Critical success factors in ERP upgrade projects
| Date | 08 April 2019 |
| DOI | https://doi.org/10.1108/IMDS-01-2018-0016 |
| Published date | 08 April 2019 |
| Pages | 656-675 |
| Author | Christian Barth,Stefan Koch |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
Critical success factors in ERP
upgrade projects
Christian Barth and Stefan Koch
Department of Business Informatics –Information Engineering,
Johannes Kepler University Linz, Linz, Austria
Abstract
Purpose –In the last years the penetration of enterprise resource planning (ERP) systems within small,
medium and large organizations increased steadily. Organizations are forced to adapt their systems and
perform ERP upgrades in order to react to rapidly changing business environments, technological
enhancements and rising pressure of competition. The purpose of this paper is to focus on the critical success
factors for such projects.
Design/methodology/approach –The paper is based on a literature review and qualitative interviews
with CEOs, CIOs, ERP consultants and project managers who recently carried out ERP upgrade projects in
their respective organizations.
Findings –This paper identifies 14 critical success factors for ERP upgrade projects. Amongst others,
effective project management, external support, the composition of the ERP team and the usage of a multiple
system landscape play a key role for the success of the ERP upgrade. Furthermore, a comparison to the
critical success factors for ERP implementation projects was conducted, and even though there are many
similarities between these types of projects, several differences emerged.
Originality/value –ERP upgrade projects have a huge impact on organizations, but their success and
antecedents for it are currently under-researched.
Keywords Success factors, Project management, ERP, Enterprise resource planning, Enterprise system,
Software upgrade
Paper type Research paper
Introduction
For decades, many large companies have implemented enterprise information systems, also
termed enterprise resource planning (ERP) systems (Davenport et al., 2004), including an
increasing number of SMEs (Olson and Staleya, 2012). In the literature, repeatedly the high
percentage of failed ERP projects is discussed (Davenport, 1998; Beatty and Williams, 2006;
Ahmad and Cuenca, 2013). Emphasis in research has been on the earlier phases in the life
cycle of ERP systems, particularly the implementation, for example by Holland and Light
(1999), Aloini et al. (2007), but also decision-making, for example by Bernroider and Koch
(2001), Stefanou (2001), Hakim and Hakim (2010). Evolution, maintenance and eventual
replacement of such systems (Gable et al., 2001) has received considerably less attention,
with some exceptions (e.g. Koch and Mitteregger, 2016; Ng et al., 2003; Nah, Faja and Cata,
2001; Salmeron and Lopez, 2010; Law et al., 2010; Haddara and Elragal, 2013). Related
issues will be of increasing relevance and importance in the next years for practice though
(Botta-Genoulaz et al., 2005; Salmeron and Lopez, 2010; Law et al., 2010), as in times of
rapidly changing business environments and newly emerging technologies, companies are
not only forced to adapt their business models, their strategy and their organizational
structures but also their information systems. This area is growing in publication activity,
the proportion of publications in 2000 was 11 percent and has grown to already 30 percent
Industrial Management & Data
Systems
Vol. 119 No. 3, 2019
pp. 656-675
Emerald Limited Publishing
0263-5577
DOI 10.1108/IMDS-01-2018-0016
Received 11 January 2018
Revised 5 June 2018
25 July 2018
Accepted 7 August 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
© Christian Barth and Stefan Koch. Published by Emerald Publishing Limited. This article is
published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce,
distribute, translate and create derivative works of this article (for both commercial and
non-commercial purposes), subject to full attribution to the original publication and authors. The full
terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
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IMDS
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in 2009 (Schlichter and Kraemmergard, 2010). A research agenda for this field spanning
over 80 topics was already proposed by Gable et al. (2001).
One possibility to adapt an existing ERP system to changing demands is to upgrade
the system to a new version, which constitutes one of the major activities within the
post-implementation phase (Nah, Faja and Cata, 2001). Typically, every three years
organizations have to conduct a major ERP upgrade and several small upgrades to
guarantee a smoothly running system (Olson and Zhao, 2006). Due to the high complexity of
ERP systems, upgrades can only be conducted within comprehensive projects and require
significant personal and financial resources as well as a high degree of ERP know-how.
Because of the large amount of money spent on ERP upgrades, which can add up to
25–33 percent of the initial implementation costs for one upgrade (Ohlson, 2000), a
comprehensive understanding of ERP upgrade concepts and their challenges is necessary to
prevent project failures (Olson and Zhao, 2006). The current change in the market leader’s
platform to SAP HANA and associated to the SAP S/4HANA ERP software makes this
issue very relevant for industrial practice. Therefore, the objective of this paper is to identify
the main factors which lead to success within ERP upgrade projects. We will especially
focus on the following research questions:
RQ1. What are the objectives in ERP upgrade projects?
RQ2. What are the factors which enable an organization to reach these objectives and
therefore can be defined as critical success factors?
RQ3. Whether any differences between critical success factors in ERP upgrade projects
and those in ERP implementation projects exist and what they are.
This paper is structured as follows: after the introduction, a literature review on ERP
implementation and upgrade is provided for an understanding of both types of projects, and
critical success factors for implementation projects. We will then detail the research
methodology which follows a qualitative approach to uncover critical success factors for
upgrade projects and differences to implementations. The next sections describe the data
analysis, followed by a discussion, conclusion and directions for future research.
Literature review
ERP implementation projects
ERP systems are large packaged enterprise information systems that consist of several
integrated subsystems, enabling planning and control of resources and processes of an
enterprise (Davenport, 1998). They facilitate a unified data source for all activities within an
organization and therefore represent the information backbone of a company. This leads to
a considerable improvement of the organization’s decision-making process, and contributes
to making it consistent, timely and reliable across organizational units and geographical
locations (Chatzoglou et al., 2016).
After the decision for deployment of an ERP software, the next steps and phases can be
classified and ordered based on a life cycle model (e.g. Stefanou, 2001). Markus and Tanis
(2000) describe the lifecycle of an ERP system on the basis of four phases. The first phase,
called the chartering phase, consists of actionsinordertodefinethebusinesscaseand
solution constraints, and select the software. In the second phase, the project phase, the
selected and defined system is set up, configured according to the organizational needs
and rolled out to more and more end users (Markus and Tanis, 2000). With the beginning
of the third phase, the shakedown phase, the system will be stabilized, bugs will be
eliminated and the system will get to normal operations. The last phase, the onward and
upward phase, covers all maintenance, support and upgrade activities (Markus and
Tanis, 2000). Esteves and Pastor (1999) distinguish between adoption decision phase,
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ERP upgrade
projects
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