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Abstract
Firms operating in service industry are working on two main targets; to satisfy customer’s demands and improving their efficiency. Based on that service organizations have invested considerable resources in the implementation of Enterprise Resource Planning (ERP) systems, as major business drivers behind ERP implementations are: meeting and exceeding the customer’s expectations, developing and maintaining a close relationship with its customers, improving productivity, providing competitive advantage.
ERP projects have often been found to be complex and risky to implement in business enterprises. The organizational relevance and risk of ERP projects make it important for service organizations to focus on what factors that makes ERP implementation fail in order to be avoided.
The aim of this study is to determine the factors or reasons that may lead to unsuccessful implementation of ERP systems in service industries in order to be avoided. Understanding and considering such factors will enable decision makers in service companies to be more proactive and better prepared for ERP systems implementation and this in return will save a lot of spending time and money for these companies.
The aim of this study is achieved by presenting a case study of a service company that decided to implement ERP system to enhance its way of doing business, and after examining this implementation for two years the study concluded the factors which have a negative impact that leads to failure implementation of ERP system in the service companies. These factors are: the mismatch between technical specification of ERP system and the business needs of the service company, concentrating on the technical dimension of the ERP project and neglecting the organizational side, ERP service provider whose ERP implementation experience is only targeting manufacturing sectors and does not have any implementation experience regarding service sectors, and finally lack of awareness of the importance of understanding the business processes cycles of the service company from the service providers side in order to be able to adopt the business process reengineering concept