An empirical study on critical failure factors for enterprise resource planning implementation in Indian retail sector

Many retailers in India have decided to adopt one or another enterprise resource planning (ERP) system to improve their businesses, but implementing an ERP system can be a demanding venture. ERP implementation has always been an intricate process and is one of the challenges of the retail sector. There have been many obstacles seen in implementing ERP successfully. According to Standish Group's report, around 75 per cent of the ERP projects are classified as failures. The purpose of this paper is to focus on the process of identifying, analyzing and prioritizing the failure factors of ERP implementation using cause‐effect and Pareto analysis.

Empirical data were collected via a survey questionnaire/interview technique. The questionnaires were distributed to practitioners like project sponsors, project managers, implementation consultants and team members who had been involved/implementing/using ERP in retail sector.

Results suggest that 9 critical failure items namely Inadequate resources, Poor User involvement, Users' resistance to change, High Attrition rate of project team members, Lack of top management commitment, Poor project management, Inadequate project team composition, Ineffective organizational change management and Unrealistic project scheduling have a high impact on ERP implementation and therefore deserve serious attention in the process of ERP implementation.

This paper identifies and prioritizes the critical failure factors of ERP implementation in Indian retail sector. The awareness about these critical failure items may help the decision makers in formulating a better strategy for ERP implementation in Indian retail.