Assessing risk in ERP projects: identify and prioritize the factors

TLDR

Enterprise resource planning systems are among the largest IT investments, yet their implementation is challenging and prone to high failure rates, as illustrated by cases like FoxMeyer, and they pose unique ongoing risks. This study seeks to identify and prioritize ERP project risk factors. Using a Delphi method, the authors identified risk factors and applied an analytic hierarchy process framework to analyze and rank them. The analysis indicates that several risk factors warrant heightened attention during ERP implementation.

Abstract

Various figures have stated that ERP (enterprise resource planning) systems have become one of the largest IT investments in recent years. The implementation of ERP system, however, is not an easy task. Previous research reports unusually high failure in ERP projects, sometimes jeopardizing the core operation of the implementing organization. The most famous case is FoxMeyer filed for Chapter 11 bankruptcy protection. Further, ERP systems appear to present unique ongoing risks due to its uniqueness. In this study, we used a Delphi method to identify potential ERP projects risk factors, and constructed an AHP‐based framework to analyze and then prioritized the ERP projects risk factors. The result reveals that some important risk factors deserve more attention during the implementation of ERP projects.