tilburg, The Netherlands; and 3
A-De´com
Consulting, Werkendam, The Netherlands
ERP implementations are complex undertakings. Recent research has provided us with plausible critical
success factors (CSFs) for such implementations. This article describes how one list of CSFs (Somers &
Nelson, 2001) was used to analyse and explain project performance in one ERP implementation in the
aviation industry. In this particular case, poor project performance led to a serious project crisis but this
situation was turned around into a success. The list of CSFs employed was found to be helpful and appropriate
in explaining both the initial failure and the eventual success of the implementation. CSFs in this case
appeared to be highly correlated, ie changes in any one of them would influence most of the others as
well. The reversal in performance after the project crisis was caused by substantial changes in attitudes
with most of the stakeholders involved, such as top management, project management, project champion
and software vendor.
European Journal of Information Systems (2002) 11, 35–46. DOI: 10.1057/palgrave/ejis/3000418
Introduction
ERP (Enterprise Resource Planning) systems may well
count as ‘the most important development in the corporate
use of information technology in the 1990s’
(Davenport, 1998). ERP implementations are usually
large, complex projects, involving large groups of people
and other resources, working together under considerable
time pressure and facing many unforeseen developments.
Not surprisingly, many of these implementations
turn out to be less successful than originally intended
(Davenport, 1998; Avnet, 1999; Buckhout et al, 1999).
Over the past few years, a considerable amount of
research has been conducted into critical success factors,
or CSFs, for ERP implementations (eg Holland & Light,
1999; Sumner, 1999; Willcocks & Sykes, 2000) and IT
implementations in general (Reel, 1999; Marble, 2000).
Such factors typically include top management support,
sound planning, end user training, vendor relations, project
champions, interdepartmental collaboration and
communication and the like. Now we even have available
a ranked version of such a list, based upon a survey
among managers of organisations that have recently
gone through an ERP implementation process
(Somers & Nelson, 2001). However, at present it is not
yet clear how these CSFs interrelate. It seems unlikely
that they all work in isolation, without one CSF also
Correspondence: H Akkermans, Eindhoven University of Technology,
Technology Mangement, PO Box 513, 5600 MD Eindhoven, The
Netherlands
Email: H.A.Akkermans tm.tue.nl
affecting another and vice versa. At present, what we
have are ‘laundry lists’ (Richmond, 1993) of relevant
CSFs. However, for the time being, we have little theory
on how these CSFs affect each other.
This article describes an exploratory research study
where this particular ranked list of CSFs was used to
analyse a case study of an ERP implementation. This
implementation at first experienced severe difficulties
but turned around remarkably after a project crisis had
resulted in changes in several of the CSFs for this case.
This article shows how, at least in the case studied, these
CSFs affected each other in a reinforcing manner. It
argues that the same reinforcing ‘loops’ of causal
relationships that at first led to a vicious cycle, or downward
spiral, of ever-degrading performance after the
crisis led to a virtuous cycle, or upward spiral, of continuously
improving implementation success (cf Senge,
1990; Sterman, 2000).
Critical success factors for ERP
implementations
In a recent article by Toni Somers and Klara Nelson
(Somers & Nelson, 2001), a very useful and wellgrounded
ranked list of CSFs for ERP implementation
is presented. The 21 CSFs in this list were first compiled
from a meta-study of over 110 ERP implementation
cases described as well as of the general literature on IT
implementation, BPR (Business Process Reengineering)
and project management. This list was then rated by 52
senior managers. This group consisted mainly of CIOs
36 Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden
(Chief Information Officer), MIS (Management Information
Systems) managers, directors, vice-presidents
(VPs) or executive vice-presidents (EVPs). The companies
involved were US firms that had completed their
ERP implementation either last year or longer ago. Table
1 shows the resulting ranked list.
In the remainder of this article, we will focus on the
top 10 CSFs, which are italicised in Table 1. The choice
for precisely this number was somewhat arbitrary, but
worked out well in our analyses, as will become apparent
later on. Strongly influenced by the sound literature
study underlying Somers’ and Nelson’s ranked list, we
will briefly discuss each of these top CSFs. Together,
they form an interesting mix of more conventional,
‘hard’, implementation aspects, such as clear goals and
objectives and strong project management, and ‘softer’
aspects, such as team competence and interdepartmental
communication and collaboration. Most of them would
hold for IT implementation projects in general, but some
are more important for ERP projects in particular.
(1) Top management support. If top management is not
actively backing an all-pervasive project like an
ERP implementation, there is little hope for it. This
is especially so in the early stages of such a project
(Slevin & Pinto, 1986; Bingi et al, 1999). It is
probably true for most implementations of innovations
into organisations (Jarvenpaa & Ives,
1991). On the other hand, it would be unwise to
suggest that top management is omnipotent in this
Table 1 Mean rankings of CSFs by degree of importance in
ERP implementation
Critical success factora Mean
(1) Top mangement support 4.29
(2) Project team competence 4.20
(3) Interdepartmental co-operation 4.19
(4) Clear goals and objectives 4.15
(5) Project management 4.13
(6) Interdepartmental communication 4.09
(7) Management of expectations 4.06
(8) Project champion 4.03
(9) Vendor support 4.03
(10) Careful package selection 3.89
(11) Data analysis and conversion 3.83
(12) Dedicated resources 3.81
(13) Steering committee 3.97
(14) User training 3.97
(15) Education on new business processes 3.76
(16) BPR 3.68
(17) Minimal customisation 3.68
(18) Architecture choices 3.44
(19) Change management 3.43
(20) Vendor partnership 3.39
(21) Vendor’s tools 3.15
(22) Use of consultants 2.90
a
Italicised CSFs used in subsequent analysis.
kind of process. Middle management and other
staff are at least as important, but will play different
roles (Mumford, 1983; McKersie & Walton, 1991).
However, if top management permanently delegates
its responsibilities to technical experts, the
chances for project failure are high (Ewushi-Mensah
& Przanyski, 1991).
(2) Project team competence. This CSF is one of those
that was originally not very high on Somers and
Nelson’s (2001) list but that ended up remarkably
high when ranked by the executives that filled in
their survey. Indeed, it seems there has not been
that much research regarding the impact of project
team competence on IT implementation success.
Somers and Nelson do refer to some vendor-related
documentation (Bancroft et al, 1998) and APICS
literature (Kapp, 1998). However, one also has to
look into literature from other fields where the
importance of team competence has been well
recognised, such as Argyris and Scho¨n (1979),
McGrath (1984), Senge (1990) or Katzenbach and
Smith (1993).
(3) Interdepartmental co-operation. Another surprisingly
high-ranking factor is interdepartmental cooperation.
Then again, perhaps it is less surprising
that the executives ranked this factor so high than
that in Somers and Nelson’s original list, which
was based on their literature review and not on
assessments by managers, it appeared as low as No.
20. For surely, ERP systems are really about
closely integrating different business functions; this
is what sets them apart from many other IT efforts.
Therefore, close co-operation between these business
functions would seem to be a natural prerequisite
(Stefanou, 1999). Indeed, one recent study
found closer interdepartmental collaboration as one
of the main post-ERP implementation benefits
(McAfee, 1998).
(4) Clear goals and objectives. It has long been common
knowledge that the first phase of an IT project
should start with a conceptualisation of goals and
ways to accomplish these (Cleland & King, 1983;
Slevin & Pinto, 1987). Clear goals and objectives
seem to form a clear-cut CSF, but can actually be
rather problematic. This is because, at the outset of
an ERP project, it is often very difficult to determine
them in a clear-cut manner. Hence the call of
Austin and Nolan to manage ERP initiatives as new
business ventures, rather than as IT projects
(Austin & Nolan, 1998) and the suggestion of Austin
and McAfee to employ a path-based approach
to ERP implementation (Upton & McAfee, 1997).
On a more methodological level, this viewpoint is
in line with the concept of IS development as one
of evolutionary complexity (Lycett & Paul, 1999).
(5) Project management. The complexity of ERP
Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden 37
implementation is very high, given the vast combination
of hardware, software and organisational
issues involved (Ryan, 1999). One approach to
overcoming this kind of complexity is to stress the
need for ‘a great amount of methodical planning
and calculated management’ (Soliman & Youssef,
1998 p. 890). This approach is often taken in textbooks
on IT project management (eg Hoffer et al,
1998). However, as organisations and projects
evolve over time, so should project management
priorities. Some degree of improvisation
(Macredie & Sandom, 1999) may also need to be
part of the skill set of ERP project managers.
(6) Interdepartmental communication. The importance
of communication across different business functions
and departments is well known in the IT
implementation literature. According to one author
on IT project management, ‘communication is the
oil that keeps everything working properly’ in these
contexts (Schwalbe, 2000). Slevin and Pinto (1986)
reached similar conclusions for project management
in general. As noted above, this need for communication
across functional boundaries is all the
more important in an ERP context since the primary
objective of ERP systems is to integrate business
functions (Davenport 1998).
(7) Management of expectations. Successfully managing
user expectations has long been known to be
important for successful implementations of IT systems
in general (Ginzberg, 1981). Misalignment of
expectations is common, for instance through overselling
of the vendor or by underestimation of the
complexity of ERP implementation by the organisation.
Therefore, management of expectations
remains important through all stages of the
implementation life cycle (Hoffer et al, 1998).
(8) Project champion. ‘The success of technological
innovations has often been linked to the presence
of a champion, who performs the crucial functions
of transformational leadership, facilitation, and
marketing the project to the users’ (Beath, 1991;
quoted from Somers & Nelson, 2001). Usually, this
will be somebody at senior management level, so
that this person has the authority to make substantial
organisational changes happen (McKersie &
Walton, 1991). One obvious place to look for such
a champion role is with the CIO, or else the CEO
(even better) or VP in charge of IT (Willcocks &
Sykes, 2000).
(9) Vendor support. A project as all-pervasive as an
ERP implementation cannot be delegated to an outside
party. In fact, strong reliance on outside consultants
or vendor support was found to have a
negative correlation with project success for MRP
II implementations (Burns et al, 1991). On the
other hand, a company typically does not have all
the technical and transformational skills in-house
for managing such a major undertaking on its own.
Therefore, it is also not surprising that other
research has shown project success to be positively
associated with fit and compatibility with the IT
vendors employed (Thong et al, 1994; Janson &
Subramanian, 1996; Willcocks & Sykes, 2000).
(10) Careful package selection. ERP vendors may claim
that their systems are overlapping in functionality
but they are not, at least not in full. For instance,
some packages are more suited for larger firms,
some more for smaller ones. Some packages have
become a de facto industry, some have a stronger
presence in certain parts of the world. And then,
once the choice for the package is made there is
the decision to be made as to what versions or modules
of the package would best fit the organisation
(Piturro, 1999). In short, if the wrong choices are
made, and these choices have to be made very early
on, the company faces either a misfit between package
and business processes and strategy, or a need
for major modifications, which are time-consuming,
costly and risky (Janson & Subramanian,
1996).
Research methodology
A theory-building case study research design
In this research, our objective has been not just to test
the explanatory power of the existing CSF list of Somers
and Nelson (2001) in a specific case but also to extend
it into a richer framework, ie one that would describe
causal interrelations between the individual CSFs. For
this purpose, we have employed a case study research
design. The case study is a well-known research method
for exploratory, theory-building research (Eisenhardt,
1989; Yin, 1989). As a research method, case studies,
and certainly single-case ones, score low on generalisability
of findings. However, on the other hand, their
richness of data lends themselves well for the inductive
process of theory building. It is precisely this ‘intimate
connection with empirical reality that permits the development
of a testable, relevant, and valid theory’
(Eisenhardt, 1989 p 532).
Action research for research relevance
In this research, the authors themselves were actively
involved as consultants to the management of the company.
We fulfilled this role for 3 months in the fourth
quarter of 1997 and the first quarter of 1998. Afterwards,
we changed roles and became neutral observers to the
changes the company was undergoing for the next 2
years. As will subsequently become clear, a key turnaround
in the ERP effort was initiated during the relatively
short period that we were actively involved as consultants.
This makes the research reported here clearly
38 Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden
action research (Reason & Bradbury, 2000). The choice
for an action research design has several clear benefits
in studying a phenomenon such as the current one. First,
it provides the ability to observe up close an organisation
during a period of strong instability, while it is experiencing
its periods of most drastic change, when normally
often no outsiders would be allowed. As Arie Lewin
once put it: ‘If you want to understand something, try
to change it’ (Daft & Lewin, 1990). Secondly, it ensures
the direction of the research to be of guaranteed managerial
relevance, since company management is closely
involved in the research effort as it progresses (Gill,
1983). Thirdly, it indirectly generates the close relations
and common understanding that enable researchers to
revisit the company during subsequent periods of change
to observe and reflect with members of the organisation
on ultimate causes and consequences of the changes
observed (Miles & Huberman, 1984).
Measures to ensure rigor and reliability
Case study research in general, and action research in
particular, are arguably well suited to ensure relevant IS
research regarding organisational change processes
(Galliers & Land, 1987), but also pose considerable
problems in ensuring sufficient rigor and reliability. By
reliability is meant the degree in which statements are
based on a careful observation of reality, rather than on
accidental circumstances regarding measurement instruments
or the researchers’ own biases as people being
personally involved (Yin, 1989). We took several measures
to ensure adequate levels of reliability for this
research. In general, these all boil down to limiting personal
biases by employing as many independent perspectives
and sources of data as possible in an iterative process
of data collection, analysis, reflection and synthesis.
The goal of having different perspectives was
accomplished by (1) having independent interviewers for
post-project evaluation, (2) interviewing multiple members
of the organisation coming from different backgrounds,
(3) performing a so-called member check by
letting preliminary research results be assessed by these
respondents and peer review of these findings by
presenting them at two subsequent peer-reviewed international
academic conferences. The goal of multiple
sources of data as to enable triangulation was achieved
by collecting data at different points in time, again with
different stakeholders and comparing these with project
documents and personal research notes.
Theory-driven case selection
In order to learn more about CSFs in ERP implementation,
one would normally need at least two cases: one
where project success was low and one where success
was high. Then, most of the variables that are not of
primary interest, such as firm size, industry, time frame,
package type etc. would have to be kept identical as
much as possible. This is the concept of theory-driven
case sampling, as developed by Yin (1989) and Eisenhardt
(1989). However, in this particular instance, it was
possible to suffice with a case within a single company.
This is because we had ample data on a particular
implementation where project performance was at first
very low, almost leading to a complete failure of the
project, and then bounced back again to reach very satisfactory
results in the end. In this way, we had both high
and low implementation success and, at the same time,
identical values for many of the variables not of primary
interest, since both stages concerned the same firm.
Research questions
According to Eisenhardt (1989), ‘An initial definition of
the research question, in at least broad terms, is
important in building theory from case studies’
(Eisenhardt, 1989 p. 536). For our research, given the
state of the art of research on CSFs for ERP implementation,
this resulted in the following two ex ante
research questions:
Research question 1: Can the Somers and Nelson list
be helpful in arriving at a better understanding of root
causes of ERP implementation success and failure?
Research question 2: If so, in what way can the
Somers and Nelson CSFs be interrelated causally?
With these two questions in mind, we have analysed our
case material.
Case data collection
The case study in question concerns a medium-sized
manufacturing firm in the aviation industry where an
ERP system was implemented. Our original case data
were collected over a time period of 2 years, spanning
the entire period from the early start of the implementation
of the ERP system to its operational use. Figure
1 contains a time line for the project.
As can be distilled from Figure 1, we collected information
on project success and ascribed causes for it from
company representatives in three different instances. The
first time was immediately after our own involvement in
our capacity as business consultants, when the project
had just recently bounced back into good shape. The
second time, we sent independent interviewers armed
with a semi-structured questionnaire just after the ERP
system had gone live. Our analysis of the findings from
these interviews was published shortly afterwards
(Akkermans et al, 1998). Almost 1 year later, we went
back again to discuss our latest insights, based on a comparison
of this case with two other IT implementations
(Akkermans et al, 1999).
Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden 39
Figure 1 Timeline for key events in ERP implementation and case data collection.
Case data analysis
Irrespective of the considerable amount of bottom-up
data collection described above, our case data analysis
as it is presented here remains an inductive effort. It consists
of three stages.
Stage 1: Assessment of scores for the top 10-CSFs:
Firstly, we have taken the ‘top 10’ of the Somers and
Nelson list and have assessed their values before and
after the project crisis. Please note that we do not suggest
that these top 10 explain everything there is to elucidate
in this case. For instance, CSF No. 22, the relevance of
the use of outside consultants, is clearly one we would
be tempted to call relevant, since we acted as such. But,
our objective is not one of completeness but of parsimony:
if the top 10 factors can explain most of what
happened and can do so plausibly, why use more?
Stage 2: Causally interrelating CSFs:
We have then, in an inductive effort, used the mapping
technique of causal loop diagramming, or CLD (cf
Senge, 1990; Sterman, 2000), to interrelate these 10
CSFs causally. We have thought about what generated
what, and about feedback loops between the different
factors. Most importantly, we have tried to arrive at a
causal structure that could explain both the state of
events leading to the project crisis as well as the subsequent
reversal of fortune of this project.
Stage 3: Formulation of tentative research propositions:
Finally, we have, in reflection on these findings, formulated
five preliminary research propositions that come
out of this exploratory research as candidates for further
investigation in subsequent research. We have called
these propositions, since they are not yet in the stage of
hypotheses ready to be tested. Generalising from a single
case is always problematic. We certainly do not suggest
that this is possible from this particular case. However,
we do believe that these propositions can form the basis
for research leading to more generalisable findings.
The case study: an ERP implementation in
the aviation industry
Case setting
The aviation industry is characterised by a small number
of major global players and many small ones, which all
develop and manufacture aeroplanes and helicopters. A
major part of the design and production has been contracted
out to suppliers. The client’s company is one of
these European suppliers in the aviation industry,
developing, producing and delivering aero-structures
such as wings and tails for the civilian and military market.
At the client’s site, some 700 people are working.
The company is a subdivision of the aviation division
of a multinational engine building company. It was taken
over by this conglomerate some time beforehand, after
40 Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden
a bankruptcy of its original parent firm. This resulted in
major changes: new management, but also new markets
to be served. The company changed from being an
internal supplier of stable product lines to competing on
the external market with a large number of frequently
changing production programmes. This change
prompted the rise of several new business functions,
such as sales and additional parts of F&A. It also led to
a need for integration of different departmental activities
(sales, engineering, production), which also meant new
business processes.
At the start of the ERP project, the crisis atmosphere
of the early days after the bankruptcy still lingered on.
Then, only a small group of the original employees had
been allowed to return and they had experienced considerable
turbulence externally and internally. The direct
motivation for the ERP system investment was that, ITwise,
a new system was needed to support the new business
processes. Moreover, the IT ‘legacy systems’ that
were being used at the time were non-millennium compliant,
with a deadline as early as January 1999, due to
long lead times in the ordering of some strategic
supplies.
Project synopsis
The history of this case extends over more than 2. years,
starting in the second quarter of 1997 and ending in the
fourth quarter of 1999, as becomes apparent from Figure
1. In the first half of 1997, the company started with the
selection of the ERP package and an ERP implementation
partner. The ERP Package became BAAN, at that
time the de facto ERP leader in the aviation industry.
The choice of the implementation partner was less
straightforward. The first candidate wanted to start an
extensive BPR project prior to the ERP implementation.
This was considered unacceptable by company management.
Hence, a choice was made for an IT services firm
that indicated that they would focus on implementing
BAAN for the processes as they were in use at the time,
the ‘AS IS processes’ to use some BPR terminology.
Stage 1: Unsuccessful project initiation:
Unfortunately, the structure of these AS–IS processes
was not so clear, which was not so surprising considering
the drastic changes these processes had been
undergoing. Nevertheless, the external project manager
who had been hired to lead the initial ‘mapping’ or process
definition phase started by making all the right
moves according to conventional wisdom. He first
focused on the development of a detailed project handbook,
which would make clear to all involved what had
to be done by whom, when and how. Meanwhile, technical
BAAN training was planned for the core project
group. His fellow external consultant started working on
the overall business control model on the basis of standard
BAAN templates.
Project crisis:
Unfortunately, this approach led to a serious project
crisis by the end of stage 1. What had gone wrong was
not at all obvious. The external consultants complained
of a lack of collaboration with project team members.
These in turn complained of a lack of industry expertise
and leadership with the external consultants. The CEO,
one of whose former jobs had been overseeing the turnkey
installation of entire factories, complained of a lack
of professionalism to his counterpart at the IT firm. This
person in turn, the account manager with the implementation
partner, complained about a lack of understanding
of the nature of IT development with company management.
Anyway, the project came to a total standstill and
the external consultants were sent packing. Both parties
came very close to ending their collaboration. Because
of potential adverse repercussions that this might have
on both sides, the authors were asked by the account
manager to try one more time to develop productive
work arrangements with the project team and company
management. In turn, the CEO appointed from his management
team a senior internal project manager to the
ERP project, who also served as a project champion for
the project.
Stage 2: Successful process mapping and functionality
specification:
This second attempt at process definitions started off
with a short interview round by us, the authors, acting
as consultants, with senior and middle management to
find out what the most pressing issues were in going
forward. Next, we organised a series of workshops,
which were successful in achieving a different way of
working together. For instance, the first workshop started
with a huge ‘brown paper session’. The brown paper
referred to hung against the wall and contained a large
process map of all relevant process steps: from sales via
engineering to production, purchasing and distribution.
This map we had created beforehand in several informal
meetings with small groups of project team members
who were experts in specific business areas.
In the brown paper workshop, these team members
explained to their colleagues their part of the map and
discussed differences in interpretation and missing links.
Once consensus was achieved in this manner, the same
map formed the starting point for a next stage of process
mapping, now more formal and detailed, using a computerised
process mapping tool. It is important to note
that it was the project team members who performed
this mapping, after some initial training in the notation
method. We, the consultants, operated as facilitators and
took care of the computerised tool that identified inconsistencies
between sub-models. This resulted in the
detailing out of over 100 processes, all signed-off by
their respective process owners. It also resulted in an
Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden 41
active involvement of the project team members and
excellent cross-departmental communication.
Another essential element of this stage was the active
involvement of senior management, which until then had
hardly taken an active part in the ERP project. At the
outset of this stage, the following rule was agreed with
all parties concerned. If, in the project team workshops,
a business issue remained unresolved after 5–10 minutes
of discussion it would be flagged as a senior management
issue and would no longer be discussed by the
team. This was done because decisions on such debated
issues would probably not be taken by the project team
but by senior management. Senior management, ie the
CEO and his management team (MT) of functional managers,
agreed to participate in a workshop with us where
all these issues would be resolved. At the outset, the
CEO expected that this would be a brief exercise, but
as it turned out, 2 full half days of hard work and some
serious preparation in between were needed. As a side
result of this, senior management became much more
aware of the ERP project and the impact it would be
having on daily work in their departments.
Stage 3: System implementation:
The process definition stage lasted for 3 months. It
yielded the business processes that were used to
implement the actual ERP system. Here, the authors left
and specialists in the BAAN software took over. The
number of company people involved in the subsequent
system implementation stage was much greater, over 50
at some stage. Obviously, more lower-level employees
were involved. We now changed our role to observers.
One phenomenon that was immediately interesting to
observe in this stage was that the 15 members of the
original core project team now became the ambassadors
for the ERP effort with their fellow employees. In the
previous phase, the lower-level employees had not been
involved directly in the ERP process, but now they were
trained and asked to participate. Eventually, and to the
surprise of many, the by then very ambitious October
1998 deadline of the project was met fairly well, and so
was the agreed budget. This was no small feat after the
progress delays in stage 1 and the considerable time
investments required to conclude stage 2.
Stage 4: System operation:
Despite some glitches in the changeover from the ERP
project organisation to business as usual, operational use
of the ERP systems has been smooth. In fact, the company
has been through a number of similarly complex
improvement projects since. Production facilities that
were spread over different locations as well as the engineering
department were all brought together in one central
factory with a strongly simplified routeing and layout.
The structure of the manufacturing organisation was
changed considerably and a new group of managers was
Figure 2 The core reinforcing loop in the ERP integration effort:
mutually reinforcing interdepartmental communication and collaboration.
nominated, mainly from the internal ranks (several of
them from the core ERP project team). The staff qualifi-
cation method used by the HRM department was harmonised
and function descriptions were rewritten. And
finally, 1 year after the ERP system had gone live, a
company-wide process improvement project was started,
with cycle time reduction and quality improvements as
its main goals.
Case data analysis
In this section we describe how we have applied the top
10 items of Somers and Nelson’s (2001) ranked list of
CSFs for ERP implementation to the case described
above. Also, we present our causal theory of how these
CSFs interrelated for this particular ERP implementation.
Figure 2 illustrates what we feel is the core CSF
process; Figure 3 shows the root causes for the project
Figure 3 Root causes of the vicious cycle leading to the project crisis.
42 Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden
crisis that developed and Figure 4 contains a CLD of
the counter-measures that were taken to overcome this
crisis.
Assessments for the top-10 CSFs before and after the
project crisis
(1) Top management support. Initially, top management
support was low and only limited to IT management.
A mid-level technical specialist was
appointed as a liaison officer. Top management saw
the ERP implementation as something equivalent
to ‘building a factory’. However, later on, senior
management was actively involved, playing a crucial
role in the decision-making workshops.
(2) Project team competence. The project team consisted
mainly of delegated process owners.
Although the team members did have in-depth
knowledge of their business area, before the crisis
the external consultants were doing most of the
mapping work. After the crisis, the consultants
acted as facilitators and made extensive use of the
knowledge of the project team members.
(3) Interdepartmental co-operation. Initially, the functional
area of programme management was not
convinced of the importance and possibilities of the
project. Therefore, they played a minor role in the
project. Later on, they became more co-operative
Figure 4 Counter-measures to reverse the vicious cycle into a virtuous
one.
and actively involved because they now perceived
the added value of the project to their business area.
Something similar happened to the purchasing
function, where a more knowledgeable person was
delegated as project team member.
(4) Clear goals and objectives. Before the project
crisis, the focus of the project was on technical and
organisational issues: how to solve the year 2000
issue? After the project crisis, the current processes
were the basis for selecting the most appropriate
ERP modules to guarantee the best support for the
company targets.
(5) Project management. The project started with a
strong emphasis on writing an extensive and
detailed project handbook, so that every party
involved would know what to do, when and how.
After the crisis, a more flexible approach was
chosen. The overall project approach was designed
and approved by senior management. To get back
on track, weekly workshops with all project members
were organised. During these intensive workshops,
the focus was on the most pressing
(business) issues and on achieving a consistent
business process model, not so much on project
management per se. (Please note that the authors
see their impact as consultants best represented
under this heading of style of project management.)
(6) Interdepartmental communication. Initially, only
the core project group was involved. Consultants
were doing the bulk of the work. Due to the character
of the workshops after the crisis, in which a
consistent company process model was to be
developed, interdepartmental communication
became one of the most important activities. Open
communication and lack of political behaviour
characterised this period.
(7) Management of expectations. Initially, the expectations
of the project team and those of the external
consultants were clearly misaligned. In the second
phase of the project, managing expectations
became an integral part of our consulting approach,
both for contacts with senior management and during
project team workshops. This resulted in an
interconnected chain of workshops leading to a
consistent business model and a well-aligned project
team, which subsequently was able to conduct
the ERP implementation successfully.
(8) Project champion. The project started without a
project champion, with only technical specialists
involved. After the crisis, the management team
appointed a project champion from its midst who
also took care of the ‘marketing’ of the project to
the rest of the organisation.
(9) Vendor support. Initially, there was no vendor support.
Later on vendor expertise was made readily
available for use by team members. The process of
Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden 43
refining and signing-off process maps together with
BAAN specialists played an important part in this.
Through this, vendor support was instrumental in
a smooth transfer from modelling to implementation
phase.
(10) Careful package selection. The selection of the
ERP package itself was quickly made, because of
the reputation and accumulated client experience of
the BAAN company in the aviation industry. However,
this selection and the ensuing discussions
around what version and modules of the software
to use, were based upon on technical arguments.
After the crisis, the discussion evolved from a technical
one into a more business process fit-driven
one.
Interrelations between CSFs: the core reinforcing
loop
ERP systems are meant to integrate different business
functions and different organisational departments. We
feel it is therefore appropriate to say that communication
and collaboration across project team members from different
departments, CSFs 3 and 6 of the Somers and
Nelson (2001) list, are at the core of the ERP implementation
process. Not only do these two CSFs go hand in
hand, but they also seem to reinforce each other, which
is an observation not just derived from this particular
case, but also an empirical observation that holds for
teams in general, as small group research has taught us
(McGrath, 1984). That is, as the one goes up, eg the
quality of the collaboration increases, then the other will
increase as well as a result. People that work together
more often communicate more often. Vice versa, better
communication will lead to better collaboration. This is
what is called in system dynamics terms a ‘reinforcing
loop’ (Senge, 1990; Sterman, 2000). Left to its own
devices, this loop will either continue to increase, in an
upward spiral of ever-better performance, or become
caught in a never-ending downward spiral of ever-lower
performance. The former we call a virtuous cycle, the
latter a vicious one.
In this particular ERP implementation, the project
team was at first caught in a vicious cycle of poor interdepartmental
collaboration and communication. After
the project crisis, the organisation managed to reverse
this process and turn this reinforcing loop into a virtuous
cycle, in which it has remained up to the end of the project.
Root causes of the vicious cycle leading to the
project crisis
What caused this vicious cycle of poor collaboration and
communication? Again, the Somers and Nelson (2001)
list is very helpful and informative. Using it as a theoretical
framework, we find the following root causes,
which are also visualised in Figure 3. First of all, communication
within the project team focused on technical
issues. Indeed, there was more communication between
the project team and the external consultants than internally
in the pre-crisis period. These technically oriented
discussions were mainly about technical issues regarding
the ERP package. This is because, although the choice
for the BAAN software had been made earlier on, the
choice for the particular set of modules that would be
most appropriate for this particular company was still
pending at the time.
Why was so much time and attention dedicated to the
technical issue of package selection (CSF 10)? At least
partly because project management (CSF 5) had a technical
orientation as well. It shared this orientation with
top management (CSF 1), that stated at the start of the
crisis that implementing an ERP system was ‘just like
assembling a new factory’, ie a mechanistic challenge.
Because of the relative lack of open and non-technical
communication between the project team members,
expectations remained mixed and unmanaged (CSF 7).
Hence, project goals and objectives did not become clear
(CSF 4). This was intensified by the initially relatively
hands-off attitude of top management. At the outset, the
management team was not involved in the ERP discussions.
Later on, of course, this attitude changed considerably
(again, CSF 1).
Counter-measures to reverse the vicious cycle into a
virtuous one
During the project crisis the company, and top management
in particular, took several decisions that turned this
whole vicious cycle around into a clear success, into a
virtuous cycle. In theory, for this to happen, any of the
CSFs in one of the loops needs to be changed strongly
and long enough to make a sustainable change. In practice,
it took several strong measures at the same time,
which are indicated in Figure 4 by the dotted arrows.
First of all, top management appointed a senior manager
as project champion (CSF 8). He and the CEO
agreed to change the project management style into a
considerably more process and organisational change
oriented one. The purely technically oriented external
consultants were replaced by colleagues with such a consulting
style (ie the authors) and from that moment on,
project team communication was much more a point of
attention. ‘Brown paper’ workshops asked for active participation,
representatives from different departments
explained to each other about their respective business
processes, subgroups consisting of employees of diverse
backgrounds were set up.
Vendor support (CSF 9) was also more actively
sought and concentrated at the same time. Technical discussions
were now conducted only after the underlying
business processes had been made clear and agreed
upon, and often conducted in smaller group settings.
Top management was not excluded from this intensi-
44 Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden
fied communication, on the contrary. Two half-day
workshops were conducted with the full management
team of the company and this resulted in a much clearer
view on the organisational complexities involved and the
need for very clear goals and objectives for the project.
The project champion also played an important role in
this goal-setting process. Top management secured suf-
ficient amounts of project time for the team members. It
may be relevant to note that there was no need to make
major changes to the project team composition: project
team competence had been sufficient before the crisis
as well; there was then just no environment for it to
flourish in.
Discussion
In this section we reflect on our research findings. Since
our observations are limited to a single case, we have to
be very cautious in the presentation of our claims.
Hence, we will formulate the results from our reflections
in the form of propositions, to be tested, refuted, con-
firmed or refined by subsequent research. Our first two
propositions reflect back on our original two research
questions, propositions 3a to 3c contain additional
exploratory thoughts.
Proposition 1: The list of critical success factors as
compiled by Nelson and Somers (2001), and more
specifically the top 10 of that list, can adequately explain
both success and failure of specific ERP implementation
projects.
As the previous section has illustrated, the top 10 of the
list of CSFs from Table 1 suffices to explain broadly
what went wrong in the particular ERP implementation
investigated, and also why performance went up after
the project crisis. This is not to say that there is no
additional detail possible. Also, other factors from the
list of 22 may be required for other cases. But, we would
be surprised to see an implementation fail completely
where eight out of 10 of these CSFs had high values, or
an implementation be successful where only two CSFs
had high values and all the others ranked low. Of course,
other research designs such as surveys would be better
suited to establish if this list has any predictive, ex ante,
value for ERP implementation success. Our point here
is that it certainly has analytical, ex post, value for understanding
ERP implementation success and failure better.
Proposition 2: These critical success factors are causally
linked in such a way that they reinforce each other in
the same direction, hence leading to either vicious or
virtuous cycles of ERP implementation performance.
The correctness of the causal loop diagram built up in
Figures 2–4 cannot be ‘proven’, since it was an intuitive
effort. We, the authors, case investigators and, originally,
external consultants, have tried our best to reconstruct
why things evolved the way they did. The fact that a
systemic perspective is second nature to us has no doubt
influenced the structure of the diagram. It should therefore
be seen as exploratory theory building and as a
possible starting point for follow-up research. Nevertheless,
a more general idea underlying this specific diagram
is that all these CSFs are closely causally related and,
hence, that changes in any of them will ripple through
in all the others. This we feel is a more fundamental and
well-established notion, which lies at the core of most
systemic thinking (Checkland, 1981; Eden et al, 1983;
Rosenhead, 1989; Senge, 1990).
Proposition 3a: The core process on any successful
implementation consists of mutually reinforcing communication
and collaboration between project team
members from different departments and business functions.
Close and active involvement of the end users in the
development of any IT system is crucial to its success
(eg Mumford, 1983). This active involvement is best
organised by way of a project team that includes representatives
from all the different business functions
affected. Intensive communication and collaboration
between the representatives from the various user groups
is therefore essential for any IT implementation. On top
of this, in the case of ERP we are considering an
enterprise-wide information system that affects most if
not all business functions in their daily operations. This
makes communication and collaboration by definition
interdepartmental in nature. It is our observation that
these two activities are (a) mutually reinforcing and (b)
really lie at the core of any ERP success. A successful
ERP project with mediocre to low interdepartmental
communication and collaboration seems very unlikely to
us, and would be a ‘black swan’ indeed (Popper, 1959).
Proposition 3b: If this core process of communication
and collaboration is under-performing, it is highly likely
that presence and/or attitude of several of the key stakeholders
are also insufficient. These key stakeholders are
(a) top management, (b) project team, (c) project management,
(d) project champion, (e) package vendor.
The intent of proposition 3a is not to suggest that ERP
project teams function in isolation and that their performance
alone determines implementation success.
Indeed, we have seen in this case that virtually the same
project team with the same competence level collaborated
and communicated well after the crisis, although it
clearly under-performed beforehand. We ascribe this to
the fact that several, if not all, of the other key stakeholders
that appear as CSFs in the Nelson and Somers
list were lacking either in presence (in this case, the project
champion), in attitude (top management and project
management) or in both (the vendor). These stakeholders
indirectly or directly determine the contingencies within
Vicious and virtuous cycles in ERP impelementation H Akkermans and K van Helden 45
which the project team has to operate and hence control
its success.
The use of outside consultants by itself, factor 22 in
the Somers and Nelson list, is not a clear candidate for
reversing such an adverse state of affairs. In this particular
case, the authors feel that, as action researchers
and consultants, they have had a role in changing the
project management style after the crisis. The usefulness
of their role in this stage has been confirmed by the
evaluation interviews conducted by independent
researchers. However, in general, the positive role of
extensive use of outside consultants is doubtful at best.
As pointed out earlier, in the MRP II implementation
literature, the use of outside consultants has been found
to have a negative correlation with implementation success
in one study (Burns et al, 1991). The changes
required for successful ERP implementations are simply
too pervasive to delegate to a third party. This may also
explain the rock-bottom rank that this factor has received
in the Somers and Nelson list.
Proposition 3c: Reversing an under-performing ERP
implementation is possible by simultaneous and reinforcing
changes in presence or attitudes of these stakeholders.
Our case may be unusual because it consists of two episodes
that are so very different in their successfulness.
From it, we can learn that it is possible to reverse a
seemingly hopeless situation into a very successful one.
But for this to happen it is essential that the key stakeholders
mend their ways and start supporting the effort
much more actively and wisely. Each of the changes
described in itself may not have been enough to induce
such a reversal of fortune, but collectively they certainly
have been. This should be a hopeful message for other
ERP projects in dire straits.
Conclusions
ERP system implementations are complex undertakings
and many of them are unsuccessful. It is therefore
important to find out what the critical success factors, or
CSFs, are, that drive ERP project success. Recent
research has given us several good candidate lists of such
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Acknowledgements – This article has been several years in the making.
Over the course of its conception we have become indebted to many
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