Prior research attempted to develop enterprise resource planning (ERP) pre-implementation readiness models and frameworks, but developing a measurement model for the same has not been addressed. This study is aimed at developing and validating an ERP pre-implementation readiness measurement tool for ERP systems. The research question addressed in this study is: “What pre-implementation readiness measurement tool could be developed for ERP system implementation?” The study has proposed a research model based on prior researchers. Then, a survey was conducted using a self-administered questionnaire. The proposed model was tested using a partial least square with the help of the Smart PLS 2.0 software. The empirical evidence of the study indicated that IT strategy and planning, top management commitment, planning, technology application management, service management, individual commitment, and individual capability were found as major influencing factors of ERP pre-implementation readiness measurement tool.
TopBackground
In today’s competitive business environment, the use of Information Technology (IT) has become pervasive in every facet of organizations’ endeavors. IT contributes to business success by allowing information to move faster, increasing the pace at which individuals and organizations can respond to events. Getting the right information to the right person can make a huge difference in terms of a company’s bottom line. IT has brought the best products to enrich various aspects of modern life; no organization can be effective without the adoption of the latest available technology. An Enterprise Resource Planning (ERP) system is one of the technologies used by organizations to attain effectiveness and efficiency (McNurlin, 2014).
ERP is a packaged application software technology that combines the technologies, people, data, and business processes for fostering the use of IT to improve organizational performance. The term ERP is used for any software system designed to support and automate the business processes of medium and large businesses by one database. The well-known ERP systems are SAP R/3, Oracle Applications, PeopleSoft, and Baan. It is a software system designed to help the business process and to work effectively in the business of the organization. ERP is used to track companies’ finances, human resources, and logistics. Upcoming market-driven requirements focus on outside connectivity and up-to-date information supply, including business-to-business support, e-commerce, and virtual enterprises (Chand et al, 2005).
ERP implementation project is a strategic initiative that has an impact on every aspect of the company. As a result, organizations must be prepared before beginning a big project. An ERP project comprises three phases; pre-implementation, implementation, and post-implementation phases. In the pre-implementation stage, organizations prepare themselves by performing activities, planning the project, and selecting the ERP system to implement. An organization requires performing readiness-relevant activities to ensure the successful implementation of an ERP system. Successful implementation of an ERP system depends largely on how an organization manages readiness-relevant activities to achieve a proper level of readiness for ERP implementation and is associated with organization readiness, social readiness, and technical readiness. Despite the benefits of a successful ERP system deployment, there is evidence of a significant failure rate in ERP implementation projects (Ahmadi, 2015). Thus, companies should evaluate their readiness for ERP implementation before launching the system.
Enterprise systems (ES) (synonymous with Enterprise-wide Systems, Integrated Vendor Solutions, Integrated Standard Software Packages, Enterprise Resource Planning Systems and Enterprise Application Systems) are complex standard software solutions that automate and integrate the core processes of a business. They integrate data and other processes with core processes in an enterprise (Singh, 2006). They are cross-functional systems that concentrate on implementing business operations around the organization that includes all levels of management. ERP systems integrate business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources into a single software system (Laudon & Laudon, 2012).