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An ERP
system is a packaged business software system that allows a company to automate
& integrate the majority of its business processes, and share common data
and practices across the entire enterprise (Seddon, Shanks & Willcocks,
2003) 1. ERP also produces and accesses information in a real time
environment. Many companies use ERP software to integrate the enterprise wide information and process for example their
financial, human resources, manufacturing, logistics, sales and marketing
functions. ERP was designed mainly to provide a total, integrated company’s
resource to manage the business process efficiently and effectively.

The success or failure of ERP
implementation is closely related to how the companies handle the process. The
ERP implementation process could differ in every company. The differences might
concern to the implementation goals, the scope, or the available resources. But
among all the differences in every implementation process there are some
general points that are important in the process and would strongly result in
the success or failure in the implementation. Those important points were
identified as critical success factors (Laudon & Laudon, 1998) 2.
Critical success factors are defined as “those few critical areas where things
must go right for the business to flourish” (Rockhart, 1979) 3.

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McNurlin (2001) 4 revealed that
only 34 percent of the companies were satisfied with their ERP system. 28
percent of the implemented ERP systems were failures. Further, 90 percent of
the implemented ERP systems were late and more expensive than the companies had
expected (Loonam & McDonagh, 2005) 5.

Moreover, 25 percent of the money
invested in ERP system was viewed as wasted and less than 75 percent of the ERP
system’ effectiveness was utilized (Ettlie, 1998) 6. Many companies only used
between 50 and 75% of the ERP system functionalities or modules. Betts (2001) 7
indicated that 80 percent of the ERP system failed to achieve the business
objectives that were expected from system. Notwithstanding this, many companies
have implemented ERP system, but few are used effectively (Yu, 2005) 8.

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