NST 2007 Extended Summary Proceedings of Engineering and Technology Innov ation, vol. 8, 2018, pp. 40 - 45 Applying Project Management Perspective for ERP Implementation: A Case Study Li-Man Liao * , Ching-Jen Huang, Xiang-Yu Lin Department of Industrial Engineering and Management, National Chin-Yi University of Technology, Taichung, Taiwan. Received 31 July 2017; received in revised form 17 November 2017; accept ed 24 November 2017 Abstract The case-study company is a well-known enterprise whose primary product is precision locknuts in Taiwan. With the rise of sales performance, the legacy enterprise resource planning (ERP) system does not provide the degree of re liab ility and maintainability the case comp any needed. In order to meet the growing needs of enterprise, the case company faces to the challenge of application integration within the enterprise. The ERP imp le mentation success depends on the rigor of the project management processes. In this researc h, firstly, case study approach is adopted to investigate how poor project manage ment imperil the imp le mentation of an ERP system. Hav ing learned the lessons from the failure of its first ERP imple mentation, the case company applies the theory of business process reengineering (BPR) to e xp lore and rationalize the business processes, and design its project manage ment practices to successfully carry out its second ERP imp le mentation. And the goal directed project manage ment (GDPM) princip les are applied to de velop a proper ERP imple mentation plan. The summary descriptions of the important aspects of ERP imple mentation are stated that the sponsor or the client of the project, the goals, and limitations on the project, and time a re included. Th is study exp lores and identifies the critica l elements of project management to provide an effective guidance for the first implementation stage . Keywor ds: ERP, project management, BPR 1. Introduction The ma rket trend of industrial nuts and bolts tends to positive growth, the value of industrial nuts and bolts within Taiwan has achieved almost 731 billion NT dolla rs in 2016. The case company is a well-known enterprise and specializing in production of precision locknut in Taiwan. Diffe rentiated capability becomes a basis for survival within a globally competitive ma rketplace where various capabilities compete intensely. Recently, it has devoted to the ‘small-volu me production of a wide range of diffe rent products’ transformation, and confronts the challenge of information integration to carry out self-require ment within the enterprise. A suitable enterprise resource planning (ERP) system can integrate the processes of internal organization and provide man y benefits, including imp roving productivity, enhancing competitive advantage and satisfying customer de mands. Despite the advantages of ERP system, failure cases of ERP imp le mentation occur frequently. Therefore, it is crit ical how to e xecute and manage t he ERP imple mentation to avoid the lack of oversight on any mistakes of systems implementation stage lengthy and over budget . The ma rket trend of industrial nuts and bolts tends to positive growth, the value of industrial nuts and bolts within Taiwan has achieved almost 731 billion NT dolla rs in 2016. The case company is a well-known enterprise and specializing in production of precision locknut in Taiwan. Diffe rentiated capability becomes a basis for survival within a globally * Corresponding author. E-mail address: t10066@cc.kyu.edu.tw Tel.: +886-7-6077138; Fax: +886-7-6077959 Proceedings of Engineering and Technology Innovation, vol. 8, 2018, pp. 40 - 45 Copyright © TAETI 41 competitive ma rketplace where various capabilities compete intensely. Recently, it has devoted to the ‘small -volu me production of a wide range of diffe rent products’ transformation, and confronts the challenge of information integration to carry out self-require ment within the enterprise. A suitable enterprise resource planning (ERP) system can integrate the processes of internal organization and provide man y benefits, including imp roving productivity, enhancing competitive advantage and satisfying customer de mands. Despite the advantages of ERP system, failure cases of ERP imp le mentation occur frequently. Therefore, it is crit ical how to e xecute and manage t he ERP imple mentation to avoid the lack of oversight on any mistakes of systems implementation stage lengthy and over budget . The ERP imp le mentation inc ludes are three phases which are evaluation and selection, installation and transformation of a new ERP system, and inspection and adjustment. This study focuses on the first phase: evaluation and selection and refers to the goal directed project management (GDPM) relates to many principles to develop the ERP project p lan [7]. There are 11 steps are developed in the first phase. In order to achieve the company’s e xpectation what the project plan is completed in May 2017. Firstly, the company constructs a project team cross -functional cooperation, reviews the current processes to aggregate and finds out the critical bottleneck. Secondly, a Gantt chart is developed which is project schedule for the estimate t ime of e xecution of each activity. In the meantime, the pro ject tea m co llects in formation of ERP system vendors, contacts with ERP system vendors, provide a RFP (request for proposal) of ERP system evaluation as refe rence for those candidate venders. And the candidate venders present their system function, technique supporting capability, and competitive advantage. Finally, a satisfaction questionnaires surv ey is made by me mbe rs of the project team and crit ical participants, and obtain the quotation of an information system from the first priority candidate of the ERP system vender. 2. System Architecture and Principles 2.1. Enterprise resource planning (ERP) ERP is an exce llent business application in modern business operations which is designed to coordinate information system and integrate business processes [9]. Despite the advantages of ERP system, the failure rate of ERP imp le mentation is still high [2, 10]. Nu merous authors have identified the critica l factors of a successful ERP imp le mentation to avoid company trapping into a loss control failure situation. A structured and disciplined approach is applied to greatly fac ilitat e the ERP imp le mentation. Th e most pro minent factors include a clea r understanding of strategic goals, e xcellent imple mentation project management, a great imple mentation tea m, top manage ment support, e xtensive education and training as we ll as organizational change manage ment, etc. Sa ini et al. [10] proposed their hypothetical success factors model which was validated fro m the data collected by questionnaire. They a lso found the business culture to impact the ERP imple mentation in organizations. Umb le et al.[11] co mp iled a list of 11 impo rtant steps for successful imple mentation fro m four e xisted works, and described the critica l factors for successful ERP imp le mentation and system selection guidelines in a company. 2.2. Project management of ERP system Ple x, manage ment plays an important role in organizations and has a major impact. Successful ERP imple mentation requires an exce llent project manage ment while enterprise must have an effective business strategy and tactic. The ma in phases of the project life cycle are varied depending upon the industry involved. It is important to ensure that the project life cycle used on the project is appropriate and the detail with in each of these distinct manageable phases. A project manage ment should have implic it trade-off a mong time , budget, and function. Gray and La rson [3] described the common phases of the whole length on project life wh ich are defin ition, p lanning, e xecution and delivery phases and shown as Fig. 1. So fa r the case co mpany has been imp le menting for ten months. The ERP definit ion phase has done which y ields the business processes to imple ment the actual ERP system, and the p lanning phase has started since six months ago and the works have been progressing. Proceedings of Engineering and Technology Innovation, vol. 8, 2018, pp. 40 - 45 Copyright © TAETI 42 The project governance requires a set of “check and balances” to ensure that the right decisions were made [6]. Metaxiotis et al. [7] presented an overview of goal directed project management (GDPM) which aims at the facilitation and effective guidance fo r the ERP systems installation process. The GDPM princip les indicate the three parts of p lanning, organization as well as control, wh ich support the imple mentation and optima l adaption (IOA) of ERP system. They also proposed five steps in the life cycle of ERP project to offer a progressive and smooth passage by ERP system. Che n et al. [2] e xplored and identified crit ical e le ments of project manage ment, which connected with “what” and “how” aspects of the ERP project failure, and adopted or avoided them for the second ERP implementation. According to the technique report of Cisco systems, Inc. [1], an ERP system must meet business needs that would require heavy involvement fro m the business community. It is critica l that select the very best people to build the imple mentation team who includes enterprise’s key-men, vendor of ERP software and consultants. The imp le mentation team is constructed and provides inter-departmental communicat ion that can bring the centripetal force of the entire enterprise. It is responsible for creating the initia l, detailed project p lan or overa ll sched ule for the entire project, assigning responsibilities for various activities and determining due dates. Saini et a l. [10] described that consultant selection could share knowledge and e xperience for the company. Umb le et al. [11] refer to the request for proposal (RFP) which contains the feature and function list, create an initial of a ll imp le mentation schedule for the project. The planning and execution stages consume most of time of ERP imple mentation, therefore enhancing the development of pro ject sche dule is crit ical. The stage provides a forecasted duration for the project activities to avoid high of the overall project budget and lengthy execution time for project stakeholders . execution definition planning delivery time start finish T h e d e g r e e o f e ff o r t now Fig. 1 Project life cycle [3] Planning stageDefinition stage 1.Define the project strategic goal 2.Project team composition 3.Review the current processes 6. Execute presentation of ERP system vendors 7.Write a request for proposal (RFP) 8.Interview the candidate vendors 5.Collect information of ERP system vendors 9.Develop a satisfaction questionnaire 4.Develop a project schedule 10.Hold a formal presentation 11.Quote and contract signing Fig. 2 The ERP system introducing evaluation framework Proceedings of Engineering and Technology Innovation, vol. 8, 2018, pp. 40 - 45 Copyright © TAETI 43 2.3. Business process re-engineering (BPR) As the developing trend for modern business moves toward a collaborative mode l, the o wn business practices and procedures should be improved to re ma in its competit ive. Business processes are actions that firm involves in accomp lishing each business task to achieve business purpose. Many ERP imp le mentation fa ilures have been due to the lack of focus on the business process and change manage ment. Managers must describe the current business processes and rationalize those processes to develop a new best practices model fro m the ERP application. Business process re -engineering (BPR) is closely tied to ERP imp le mentation, a la rge a moun t of re-engineering should take place iterative ly and usually has the significant challenge of ERP systems. Ke mp and Lo w [4] focused on organizat ional behavior which imp le mented ERP system with re - engineering of the re lated business processes incorporating change manage ment. The BPR inc ludes the change manage ment, organization culture as we ll as operation processes to re -planning and carry out. Umble et a l. [11] mentioned that organizational change manage ment is one of the critica l factors for successful ERP imple mentation. For sustaining the effectiveness of the reengineering efforts, redesigned processes must correspond with realignment in organizational control. Organizational culture is defined as the deeply rooted values, beliefs and assumption that ar e shared by personnel in an organization. It involves all part icipants of each department and the process of the whole enterprise. A business with e xcellent culture could sustain the long -term co mpetitive advantage. An ERP system has been credited with rescuing the idea of BPR which focused to redefine and redesign the workflows to fit the new software [9]. Clearly, this is a good chance for enterprises to imple ment BPR as the new ERP system is introduced. In order to obtain an e xce llent BPR, the organizati on must have the objective of regulating the whole fra mewo rk, e xecutor power fo r decision ma king, commit ment by top management, and the great channel of communication, etc . 3. Developing the Project Planning A project is undertaken for a specific purpose with tangible value in a g iven duration. Th is section main ly describes how to imple ment project manage ment of ERP system for the case co mpany. The ERP imple mentation is d ivided into three phases: evaluation and selection, setup and transformation of a new ERP system, and check phases. The first phase has two stages which are definition and planning and shown as Fig. 2. This case study describes the first ERP upgrade project at the Dead Sea Works (DSW) chemical company. The case company has an imp le mented e xperience fro m the e xisting ERP. A project tea m consists of top managers and key me mbers wh ich is responsible for creat ing the initia l, detailed project planning and making all necessary demands will be available on the second ERP system. The case company has a consultancy, Corporate Synergy Develop ment Center, which prov ides essential assistance to identify the important e le ments of the ERP pro ject. Therefore, this study proposes the ERP imple mentation project p lan via literatures review and the consultant’s suggestions. Because the top managers have a great vision and determination to overcome all the obstacles to ERP imp le mentation; moreover, almost e mployees are young and have a strong will to participate th e changeover of the new ERP system. Fig. 3 The Gantt chart of evaluation and selection phase at ERP project 91 60 91 15 35 4 17 60 2016/5/1 2016/7/2 2016/9/2 2016/11/3 2017/1/4 2017/3/7 2017/5/8 Review the current process Collect information of ERP system vendors Execute presentation of ERP system vendors Write a request for proposal (RFP) Interview the candidate vendors Develop a satisfaction questionnaire Hold a formal presentation Quote and contract signing Proceedings of Engineering and Technology Innovation, vol. 8, 2018, pp. 40 - 45 Copyright © TAETI 44 According to the goal directed project management (GDPM ) principles by Meta xiotis et al. [7], the sponsor must have a description of the critica l aspects of the IT pro ject. In May 2016, the information depart ment started up the ERP project p la n and named it “The pro ject manage ment of case co mpany’s ERP system rep lace ment assessment”. The d irector of informat ion department is the sponsor who forms the ERP project tea m. Firstly, the current processes are reviewed to find out the key process bottlenecks, and rationalize the internal processes of each department and eliminate the obstacles of across department boundaries. The pro ject must be constructed with t ime schedule and all the activit ies have to identify and be performed. Therefore, the project tea m develops a project schedule to estimate the input resources for the e xecution of each activity. The Every activity is recorded into calendar to ensure that the ultimate goals of the project are achieved. Secondly, the director of informat ion depart ment contacts with ERP software vendors and collects data relat ive to ERP imple mentation, and the qualified vendors are sifted out. Each q ualified vendor must present his own system functions, available resources and previous successful cases. Third ly, a request for proposal (RFP) of the case company is proposed. The RFP contains the purpose of the project planning, current operational proce sses, and demands of each department for the ERP system. The contents make the staffs of the case company and the venders understand the project goal and imp le ment procedures. After the vendors’ presentation takes place, the project team and partic ipants evaluate the fitness of ERP software v ia questionnaire survey as a preliminary assessment for the vendors. Finally, the pro ject tea m determines the first priority vendor who provides the quotation and signs the contract. The contract had done in May 2017. The objective of this study is the assistance that progressive and smooth passage of the enterprise is provided by the new ERP environment . 4. Conclusion This study ma inly identified the c rit ical ele ments and procedures of evaluation and selection stage of ER P project imple mentation. Owing to learn ing the lesson of the first ERP system, the case company pays attention to the new ERP imple mentation. The overall internal business processes and reporting sheets are reviewed and analyzed, and then are rationalized and aggregated via business process reengineering (BPR) approach. The fu zzy AHP approach is applied to evaluate three ERP systems, and VIKOR method is developed to determine the best -fit ERP system for the case company. The executive steering committee (ESC) tea m co mprises the top executives, the leader of each functional department, staffs of information department of the case company, and the consultant. The ESC tea m focuses on the processes of each department to find out major bottlenecks, and integrate s all demands as a reference of the new ERP system. The ERP system is designed to integrate all information processing, so the case company imp le ment s business process reengineering (BPR) to identify the suitable operations for each department by ERP imp le mentation. Besides, this study constructs an imp le mentation fra me work of the ERP project, and develop a project schedule as a direction of the evaluation and selection stage of project manage ment. Although the project imple mentation ever is id ling about tw o months because of some proble ms cannot proceed immed iately. Fortunately, the case co mpany found a solution to overcome the proble ms. The case company has contracted with the first priority ERP vendor in May 2017, and the project proceeded to the next pha se. Acknowledgment Thi sresearch is funded by the Ministry of Science and Technology of the Republic of Ch ina under Grants MOST104 - 2622-E-167-018-CC3. And special thanks to all who have helped to make this study, especially a ll the people of case company. 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