The Infulence of complexities of ERP for effective implementation at medium sized companies in Sri Lanka

Abstract

Enterprise resource planning (ERP) software plays a critical role in today’s cuttingedge business world. By bringing a company’s different functions together into one large integrated system, an ERPsystem creates a plethora of opportunities for growth and increased productivity. Medium sized enterprises in the developed world are well ahead in their usage of ERP systems. However, the available studies pertaining to the use of ERP systems in developing countries reveal that, the medium scaled businesses in Sri Lanka are far behind in adaptation of ERP systems. Literature reveals that there are many significant factors contributing towards the said low level of adaptation. Out of the many factors identified, the complexity of ERP systems is one of a key contributing factor for the low adaptation of ERP systems in medium scaled enterprises in Sri Lanka. The main objectives of this research are to identify the influencing factors that contribute towards the complexity of ERP for effective implementation, and to establish an ERP complexity index for the advancement of mid-sized companies in Sri Lanka.Further this research established some important recommendations for the acquisition and implementation of ERP systems for medium sized enterprises. The research methodology used was quantitative data gathered via questionnaire surveys of ERP users in medium scaled enterprises in Sri Lanka.Secondary data was gathered from trusted internet sources and from previous researches carried out for information systems applications in Sri Lanka.For the survey 120 ERP users were selected from medium scaled enterprises and from IT experts who possess ERP knowledge and experience. Primary data constituted 91 responses gathered via the online survey published, face to face interviews, telephone interviews and printed copies of the survey, which was used for the sample validation. Outcome of the research identified that the key contributing factors for the complexity of ERP systems are product dimension, people factor, project dimension and company business processes and there is a strong correlation among variables. Complexity analysis survey results revealed that SAP and Oracle records higher complexity index and Microsoft Dynamics and Web ERP records lower complexity indexes. Further secondary data revealed that SAP and Oracle records highest ERP per user cost. ERP’s such as IFS Applications, Dynamics GP, and Sage Accpacc, Web ERP records less ERP per user cost compared to SAP and Oracle. As per the research analysis, customization of ERP system is another key concern apart from the above mentioned complexity and cost analysis in the ERP selection process for medium scaled businesses.